Supplement to Prospectus Dated May 3, 1999
Supplement dated October 18, 1999
This Supplement should be retained with the current Prospectus for your variable
life policy issued by American Skandia Life Assurance Corporation ("American
Skandia"). If you do not have a current prospectus, please contact American
Skandia at 1-800-SKANDIA.
VARIABLE INVESTMENT OPTIONS
The following underlying Portfolios are being added to the section entitled
"What are the Investment Objective and Policies of the variable investment
options? What charges are made by the Portfolios in which these options invest?"
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C> <C> <C>
Investment Other Total Net
STYLE/ INVESTMENT OBJECTIVES/POLICIES Management Expenses Annual
TYPE Fee Expenses
- ----------------- ----------------------------------------------------------------------------------- ----------- ------------- ----
AST MFS Growth with Income: seeks reasonable current income
and long-term capital growth and income. Under normal
market conditions, the Portfolio invests at least 65% of
its total assets in common stocks and related securities,
such as preferred stocks, convertible securities and
GROWTH depositary receipts. The stocks in which the Portfolio 0.90% 0.23% 1.19%(1)
& invests generally will pay dividends. While the Portfolio
INCOME may invest in companies of any size, the Portfolio
generally focuses on companies with larger market
capitalizations that the Sub-advisor believes have
sustainable growth prospects and attractive valuations
based on current and expected earnings or cash flow. The
Portfolio may invest up to 20% of its net assets in foreign
securities.
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AST MFS Growth: seeks long-term capital growth and future
income. Under normal market conditions, the Portfolio
invests at least 80% of its total assets in common stocks
GROWTH and related securities, such as preferred stocks,
convertible securities and depositary receipts, of 0.90% 0.24% 1.20%(1)
companies that the Sub-advisor believes offer better than
average prospects for long-term growth. The Sub-advisor
seeks to purchase securities of companies that it considers
well-run and poised for growth. The Portfolio may invest up
to 30% of its net assets in foreign securities.
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INVESCO VIF Dynamics: seeks securities that will increase
in value over the long term. The Portfolio invests in a
variety of securities which are believed to present
opportunities for capital growth - primarily common stocks
of companies traded on U.S. securities exchanges, as well
as over-the-counter. The Portfolio also may invest in
MID-CAP preferred stocks and debt instruments that are convertible 0.60% 14.41% 1.45%(2)
GROWTH into common stocks, as well as in securities of foreign
companies. In general, the Portfolio invests in securities
of companies in industries that are growing globally and
usually avoids stocks of companies in cyclical, mature or
slow-growing industries or economic sectors. The Portfolio
seeks to invest in stocks of leading companies in
attractive markets or industries, or emerging leaders that
have developed a new competitive advantage.
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Evergreen VA Special Equity: seeks capital growth. The
Portfolio strives to provide a return greater than broad
stock market indices such as the Russell 2000(R) Index by
investing principally in a diversified portfolio of common
SAMLL stocks of domestic companies. The Portfolio's Investment 1.45% 0.72% 1.00%(3)
CAPITALIZATION Adviser principally chooses companies which it expects will
experience growth in earnings and price, and which have
small market capitalizations (under $1 billion) and medium
market capitalizations (between $1 billion and $5 billion).
The Portfolio may also invest in companies that have large
market capitalizations (over $5 billion).
- ----------------- ----------------------------------------------------------------------------------- ----------- ------------- ----
<PAGE>
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Investment Other Total Net
STYLE/ INVESTMENT OBJECTIVES/POLICIES Management Expenses Annual
TYPE Fee Expenses
- ------------------- --------------------------------------------------------------------------------- ----------- ------------- ----
AST MFS Global Equity: seeks capital growth. Under normal
market conditions, the Portfolio invests at least 65% of
its total assets in common stocks and related securities,
such as preferred stock, convertible securities and 1.00% 0.48% 1.54%(1)
depositary receipts, of U.S. and foreign issuers (including
issuers in developing countries). The Portfolio generally
seeks to purchase securities of companies with relatively
large market capitalizations relative to the market in
which they are traded.
