AAL VARIABLE ANNUITY ACCOUNT II
N-4, 1999-02-05
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                                                  1933 Act Registration No. 333-
                                                  1940 Act Registration No. 811-

   As filed with the Securities and Exchange Commission on February 5, 1999.
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM N-4

                        REGISTRATION STATEMENT UNDER THE
                             SECURITIES ACT OF 1933

                           Pre-Effective Amendment No.
                          Post-effective Amendment No.

                                     and/or

                        REGISTRATION STATEMENT UNDER THE
                         INVESTMENT COMPANY ACT OF 1940

                                Amendment No. ___

                         AAL VARIABLE ANNUITY ACCOUNT II
               (Exact name of registrant as specified in charter)

                          Aid Association for Lutherans
                               (Name of Depositor)
                             4321 NORTH BALLARD ROAD
                         APPLETON, WISCONSIN 54919-0001
               (Address of Principal Executive Offices)(Zip Code)

       Registrant's Telephone Number, including Area Code: (920) 734-5721

                              WOODROW E. ENO, ESQ.
             Senior Vice President, Secretary and General Counsel of
                          AID ASSOCIATION FOR LUTHERANS
                             4321 NORTH BALLARD ROAD
                         APPLETON, WISCONSIN 54919-0001
                     (Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:  As soon as practicable  after the
effective date of the registration statement.

Title of Securities  Being  Registered:  Individual  Immediate  Variable Annuity
Contracts


<PAGE>



                           VARIABLE ANNUITY ACCOUNT II
                              CROSS REFERENCE SHEET


<TABLE>
<CAPTION>
<S>                                                           <C>   
Item No.- Part A                                              Prospectus Caption

Item 1 Cover Page.............................................Cover Page
Item 2 Definitions............................................Glossary
Item 3 Synopsis...............................................Summary
Item 4 Condensed Financial Information........................Condensed Financial Information
Item 5 General Description of Registrant,
       Depositor, and Portfolio Companies.....................AAL, The Variable Account
                                                              and the Fund
Item 6 Deductions and Expenses ...............................Transfers among Subaccounts 
                                                              and/or Fixed Account, Certificate 
                                                              Fees and Charges
Item 7 General Description of
       Variable Annuity Contracts.............................The Certificate, Transfers among 
                                                              Subaccounts and/or Fixed 
                                                              Account, General Information
                                                              about the Certificates
Item 8 Annuity Period.........................................Annuity Options, Fixed Account 
                                                              Annuity Payments, Variable        
                                                              Annuity Payments
Item 9 Death Benefit..........................................Death of the Owner and/or
                                                              Annuitant
Item 10 Purchases and Contract Value..........................Application and Purchase, 
                                                              Crediting and Allocating your   
                                                              Premium Payment, Distribution
                                                              Arrangements
Item 11 Redemptions...........................................Surrenders and Withdrawals, 
                                                              Free Look Period
Item 12 Taxes.................................................Federal Tax Status
Item 13 Legal Proceedings.....................................Legal Matters
Item 14 Table of Contents of the
        Statement of Additional Information...................Contents of the Statement of
                                                              Additional Information

                                                              Statement of Additional
Item No. - Part B                                             Information Caption

Item 15 Cover  Page...........................................Cover Page 
Item 16 Table of Contents.....................................Table of Contents 
Item 17 General Information and History.......................General Information 
Item 18 Services..............................................Not  Applicable  
Item 19 Purchase  of  Securities  Being  Offered..............Not  Applicable  
Item 20 Underwriters..........................................Principal  Underwriter
Item 21 Calculation of Performance Data.......................Performance Information  
Item 22 Annuity  Payments.....................................Not Applicable                  
Item 23 Financial Statements..................................Financial Statements
</TABLE>

PART C
Information  required  to be  set  forth  in  Part  C is  set  forth  under  the
appropriate item, so Numbered in Part C of the Registration Statement.

<PAGE>



                         AAL VARIABLE ANNUITY ACCOUNT II
                                   PROSPECTUS
                                  July 1, 1999
                                     for the
                            SINGLE PREMIUM IMMEDIATE
                          VARIABLE ANNUITY CERTIFICATES

This  Prospectus  describes  the immediate  variable  annuity  certificate  (the
Certificate)  Aid Association for Lutherans (AAL, we, us, our) offers.  We are a
fraternal benefit society organized under the laws of the State of Wisconsin. We
offer the  Certificates to people (you, your) who are eligible for membership in
AAL as well as employees of AAL and its affiliates.

The Certificate  may be sold to or issued in connection  with retirement  plans,
including  plans that qualify for special federal income tax treatment under the
Internal Revenue Code.

You may allocate  Premiums and transfer  your  investment  to one or more of the
seven  Subaccounts of AAL Variable Annuity Account II or the Fixed Account.  The
assets of each Subaccount are invested  solely in a  corresponding  Portfolio of
AAL Variable Product Series Fund, Inc. (the "Fund").

Under  the  Certificate,  we make  periodic  Annuity  Payments  to you (or other
designated  Payee). The dollar amount of each Annuity Payment may vary according
to  the  investment   performance  of  the  portfolios  in  which  the  selected
Subaccounts invest and the interest we credit under the Fixed Account.  You bear
the investment risk of amounts invested in the Variable Account.

This Prospectus sets forth concisely the information that you should know before
purchasing a Certificate,  and it should be read and kept for future  reference.
We have filed a  Statement  of  Additional  Information,  bearing the same date,
which contains further information,  with the Securities and Exchange Commission
and incorporate by reference the Statement of Additional  Information  into this
Prospectus.  The  Securities  and  Exchange  Commission  maintains  a  Web  site
(http://www.sec.gov)  that  contains the  Statement of  Additional  Information,
material  incorporated by reference and other information  regarding registrants
that file electronically with the Securities and Exchange Commission.  A copy of
the  Statement  of  Additional  Information  may be obtained  without  charge by
calling (800) 225-5225,  or by writing AAL at its principal office at 4321 North
Ballard  Road,  Appleton,  Wisconsin  54919-0001.  A Table of  Contents  for the
Statement of Additional Information appears in this Prospectus on page --.

This  Prospectus is not valid unless given with a current  prospectus of the AAL
Variable Product Series Fund, Inc.

These  Securities  have not been approved or  disapproved  by the Securities and
Exchange Commission, nor has the Commission passed upon the accuracy or adequacy
of this prospectus. Any representation to the contrary is a criminal offense.

You should read this prospectus carefully and keep it for future reference.

This  prospectus  does not constitute an offering in any  jurisdiction  in which
such offering may not lawfully be made. You should rely only on the  information
contained  in  this  document  or  that we have  referred  you to.  We have  not
authorized anyone to provide you with information that is different.


<PAGE>



                                TABLE OF CONTENTS


GLOSSARY.......................................................................

SUMMARY........................................................................

FEE AND EXPENSE TABLES.........................................................

CONDENSED FINANCIAL INFORMATION................................................

PERFORMANCE INFORMATION........................................................

AAL, THE VARIABLE ACCOUNT AND THE FUND ........................................
         AAL...................................................................
         The Variable Account..................................................
         The Fixed Account.....................................................
         The Fund..............................................................

THE CERTIFICATE................................................................
         Application and Purchase..............................................
         Crediting and Allocating Your Premium Payment.........................
         Free Look Period......................................................
         Owners, Payees and Annuitants.........................................
         Adult and Juvenile Certificates.......................................
         Beneficiaries.........................................................
         Assignments of Ownership..............................................
         Selecting an Annuity Payment Option...................................

ANNUITY OPTIONS................................................................
         Fixed Period Income...................................................
         Life Income and Guaranteed Payment Period.............................
         Joint and Survivor Life Income with Guaranteed Payment Period.........
         Annuity Payment Dates
         ......................................................................

FIXED ACCOUNT ANNUITY PAYMENTS.................................................

VARIABLE ANNUITY PAYMENTS......................................................
         First Variable Annuity Payment........................................
         Subsequent Variable Annuity Payments..................................
         Subaccount Investment Factor..........................................
         Assumed Investment Return.............................................

TRANSFERS AMONG SUBACCOUNTS AND/OR FIXED ACCOUNT ....................
         Telephone Transfer Requests...........................................

SURRENDERS AND WITHDRAWALS.....................................................

DEATH OF THE OWNER AND/OR ANNUITANT............................................

CERTIFICATE FEES AND CHARGES...................................................
         Sales Charge..........................................................
         Premium Tax Charge....................................................
         Transfer Charge ......................................................
         Mortality and Expense Risk Charge.....................................
         Miscellaneous Taxes ..................................................

GENERAL INFORMATION ABOUT THE CERTIFICATES....................................
         The Entire Contract...................................................
         Voting Rights.........................................................
         Surplus Refunds.......................................................
         Reports to Owners.....................................................
         Date of Receipt.......................................................
         Payment by Check......................................................
         Postponement of Payments..............................................
         Certificate Inquiries.................................................

FEDERAL TAX STATUS.............................................................
         Variable Account Tax Status...........................................
         Diversification Requirements..........................................
         Taxation of Annuities in General......................................
         Certificates Held by Natural Persons..................................
         Distributions.........................................................
         Distributions from Qualified Plans....................................
         Penalty Tax on Premature Distributions................................
         Federal Income Tax Withholding........................................
         Death Proceeds........................................................
         Additional Tax Considerations.........................................
         Multiple Certificates.................................................
         Tax Free Exchanges (1035 Exchanges)...................................
         Transfers among Subaccounts...........................................
         Qualified Plans.......................................................
         Tax-Sheltered Annuities...............................................
         H.R. 10 (Keogh) Plans.................................................
         Corporate Pension and Profit Sharing Plans............................
         Traditional Individual Retirement Annuity (Traditional IRAs)..........
         Simplified Employee Pension Plans (SEP-IRAs)..........................
         Roth Individual Retirement Annuity (Roth IRA).........................
         Rollover into an IRA..................................................
         Deferred Compensation Plans...........................................
         Other Tax Considerations..............................................

OTHER INFORMATION..............................................................
         Rights Reserved by AAL................................................
         Maintenance of Solvency...............................................
         Distribution Arrangements.............................................
         Year 2000 Disclosure..................................................
         Legal Matters.........................................................
         Financial Statements..................................................


<PAGE>




GLOSSARY

AAL, we, us, our: Aid  Association  for Lutherans,  a fraternal  benefit society
owned by and operated for its members.

Annuitant: The person on whose life or life expectancy the Certificate is based.

Annuity Payment: One of a series of periodic payments.

Annuity  Payment  Date:  The date of the  month on which  you  elect to  receive
Annuity Payments.

Annuity Payment Period: The period during which Annuity Payments are made.

Annuity Unit: The accounting unit of measurement used to calculate the amount of
the annuity Payment.

Annuity Unit Value:  The value of an Annuity  Unit for a Subaccount  for a given
Valuation Period.

Assumed Investment Return: The investment return upon which the variable Annuity
Payments are based.

Beneficiary:  The person who you have chosen to receive the Death  Proceeds upon
the Annuitant's death.

Certificate:  The  contract  between  you and us  providing  the single  premium
immediate variable annuity.

Certificate  Anniversary:  The same date in each year as the  Certificate  Issue
Date.

Certificate Year: A period beginning on a Certificate  Anniversary and ending on
the day immediately preceding the next Certificate Anniversary.

Code: The Internal Revenue Code of 1986, as amended.

Commuted  Value:  The  present  value  of  future  payments  for  the  remaining
guaranteed  payment  period.  The interest  rate used to discount the  remaining
payments will be equal to the maximum valuation interest rate for single premium
immediate  annuities,  as prescribed by the standard  valuation law for the year
the Certificate is issued, plus 2%.

Death Benefit or Death Proceeds:  Upon the death of all annuitant(s)  within the
guaranteed  payment  period,  the  beneficiary  can elect to continue  receiving
payments for the remaining  guaranteed  payment period,  or receive the commuted
value of those payments.

Fixed  Account:  Part of the general  account of AAL. That includes all of AAL's
assets other than those in any separate account of AAL.

Free  Look  Period:  The  period  of  time  during  which  you  may  cancel  the
Certificate.

Fund: AAL Variable Product Series Fund, Inc.

Home Office: Our principal  executive office located at 4321 North Ballard Road,
Appleton, Wisconsin,  54919-0001. The toll-free number is 800-225-5225,  locally
734-5721.

Issue Date: The effective date of the  Certificate,  generally the date on which
we apply your Premium.

Member:  Generally, you must be Lutheran,  profess to be Lutheran or be a spouse
or child of such person to be eligible for membership.  You apply for membership
by completing a membership  application  at the time you complete an application
for the AAL Single  Premium  Immediate  Variable  Annuity or other AAL insurance
product. Associate Members do not have to buy an insurance product but the other
requirements apply.

Net Asset Value: Each Portfolio's  share's value at the close of regular trading
on the New York Stock Exchange (currently 4:00 p.m. Eastern Time).

Owner, you, your, yours: The person or entity who owns the Certificate.

Payee: The person you designate to receive payments under the Certificate.

Portfolio:  One of a  series  of the Fund  currently  available  for  investment
through a corresponding Subaccount.

Proof of Death: A certified copy of the death  certificate or a certified decree
of a court of  competent  jurisdiction  as to the  finding of death or any other
proof satisfactory to AAL.

Premium: The payment you invest in the Certificate.

Qualified Plan: A retirement  plan which receives  favorable tax treatment under
Section 401, 403(b), 408 or 408A of the Code.

Service Center:  The AAL Variable  Products Service Center located at 4321 North
Ballard Road, Appleton, Wisconsin, 54919-0001. The toll-free telephone number is
800-225-5225, locally 734-5721.

Subaccount:  A division of the  Variable  Account that  invests  exclusively  in
shares of a single portfolio of the Fund.

Valuation  Date:  Any  date we are  open for  business  and the New  York  Stock
Exchange is open for regular trading.

Valuation  Period:  The period of time from the end of one Valuation Date to the
end of the next Valuation Date.

Variable  Account:  AAL Variable Annuity Account II, which is a separate account
of AAL.

Written  Request:  A written request or notice signed by the Owner,  received in
good order by AAL at its Service Center and  satisfactory in form and content to
AAL.

SUMMARY

This summary only gives you a brief overview of the more significant  aspects of
the  Certificate.  Please  refer to the  remainder of this  Prospectus  for more
detailed  information.  The  Certificate  along with any riders or  endorsements
constitute the entire  agreement  between you and us. Please retain them as part
of your permanent records.

The Certificate

The Certificate is an individual single premium immediate  variable annuity that
allows you to receive  periodic  payments  whose amounts are adjusted up or down
according to the performance of various underlying Subaccounts you select.

Purchase of the Certificate

You may purchase the Certificate for a minimum initial premium of $5000.

