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Rule 497(e)
File No. 333-42567
AMERICAN GENERAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL-R
PLATINUM INVESTOR I /(SM)/ AND PLATINUM INVESTOR II /(SM)/
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
SUPPLEMENT DATED AUGUST 10, 1998
TO
PROSPECTUS DATED APRIL 1, 1998
Effective August 10, 1998, American General Life Insurance Company is
changing the daily charge, described on page 8 of the prospectus, and the
preferred loan interest rate, described on page 19 of the prospectus, for both
Platinum Investor I and Platinum Investor II Policies. Either or both of these
changes may be of benefit to you. Certain other descriptions in the prospectus
are being reworded or added.
CHANGES WITH RESPECT TO DAILY CHARGE
AND PREFERRED LOAN INTEREST RATE
1. CHANGES WITH RESPECT TO THE DAILY CHARGE
ON PAGE 8, THE ENTIRE PARAGRAPH UNDER "DAILY CHARGE" IS DELETED IN ITS
ENTIRETY AND REPLACED WITH THE FOLLOWING:
Daily charge. We make a daily deduction at an annual effective rate of
.75% of your accumulation value that is then being invested in any of the
investment options (other than our declared fixed interest option). After a
Policy has been in effect for 10 years, we will reduce the rate of the
charge to a maximum of .50%, and after 20 years, we will further reduce the
charge to a maximum of .25%. The daily deduction charges, including the
current charge of .75%, are the maximums we may charge; we may charge less,
but we can never charge more.
ON PAGE 14, THE FIFTH PARAGRAPH, WHICH BEGINS WITH "THE PLANNED REDUCTION
IN THE CURRENT DAILY CHARGE BY .25%..." IS DELETED IN ITS ENTIRETY.
2. CHANGE WITH RESPECT TO PREFERRED LOAN INTEREST RATE
ON PAGE 19, THE FOURTH SENTENCE UNDER "PREFERRED LOAN INTEREST RATE" IS
DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
We have full discretion to vary the preferred rate, provided that it
will always be greater than the rate we are then crediting in connection
with regular Policy loans, and will never be less than an effective annual
rate of 4.5%.
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OTHER CHANGES
3. CHANGES WITH RESPECT TO ANNUAL EXPENSES
ON PAGE 11, ADD AN ADDITIONAL FOOTNOTE (2) REFERENCE TO THE COLUMN TITLED
"FUND MANAGEMENT FEES."
ALSO ON PAGE 11, FOR THE MORGAN STANLEY UNIVERSAL FUNDS, INC. PORTFOLIOS,
THE EQUITY GROWTH PORTFOLIO'S FUND MANAGEMENT FEES, OTHER FUND OPERATING
EXPENSES (AFTER EXPENSE REIMBURSEMENT), AND THE TOTAL FUND OPERATING EXPENSES
ARE CHANGED TO 0.00%, 0.85%, AND 0.85%, RESPECTIVELY. THE HIGH YIELD PORTFOLIO'S
FUND MANAGEMENT FEES, OTHER FUND OPERATING EXPENSES (AFTER EXPENSE
REIMBURSEMENT), AND THE TOTAL FUND OPERATING EXPENSES ARE CHANGED TO 0.00%,
0.80%, AND 0.80%, RESPECTIVELY.
ON PAGE 12, FOOTNOTE (2) IS DELETED IN ITS ENTIRETY AND REPLACED WITH THE
FOLLOWING:
(2) If certain voluntary expense reimbursements from the investment
adviser were terminated, fund management fees, other fund operating
expenses, and total fund operating expenses for the Morgan Stanley
Equity Growth Portfolio would have been 0.55%, 1.50%, and 2.05%,
respectively; for the Morgan Stanley High Yield Portfolio, such fees
and expenses would have been 0.50%, 1.18%, and 1.68%, respectively;
for the Van Kampen American Capital Strategic Stock Portfolio, other
expenses would have been 2.09%.