INTERNATIONAL --------------------------------------------------------------------------------- ----------- ------------- ----
EQUITY Evergreen VA Global Leaders: seeks to provide investors
with long-term capital growth. The Portfolio normally
invests as least 65% of its assets in a diversified
portfolio of U.S. and non-U.S. equity securities of
companies located in the world's major industrialized 0.95% 0.61% 1.00%(4)
countries. The Portfolio will invest in no less than three
countries, which may include the U.S., but may invest more
than 25% of its total assets in one country. The Portfolio
invests only in the best 100 companies, which are selected
by the investment advisor based on qualitative and
quantitative criteria such as high return on equity,
consistent earnings growth and established market presence.
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Sector funds generally diversify their investments across particular economic
sectors. However, because those investments are limited to a comparatively
narrow segment of the economy, sector funds are generally not as diversified as
most mutual funds. Sector funds tend to be more volatile than other types of
funds. The value of fund shares may go up and down more rapidly than other
funds. Each sector of the economy may also have different regulatory or other
risk factors that can cause greater fluctuations in the share price. Please read
the prospectus for the underlying sector fund for further details about the
risks of the particular sector of the economy.
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INVESCO VIF Technology: seeks capital appreciation. The
Portfolio normally invests at least 80% of its total assets
in the equity securities of companies engaged in
technology-related industries. These include, but are not 0.75% 5.85% 1.40%(5)
limited to, communications, computers, video, electronics,
oceanography, office and factory automation, and robotics.
A core portion of the Portfolio's holdings are invested in
market-leading technology companies which the Investment
Advisor believes will maintain or improve their market
share regardless of overall conditions.
SECTOR --------------------------------------------------------------------------------- ----------- ------------- ----
INVESCO VIF Health Sciences: seeks capital appreciation.
The Portfolio invests at least 80% of its assets in the
equity securities of companies that develop, produce or
distribute products or services related to health care.
These industries include, but are not limited to, medical 0.75% 3.57% 1.27%(6)
equipment or supplies, pharmaceuticals, health care
facilities, and applied research and development of new
products or services. The Investment Advisor attempts to
blend well-established healthcare firms with
faster-growing, more dynamic health care companies, which
have new products or are increasing their market share of
existing products.
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<PAGE>
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Investment Other Total Net
STYLE/ INVESTMENT OBJECTIVES/POLICIES Management Expenses Annual
TYPE Fee Expenses
- ------------------- --------------------------------------------------------------------------------- ----------- ------------- ----
INVESCO VIF Financial Services: seeks capital appreciation.
The Portfolio normally invests at least 80% of its assets
in the equity securities of companies involved in the
financial services sector. This sector includes, among
others, banks (regional and money-centers), insurance 0.75% 0.59% 1.25%(7)
companies (life, property and casualty, and multiline), and
investment and miscellaneous industries (asset managers,
brokerage firms, and government-sponsored agencies). The
Investment Advisor seeks companies which it believes can
grow their revenues and earnings regardless of the interest
rate environment - although securities prices of financial
SECTOR services companies generally are interest rate-sensitive.
(Cont.) --------------------------------------------------------------------------------- ----------- ------------- ----
INVESCO VIF Telecommunications: seeks capital appreciation.
The Portfolio normally invests at least 80% of its assets
in the equity securities of companies that are primarily
engaged in the design, development, manufacture,
distribution, or sale of communications services and
equipment, and companies that are involved in developing, 0.75% 0.59% 1.25%(7)
constructing, or operating communications infrastructure
projects throughout the world, or in supplying equipment or
services to such companies. The telecommunications sector
includes companies that offer telephone services, wireless
communications, satellite communications, television and
movie programming and broadcasting. Normally, the Portfolio
will invest at least 65% of its assets in companies located
in at least three different countries, although U.S.
issuers will often dominate the holdings.
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</TABLE>
1 These portfolios commenced operations on October 18, 1999. "Other Expenses"
are estimated amounts for the for the fiscal year ended December 31, 1999.
With respect to each portfolio, the Total Net Annual Expenses reflects an
Estimated Distribution and Service (12b-1) Fees of 0.06%. See "Distribution
Plan for Portfolios of American Skandia Trust" below for a description of this
deemed charge.
2 The Total Net Annual Expenses reflect Fee Waivers and/or Expense Reimbursement
of 13.56%.
3 This portfolio commenced operations on September 30, 1999. "Other Expenses"
are estimated amounts for the fiscal year ended December 31, 1999. The Total
Net Annual Expenses reflect Fee Waivers and/or Expense Reimbursement of 1.17%.