Investment Options

The  Certificate  offers a choice  of seven  variable  investment  options.  The
Certificate  also offers a Fixed Account  option under which we pay a fixed rate
of interest.

Each  variable  investment  option  or  Subaccount  invests  in a  corresponding
Portfolio of the Fund. The Portfolios include:

o AAL Variable  Product  Money Market  Portfolio o AAL  Variable  Product  Small
Company  Stock  Portfolio o AAL Variable  Product Bond  Portfolio o AAL Variable
Product  International Stock Portfolio o AAL Variable Product Balanced Portfolio
o AAL Variable  Product High Yield Bond  Portfolio o AAL Variable  Product Large
Company Stock Portfolio

Charges and Deductions

There are other  indirect  charges that occur on the Variable  Account level and
the Fund level.  If you invest in a Variable  Account  Option,  you will incur a
mortality and expense risk charge  computed at an aggregate  annualized  rate of
1.25% on the average  daily net asset  value of the  Variable  Account.  A daily
charge based on a percentage of each  Portfolio's  average daily net asset value
is payable by each  Portfolio  to its  investment  adviser.  In  addition to the
investment  advisory fees, each Portfolio  incurs other operating  expenses that
may vary. See the accompanying  Fund Prospectus for more information  concerning
the investment advisory fee.

Free Look Period

You may cancel your  Certificate  within 10 days starting on the day you receive
it. This 10-day period is called the free look period.  Some states require that
we provide you a longer free look period. In some states we restrict the initial
premium  allocation to the AAL Variable Product Money Market  Subaccount  during
the free look period.  For more  information  conerning our  procedures see Free
Look Period, page --.

Surrenders

Unless your  Certificate is  irrevocable,  you may surrender the Certificate for
its commuted  value.  Proceeds  paid to you may be subject to taxes  including a
penalty tax for taking a distribution before age 59 1/2.

Transfers

You may transfer all or a part of your Certificate's value among the Subaccounts
or from the Subaccounts to the Fixed Account subject to certain limitations.  We
do not allow transfers from the Fixed Account.  Certain other restrictions apply
to  transfers.  After  the  first  two  transfers  from  the  Subaccounts  in  a
Certificate Year, we will impose a $25 transfer charge.

Annuity Payment Amount

We determine the amount of your Annuity  Payment based upon your Premium and the
investment allocation(s) that you make.

Federal Tax Treatment

All or a portion of every  distribution  or Annuity  Payment  will  generally be
taxable as ordinary income.  The taxable portion of most  distributions  will be
subject to  withholding  unless  the Payee  elects  otherwise.  There may be tax
penalties if you take a  distribution  before  reaching age 59 1/2.  Current tax
laws may change at any time.

                             FEE AND EXPENSE TABLES

Certificate Owner Transaction Expense(s)

Sales Charge Imposed on Premium Payment                       None
Contingent Deferred Sales Charge                              None


Variable Account Annual Expenses

Mortality and Expense Risk Charges                            1.25%
Administrative Charge                                         None

Total Variable Account Annual Expenses                        1.25%

AAL Variable Product Series Fund, Inc. Annual Expenses:
(as a percentage of average net assets of each Portfolio):

                                                              Total Annual Fund
                                            Other Expenses    Expenses After
                           Investment       After Expense     Expense
Portfolio                  Advisory Fees    Reimbursement     Reimbursement

Money Market               0.35%                 0%                  0.35%
Bond                       0.35                  0                   0.35
Balanced                   0.33                  0                   0.33
Large Company Stock        0.33                  0                   0.33
Small Company Stock        0.35                  0                   0.35
International Stock        0.80                  0                   0.80
High Yield Bond            0.40                  0                   0.40

The above  tables  are  intended  to assist you in  understanding  the costs and
expenses that you will bear  directly or indirectly  and reflect the expenses of
the  Variable  Account  and the Fund.  For a more  complete  description  of the
various  costs and expenses,  see the  Prospectus  for the AAL Variable  Product
Series Fund, Inc. that accompanies this Prospectus.


Examples

The following examples  illustrate the expenses incurred on a $10,000 investment
and a 5% return on assets:

1 year
3 years

Note:  The example should not be considered a  representation  of past or future
expenses for the Variable  Account or for any portfolio.  Actual expenses may be
greater or less than those shown above. Similarly,  the 5% annual rate of return
assumed in the  example is not an  estimate or  guarantee  of future  investment
performance.

Notes to Fee and Expense Tables and Example

1.       The Certificates are currently not subject to state premium taxes.

2.   You can make two free  transfers from the  Subaccounts in each  Certificate
     Year.  We will  charge  a $25 fee for  each  subsequent  transfer.  See the
     Transfers  Among  Subaccounts  and/or  the Fixed  Account  section  in this
     prospectus  for more  information  on this charge and the  restrictions  on
     transfers from the Fixed Account.

3.   We have  agreed to pay on behalf of the Fund or to  reimburse  the Fund for
     all expenses in excess of 0.33% for the Balanced  and Large  Company  Stock
     Portfolios,  0.35% for the Money  Market,  Bond,  and Small  Company  Stock
     Portfolios,  0.80% for the International  Stock Portfolio and 0.40% for the
     High  Yield  Bond  Portfolio.  We can reduce or  terminate  this  voluntary
     reimbursement  upon 30-days' written notice to the Fund. Absent the expense
     reimbursement, the total Portfolio expenses would have been:

                                 Actual Expenses

          Portfolio


         Money Market Portfolio                               0.44%
         Bond Portfolio                                       0.52
         Balanced Portfolio                                   0.39
         Large Company Stock Portfolio                        0.38
         Small Company Stock Portfolio                        0.43
         High Yield Bond Portfolio*                           0.54
         International Stock Portfolio*                       1.30

         *March 1, 1998 inception date.

                         CONDENSED FINANCIAL INFORMATION

This  Prospectus  does  not  include  Condensed  Financial  Information  showing
accumulation unit values because the Certificate provides only immediate annuity
benefits.


<PAGE>




                             PERFORMANCE INFORMATION

From time to time, the Variable Account may include in advertisements  and other
sales materials  several types of performance  information for the  Subaccounts.
This information may include "average annual total return." The Bond Subaccount,
the Balanced  Subaccount,  and the High Yield Bond Subaccount may also advertise
"yield."  The Money  Market  Subaccount  may  advertise  "yield" and  "effective
yield."

The performance  information that we may present is not an estimate or guarantee
of future  investment  performance and does not represent the actual  investment
experience of amounts  invested by a particular  Owner.  Additional  information
concerning a  Subaccount's  performance  appears in the  Statement of Additional
Information.

Total Return and Yield  Quotations.  Average annual total return figures measure
the net income of a Subaccount and any realized or unrealized gains or losses of
the underlying  investments in the Subaccount,  over the period stated.  Average
annual total return figures are annualized and, therefore, represent the average
annual  percentage change in the value of an investment in a Subaccount over the
period stated.

Yield is a  measure  of the net  dividend  and  interest  income  earned  over a
specific  one-month  or 30-day  period  (seven-day  period for the Money  Market
Subaccount),  expressed as a percentage of the value of the Subaccount's Annuity
Units.  Yield is an  annualized  figure,  which  means  that we assume  that the
Subaccount  generates  the same level of net income  over a one-year  period and
compound that income on a semi-annual  basis.  We calculate the effective  yield
for the Money  Market  Subaccount  similarly,  but include the  increase  due to
assumed  compounding.  The Money  Market  Subaccount's  effective  yield will be
slightly higher than its yield due to this compounding effect.

Expense  and  performance  information  for the  Portfolios  may be  compared in
advertising, sales literature and other communications to that of other variable
products tracked by Lipper Analytical Services, Inc. (Lipper),  Variable Annuity
Research  Data  Service  (VARDS),  Morningstar,  Inc.  (Morningstar)  and  other
services.  In addition,  we may compare the performance of the Portfolios to the
S&P 500 Index,  the S&P SmallCap 600 Index,  the Wilshire  Small Cap Index,  the
Lehman Bond Index,  the Dow Jones Industrial  Average,  Merrill Lynch High Yield
Master Index and other widely recognized  indices.  Unmanaged indices assume the
reinvestment  of  dividends,  if any, but do not reflect any  deduction for fund
expenses.  We periodically report performance ratings in financial  publications
such as Forbes,  Barron's,  Fortune,  Money Magazine,  Business Week,  Financial
Planning, The New York Times and The Wall Street Journal.

We may also  report  other  information  concerning  the effect of  tax-deferred
compounding on a Subaccount's returns that may be illustrated by tables,  graphs
or charts. All income and capital gains derived from Subaccount  investments are
reinvested and lead to substantial  long-term  accumulation of assets,  provided
that the underlying Portfolio's investment experience is positive.

See the Fund  Prospectus  and  Statement of  Additional  Information  for a more
complete  description  of the methods used to calculate a Portfolio's  yield and
total return.

                          AAL, THE ACCOUNT AND THE FUND

AAL

AAL is a fraternal benefit society owned by and operated for its members.  AAL's
mission is to bring  Lutheran  people  together to pursue quality living through
financial  security,  volunteer  action and help for others.  AAL was founded in
1902  under  the  laws of the  State of  Wisconsin  as a  non-stock,  non-profit
corporation.  As of December 31, 1998, AAL has approximately 1.7 million members
and  is one of the  world's  largest  fraternal  benefit  society  in  terms  of
statutory  assets (over $18 billion) and life  insurance in force ($82 billion),
ranking it in the top two percent of all life  insurers in the United  States in
terms of ordinary life insurance in force. AAL is currently licensed to transact
life  insurance  business in all 50 states and the  District of Columbia  and is
offering the Certificates in all states except -------------.

The Variable Account

We established the Variable  Account as a separate account under the laws of the
State of Wisconsin on February 4, 1999. The Variable  Account is registered as a
unit  investment  trust with the  Securities and Exchange  Commission  (the SEC)
under the Investment  Company Act of 1940 (the 1940 Act).  The Variable  Account
meets the definition of a separate  account under the Federal  securities  laws.
The SEC does not supervise the management or investment practices or policies of
the Variable Account.

The Variable Account is divided into Subaccounts. Your Premium flows through the
Certificate  to either the Variable  Account or the Fixed  Account  according to
your  instructions.  From  the  Variable  Account,  the  premium  flows  to  the
Subaccounts in the amounts or percentages you allocate. In turn, the Subaccounts
invest  in  shares  of one of the  corresponding  Portfolios  of the  Fund.  The
Portfolios  and their  investment  objectives  are described  below.  We make no
assurance that the Portfolios will meet their investment objectives.

You bear all the  investment  risk for Premiums  allocated  to the  Subaccounts.
Annuity  Payments  and  Commuted  Value  will vary with the  performance  of the
Subaccounts.

Under  Wisconsin  law, the assets of the Variable  Account that are equal to the
reserves  and  other  contract  liabilities  of the  Variable  Account  are  not
chargeable with liabilities arising out of any other business we may conduct. We
will  maintain  an amount of assets in the  Variable  Account  that always has a
value  approximately  equal to or in excess of the  amount  of  Commuted  Values
allocated  to the  Variable  Account  under the  Certificates.  Income gains and
losses,  whether or not  realized,  are, in  accordance  with the  Certificates,
credited to or charged against the Variable  Account without regard to our other
income,  gains or losses.  Obligations  arising under the  Certificates  are our
obligations.

The Fixed Account

Amounts allocated to Fixed Account under the Certificate are part of our general
account  which  supports  our  annuity  and  insurance  obligations.  Because of
exemptive and exclusionary  provisions,  we have not registered interests in the
Fixed  Account  under the  Securities  Act of 1933 nor the Fixed  Account  as an
investment  company under the 1940 Act. The SEC has not reviewed the  disclosure
relating to the Fixed Account. However,  disclosures regarding the Fixed Account
may be  subject  to  certain  generally  applicable  provisions  of the  federal
securities  laws  relating to the accuracy and  completeness  of  statements  in
prospectuses.

You have no voting rights with respect to Fixed Account values.

The Fund

You  may  allocate  your  Premiums  to  one or  more  of  the  Subaccounts.  The
Subaccounts,  in turn, invest in shares of a corresponding  Portfolio of the AAL
Variable  Product  Series  Fund,  Inc.  (the  Fund).  The  Fund  is  a  Maryland
corporation  registered  with  the SEC  under  the  1940  Act as a  diversified,
open-end  investment  company commonly known as a mutual fund. This registration
does  not  involve  supervision  by  the  SEC of the  management  or  investment
practices or policies of the Fund.

The Fund currently offers its shares to three of our separate accounts:  the AAL
Variable  Annuity Account I and II , and the AAL Variable Life Account I as well
as retirement plans including the Aid Association for Lutherans Savings Plan. We
also purchase Fund shares directly.

We serve as investment  adviser to the Fund and are registered as such under the
Investment Advisers Act of 1940.

The Variable  Account will purchase and redeem shares from the Fund at Net Asset
Value  without any sales or  redemption  charge.  We will  redeem  shares to the
extent  necessary to collect  charges  under the  Certificates,  to make Annuity
Payments,  withdrawals or surrenders, to provide benefits under the Certificates
or to transfer assets from a Subaccount to another  Subaccount  and/or the Fixed
Account as you request.

We  automatically  reinvest any dividends or capital gain  distribution  amounts
that we receive on shares of the  Portfolios  held  under the  Certificates.  We
reinvest at the Portfolio's  net asset value on the date payable.  Dividends and
capital gain distribution  amounts will reduce the net asset value of each share
of the corresponding  Portfolio and increase the number of shares outstanding of
the Portfolio by an equivalent value. However,  these dividends and capital gain
distribution amounts do not change your Account Value.

The chart below  indicates the names of the Portfolios in which the  Subaccounts
invest, as well as the investment objectives, investment adviser and sub-adviser
for each Portfolio.