4. NEW PROVISION WITH RESPECT TO POLICY EXCHANGES
ON PAGE 18, IMMEDIATELY FOLLOWING THE SECOND PARAGRAPH OF "PARTIAL
SURRENDER," ADD THE FOLLOWING NEW PROVISION:
Exchange of policy in certain states. Certain states require that a
Policy owner be given the right to exchange the Policy for a fixed benefit
life insurance policy, within either 18 or 24 months from the date of
issue. This right is subject to various conditions imposed by the states
and us. In such states, this right has been more fully described in your
Policy or related endorsements to comply with the applicable state
requirements.
5. CHANGE WITH RESPECT TO MODIFIED ENDOWMENT CONTRACTS
ON PAGE 30, THE LAST SENTENCE OF THE SECOND PARAGRAPH UNDER "TESTING FOR
MODIFIED ENDOWMENT CONTRACT STATUS" IS DELETED IN ITS ENTIRETY AND REPLACED WITH
THE FOLLOWING:
A material change for these purposes could occur as a result of a
change in death benefit option or the selection of additional rider
benefits. A material change
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will occur as a result of an increase in your Policy's specified amount of
coverage, and certain other changes.
6. CHANGE WITH RESPECT TO VOTING PRIVILEGES
ON PAGE 34, THE ENTIRE SECTION UNDER "VOTING PRIVILEGES" IS DELETED IN ITS
ENTIRETY AND REPLACED WITH THE FOLLOWING:
We are the legal owner of the Funds' shares held in Separate Account
VL-R. However, you may be asked to instruct us how to vote the Fund shares
held in the various Mutual Funds and attributable to your Policy at
meetings of shareholders of the Funds. The number of votes for which you
may give directions will be determined as of the record date for the
meeting. The number of votes that you may direct with respect to a
particular Fund is equal to (a) your accumulation value invested in that
Fund divided by (b) the net asset value of one share of that Fund.
Fractional votes will be recognized.
We will vote all shares of each Fund that we hold of record, including
any shares we own on our own behalf, in the same proportions as those
shares for which we have received instructions from owners participating in
that Fund through Separate Account VL-R.
If you are asked to give us voting instructions, we will send you the
proxy material and a form for providing such instructions. Should we
determine that we are no longer required to send the owner such materials,
we will vote the shares as we determine in our sole discretion.
In certain cases, we may disregard instructions relating to changes in
a Fund's investment manager or its investment policies. We will advise you
if we do and detail the reasons in our next report to Policy owners. AGL
reserves the right to modify these procedures in any manner consistent with
applicable legal requirements and interpretations as in effect from time to
time.
7. CHANGE WITH RESPECT TO PAYMENT OF POLICY PROCEEDS
ON PAGE 41, THE PARAGRAPH UNDER "DELAY OF SEPARATE ACCOUNT PROCEEDS" IS
DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
Delay of separate account proceeds. We may suspend the calculation and
payment of the Policy's cash surrender value in the following
circumstances: (1) if there is a failure in any of the means normally
employed in ascertaining the prices or values of investments; or (2) if
for any reason the prices or values of investments in Separate Account VL-R
cannot be reasonably ascertained; or (3) if circumstances exist as a
result of which it is not reasonably practicable to realize any of
Separate
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Account VL-R's investments or to determine fairly the net asset value of
Separate Account VL-R; or (4) if the remittance of funds involved in the
realization of, or in the payment for investments or payment due under this
Policy cannot be carried out without undue delay and at normal rates of
exchange; or (5) the SEC determines that a state of emergency exists; or
(6) an order of the SEC permits a delay for the protection of owners.
Transfers and allocations of accumulation value among the investment
options may also be postponed under these circumstances. Payments or
calculations which were due to have been made and which were deferred
following the suspension of the calculation of the cash surrender value
will be made within thirty (30) days following the lifting of the
suspension, and will be calculated based on the next values that we do
compute following termination of the suspension.
8. CHANGE OF NAME
THE NAME "AMERICAN GENERAL INDEPENDENT PRODUCER DIVISION," WHICH APPEARS
UNDER "LEGAL MATTERS" ON PAGE 46 AND UNDER "SERVICES AGREEMENT" ON PAGE 47 HAS
BEEN CHANGED TO "AMERICAN GENERAL LIFE COMPANIES" AND THE ACRONYM "AGIPD," WHICH
APPEARS ON PAGE 47, HAS BEEN CHANGED TO "AGLC."
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