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AMERICAN GENERAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL-R
LEGACY PLUS
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
SUPPLEMENT DATED DECEMBER 9, 1998
TO
PROSPECTUS DATED SEPTEMBER 1, 1998
Effective December 9, 1998, American General Life Insurance Company
("AGL") is amending the distribution of the Legacy Plus policies described on
page 23 of the prospectus. The purpose for amending the prospectus is to include
the range of compensation for the broker-dealers who may offer the policies and
to delete the arrangement with Independent Advantage Financial and Insurance
Services, Inc. ("IAF"), since IAF is no longer an affiliate of AGL and this
arrangement is no longer in place.
CHANGES WITH RESPECT TO
DISTRIBUTION OF THE POLICIES
ON PAGE 23 OF THE PROSPECTUS, THE ENTIRE SECTION UNDER "DISTRIBUTION OF
THE POLICIES" IS DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
DISTRIBUTION OF THE POLICIES
American General Securities Incorporated ("AGSI") is the principal
underwriter of the Policies. AGSI is a wholly-owned subsidiary of AGL, a
wholly-owned subsidiary of American General Corporation ("American General"),
and its principal office is 2727 Allen Parkway, Houston, Texas 77019. AGSI was
organized as a Texas corporation on March 8, 1983 and is a registered
broker-dealer under the Securities Exchange Act of 1934, as amended ("1934 Act")
and is a member of the National Association of Securities Dealers, Inc.
("NASD"). AGSI is also the principal underwriter for AGL's Separate Accounts A
and D, and Separate Account E of American General Life Insurance Company of New
York, which is a wholly-owned subsidiary of AGL. These separate accounts are
registered investment companies.
We and AGSI have sales agreements with various broker-dealers and banks
under which the Policies will be sold by registered representatives of the
broker-dealers or employees of the banks. These registered representatives and
employees are also required to be authorized under applicable state regulations
as life insurance agents to sell variable life insurance. The broker-dealers are
ordinarily required to be registered with the SEC and must be members of the
NASD.
We pay compensation directly to broker-dealers and banks for promotion
and sales of the Policies. AGSI also has its own registered representatives who
will sell the Policies, and we will pay compensation to AGSI for these sales.
The compensation payable to broker-dealers or banks for the sales of the
Policies may vary with the sales agreement, but is generally not expected to
exceed, for the Policies, 2.5% of the Policy's accumulation value (reduced by
any outstanding loan) in Policy
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year 1, 1.0% annually of the Policy's accumulation value (reduced by any
outstanding loan) in Policy years 2 through 10, 0.50% annually of the Policy's
accumulation value (reduced by any outstanding loan) in Policy years 11 through
20 and 0.25% annually of the Policy's accumulation value (reduced by any
outstanding loan) thereafter.
The maximum value of any alternative amounts we may pay for sales of the
Policies is expected to be equivalent over time to the amounts described above.
For example, we may pay a broker-dealer compensation in a lump sum which will
not exceed the aggregate compensation described above.
We pay a comparable amount of compensation to the broker-dealers or
banks with respect to any increase in the specified amount of coverage that you
request. In addition, we may pay the broker-dealers or banks expense allowances,
bonuses, wholesaler fees and training allowances.
We pay the compensation directly to AGSI or any other selling broker-
dealer firm or bank. We pay the compensation from our own resources which does
not result in any additional charge to you that is not described on pages 6 and
7 of the prospectus. Each broker-dealer firm or bank, in turn, may compensate
its registered representative or employee who acts as agent in selling you a
Policy.
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