<TABLE>
<CAPTION>
- ---------------------------------- -------------------------------------        ---------------- --------------------------
<S>                                             <C>                                <C>                   <C>    
                                                Investment                         Investment            Investment
           Portfolio                            Objectives                         Adviser               Sub-Adviser
- ---------------------------------- -------------------------------------        ---------------- --------------------------
- ---------------------------------- -------------------------------------        ---------------- --------------------------

Money Market Portfolio             Seeks maximum current income and a                AAL                 Not Applicable
                                   constant  Net Asset  Value of $1.00 per share
                                   by  investing  in  high-quality,   short-term
                                   money market instruments.
- ---------------------------------- -------------------------------------        ---------------- --------------------------
- ---------------------------------- -------------------------------------        ---------------- --------------------------

Bond Portfolio                     Strives for investment results                    AAL                 Not Applicable
                                   similar to the Lehman Brothers Aggregate Bond
                                   Index by  investing  primarily  in bonds  and
                                   other debt securities included in the Index.
- ---------------------------------- -------------------------------------        ---------------- --------------------------
- ---------------------------------- -------------------------------------        ---------------- --------------------------

Balanced Portfolio                 Seeks capital growth and income by                AAL                 Not Applicable
                                   investing  in a mix of common  stocks,  bonds
                                   and money market instruments.  Securities are
                                   selected  consistent with the policies of the
                                   AAL  Variable  Product  Large  Company  Stock
                                   Portfolio,  Bond  Portfolio  and Money Market
                                   Portfolios.
- ---------------------------------- -------------------------------------        ---------------- --------------------------
- ---------------------------------- -------------------------------------        ---------------- --------------------------

Large                              Company   Stock    Portfolio    Strives   for
                                   investment  results  that                         AAL                 Not  Applicable
                                   approximate the performance of the Standard &
                                   Poor's 500  Composite  Stock  Price  Index by
                                   investing primarily in common stocks of the
                                   index.
- ---------------------------------- -------------------------------------        ---------------- --------------------------
- ---------------------------------- -------------------------------------        ---------------- --------------------------

Small                              Company   Stock    Portfolio    Strives   for
                                   investment  results  that                         AAL                 Not  Applicable
                                   approximate   the   performance  of  the  S&P
                                   SmallCap 600 Index by investing  primarily in
                                   common stocks of the
                                   Index.
- ---------------------------------- -------------------------------------        ---------------- --------------------------
- ---------------------------------- -------------------------------------        ---------------- --------------------------

International Stock Portfolio      Seeks long-term capital growth by                 AAL                 Oechsle International
                                   investing primarily in foreign                                        Advisors, LLC
                                   stocks.
- ---------------------------------- -------------------------------------        ---------------- --------------------------
- ---------------------------------- -------------------------------------        ---------------- --------------------------

High Yield Bond Portfolio          Seeks high current income and                     AAL                 AAL Capital Management
                                   secondarily capital growth by                                         Corporation
                                   investing primarily in high risk,
                                   high yield bonds commonly referred
                                   to as "junk bonds."
- ---------------------------------- -------------------------------------        ---------------- --------------------------
</TABLE>

Before  selecting any Subaccount,  you should  carefully read the prospectus for
the Fund. The prospectus provides more complete information about the Portfolios
of the Fund in which the Subaccounts invest, including investment objectives and
policies, charges and expenses.

High  yielding  fixed-income  securities,  such as those in which the High Yield
Bond Portfolio invests,  are subject to greater market  fluctuations and risk of
loss of income and principal than  investments  in lower  yielding  fixed-income
securities. You should carefully read about this Portfolio in the prospectus and
related  statement of  additional  information  for the Fund and  consider  your
ability  to  assume  the  risks of making  an  investment  in the  corresponding
Subaccount.

                                 THE CERTIFICATE

Application and Purchase

The Certificate is an individual single premium immediate  variable annuity.  We
offer  Certificates  to members,  people who are  eligible  for  membership  and
employees  of  AAL  who  reside  in  Wisconsin   (including   employees  of  our
subsidiaries and affiliates

We may issue the Certificate as one of the following:

- -    a Non-qualified Annuity;

- -    an annuity for a Qualified Retirement Plan;

- -    a Traditional Individual Retirement Annuity (Traditional IRA);

- -    an annuity for a Simplified Employee Pension Plan (SEP-IRA);

- -    a Roth Individual Retirement Annuity (Roth IRA); or

- -    a Tax Sheltered Annuity (TSA).

You may purchase a Certificate by completing and submitting an application.  The
Annuitant  must be younger than 100 years as of the Issue Date.  Some states may
have additional limitations.

You may apply for a Certificate by completing a traditional paper application or
an electronic  application  available  through your AAL  Representative.  If you
submit an electronic application,  you will be asked to certify the accuracy and
completeness  of the  information  in your  electronic  application  and  sign a
electronic  signature pad. The data will then be transmitted  electronically  to
us. We will attach a paper copy of your  application to your  Certificate if the
Certificate can be issued.

You must give us or  arrange to have sent to us a single  Premium  Payment of at
least  $5,000  along  with  your  application.  You can not make any  additional
Premium  Payments  unless we agree.  Single  premium  payments  over  $1,000,000
require our prior written approval.

Certain  provisions of the Certificates may vary from state to state in order to
conform with the law of the state in which you reside. This Prospectus describes
generally  applicable  provisions.  You should refer to your Certificate for any
variations required by state law.

Crediting and Allocating Your Premium Payment

You may allocate your Premium to any  Subaccount of the Variable  Account and/or
the Fixed Account.  Your allocation must be in whole  percentages and total 100%
of the Premium.  You may not  allocate  less than $50 to any  Subaccount  or the
Fixed  Account.  We will  allocate  your Premium  according  to your  allocation
instructions on your  application.  If you do not designate  Premium  allocation
percentages, we will treat your application as not in good order.

If your  application  is in good  order,  we will  allocate  the Premium to your
chosen  Subaccount(s)  and/or Fixed Account (or in certain states,  to the Money
Market  Subaccount,  as  discussed  below)  within  two days of  receipt  of the
completed  application  and Premium.  If we determine the  application is not in
good order,  we will attempt to complete the  application  within five  business
days.  If the  application  is not complete at the end of this  period,  we will
inform  you of the reason for the delay and that the  Premium  will be  returned
immediately unless you specifically consent to our keeping the Premium until the
application is complete.

Once each day that we are open for  business,  we determine  the Net Asset Value
(NAV) per share of the underlying  Portfolios at the close of regular trading on
the New York Stock Exchange, currently 4:00 p.m. Eastern Time. We also determine
the Annuity Unit Value (AUV) of each  Subaccount  at the end of each day also at
4:00 p.m. Eastern Time. We do not determine the NAV on holidays  observed by the
Exchange or the AUV on holidays observed by AAL.

The Exchange is regularly closed on Saturdays and Sundays and on New Year's Day,
Martin  Luther King Day,  the third Monday in  February,  Good Friday,  the last
Monday in May, Independence Day, Labor Day,  Thanksgiving and Christmas.  If one
of these holidays falls on a Saturday or Sunday,  the Exchange will be closed on
the preceding  Friday or the following  Monday,  respectively.  During 1999, AAL
will be closed for  business on the Friday  following  Thanksgiving  and the day
before  Christmas.  On those days,  we will not purchase or redeem any shares of
the Fund notwithstanding the fact that the New York Stock Exchange will be open.
We will not  purchase  or redeem any  Annuity  Units on any days that AAL is not
open for business.

Free Look Period

Generally, you may return your Certificate for cancellation within 10 days after
you initially receive it. However some states require a longer free look period.
Please review your Certificate to determine your free look period.

In order to return your  Certificate,  you must deliver or mail the  Certificate
along  with a  Written  Request  to your AAL  Representative  or to our  Service
Center.  Upon  cancellation,  the Certificate will be void as of the Certificate
Issue  Date  and you  will  be  entitled  to  receive  an  amount  equal  to the
Certificate's  value as of the date you  notify us or the date we  receive  your
cancellation  request in our Service  Center,  whichever  is  earlier.  You will
receive  your  money  within  seven  days  after we  receive  your  request  for
cancellation.  However,  if your  Certificate is an IRA and you decide to cancel
it,  within  seven days from the receipt of your IRA  disclosure  we will refund
your Premium less any payments made.

Certain  states  require a full  refund of  Premiums  paid if a  Certificate  is
returned during the free look period.  In these  situations we reserve the right
to allocate  all  Premiums to the Money  Market  Subaccount  until the free look
period expires plus an additional  five-day  period to allow for your receipt of
the Certificate by mail.  After this period,  we will allocate the Annuity Units
Value of your Certificate to the Subaccount(s) and/or Fixed Account according to
your original  instructions.  In all such states,  we will refund the greater of
Premiums paid or the Accumulated Value less any payments made.

Owners, Payees and Annuitants

You, as Owner,  are  typically  the  recipient  of all  distributions  under the
Certificate.  Unless the Owner is an entity, the Owner is also the Annuitant. As
Owner, you can name Beneficiaries,  and transfer allocations between Subaccounts
and the  Fixed  Account.  You will  receive  all  Annuity  Payments  during  the
Annuitant's  lifetime,  unless  you  designate  another  person or entity as the
Payee. Keep in mind that if you designate another person or entity as Payee, you
may still be responsible for any income tax payable on the payments.

In the event the  Annuitant(s)  dies during the Guaranteed  Payment Period,  the
Death Proceeds will be payable to the named Beneficiary.  We use the Annuitant's
life to determine the amount and duration of any Annuity  Payments.  In the case
of a qualified  retirement  plan, the Annuitant is the plan  participant and the
Owner is the retirement plan.

Under certain  circumstances  other entities,  such as trusts,  may purchase AAL
products but are not eligible for membership.

Adult and Juvenile Certificates

We issue Adult  Certificates  to applicants  age 16 or older who become  benefit
members of AAL. We issue Juvenile  Certificates  when the proposed  Annuitant is
younger than age 16, but is otherwise eligible for benefit membership.

In the case of the Adult  Certificate,  the Annuitant must be 16 years of age or
older. Typically, the applicant of the Certificate is the Owner and Annuitant of
the Certificate.  While the Annuitant is alive, the Owner of the Certificate may
exercise every right and enjoy every benefit  provided in the  Certificate.  The
person who applies for the Certificate  becomes a benefit member of AAL upon our
approval of the membership application.

For the Juvenile Certificate,  a Juvenile is named as the Annuitant and Owner of
the  Certificate.  However,  because of age,  the Juvenile  cannot  exercise the
rights of  ownership.  Therefore,  an adult must apply on behalf of the Juvenile
and  retain  control  over  the  Certificate.  The  adult  applicant  controller
exercises certain rights of ownership on behalf of the Juvenile Annuitant. These
rights are  described  in the  Certificate.  The adult  controller  may transfer
control  to  another  eligible  person,  but cannot  transfer  ownership  of the
Certificate.

Transfer  of  control  to the  Juvenile  Annuitant  will take place at the first
Certificate Anniversary Date following the earlier of:

- -    the Annuitant's 21st birthday; or

- -    the Annuitant's 16th birthday after the adult controller transfers control
     to the Annuitant in writing; or

- -    the death of the adult controller after the Annuitant's 16th birthday.

If the person who has control of the Certificate dies before the Annuitant gains
control,  control will be vested in an eligible person  according to our Bylaws.
If we determine  that it is best for the Annuitant,  we may transfer  control of
the Certificate to some other eligible person according to our Bylaws.

The  Juvenile  Annuitant  will  become  a  benefit  member  of AAL on the  first
Certificate Anniversary Date on or following the Juvenile's 16th birthday.

Beneficiaries

You may name one or more  Beneficiaries  to receive the Death  Proceeds  payable
under  the  Certificate,  if  any.  If no  Beneficiary  has  been  named  or the
Beneficiary  does not survive the Annuitant,  the Death Proceeds will be paid to
you, if living, otherwise to your estate. Our Bylaws list persons eligible to be
Beneficiaries.  You may designate beneficiaries as either first, second or third
class.  Unless  otherwise  specified,  we will distribute  Death Proceeds in the
following order to Beneficiaries:

- -    equally to the Beneficiaries in the first class.  If none are living, then;

- -    equally to the Beneficiaries in the second class. If none are living, then;

- -    equally to the Beneficiaries in the third class.

If a Beneficiary  dies within 15 days after the death of the Annuitant,  we will
consider  the  Beneficiary  to have died before the  Annuitant  for  purposes of
paying the Death Proceeds.

You may change Beneficiaries by sending a Written Request to our Service Center.
We will give you a special form to make this request. We must approve any change
in  Beneficiary.  Any such change is effective on the date you designate on your
Written  Request,  or the date we receive  your  Written  Request at our Service
Center  if no date  appears  on the  request.  A change in  Beneficiary  is only
effective if the request was mailed or  delivered  to us while the  Annuitant is
alive.  We are not liable for any payments made or actions taken by us before we
receive and approve changes in Beneficiary designations.

If you elect not to have a  Guaranteed  Payment  Period or all  Annuitants  live
beyond the Guaranteed Payment Period, no Death Proceeds will be payable.

Assignments of Ownership

The Certificate can not be sold, assigned,  discounted, or pledged as collateral
for a loan or as  surety  for  performance  of an  obligation  or for any  other
purpose.

                       SELECTING AN ANNUITY PAYMENT OPTION

The  Annuity  Payment  Option  specifies  the  type of  annuity  to be paid  and
determines how long the annuity will be paid, the frequency of payment,  and the
amount of the first Annuity Payment.  You must select the Annuity Payment Option
when applying for the  Certificate.  This election is irrevocable  once we issue
the Certificate.  You must also select the Subaccounts  and/or the Fixed Account
to which we will apply your Premium. Except as discussed in the Free Look Period
section, the Annuity Unit Value for each Subaccount selected as of the Valuation
Date when we receive your Premium,  will be used to calculate the first Variable
Annuity  Payment.  Your total Annuity  Payment will be the Fixed Account Annuity
Payment, if any, plus the Variable Account Annuity Payment.

You must also  elect at time of  application  whether  the  Certificate  and its
Annuity  Payments  will be either  irrevocable  or  revocable.  If you elect the
irrevocable  option, you cannot later change the Annuity Payments,  or receive a
withdrawal or surrender from the Certificate. If you elect the revocable option,
you can later change the Annuity Payments,  receive  withdrawals,  and surrender
the Certificate.  If you elect the revocable option, you can later change to the
irrevocable option. If you elect the irrevocable option, you cannot later change
to the revocable option once we issue the Certificate.

                             ANNUITY PAYMENT OPTIONS

Fixed Period Income

We make Annuity  Payments at regular  intervals  for a fixed number of payments,
not to exceed the greater of 30 years or the  Annuitant's  life  expectancy.  We
call this payment  period the  "Guaranteed  Payment  Period".  At the end of the
Guaranteed  Payment Period, all of the Annuity Payments will have been paid, the
Commuted  Value  of the  Certificate  will be  zero,  and the  Certificate  will
terminate.

Life Income with Guaranteed Payment Period

We make Annuity Payments at regular intervals for the lifetime of the Annuitant.
If the Annuitant dies during the  Guaranteed  Payment  Period,  we will continue
payments to the Beneficiary to the end of the Guaranteed Payment Period. You may
choose a  Guaranteed  Payment  Period  of 0 to 30 years at the time we issue the
Certificate.  The  amount of the  payments  depends  upon the sex and age of the
Annuitant, at the time we issue the Certificate.