4 The Total Net Annual Expenses reflect a Fee Waiver and/or Expense
Reimbursement of 0.56%.
5 The Total Net Annual Expenses reflect a Fee Waiver and/or Expense
Reimbursement of 5.20%.
6 The Total Net Annual Expenses reflect a Fee Waiver and/or Expense
Reimbursement of 3.05%.
7 These portfolios commenced operations on August 31, 1999. "Other Expenses"
are estimated amounts for the fiscal year ended December 31, 1999. With
respect to both portfolios, the Total Net Annual Expenses reflect a Fee
Waiver and/or Expense Reimbursement of 0.09%.
Distribution Plan for Portfolios of American Skandia Trust
Pursuant to a vote of the shareholders of American Skandia Trust (the "Trust"),
the Trust has adopted a Distribution Plan (the "Distribution Plan") under Rule
12b-1 of the Investment Company Act of 1940 to permit an affiliate of the
Trust's Investment Manager to receive brokerage commissions in connection with
purchases and sales of securities held by Portfolios of the Trust, and to use
these commissions to promote the sale of shares of such Portfolios. While the
brokerage commission rates and amounts paid by the various Portfolios are not
expected to increase as a result of the Distribution Plan, the staff of the
Securities and Exchange Commission takes the position that commission amounts
received under the Distribution Plan should be reflected in the expenses of the
Funds. Total returns for the Portfolios are not expected to be adversely
affected by the deemed increase in fees. The Distribution Fee estimates are
derived from data regarding each Portfolio's brokerage transactions, and the
proportions of such transactions directed to selling dealers, for the period
ended June 30, 1999. However, it is not possible to determine with accuracy
actual amounts that will be received under the Distribution Plan. Such amounts
will vary based upon the level of a Portfolio's brokerage activity, the
proportion of such activity directed under the Distribution Plan, and other
factors.
The following table estimates how each Portfolio's expenses (as a percentage of
Portfolio assets on an annual basis) will be deemed to increase as a result of
the implementation of the Plan.
<PAGE>
<TABLE>
<CAPTION>
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Portfolio Increase in Portfolio Increase in
Expenses Expenses
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
<S> <C> <C> <C>
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
AST Founders Passport 0% AST JanCap Growth 0.01%
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AST T. Rowe Price International Equity 0% AST Bankers Trust Enhanced 500 0%
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
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AST AIM International Equity 0.14% AST Cohen & Steers Realty 0.07%
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
AST Janus Overseas Growth 0% AST American Century Income & Growth 0.05%
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
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AST American Century International Growth 0% AST Lord Abbett Growth and Income 0.08%
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
AST Janus Small-Cap Growth 0.05% AST INVESCO Equity Income 0.04%
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
AST Kemper Small-Cap Growth 0.18% AST AIM Balanced 0.08%
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
AST Lord Abbett Small Cap Value 0% AST American Century Strategic Balanced 0%
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
AST T. Rowe Price Small Company Value 0% AST T. Rowe Price Asset Allocation 0%
- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
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AST Neuberger Berman Mid-Cap Growth 0.08% AST T. Rowe Price International Bond 0%
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AST Neuberger Berman Mid-Cap Value 0.19% AST Federated High Yield 0%
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AST T. Rowe Price Natural Resources 0.07% AST PIMCO Total Return Bond 0%
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- -------------------------------------------------- ---------------- ------------------------------------------------ --------------
AST Oppenheimer Large-Cap Growth 0.05% AST PIMCO Limited Maturity Bond 0%
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AST Marsico Capital Growth 0.06% AST Money Market 0%
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</TABLE>
This information was provided by the Trust and has not been independently
verified by us. Additional information on Portfolio expenses is included in the
Trust's Prospectus.
Portfolio/Sub-account Name Change
Effective October 18, 1999, the name of the AST Bankers Trust Enhanced 500
portfolio has been changed to the AST Bankers Trust Managed Index 500 portfolio.
The investment objective and policies of the portfolio are not changed.
Appendix A - Hypothetical Illustrations of Death Benefits, Account Values and
Cash Values The weighted average expense ratio for the Portfolios, used as an
assumption in the hypothetical illustrations found in Appendix A, does not
reflect the expenses of the new Portfolios discussed above or the amount deemed
to be charged by certain portfolios of American Skandia Trust under the
Distribution Plan discussed above.
ASTr/FPVLI VLI10/18
