SUPPLEMENT dated November 2, 1998 to
PROSPECTUS dated May 1, 1998 for
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED
VARIABLE AND FIXED ANNUITY CONTRACT
issued by American Foundation Life Insurance Company
PIC MONEY MARKET FUND REPLACEMENT
American Foundation Life Insurance Company ("American Foundation")
proposes to replace PIC Money Market Fund with Oppenheimer Money Fund as an
investment option under the Contracts described in your May 1, 1998 prospectus.
On or about October 28, 1998, American Foundation and several other applicants
filed an application with the Securities and Exchange Commission seeking an
order approving the substitution of shares of Oppenheimer Variable Account
Funds' Money Fund for shares of Protective Investment Company's Money Market
Fund currently held by the PIC Money Market subaccount of Variable Annuity
Account A of American Foundation. American Foundation will also obtain approvals
of state insurance regulators in any state where such approval is required by
state law. The substitution will not be made until all necessary approvals are
obtained.
Oppenheimer Money Fund seeks the maximum current income from
investments in "money market" securities consistent with low capital risk and
the maintenance of liquidity. Owners and prospective purchasers should carefully
read the prospectus for Oppenheimer Variable Account Funds, which accompanied
your May 1, 1998 prospectus.
Each Owner may make one transfer of all Contract Value invested in the
PIC Money Market subaccount on the date of this supplement to another subaccount
or a fixed account without that transfer counting as a "free" transfer permitted
under a Contract. Also, American Foundation will not exercise any rights
reserved under any Contract to impose additional restrictions on transfers from
the PIC Money Market subaccount to another subaccount or a fixed account until
at least thirty (30) days after the proposed substitution.
If the proposed substitution is carried out, American Foundation will
send each Owner affected by the substitution a written notice that the
substitution was carried out and that he or she may, within thirty (30) days
after the substitution, make one transfer of all Contract Value invested in the
Oppenheimer Money Fund subaccount on the date of the notice to another
subaccount or a fixed account without that transfer counting as a "free"
transfer permitted under a Contract.
INVESTMENT MANAGER NAME CHANGE
The investment manager for each of the Protective Investment Company
Funds, Investment Distributors Advisory Services, Inc. ("IDASI"), has changed
its name to Protective Investment Advisors, Inc.
Please keep this supplement with your May 1, 1998 prospectus for future
reference.