Joint and Survivor Life Income with Guaranteed Payment Period

We  make  Annuity  Payments  at  regular  intervals  for  the  lifetime  of both
Annuitants.  Upon the death of one of the Annuitants,  we will continue payments
for the lifetime of the surviving  Annuitant.  If both Annuitants die during the
Guaranteed  Payment Period,  we will continue payments to the Beneficiary to the
end of that period.  You may choose a Guaranteed Payment Period of 0 to 30 years
at the time of issue.  You may also  choose to have the Annuity  Payment  reduce
upon the death of the first  Annuitant to die. The Annuity Payment may reduce by
a factor of 1/2, 1/3, or 1/4. A higher  reduction amount will result in a higher
payment while both Annuitants are alive. The amount of the payments depends upon
the age and sex of the Annuitants at the time of issue.

Annuity Payment Dates

We compute and pay all Annuity  Payments  after the first Annuity  Payment as of
the Annuity  Payment Dates.  These dates are generally the same day of the month
as the Annuity  Start Date based on the Annuity  Payment  frequency  you select.
Annuity Payments may be made monthly, quarterly, semi-annually and annually. The
annual Annuity Payment may be divided into twelve (12) equal monthly payments.
One you select the Annuity Payment frequency, it may not be changed.

In the event that you do not select a payment  frequency,  Annuity Payments will
be made monthly.
                         FIXED ACCOUNT ANNUITY PAYMENTS

You may choose to  deposit  some or none of your  Premium  in the Fixed  Account
portion of the Certificate.

Premiums deposited in the Fixed Account will fund guaranteed  periodic payments.
We will  determine  the  guaranteed  Annuity  Payment  at the time we issue  the
certificate.  We may  pay  more  than  the  guaranteed  Annuity  Payment  if the
investment experience of the Fixed Account is more favorable than the guaranteed
interest rate shown in the Certificate. We may also pay more than the guaranteed
payment if our mortality experience or administration expenses are favorable. We
may change the amount of the Fixed Account Annuity Payment at any time, but will
not pay an amount lower than the guaranteed amount.

Premiums placed in the Fixed Account may not be transferred to the Subaccounts.

                            VARIABLE ANNUITY PAYMENTS

First Variable Annuity Payment

Variable  Annuity  Payments are periodic  payments we make,  the amount of which
varies  from  one  Annuity  Payment  Date to the next as a  function  of the net
investment performance of the Subaccounts you selected. The dollar amount of the
first Variable Annuity Payment depends on the Annuity Payment Option chosen, the
age of the Annuitant, the gender of the Annuitant (if applicable), the amount of
Premium  applied to  purchase  the  Variable  Annuity  Payments,  and an Assumed
Investment Return that you select.

The dollar value of the first Variable  Annuity  Payment is the sum of the first
Variable Annuity Payments attributable to each Subaccount.  The dollar amount of
the first total Annuity Payment is the sum of the first Variable Annuity Payment
and the Fixed Account Annuity Payment.

Annuity Units

The number of Annuity Units  attributable to a Subaccount is derived by dividing
the first  Variable  Annuity  Payment  attributable  to that  Subaccount  by the
Annuity Unit Value for that  Subaccount  for the Valuation  Period ending on the
Issue Date. The number of Annuity Units  attributable to each Subaccount under a
Certificate remains fixed unless:

- -    there is a transfer of Annuity Units between Subaccounts; or

- -    one of the Annuitant dies after the  Guaranteed  Payment Period had elapsed
     under the Joint and Survivor Life Income  Annuity  Payment Option for which
     you elected a reduction factor


Subsequent Variable Annuity Payments

We determine  the dollar  amount of each  subsequent  Variable  Annuity  Payment
attributable  to each  Subaccount by multiplying  the number of Annuity Units of
that  Subaccount by the Annuity Unit Value for that Subaccount for the Valuation
Period ending on the Annuity  Payment Date, or during which the Annuity  Payment
Date falls.  We aggregate  the  subsequent  Variable  Annuity  Payments for each
Subaccount to determine the Variable  Annuity  Payment.  When an Annuity Payment
Date would fall on a day that is not a Valuation Date, we calculate the Variable
Annuity Payment as of the Valuation Date  immediately  preceding what would have
been the Annuity Payment Date.

The Annuity Unit Value of each  Subaccount for any Valuation  Period is equal to
(a) multiplied by (b) multiplied by (c) where:

a)   is the Annuity Unit Value for the preceding Valuation Period; and

b)   is the Subaccount  Investment  Factor for the Valuation Period for which we
     calculate the Annuity Unit Value;

c)   is a daily discount  factor which adjusts the Annuity Unit Value to reflect
     the Assumed  Investment  Return.  This factor is  compounded to reflect the
     number of days in the Valuation Period.

Subaccount Investment Factor

The Subaccount Investment Factor for any Valuation Period is equal to:

1.   the Net Asset Value of the  corresponding  Fund Portfolio at the end of the
     Valuation Period;

2.   plus the amount of any dividend, capital gain or other distribution paid by
     the Portfolio if the "ex-dividend" date occurs during the Valuation Period;

3.   plus or minus any  cumulative  credit or charge for taxes reserved from the
     operation of the Portfolio;

4.   minus the dollar  amount of the mortality and expense risk charge we deduct
     each day in the Valuation Period; and

5.   divided by the Net Asset Value of the  corresponding  Fund Portfolio at the
     beginning of the Valuation Period.

Assumed Investment Return

The Annuity Unit Value will increase or decrease  from one Annuity  Payment Date
to the next in direct  proportion to the net investment return of the Subaccount
or Subaccounts supporting the Variable Annuity Payments,  less an adjustment for
the selected  Assumed  Investment  Return.  The purpose of the  adjustment is to
ensure the Annuity Unit Value only changes when the Subaccount Investment Factor
represents  a rate of return  greater  than or less than the Assumed  Investment
Return you selected.

The Certificate  permits you to select one of three Assumed Investment  Returns:
3%, 4% or 5%. A higher Assumed Investment Return will result in a higher initial
payment,  a more  slowly  rising  series  of  subsequent  payments  when  actual
investment  performance  (minus any deductions and expenses) exceeds the Assumed
Investment  Return,  and a more rapid drop in  subsequent  payments  when actual
investment  performance  (minus any  deductions  and  expenses) is less than the
Assumed Investment Return.

For  example,  if you  select  a 3%  Assumed  Investment  Return  and if the net
investment  return of the Subaccount  for an Annuity  Payment period is equal to
the pro-rated portion of the 3% Assumed  Investment Return, the Variable Annuity
Payment  attributable to that Subaccount for that period will equal the Variable
Annuity  Payment for the prior  period.  To the extent that such net  investment
return  exceeds an  annualized  rate of return of 3% for a payment  period,  the
Variable  Annuity  Payment  for that period  will be greater  than the  Variable
Annuity  Payment  for the prior  period and to the extent that such return for a
period falls short of an annualized rate of 3%, the Variable Annuity Payment for
that period will be less than the Variable Annuity Payment for the prior period.

              TRANSFERS AMONG SUBACCOUNTS AND/OR THE FIXED ACCOUNT

Except for certain  restrictions  mentioned  below, you may transfer the Annuity
Units of one or more  Subaccounts  to one or more other  Subaccounts  and/or the
Fixed Account. We will process requests for transfer that we receive before 3:00
p.m.  Central Time as of the close of business on that  Valuation  Date. We will
process  requests we receive  after that time as of the close of business on the
following Valuation Date.

To accomplish a transfer from a Subaccount,  we will redeem the Annuity Units in
that  Subaccount  and  reinvest  that  value  in  Annuity  Units  of  the  other
Subaccounts  and/or the Fixed  Account you  specified.  We impose the  following
restrictions on transfers:

- -    You may make two free  transfers in each  Certificate  Year.  After that we
     will charge you $25 for each  subsequent  transfer.  We deduct the transfer
     charge from your value in the Subaccount  from which the transfer was made.
     When you transfer from two or more  Subaccounts,  we apply the $25 transfer
     charge among those Subaccounts in proportion to the amounts you transfer.

- -    You may not transfer from the Fixed Account.

- -    We reserve the right to limit the number of transfers.

Telephone Transfer Requests

If we  receive  a  signed  Telephone  Transaction  Authorization  (found  on the
Certificate  Application and on the Variable Annuity Option Selection Form), you
may make  withdrawals  and  transfers  pursuant to your  telephone  instructions
("Telephone  Request").  We employ reasonable  security procedures to ensure the
authenticity of telephone instructions, including, among other things, requiring
identifying  information,   recording   conversations,   and  providing  written
confirmations   of   transactions.   Nevertheless,   we  will  honor   telephone
instructions from anyone who provides the correct  identifying  information.  We
may be liable for losses due to unauthorized or fraudulent  instructions only if
we fail to observe reasonable procedures.

If several people want to make Telephone  Requests at or about the same time, or
if our  recording  equipment  malfunctions,  we may  not be able  to  allow  any
Telephone  Requests  at that time.  If this  happens,  you must submit a Written
Request to our Service  Center.  If there is a  malfunction  with the  telephone
recording  system or the quality of the  recording  itself is poor,  we will not
process the transaction.

The phone  number for  telephone  transactions  is  1-800-225-5225  or  734-5721
locally. We reserve the right to suspend or limit telephone transactions.

                           SURRENDERS AND WITHDRAWALS

If you elected the revocable  option,  you may surrender the  Certificate at any
time while an Annuitant is alive. If you elected a Fixed Period Income,  you may
withdraw up to the Commuted Value of the Certificate. If you elected a Single or
Joint Life Income,  you may withdraw up to the Commuted Value of the Certificate
minus all previous  withdrawals.  To surrender your  Certificate and receive the
Commuted Value, you must submit a Written Request to our Service Center. We will
not  accept  Telephone  Requests  for  surrender  requests.  We must  receive  a
withdrawal or surrender request by 3:00 p.m. Central Time on a Valuation Date in
order to process it on the same day.

You may  select  the  source of a  withdrawal  by  specifically  indicating  the
Subaccount or Fixed Account.  However,  we must agree to any  selection.  If you
request a  withdrawal  and do not  specify  the  source of the  withdrawal  (the
specific Subaccount or Fixed Account), we will take the withdrawal on a pro rata
basis from each Subaccount and the Fixed Account. You may not withdraw less than
$1000.  If you make a Telephone  Request for a  withdrawal,  we are  required to
withhold 10% for federal income taxes.  If you take a withdrawal,  we will issue
you a supplemental contract for the remaining Annuity Payments.

If you  elected  the  irrevocable  option,  you  may  not  surrender  or  make a
withdrawal from the Certificate.

You  should  consult  your  tax  adviser  regarding  the tax  consequences  of a
withdrawal or surrender. A withdrawal or surrender made before you attain age 59
1/2 may result in adverse tax  consequences,  including the  imposition of a 10%
federal income tax penalty.
See "Federal Tax Considerations" for more details.

                       DEATH OF THE OWNER AND/OR ANNUITANT

If you are a joint  Annuitant  and joint  Owner,  and die during the  Guaranteed
Payment  Period,  we will continue making payments to the surviving joint Owner,
if any. The surviving  joint Owner,  if any, will become the sole  Annuitant and
Owner.  If you are a joint  Annuitant  and die after  the end of the  Guaranteed
Payment  Period,  we will make  payments to the surviving  joint Owner,  if any,
based upon the reduction factor you selected.

If you were the only Annuitant and Owner and die during the  Guaranteed  Payment
Period,  we will continue making payments to your  Beneficiary for the remainder
of the Guaranteed  Payment Period, if any. Your Beneficiary will have the option
of receiving  the Commuted  Value as a single lump sum in lieu of  continuing to
receive payments.

If you were the only  Annuitant and Owner and die after the  Guaranteed  Payment
Period, no Death Proceeds would be payable.

If the Owner is an entity,  upon the Annuitant's  death, we will continue making
payments to the Beneficiary for the remainder of the Guaranteed  Payment Period,
if any. Generally, the Owner will also be the Beneficiary.  The Beneficiary will
have the option of receiving the Commuted  Value as a single lump sum in lieu of
continuing  to receive  payments.  If the  Annuitant  died after the  Guaranteed
Payment Period, there would be no Death Proceeds would be payable.

Upon your death, any remaining  Annuity Payments will be distributed at least as
rapidly  as under the method of  distribution  being used as of the date of your
death.

We will calculate the Death Proceeds payable as of the later of:

- -    the date we receive Proof of Death; and

- -    the date on which we  receive a request  in  writing in good order from the
     Beneficiary as to the method of payment they choose.

Before we can process any Death Proceeds, we must receive:

- -    proof that the Annuitant or Owner died;

- -    a completed claim form; and

- -    any other information that we reasonably require to process the claim.

                          CERTIFICATE FEES AND CHARGES

Sales Charge

There is no sales charge deducted from your Premium Payment.

Premium Tax Charge

There is currently no premium tax applicable to the Certificates.

Transfer Charge

You may make two free transfers in each Certificate Year. We will charge you $25
for each subsequent transfer.

Mortality and Expense Risk Charge

We deduct from Variable  Account assets a daily charge at an annualized  rate of
1.25% of the average daily net asset value of the Variable Account  attributable
to the  Certificates.  This charge  compensates  us for assuming  mortality  and
expense risks under the Certificates.

We expect to earn a profit on the charge.

In assuming the mortality risk, we incur the risks that

- -    Our actuarial estimate of mortality rates may prove erroneous, and

- -    Annuitants will live longer than expected.

In  assuming  the expense  risk,  we incur the risk that the  revenues  from the
expense  charges  under the  Certificates  (charges  that we guarantee  will not
increase) will not cover our expense of administering the Certificates.

Miscellaneous

Each Portfolio  pays charges and expenses out of its assets.  The prospectus for
the Fund describes the charges and expenses.

We reserve the right to impose charges or establish  reserves for any federal or
local  taxes  that we incur  today or may incur in the  future  and that we deem
attributable to the Certificates.

Taxes

Currently,  we do not assess a charge  against the Variable  Account for federal
income taxes or state premium  taxes.  We may assess such a charge in the future
if income or gains within the Variable  Account result in any federal income tax
liability to us or we become  subject to state  premium  taxes.  Charges for any
other taxes  attributable to the Variable  Account may also be made. See Federal
Tax Status.

                   GENERAL INFORMATION ABOUT THE CERTIFICATES

The Entire Contract

The entire contract between you and us consists of:

- -    the Certificate;

- -    the application;

- -    attached endorsements or amendments, if any; and

- -    the AAL Articles of Incorporation  and Bylaws in force as of the Issue Date
     of your Certificate.

We treat any statements you make in the application as  representations  and not
warranties.  We will not use a statement  to void the  Certificate  or to deny a
claim unless it appears in the application. No representative of ours except the
president or the secretary may change any part of the Certificate on our behalf.
We will not be able to contest the  Certificate  after it has been in effect for
two years from its Issue Date, provided that the Annuitant is still living.

Voting Rights

There are certain voting rights  attributable  to the Portfolios  underlying the
Variable Account portion of the  Certificates.  As required by law, we will vote
the  Portfolio  shares  held in a  Subaccount.  We will  vote  according  to the
instructions of Certificate Owners who have interests in any Subaccount involved
in the matter being voted upon. If the 1940 Act or any related regulation should
be amended or if the present  interpretation of it should change and as a result
we determine that we are permitted to vote the Fund shares in our own right,  we
may elect to do so.

We  determine  the number of votes you have the right to cast by  applying  your
percentage interest in a Subaccount to the total number of votes in the Variable
Account attributable to the entire Subaccount.  We will count fractional shares.
We determine  the number of votes of the Portfolio you have the right to cast as
of the record  date.  These votes are cast at the  meeting of the Fund.  We will
solicit voting instructions by writing you before the meeting in accordance with
procedures established by the Fund.

Any  Portfolio  shares held in a Subaccount  for which we do not receive  timely
voting instructions will be voted by us in proportion to the voting instructions
we receive for all Owners  participating  in that  Subaccount.  We will vote any
Portfolio  shares held by us or our  affiliates  in  proportion to the aggregate
votes of all  shareholders  in the Portfolio.  We will send to everyone having a
voting  interest in a Subaccount  proxy  materials,  reports and other materials
relating to the appropriate Portfolio.

Surplus Refunds

If our Board of Directors declares any surplus refunds to Certificate Owners, we
will pay you such surplus  refunds on the portion that you have allocated to the
Fixed  Account.  Surplus  refunds  are paid in cash  with that  portion  of each
payment attributable to the Fixed Account.

Reports to Owners

At least  annually,  we will mail you a report  showing the  Commuted  Value and
Annuity  Payments  for your  Certificate  as of a date not more than two  months
prior  to the  date of  mailing  and any  further  information  required  by any
applicable  law.  We will mail  reports  to you at your last  known  address  of
record.  We will also promptly mail a confirmation of each Premium,  withdrawal,
surrender or transfer you make.

Date of Receipt

Unless  we state  otherwise,  the Date of  Receipt  by us of any  Premium  made,
Written Request, Telephone Request or any other communication is the actual date
it is received at our Service  Center in proper  form.  If we receive them after
the close of  regular  trading  on the New York  Stock  Exchange,  usually  4:00
Eastern Time or on a date which is not a Valuation  Date,  we will  consider the
Date of Receipt to be the next Valuation Date.

Payment by Check

If you make a Premium by check and your check is returned to us for insufficient
funds, we do reserve the right to seek reimbursement for any payments we made to
you.

Postponement of Payments

We will  normally make  payments of your  withdrawal  or surrender  value within
seven days after we receive your request at our Service Center.  However, we may
delay this payment or any other type of payment  from the  Variable  Account for
any period when:

- -    the New York Stock  Exchange  is closed for  trading  other than  customary
     weekend and holiday closings;

- -    trading on the New York Stock Exchange is restricted;

- -    an emergency exists, as a result of which it is not reasonably  practicable
     to dispose of securities or to fairly determine their value; or

- -    the SEC by order permits the delay for the protection of Owners.

We may also postpone  transfers and  allocations  among the  Subaccounts and the
Fixed Account under these circumstances.  We may delay payment of any withdrawal
or surrender  value from the Fixed Account for up to six months after we receive
a request at our Service Center.

Certificate Inquiries

You may make  inquiries  regarding  the  Certificate  by writing or calling  our
Service  Center.  The address for the Service  Center is: AAL Variable  Products
Service Center, 4321 North Ballard Road, Appleton,  Wisconsin,  54919-0001.  The
toll-free telephone number is 800-225-5225, locally 734-5721.

                               FEDERAL TAX STATUS

We do not intend these  discussions of tax matters and those in the Statement of
Additional  Information  as tax advice.  The ultimate  effect of federal  income
taxes on a  Certificate  or the  economic  benefit  to the Owner,  Annuitant  or
Beneficiary  depends upon the tax status of such person and, if the  Certificate
is purchased  under a qualified  retirement  plan,  upon the tax and  employment
status  of  the  individual   concerned.   This   discussion  is  based  on  our
understanding of federal income tax laws, as currently  interpreted.  We make no
representation  regarding whether the Internal Revenue Service will continue its
current  interpretations  of these laws. We do not make any guarantee  regarding
the tax status of any  Certificate.  Please consult with a qualified tax adviser
for your particular tax situation.

Variable Account Tax Status

The Code, in effect,  provides  that the income,  gains and losses from separate
account investments are not income to the insurer issuing the variable contracts
so long as the Certificates  and the Variable Account meet certain  requirements
set forth in the Code.  Because the  Certificates  and the Variable Account meet
such   requirements,   we  anticipate  no  tax  liability   resulting  from  the
Certificates and, consequently, no reserve for income taxes is currently charged
against or maintained by us with respect to the  Certificates.  We are currently
exempt from most types of state and local  taxes.  We may make  charges for such
taxes  if  there is a  material  change  in  federal,  state  or local  tax laws
attributable to the Variable Account.

Diversification Requirements

Under Section 817(h)(1) of the Code and related regulations,  we are required to
ensure  that  the  assets   underlying  the  Variable  Account  portion  of  the
Certificates  are  adequately  diversified.   This  means  that  the  underlying
Portfolios  must have  enough  distinctly  different  holdings  to  satisfy  the
requirements.  If we would not meet the requirements,  the Certificate would not
be treated as an annuity contract, unless the failure to satisfy the regulations
was  inadvertent,  the failure is  corrected  and you or we pay an amount to the
Internal  Revenue  Service (IRS).  If we would fail to diversify and not correct
the problem,  you would be deemed the Owner of the underlying  securities in the
Portfolio and would be taxed on the earnings of your account.

We   believe   that  the  assets   underlying   the   Certificates   meet  these
diversification  standards.  We  will  continually  monitor  the  Fund  and  the
regulations  of the  Treasury  Department  to ensure that the  Certificate  will
continue to qualify as a variable annuity contract under the Code.

Taxation of Annuities in General

Section 72 of the Code  governs the federal  income  taxation  of  annuities  in
general.   We  do  not  discuss  the  impact  of  estate,   gift  or  state  tax
considerations.

Certificates Held by Natural Persons

You are not  taxed  on  increases  in the  value  of  your  Certificate  until a
distribution  occurs,  either  in the  form of a  withdrawal,  surrender,  or as
Annuity Payments.

Distributions

For Annuity  Payments,  the taxable  portion is  determined by dividing the cost
basis by the  anticipated  number of payments  payable under the Certificate and
subtracting  the result  from each  payment.  . The  nontaxable  portion of each
payment equals the cost basis divided by the anticipated number of payments. The
balance of the payment is taxable. For non-qualified annuities,  your cost basis
is generally your Premium.

Payments from a withdrawal or a surrender of a  Certificate  are not  considered
Annuity Payments.  Therefore  withdrawals and surrenders will generally be taxed
as ordinary income to the extent that the Commuted Value exceeds your cost basis
in the Certificate.

The taxable portion of any Annuity Payment,  withdrawal or surrender is taxed at
ordinary income tax rates.

Distributions from Qualified Plans

For certain  Qualified Plans involving  pre-tax  contributions,  there may be no
cost basis in the Certificate. In such event, the total payments received may be
taxable.  You, the Annuitant and any Beneficiaries  for your Certificate  should
seek  qualified  tax  and  financial   advice  about  the  tax  consequences  of
distributions   under  the  Qualified   Plans  in  connection  with  which  such
Certificates are purchased.

Penalty Tax on Premature Distributions

Generally, withdrawals, and surrenders of a Certificate before you attain age 59
1/2 will result in an additional federal income tax penalty of 10% of the amount
distributed  that is included in your gross  income.  The penalty tax  generally
will not apply to Annuity Payments unless you purchased the Certificate with the
proceeds exchanged another annuity or life insurance certificate.

The 10% federal income tax penalty also applies to Certificates which are issued
in connection with Qualified Plans. This penalty will not apply if distributions
are made over the life or life expectancies of the IRA owner or plan participant
(or the joint life or life  expectancies  of the IRA owner/plan  participant and
the  designated  Beneficiary),  or  if  you  are  over  age  59-1/2.  Additional
exemptions apply.

Federal Income Tax Withholding

The taxable portion of Annuity Payments, withdrawals or surrenders is subject to
federal income tax  withholding.  Except for  Certificates  issued in connection
with  certain  Qualified  Plans,  you can elect not to have  federal  income tax
withheld, but only by Written Request.

Death Proceeds

Generally,  distributions  received from your  Certificate  by your  Beneficiary
because of your death are taxable in the year in which your Beneficiary receives
the distribution.  received. Your Beneficiary will be taxed on the distributions
in  the  same  manner  that  you  would  have  been  taxed.  The  10%  premature
distribution penalty does not apply to these distributions.

Multiple Certificates

All nonqualified  annuity  Certificates we issue to you during any calendar year
shall be treated as one Certificate  for  determining  the amount  includible in
gross income.  Therefore,  distributions from one Certificate will be taxable to
the extent there is a gain in any Certificate issued in the same year. The total
impact of this rule to immediate  annuities  is not clear.  You will most likely
have a larger amount of taxable gain if you own multiple  Certificates  with us.
If you are subject to the 10% premature distribution penalty, the amount subject
to that tax would also increase.

Tax-Free Exchanges (1035 Exchanges)

Section  1035 of the Code  permits  the  exchange  of  certain  life  insurance,
endowment and annuity  contracts for an annuity contract without a taxable event
occurring.  If you already own an annuity or life insurance  contract  issued by
another  insurer,  you  are  generally  able to  exchange  that  contract  for a
Certificate issued by us tax-free.  There are certain restrictions that apply to
such exchanges,  including that the contract surrendered must truly be exchanged
for the  Certificate and not merely  surrendered in exchange for cash.  Further,
the owner of the new Certificate  must be the same as the Owner of the exchanged
Certificate.  Careful  consideration  must be  given  to  compliance  with  Code
provisions and regulations and rulings relating to exchange requirements. If you
are contemplating an exchange,  please be sure that you understand any surrender
charges or loss of benefits  which might arise in the  exchange of the  existing
certificate.  If you are considering  such an exchange,  you should consult with
your tax adviser to ensure that the requirements of Section 1035 are met.

Transfers among Subaccounts

Transfers among  Subaccounts  and between  Subaccounts and the Fixed Account are
tax-free.

Qualified Plans

You may use the  Certificate  to fund one of several  types of Qualified  Plans,
although the uses may be limited  because of the  requirement to elect immediate
payments.  The tax rules that apply to participants in such Qualified Plans vary
according  to the  type of plan  and  the  terms  and  conditions  of the  plan.
Therefore, no attempt is made to provide more than general information about the
use of the  Certificates  with the various types of Qualified  Plans. We caution
Qualified Plan  participants,  plan  administrators  and Beneficiaries  that the
rights of any person to any benefits under such Qualified Plan may be subject to
the  terms  and  conditions  of the plan  itself,  regardless  of the  terms and
conditions of the  Certificate  issued in connection with the plan. What follows
are brief descriptions of the various types of Qualified Plans.


Tax-Sheltered Annuities

Section  403(b) of the Code permits  certain  types of employers  (organizations
specified under section 501(c)(3) of the Code such as schools,  churches,  etc.)
to  purchase  annuity  contracts  on behalf of their  employees.  These  annuity
contracts  are  commonly  referred  to  as  tax-sheltered   annuities.   Section
403(b)(11) of the Code requires that distributions from a tax-sheltered  annuity
that are  attributable to employee salary  reduction  contributions  may be paid
only when the employee reaches age 59 1/2, separates from service, dies, becomes
disabled or in the case of hardship.  (Hardship,  for this purpose, is generally
defined as an immediate and heavy financial need, such as for paying for medical
expenses,  for the  purchase  of a  principal  residence  or for paying  certain
tuition expenses.) Because of these restrictions on distributions,  you may only
purchase the Certificate as a tax-sheltered  annuity if you are eligible to take
distributions from your 403(b) funds.

H.R. 10 (Keogh) Plans

The  Self-Employed  Individuals  Tax Retirement  Act of 1962,  which is commonly
referred to as H.R. 10, permits self-employed individuals to establish Qualified
Plans for themselves and their  employees.  Such retirement plans may permit the
purchase  of the  Certificates  to  provide  annuity  benefits  under the plans.
Individuals  intending to use the  Certificates  in  connection  with such plans
should seek qualified advice in connection with such use.

Corporate Pension and Profit-Sharing Plans

Sections 401(a) and 403(a) of the Code permit  corporate  employers to establish
various types of  retirement  plans for  employees.  Such  retirement  plans may
permit the purchase of the  Certificates to provide  annuity  benefits under the
plans.  Corporate employers intending to use the Certificates in connection with
such plans should seek qualified advice in connection with such use.

Traditional Individual Retirement Annuities (Traditional IRAs)

If you are  under  age 70 1/2 and  have  earned  income,  you  are  eligible  to
contribute to a traditional Individual Retirement Annuity or traditional IRA. If
you are eligible for a distribution  from certain other Qualified Plans, you can
rollover  on a tax  deferred  basis  your  Qualified  Plan  distribution  into a
traditional IRA.

Unless you made  nondeductible  contributions  to a  traditional  IRA,  you will
generally be taxed on any distributions from a traditional IRA. If you are under
age 59-1/2 when you take the  distribution,  you may be subject to a 10% federal
premature  distribution  penalty on the taxable amount.  If you elect a Joint or
Single Life Income or elect to have a Guaranteed  Payment  Period over 10 years,
you are  generally  exempt  from this  penalty  tax.  You are  required to begin
distributions  from traditional IRAs by April 1st of the year following the year
in which you attain age 70 1/2.

Because of the limitations on contributions under the Certificate,  you can only
purchase this  Certificate as a traditional  IRA Certificate if you are at least
partially funding the Certificate with proceeds from an existing Qualified Plan.
In addition,  you should only purchase this  Certificate as a traditional IRA if
you do not  intend  on  making  additional  contributions  and wish to begin the
immediate periodic distribution of your IRA.

Simplified Employee Pension Plans (SEP-IRAs)

Section 408(k) of the Code permits  employers to make  deductible  contributions
directly into IRAs  established  for their  employees.  Distribution  limits and
restrictions  similar to those of traditional IRAs apply to these  Certificates.
Employers who use the Certificates in connection with a SEP-IRA plan should seek
qualified tax advice. In addition,  you should only purchase this Certificate as
a  SEP-IRA  if you do not  intend  on  making  additional  contributions  to the
Certificate  and you wish to begin the immediate  periodic  distribution of your
SEP-IRA.

Roth Individual Retirement Annuity (Roth IRA)

If your adjusted gross income is under $160,000,  you are eligible to contribute
to Roth IRA. If you own a  traditional  IRA and your  adjusted  gross  income is
under  $100,000,  you may convert some or all of the traditional IRA into a Roth
IRA.   Generally,   unless  the   traditional   IRA   contained   non-deductible
contributions, you will be taxed on the entire conversion amount.

If you take a distribution  after five years of  establishing a Roth IRA and you
have incurred on of the following  triggering  events,  the distribution will be
tax-free. The triggering events are: attaining age 59 1/2, death,  disability or
qualifying as a first time home buyer ($10,000  lifetime  limit).  If you take a
distribution  from a Roth  IRA  before  five  years  have  elapsed  and you have
incurred a triggering event, the distribution will be tax free to the extent you
have cost basis.  If you take a distribution  in an amount over your cost basis,
the amount over and above your cost basis will be taxable. If you take a taxable
distribution  before  you  attain  age 59 1/2,  you may also be subject to a 10%
premature  distribution  penalty tax on the taxable  amount.  The 10%  premature
distribution  penalty  does not apply upon a  conversion  to a Roth IRA, but may
apply if you take a distribution  from a conversion IRA within five years of the
conversion.

Because of the limitations on contributions  under the  Certificate,  a Roth IRA
Certificate  can only be purchased  with  traditional or Roth IRA proceeds which
have  been  converted,  rolled or  transferred  to the new IRA  Certificate.  In
addition,  you should  only  purchase  the  Certificate  if you do not intend on
making  additional  contributions  to the  Certificate,  you wish to  begin  the
immediate periodic distribution of your IRA proceeds, and have incurred both the
five year holding period and a triggering event.

Rollover into an IRA

You may  rollover  assets from a Qualified  Plan into a  traditional  IRA in two
ways. First, you may directly  rollover an eligible  rollover  distribution to a
traditional  IRA. The Qualified Plan  administrator  sends the funds directly to
the traditional IRA as a direct rollover.  Second,  the employee may receive the
distribution  from the Qualified  Plan and rollover the same amount the employee
received  within 60 days.  However,  any amount  that was not  distributed  as a
direct rollover will be subject to mandatory 20% federal income tax withholding.

Deferred Compensation Plans

Code Section 457 provides for certain deferred  compensation  plans. These plans
may be offered with respect to service for state governments, local governments,
political  subdivisions,  agencies,  instrumentalities and certain affiliates of
such entities,  and tax exempt  organizations.  In general, all amounts received
under a Section  457 plan are  taxable  and are  subject to  federal  income tax
withholding  as wages.  Such  retirement  plans may permit the  purchase  of the
Certificates to provide annuity benefits under the plans. Employers intending to
use the  Certificates in connection with such plans should seek qualified advice
in connection with such use.

Other Tax Considerations

Because  of  the  complexity  of the  law  and  its  application  to a  specific
individual,  tax advice may be needed by a person  contemplating  purchase  of a
Certificate or the exercise of elections under a Certificate. The above comments
concerning  federal income tax consequences are not exhaustive and special rules
are provided with respect to situations  not discussed in this  Prospectus.  The
above  discussion is based upon our  understanding of current federal income tax
law. Statutory changes in the Code with varying effective dates, and regulations
adopted  thereunder  may also alter the tax  consequences  of  specific  factual
situations.  We have not taken into  account  estate and gift,  state  income or
other  state tax  considerations  which may be  involved  in the  purchase  of a
Certificate  or the exercise of elections  under the  Certificate.  For complete
information on such federal and state tax  considerations,  you should consult a
qualified tax adviser.

                                OTHER INFORMATION

Rights Reserved by AAL

Subject to  applicable  law, we reserve the right to make certain  changes if we
determine  they would  serve your  interests  or if it would be  appropriate  in
carrying  out the  purposes of the  Certificate.  When it is  required,  we will
obtain your  approval or regulatory  approval.  Some examples of such changes we
may make include:

- -    To operate the Variable  Account in any form allowed  under the 1940 Act or
     in any other form allowed by law;

- -    To create new separate accounts;

- -    To add, delete, combine or modify Subaccounts in the Variable Account;

- -    To restrict or eliminate any voting rights of  Certificate  Owners or other
     persons who have voting rights as to the Variable Account;

- -    To  add,  delete  or  substitute,  for  the  Portfolio  shares  held in any
     Subaccount,  the shares of another  Portfolio  of the Fund or the shares of
     another fund or any other investment allowed by law; and

- -    To make any amendments to the  Certificates  necessary for the Certificates
     to comply with the provisions of the Code or any other  applicable  federal
     or state law.

- -    To substitute the shares of any registered investment company for shares of
     any  other  registered  investment  company  already  purchased  or  to  be
     purchased  in  the  future  by  he  Variable   Account  provided  that  the
     substitution has been approved by the Securities and Exchange Commission.

Maintenance of Solvency

The Certificate  contains maintenance of solvency provision that applies only to
values in the  Fixed  Account.  If our  reserves  for any class of  Certificates
become  impaired,  you may be  required to make an extra  payment.  Our Board of
Directors  will determine the amount of any extra payment based on each member's
fair share of the deficiency.  If you do not make the payment, we will charge it
as an indebtedness  against your  Certificate  with interest at a rate of 5% per
year,  compounded  annually.  You may choose an equivalent reduction in benefits
instead of or in combination with the payment or indebtedness.

Distribution Arrangements

AALCMC  serves as the principal  underwriter  of the  Certificates.  AALCMC is a
wholly  owned,  indirect  subsidiary  of AAL.  Principal  offices  of AALCMC are
located at 222 West College  Avenue,  Appleton,  Wisconsin,  54911.  AALCMC is a
member of the National  Association  of Securities  Dealers,  Inc.  (NASD) and a
broker-dealer registered with the SEC under the Securities Exchange Act of 1934.

The Certificates are sold by duly licensed registered  representatives of AALCMC
who are also  employees of AAL and licensed by state  insurance  departments  to
sell variable  insurance  products (AAL  Representatives).  The Certificates may
also be sold by representatives of other  broker-dealer  firms with which AALCMC
has executed a selling  agreement.  In  addition,  AAL may retain other firms to
serve as principal underwriters of the Certificates. AAL offers the Certificates
in all states where AAL is authorized to sell the Certificates.

We  will  pay  the  AAL  Representatives   commissions  and  other  distribution
compensation on the sale of Certificates.  This will not result in any charge to
you in addition to the charges already described in this Prospectus.  We pay AAL
Representatives  a commission of not more than 2.25% of the Premiums paid on the
Certificates.  In addition to direct  compensation,  AAL  Representatives may be
eligible to receive  certain  employee  benefits from AAL based on the amount of
earned commissions.

Year 2000 Disclosure

Year 2000 is  approaching  and we are addressing  potential  problems that could
affect our systems and the systems of AAL's  other  service  providers,  such as
custodians,  telephone  companies,  etc. If systems are not year-2000 compliant,
systems cannot  distinguish  the year 2000 from the year 1900 because of the way
the software encodes and calculates  dates. In 1995, we formed a project team to
review our systems as well as those of AAL's other service  providers to address
the year 2000  problem.  We believe  that we have  devoted and will  continue to
devote the appropriate  amount of resources  necessary to prepare our systems so
that services  provided to AAL will continue without material  disruption across
the pending change in the millennium. Despite our best efforts, we cannot assure
that this will be sufficient to avoid any adverse impact on AAL.

Legal Matters

We know of no material legal proceedings pending to which we are or the Variable
Account is a party or which would materially affect the Variable Account.

Financial Statements*

Audited financial  statements of AAL are included in the Statement of Additional
Information and are incorporated by reference in this Prospectus.

The Variable Account has not yet commenced operations so no financial statements
for the Variable Account are available.

*To be filed with a pre-effective amendment.



<PAGE>



               CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION


General Information.........................................................SAI-

Regulation and Reserves.....................................................SAI-

Principal Underwriter.......................................................SAI-

Reasonableness of Mortality and Expense Risk Charges........................SAI-

Gender Neutral Benefits.....................................................SAI-
Performance Information.....................................................SAI-

         Money Market Subaccount............................................SAI-
         Other Subaccounts..................................................SAI-
         Performance Comparisons............................................SAI-

Financial Statements........................................................SAI-

- --------------------------------------------------------------------------------

Order Form


Please send me a copy of the most recent Statement of Additional Information for
the Individual Single Premium Immediate Variable Annuity Certificate.


- -------------------------------             --------------------------------
(Date)                                      (Name)

- -------------------------------------------------------------------------------
(Street Address)

- --------------------------------     -----------     ---------------------
(City)                               (State)         (Zip Code)



Send to:

AAL Variable Products Service Center
4321 N. Ballard Road
Appleton, WI   54919-0001



                            SINGLE PREMIUM IMMEDIATE
                          VARIABLE ANNUITY CERTIFICATE
                                   Offered By:

                          AID ASSOCIATION FOR LUTHERANS
                            4321 North Ballard Road
                            Appleton, Wisconsin 54919

                             STATEMENT OF ADDITIONAL
                                   INFORMATION
                               Dated July 1, 1999

This Statement of Additional Information ("SAI") is not a prospectus, but should
be read in conjunction  with the Prospectus dated July 1, 1999, for AAL Variable
Annuity  Account II (the "Variable  Account")  describing the individual  single
premium  immediate  variable  annuity  certificates  ("Certificates")  that  Aid
Association for Lutherans  ("AAL") offers to persons  eligible for membership in
AAL.  Capitalized  terms used in this SAI that are not otherwise  defined herein
have the same meanings given to them in the Prospectus. A copy of the Prospectus
may be  obtained  at no charge by  writing  AAL  (attention:  Variable  Products
Service Center) at the above address.


TABLE OF CONTENTS

Caption                                                                     Page


GENERAL INFORMATION.........................................................SAI-

REGULATION AND RESERVES.....................................................SAI-

PRINCIPAL UNDERWRITER.......................................................SAI-

REASONABLENESS OF MORTALITY AND EXPENSE RISK CHARGES........................SAI-

GENDER NEUTRAL BENEFITS.....................................................SAI-

PERFORMANCE INFORMATION.....................................................SAI-

Money Market Subaccount.....................................................SAI-

Other Subaccounts...........................................................SAI-

Performance Comparisons.....................................................SAI-

FINANCIAL STATEMENTS........................................................SAI-


<PAGE>


GENERAL INFORMATION

AAL is a fraternal benefit society organized under Internal Revenue Code section
501(c)(8) and  established on November 24, 1902,  under the laws of the State of
Wisconsin.  Membership is open to Lutherans and their families.  AAL offers life
insurance, disability income insurance and annuities to its members. All members
are part of one of almost 9,800 local AAL branches throughout the United States.
AAL is currently  licensed to transact life insurance  business in all 50 states
and the District of Columbia.

REGULATION AND RESERVES

AAL is subject to regulation by the Office of the  Commissioner  of Insurance of
the  State  of  Wisconsin  and by  insurance  departments  of other  states  and
jurisdictions in which it is licensed to do business.  This regulation  covers a
variety of areas, including benefit reserve requirements,  adequacy of insurance
company capital and surplus,  various  operational  standards and accounting and
financial  reporting  procedures.  AAL's  operations and accounts are subject to
periodic  examination  by  insurance  regulatory   authorities.   The  forms  of
Certificates  described in the  Prospectus  are filed with and (where  required)
approved  by  insurance  officials  in each  state  and  jurisdiction  in  which
Certificates are sold.

Although  the  federal  government  generally  has not  directly  regulated  the
business of insurance, federal initiatives often have an impact on the insurance
business in a variety of ways.  Federal  measures that may adversely  affect the
insurance  business  include  employee  benefit  regulation,   tax  law  changes
affecting the taxation of insurance companies or of insurance products,  changes
in the relative desirability of various personal investment vehicles and removal
of impediments on the entry of banking institutions into the insurance business.
Also,  both the executive  and  legislative  branches of the federal  government
periodically  have under  consideration  various insurance  regulatory  matters,
which could  ultimately  result in direct federal  regulation of some aspects of
the insurance  business.  It is not possible to predict  whether this will occur
or, if so, what the effect on AAL would be.

Pursuant to state insurance laws and  regulations,  AAL is obligated to carry on
its books, as liabilities,  reserves to meet its obligations  under  outstanding
insurance contracts.  These reserves are based on assumptions about, among other
things,  future claims  experience and investment  returns.  Neither the reserve
requirements  nor the  other  aspects  of  state  insurance  regulation  provide
absolute   protection   to  holders  of  insurance   contracts,   including  the
Certificates,  if AAL were to incur  claims or expenses  at rates  significantly
higher than expected or significant unexpected losses on its investments.

PRINCIPAL UNDERWRITER

AAL  Capital  Management  Corporation  ("AALCMC"),   a  wholly-owned,   indirect
subsidiary  of AAL,  serves as the  principal  underwriter  of the  Certificates
pursuant to a Principal Underwriting and Servicing Agreement to which AALCMC and
AAL, on behalf of itself and the Variable Account, are parties. The Certificates
are sold  through  AAL  Representatives  who are  licensed  by  state  insurance
officials  to  sell  the  Certificates  and  who are  duly  licensed  registered
representatives  of AALCMC. The Certificates may also be sold by representatives
of other broker-dealer firms with which AALCMC has executed a selling agreement.
In addition,  AAL may retain other firms to serve as principal  underwriters  of
the Certificates.  The Certificates are continuously offered in all states where
AAL is authorized to sell the Certificates. AAL paid underwriting commissions of
$5,059,274.35 to AALCMC for the year ended December 31, 1996,  $7,756,917.58 for
the year ended December 31, 1997, and  $------------ for the year ended December
31, 1998 for other products. Of these amounts, AALCMC retained $0.

REASONABLENESS OF MORTALITY AND EXPENSE RISK CHARGES

Aid  Association  for Lutherans  represents  that the fees and charges  deducted
under the contract, in the aggregate, are reasonable in relation to the services
rendered,  the  expenses  expected to be incurred  and the risks  assumed by the
sponsor.

GENDER NEUTRAL BENEFITS

We  distinguish   between  men  and  women  because  of  their   different  life
expectancies.  However,  we do not make any such  distinctions  for Certificates
that we  issue  in the  state  of  Montana.  This  is  because  Montana  enacted
legislation that requires that annuity benefits (i.e., the Annuity Payments) not
vary based on a person's sex. In Arizona Governing  Committee v. Norris, the U.S
Supreme  Court  let  stand a U.S.  Court of  Appeals  decision  which  held that
optional annuity  benefits  provided under an employer's  deferred  compensation
plan could not,  under Title VII of the Civil  Rights Act of 1964,  vary between
men and women on the basis of sex.  Because of this decision,  the Fixed Account
Annuity   Payment  rates   applicable  to   Certificates   purchased   under  an
employment-related  insurance or benefit program may not, in some cases, vary on
the basis of sex. We will apply unisex rates to Qualified  Plans and those plans
where an employer  believes  that the Norris  decision  applies.  Employers  and
employee  organizations should consider, in consultation with legal counsel, the
impact of Norris and Title VII generally and any comparable  state laws that may
be applicable,  on any employment-related  insurance or benefit plan for which a
Certificate may be purchased.

PERFORMANCE INFORMATION

The Variable Account may, from time to time,  advertise  information relating to
the  performance of its  Subaccounts.  The performance  information  that may be
presented is not a prediction or guarantee of future investment  performance and
does not  represent the actual  experience  of amounts  invested by a particular
Owner.

Money Market Subaccount - Yield and Effective Yield

Advertisements  for the  Certificates  may  include  yield and  effective  yield
quotations  for the Money Market  Subaccount,  which are computed in  accordance
with standard  methods  prescribed by the SEC.  Under these  methods,  the Money
Market  Subaccount's  yield is calculated  based on a hypothetical  pre-existing
account having a balance of one Money Market Subaccount Accumulation Unit at the
beginning of a specified seven-day period. Yield is computed by dividing the net
change,  exclusive of capital changes, in the Accumulation Unit Value during the
seven-day period,  subtracting a hypothetical charge reflecting  deductions from
Owner accounts,  dividing the difference by the  Accumulation  Unit Value at the
beginning  of the period to obtain the base period  return and  multiplying  the
base  period  return  by the  fraction  365/7.  The  Money  Market  Subaccount's
effective yield is calculated by compounding the base period return (computed as
described  above)  for such  period by adding 1 and  raising  the sum to a power
equal to 365/7 and  subtracting 1 from the result.  Yield and effective yield do
not reflect the deduction of withdrawal or surrender  charges.  The Certificates
currently are not subject to charges for state premium taxes.

Other Subaccounts

30-Day  Yield:  Advertisements  for the  Certificates  may  include  30-day  (or
one-month)  yield  quotations  for each  Subaccount  other than the Money Market
Subaccount,  which are computed in accordance with a standard method  prescribed
by the SEC.  These  30-day  yield  quotations  are  computed by dividing the net
investment  income per  Accumulation  Unit  earned  during  the period  (the net
investment  income earned by the Fund Portfolio  attributable to shares owned by
the Subaccount  less expenses  incurred during the period) by the offering price
per Accumulation Unit on the last day of the period,  according to the following
formula that assumes a semi-annual reinvestment of income:

                         Yield = 2[(((a-b)/cd)+1)^6-1]

Where:

          a =  Net  dividends  and  interest  earned  during the period by the
               Portfolio attributable to the Subaccount

          b =  Expenses accrued for the period (net of reimbursements)

          c =  The average  daily  number of  Accumulation  Units  outstanding
               during the period d = The Accumulation Unit Value per Unit on the
               last day of the period

Standardized and  Non-Standardized  Average Annual Total Return:  Advertisements
for the Certificates may also include standardized and non-standardized  average
annual total return  quotations for each Subaccount for 1, 5 and 10-year periods
(or the life of the  Subaccount,  if less).  Standardized  average  annual total
return  quotations are computed in accordance with a standard method  prescribed
by the SEC. The average  annual  total  return for a  Subaccount  for a specific
period is computed by finding the average annual compounded rates of return over
the  applicable  period  that would  equate the initial  amount  invested to the
ending redeemable value, according to the following formula:

                                P(1 + T)^n = ERV
         Where:

          P =   A hypothetical initial payment of $1,000

          T =   Average annual total return

          n =   Number of years

          ERV = Ending  redeemable value of a hypothetical  $1,000 payment made
               at the beginning of the 1-, 5- or 10-year  periods (or fractional
               portion thereof)

Non-standardized  average annual total returns are calculated in the same manner
and for the same time periods as the  standardized  average annual total returns
described immediately above, except that the value of the non-standardized total
returns do not reflect the effect of the withdrawal or surrender.

Cumulative  Total Return:  Advertisements  for the Certificates may also include
cumulative total return  quotations for each  Subaccount,  for which the SEC has
not prescribed a standard method of calculation.  Cumulative total return is the
non-annualized cumulative rate of return on a hypothetical initial investment of
$1,000  in  a  Subaccount  for  a  specified   period   ("Hypothetical   Initial
Investment").  Cumulative  total return is calculated by finding the  cumulative
rates of return of the  Hypothetical  Initial  Investment over various  periods,
according to the following formula and then expressing that as a percentage:

                                 C = (ERV/P) - 1
         Where:

          P =   A hypothetical initial payment of $1,000

          C =   Cumulative total return

          ERV = Ending  redeemable value of a hypothetical  $1,000 payment made
                at the beginning of the applicable period

Performance quotations for each Subaccount reflect the deduction of ----and Fund
operating  expenses (net of  reimbursements),  except that yield  quotations and
non-standardized  average  annual total return  calculations  do not reflect any
deduction  for  withdrawal  or  surrender  charges.  The  Certificates  are  not
currently subject to a charge for state premium taxes.


Performance Comparisons

The performance of each of the Subaccounts may be compared in advertisements and
sales literature to the performance of other variable annuity issuers in general
or to the  performance of particular  types of variable  annuities  investing in
mutual funds or series of mutual funds,  with investment  objectives  similar to
each of the Portfolios in which the Subaccounts  invest. Such comparisons may be
made by use of  independent  services that monitor and rank the  performance  of
variable  annuity  issuers  in  each  of  the  major  categories  of  investment
objectives on an industry-wide basis, ranking such issuers on the basis of total
return,  assuming  reinvestment  of dividends and  distributions,  but excluding
sales charges,  redemption  fees or certain  expense  deductions at the separate
account level.  Some rankings are based on total returns adjusted for withdrawal
or surrender  charges or may consider the effects of market risk on total return
performance.

Companies  providing  rankings  that  may be used in  advertisements  and  sales
literature include Lipper Analytical Services,  Inc., Morningstar,  Inc. and the
Variable Annuity Research and Data Service.

In addition, each Subaccount's performance may be compared in advertisements and
sales  literature  to various  benchmarks  including  the  Standard & Poor's 500
Composite  Stock Price  Index,  Morgan  Stanley  Capital  International  Europe,
Australasia  and Far East (MSCI EAFE) Index,  S&P  SmallCap  600 Index,  Merrill
Lynch High  Yield  Master  Index,  the  Wilshire  Small Cap Index and the Lehman
Brothers Aggregate Bond Index.

The  Portfolios  may also,  from time to time,  illustrate the concepts of asset
allocation by use of hypothetical case studies  representing various life cycles
and/or risk levels of a Certificate Owner.

FINANCIAL STATEMENTS*

The financial  statements  of AAL should be considered  only as bearing upon the
ability of AAL to meet its  obligations  under the  Certificates.  The financial
statements  of AAL  should  not  be  considered  as  bearing  on the  investment
experience of the assets held in the Variable Account.

The most current financial statements of AAL are those as of the end of the most
recent  fiscal year ended  December  31,  1998.  AAL does not prepare  financial
statements  more often than  annually  in the form  required to be included in a
prospectus and believes that any incremental benefit to prospective  Certificate
Owners that may result from  preparing  and  delivering  more current  financial
statements, though unaudited, does not justify the additional cost that would be
incurred.

The financial  statements for the Variable Account and the accompanying  Reports
of  Independent  Auditors  are  incorporated  by  reference  from the  Report to
shareholders for the fiscal year ended December 31, 1998. You may receive a copy
of the Annual Report without charge by calling 800-225-5225 or 734-5721 locally.

*To be filed with a pre-effective amendment

PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits

(a)      Financial Statements:
                  No statements  are filed because the Account has not commenced
                  operations.

         Aid Association for Lutherans
         The  following  audited  financial  statements of Aid  Association  for
         Lutherans  ("Depositor")  as of December  31, 1998 will be filed with a
         pre-effective amendment:

                  Report of Independent Auditors
                  Statement  of  Financial  Position  as of  December  31,  1998
                  Statement of Operations  for the years ended December 31, 1998
                  Statement  of  Changes  in  Certificate   Owners'  Contingency
                         Reserves for the years ended December 31, 1998
                  Statements of Cash Flow for the years ended December 31, 1998
                  Notes to Financial Statements

(b)      Exhibits:

Except as noted below, all required  exhibits will be filed with a pre-effective
amendment.

<TABLE>
<CAPTION>
<S>            <C>                                                      <C>                               <C>    
Exhibit        Name of Exhibit                                          Will Be Filed with a              Filed
Number                                                                  Pre-effective Amendment           Herewith
1              Resolution of the Board of Directors of the Depositor
               authorizing the establishment of AAL Variable Annuity                                         X
               Account II
2              Not applicable
3              Form of Principal Underwriting and Servicing Agreement    
               between Aid Association for Lutherans (AAL) and AAL              X
               Capital Management Corporation (AAL CMC) amended and
               restated
4(a)           Variable Annuity Certificate                                                                  X
4(b)           Omnibus IRA Endorsements                                         X
4(c)           403(b) Endorsement and SIMPLE-IRA Endorsement
                                                                                X
4(d)           Variation pages applicable to Certificates used in
               various states                                                   X
5(a)           Standard Computer Certificate Application Form                   X
5(b)           Immediate Variable Annuity Option Selection Form
                                                                                X
5(c)           Section 1035 Exchange Form                                       X
5(d)           Omnibus IRA Disclosures and Financial Disclosures
                                                                                X
6(a)           Articles of Incorporation of Depositor                           X
6(b)           Bylaws of Depositor                                              X
7              Not applicable
8(a)           Amended and Restated Participation Agreement between
               AAL and the AAL Variable Product Series Fund, Inc.               X
               (the "Fund) as of
8(b)           Second Amendment to the Trade Name/Service Mark
               Licensing Agreement between AAL and the Fund dated ------        X
9              Opinion of Counsel as to the legality of the
               securities being registered (including written consent)          X
10             Consent of Independent Auditors                                  X
11             Not applicable
12             Stock Subscription Agreement dated
13
15
</TABLE>


Item 25. Directors and Officers of the Depositor

The directors,  executive  officers and, to the extent  responsible for variable
annuity operations, other officers of Depositor, are listed below:


Name and Principal                                     Positions and Offices
Business Address                                       with Depositor

Richard L. Gunderson
10801 E. Happy Valley Road #67                         Chairman of the Board
Scottsdale, AZ   85255

John O. Gilbert
4321 North Ballard Road                                Director, President and
Appleton, WI  54919                                    Chief Executive Officer

Herbert J. Arkebauer
Professor
Speech and Hearing Science
Southwest State University
Springfield, MO  65802                                 Director

Raymond G. Avischious
Formerly President & General Manager
Shurfine-Central
4200 Oaksbury Lane                                     Director
Rolling Meadows, IL 60008

Richard E. Beumer
President
Sverdrup Corporation
2545 Trevor Lane
Colorado Springs, CO  80919                            Director

Kenneth Daly
Partner
KPMG Peat Marwick
1600 Market Street
Philadelphia, PA 19103-7201                            Director

Elizabeth A. Duda
2450 Mikler Road
Oviedo, FL 32765                                       Director

Edward A. Engel
President
Edward A. Engel & Associates
P.O. Box 2039
Birmingham, MI 48012                                   Director

Gary J. Greenfield
President
Wisconsin Lutheran College
8830 West Bluemound Road
Milwaukee, WI 53226                                    Director



<PAGE>




Robert H. Hoffman
Vice President
Taylor Corporation
1725 Roe Crest Drive
P.O. Box 3728                                          Director
North Mankato, MN 56002-3728

Robert E. Long
Senior Vice President Administration
Park Bank
7540 West Capitol Drive
Milwaukee, WI 53216                                    Director

Robert B. Peregrine
President
Peregrine Law Offices, S.C.
633 West Wisconsin Avenue
Milwaukee, WI 53203                                    Director

Paul D. Schrage
formerly Sr. Exec. Vice President &
Chief Marketing Officer
McDonald's Corporation
1405 Midwest Club                                      Director
Oak Brook, IL  60523
James H. Scott
Principal
Miller Anderson & Shernerd
West Conshohocken, PA 19428                            Director

Kathi P. Seifert
Group President
Kimberly Clark Corporation
Neenah, WI 54956                                       Director

Roger G. Wheeler
President
Wheel-Air Charter, Inc.
8891 Airport Road
Minneapolis, MN 55449                                  Director


<PAGE>




E. Marlene Wilson
President
Volunteer Management Associates
1113 Spruce Street, Suite 406
Boulder, CO 80302                                      Director

Rev. Thomas R. Zehnder
President Lutheran Ministry Center
Lutheran Church Missouri Synod
7207 Monetary Drive
Orlando, FL  32809-5724                                Director

Walter S. Rugland
4321 North Ballard Road                                Executive Vice President
Appleton, WI  54919                                    and Chief Operating 
                                                       Officer

Roger J. Johnson
4321 North Ballard Road                                Executive Vice President
Appleton, WI 54919

Woodrow E. Eno, Esq.
4321 North Ballard Road                                Senior Vice President,
Appleton, WI 54919                                     Secretary and General 
                                                       Counsel

Ronald G. Anderson
4321 North Ballard Road                                Senior Vice President and
Appleton, WI 54919                                     Chief Financial Officer

Steven A. Weber
4321 North Ballard Road
Appleton, WI 54919                                     Senior Vice President

Fred Ohlde
4321 North Ballard Road
Appleton, WI  54919                                    Senior Vice President

Carl Rudolph
4321 North Ballard Road
Appleton, WI  54919                                    Vice President, 
                                                       Controller and Treasurer


<PAGE>




James H. Abitz
222 West College Avenue
Appleton, WI 54919                                     Vice President - 
                                                       Investments

Jon. M. Stellmacher
4321 North Ballard Road
Appleton, WI   54919                                   Senior Vice President


James Jawort
4321 North Ballard Road
Appleton, WI 54919                                     Vice President

Gary Mounce
4321 North Ballard Road
Appleton, WI 54919                                     Assistant Vice President
Dan Shinnick
4321 North Ballard Road
Appleton, WI 54919                                     Second Vice President

Item 26.  Persons  Controlled  by or Under  Common  Control  with  Depositor  or
Registrant

Registrant  is a separate  account  of  Depositor,  established  by the Board of
Directors of Depositor in 1999,  pursuant to the laws of the State of Wisconsin.
Depositor is a fraternal  benefit society  organized under the laws of the State
of  Wisconsin  and  is  owned  by  and  operated  for  its  members.  It  has no
stockholders  and is not  subject  to the  control  of any  affiliated  persons.
Depositor controls the following wholly-owned, direct and indirect subsidiaries:
(a) AAL Holdings,  Inc., a Delaware  corporation  that is a holding company that
has no independent operations;  (b) AAL Capital Management Corporation (AALCMC),
a Delaware corporation that is a registered broker-dealer; and (c) North Meadows
Investment,  Ltd., a Wisconsin  corporation organized for the purpose of holding
and investing in real estate; (d) The AAL Trust Company FSB, and(e) AAL Variable
Product  Series Fund,  Inc.  ("Fund"),  a Maryland  corporation  organized as an
open-end management investment company. Financial statements of AAL are filed on
a consolidated basis with regard to each of the foregoing  entities,  other than
the Fund, which files separate financial statements.

Item 27. Number of Certificate Owners

The Account has not began operations.

Item 28. Indemnification

Section 32 of  Depositor's  Bylaws,  filed as an  Exhibit  to this  Registration
Statement,  Section  E,  subsection  (viii) of  Article  Seventh  of the  Fund's
Articles of Incorporation and Article X of the Fund's Bylaws,  and Section Eight
of  AALCMC's  Articles  of  Incorporation,   contain  provisions  requiring  the
indemnification  by  Depositor,   the  Fund,  and  AALCMC  of  their  respective
directors,  officers and certain other  individuals  for any  liability  arising
based on their duties as directors, officers or agents of the Depositor, Fund or
AALCMC,  unless,  in the case of the  Fund,  such  liability  arises  due to the
willful misfeasance,  bad faith, gross negligence,  or reckless disregard of the
duties involved in the conduct of such office.

In addition, Section 3 of the Investment Advisory Agreement between the Fund and
AAL contains a provision  in which the Fund and AAL mutually  agree to indemnify
and hold the  other  party  (including  its  officers,  agents,  and  employees)
harmless  for any and all loss,  cost damage and expense,  including  reasonable
attorney's  fees,  incurred by the other party arising out of their  performance
under the  Agreement,  unless  such  liability  is  incurred  as a result of the
party's  gross  negligence,  bad  faith,  or  willful  misfeasance  or  reckless
disregard of its obligations and duties under the Agreement.

Sections 15 and 16 of the  Transfer  Agency  Agreement  between the Fund and AAL
provide that each party shall indemnify the other for certain liability. Section
15  states  that  AAL  shall  act in good  faith  and use  best  efforts  within
reasonable limits to ensure the accuracy of the services performed for the Fund,
but assumes no  responsibility  for loss or damage due to errors.  However,  AAL
will hold the Fund  harmless from all loss,  cost damage and expense,  including
reasonable  attorney's  fees,  incurred  by the Fund as a result of AAL's  gross
negligence,  bad faith,  or  willful  misfeasance  or by reason of its  reckless
disregard  of its  obligations  and duties under the  Agreement,  or that of its
officers,  agents and employees.  The Fund shall indemnify and hold AAL harmless
for all loss,  cost damage and expense  resulting  from the  performance  of its
duties,  unless due to the gross negligence,  bad faith,  willful misfeasance or
reckless  disregard  of its  obligations  on the  part  of  AAL,  its  officers,
employees and agents.

Section 7 of the  Participation  Agreement  between AAL and the Fund  contains a
provision  in which the Fund and AAL mutually  agree to  indemnify  and hold the
other party (including its Officers, agents, and employees) harmless for any and
all loss,  cost  damage  and  expense,  including  reasonable  attorney's  fees,
incurred  by  the  other  party  arising  out of  their  performance  under  the
Agreement,  unless such  liability is incurred as a result of the party's  gross
negligence,  bad faith,  or willful  misfeasance  or reckless  disregard  of its
obligations and duties under the Agreement.

Section 8 of the Principal  Underwriting and Servicing Agreement between AAL and
AALCMC  contains a provision in which AAL and AALCMC mutually agree to indemnify
and hold the  other  party  (including  its  officers,  agents,  and  employees)
harmless  for any and all loss,  cost damage and expense,  including  reasonable
attorney's  fees,  incurred by the other party arising out of their  performance
under the  Agreement,  unless  such  liability  is  incurred  as a result of the
party's  gross  negligence,  bad  faith,  or  willful  misfeasance  or  reckless
disregard of its obligations and duties under the Agreement.

Insofar as indemnification  for liabilities  arising under the Securities Act of
1933  may be  permitted  to  directors,  officers  and  controlling  persons  of
Registrant,  pursuant to the foregoing  provisions or otherwise,  Registrant has
been advised that,  in the opinion of the  Securities  and Exchange  Commission,
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such  liabilities  (other than the payment by  Depositor,  the Fund or AALCMC of
expenses  incurred  or paid by a director  or officer or  controlling  person of
Registrant  in the  successful  defense of any action,  suit or  proceeding)  is
asserted  by such  director,  officer or  controlling  person of  Registrant  in
connection with the securities being registered,  Depositor,  the Fund or AALCMC
will,  unless in the  opinion of its  counsel  the  matter  has been  settled by
controlling  precedent,  submit  to a  court  of  appropriate  jurisdiction  the
question of whether or not such  indemnification  by it is against public policy
as expressed in the Act and will be governed by the final  adjudication  of such
issue.

An insurance company blanket bond is maintained,  providing $10,000,000 coverage
for officers and employees of Aid  Association for Lutherans (the Depositor) the
Fund and AALCMC,  and $750,000 coverage for their general agents and Depositor's
Representatives, both subject to a $100,000 deductible.

Item 29. Principal Underwriter

(a)      AALCMC,  the principal  underwriter  of the  Certificates,  is also the
         distributor  of the shares of The AAL  Mutual  Funds,  a  Massachusetts
         Business Trust offering a series of individual funds, including The AAL
         Small Cap Stock, Mid Cap Stock,  International,  Capital Growth, Equity
         Income,  Balanced,  High Yield Bond, Municipal Bond, Bond, Money Market
         Funds  (Class A and Class B) and The AAL U.S.  Government  Zero  Coupon
         Target Fund Series 2001 and The AAL U.S.  Government Zero Coupon Target
         Fund  Series  2006,  all of which are  open-end  management  investment
         companies.

(b)      The  directors  and  principal  officers  of AALCMC  are set out below.
         Unless  otherwise  indicated,  the principal  business  address of each
         person named below is 222 West  College  Avenue,  Appleton,  Wisconsin,
         54911.


Name and Principal               Positions and Offices
Business Address                 with Underwriter

Ronald G. Anderson               Chairman of the Board and President

Steven A. Weber                  Director

Walter Rugland                   Director

Carl J. Rudolph                  Director and Treasurer

Woodrow E. Eno                   Director, Vice President, General Counsel 
                                 and Secretary

James H. Abitz                   Director and Senior Vice President

Thomas R. Mischka                Director and Vice President

Stanley H. Herman                Director and Vice President

Jon M. Stellmacher               Director and Vice President

Jeffrey L. Verhagen              Vice President

Robert G. Same                   Assistant Secretary

Lori Richardson                  Vice President

Krien VerBerkmoes III            Vice President and Chief Compliance Officer

Paul M. Stadler                  Vice President

Cindy L. Haas                    Assistant Vice President

Charles D. Gariboldi             Assistant Vice President

Charles A. Friedman              Assistant Vice President

Wendy S. Schmidt                 Assistant Vice President

(c)      Not Applicable.

Item 30. Location of Accounts and Records

The  accounts  and  records of  Registrant  are  located  at the  offices of the
Depositor at 4321 North Ballard Road, Appleton,  Wisconsin,  54919, and 222 West
College  Avenue,  Appleton,  Wisconsin,  54911,  and 125 North Superior  Street,
Appleton, Wisconsin,54911.


Item 31.  Services

Not Applicable.


Item 32. Undertakings

(a)  Registrant   undertakes  to  file  a   post-effective   amendment  to  this
     Registration  Statement  as  frequently  as is necessary to ensure that the
     audited financial statements in this Registration  Statement are never more
     than 16 months old for so long as payments  under the  Certificates  may be
     accepted.

(b)  Registrant  undertakes to include either: (1) as part of any application to
     purchase a Certificate offered by the Prospectus, a space that an applicant
     can check to  request  a  Statement  of  Additional  Information,  or (2) a
     postcard  or similar  written  communication  affixed to or included in the
     Prospectus  that  the  applicant  can  remove  to send for a  Statement  of
     Additional Information.

(c)  Registrant undertakes to deliver any Statement of Additional Information or
     financial  statements  required  to  be  made  available  under  this  Form
     promptly, upon either written or oral request.

(d)  The  Depository  insurance  company  represents  that the fees and  charges
     deducted under the contract,  in the aggregate,  are reasonable in relation
     to the services  rendered,  the expenses  expected to be incurred,  and the
     risks assumed by the Depositor.



<PAGE>


SIGNATURES

         As required by the Securities  Act of 1933 and the  Investment  Company
Act of 1940, as amended,  Aid  Association  for Lutherans,  on behalf of its AAL
Variable Annuity Account II has caused this amended Registration Statement to be
signed on its behalf in the City of Appleton  and State of Wisconsin on this 4th
day of February, 1999.

                         AAL VARIABLE ANNUITY ACCOUNT II
                         (Registrant)

                         By:  Aid Association for Lutherans
                              (Depositor, on behalf of itself and Registrant)


                         By:  /s/ John O. Gilbert
                              ---------------------------------------------
                              John O. Gilbert
                              President and Chief Executive Officer

         As required by the  Securities Act of 1933,  this amended  Registration
Statement has been signed by the following  persons in the capacities and on the
dates indicated:

/s/ John O. Gilbert           President and
- ----------------------------  Chief Executive Officer
John O. Gilbert               (Principal Executive Officer)     February 4, 1999

/s/ Ronald G. Anderson        Chief Financial Officer
- ----------------------------  (Principal Financial Officer,
Ronald G. Anderson            Principal Accounting Officer)     February 4, 1999

All of the Board of Directors:
Herbert J. Arkebauer         John O. Gilbert              Paul D. Schrage
Raymond G. Avischious        Gary J. Greenfield           James H. Scott
Richard E. Beumer            Richard L. Gunderson         Kathi P. Seifert
Kenneth Daly                 Robert H. Hoffman            Roger B. Wheeler
Elizabeth A. Duda            Robert E. Long               E. Marlene Wilson
Edward A. Engel              Robert B. Peregrine          Rev. Thomas R. Zehnder

         John O.  Gilbert,  by signing  his name  hereto,  does hereby sign this
document on behalf of each of the  above-named  Directors of Aid Association for
Lutherans pursuant to powers of attorney duty executed by such persons.

/s/ John O. Gilbert                                      February 4, 1999
- ----------------------------
John O. Gilbert
Attorney-in-Fact


<PAGE>

                         AAL VARIABLE ANNUITY ACCOUNT II

                                INDEX TO EXHIBITS

         The exhibits below  represent only those exhibits which are newly filed
with this  Registration  Statement.  See Item 24(b) of Part C for  exhibits  not
listed below.

1.   Resolution of AAL Board of Directors  authorizing the  establishment of AAL
     Variable Annuity Account II

2.   Variable Annuity Certificate


                                  RESOLUTIONS

WHEREAS,  Aid Association for Lutherans ("AAL") desires to develop,  sell, issue
and  administer  variable  immediate  annuity  contracts,  and to establish  and
operate such  separate  accounts as may be necessary  or  appropriate  for AAL's
planned variable immediate annuity contracts;

WHEREAS,  the Board of Directors of AAL intends to authorize  AAL  management to
proceed with the  development of this plan and to obtain the necessary state and
federal approvals in connection with the contracts and the separate accounts;

NOW THEREFORE BE IT RESOLVED,  that AAL shall make all necessary state insurance
department  filings  necessary to obtain  approvals to issue variable  immediate
annuity  contracts,  including but not limited to,  filing with state  insurance
departments the form of the Certificate of Membership and Annuity.

RESOLVED,  that pursuant to authority  granted under Section 614.24 of Wisconsin
Statutes,  AAL hereby establishes a separate account to provide a funding medium
to support reserves under variable  immediate  annuity  contracts issued by AAL,
under the name of "AAL Variable Annuity Account II" (the "Account"), under which
income, gains and losses, whether or not realized,  from assets allocated to the
Account, are, in accordance with the applicable contract, credited to or charged
against the Account without regard to other income, gains or losses of AAL, with
assets  attributable  to  contracts to be held and applied  exclusively  for the
benefit of the contract owners;  under which contracts any accumulation or value
of  the  contracts,  or  any  portion  thereof,  or  any  unit  of  interest  or
participation  therein,  varies  according to the  investment  experience of the
Account;  the  assets of which  Account  shall be  legally  segregated  from the
general  account  assets  of AAL and  shall,  at the time  during  the year that
adjustments  in the  reserves  are  made,  have a value  at  least  equal to the
reserves and other contract  liabilities with respect to the Account, and at all
other  times,  shall  have a value  approximately  equal to or in excess of such
reserves and  liabilities;  and that portion of such assets having a value equal
to, or approximately equal to, such reserves and contract  liabilities shall not
be chargeable with  liabilities  arising out of any other business which AAL may
conduct.

RESOLVED, that any Chief Executive Officer,  President, Senior or Executive Vice
President,  Vice  President,   Secretary,  Assistant  Secretary,  Treasurer,  or
Assistant Treasurer of AAL ("Officers") is hereby authorized,  for and on behalf
of AAL, and with respect to the Account, to execute and file with the Securities
Exchange Commission ("SEC"): a notification of registration,  and a registration
statement  on the  applicable  forms,  to provide  for the  registration  of the
Account as a unit  investment  trust  investment  company  under the  Investment
Company Act of 1940("1940  Act"); any application or applications for exemptions
from  provisions of the 1940 Act and/or rules  thereunder  which  application of
applications may be on behalf of any other separate  account  established by AAL
or any affiliated company of AAL, now or in the future; a registration statement
on an applicable form to register the contracts or interests  thereunder  (which
may be in an indefinite  amount) from time to time under the  Securities  Act of
1933, as amended ("1933 Act"), all in such form as such Officers may approve and
amendments, exhibits and other supporting documents thereto,

RESOLVED,  that the  above AAL  Officers  are  hereby  authorized  to  establish
sub-accounts  in the Account;  to provide that  allocations  may be made thereto
pursuant to contract provisions and contract owner instructions; to add, remove,
consolidate or otherwise modify  sub-accounts of the Account;  and to change the
name of the Account.

RESOLVED,  that  the  above  AAL  Officers  are  hereby  authorized  to  create,
establish,  and provide the funds and  administrative  services  for one or more
separate investment  companies;  that the Account shall invest in shares of such
investment  companies  established for this purpose (underlying mutual funds) as
the Officers may designate, now or in the future,  consistent with the contracts
and applicable law; that given  sub-accounts of the Account shall invest in only
one  company or one series of a company;  that the  contracts  issued by AAL may
include a provision for investment in AAL's general  account,  in which case the
values  shall be  combined  with  other AAL  assets  and shall be subject to the
maintenance of solvency and other provisions applicable to the general account.

RESOLVED,  that Woodrow E. Eno, the general counsel of AAL, or his successor, is
hereby designated as the person authorized to receive notices and communications
from the SEC with respect to such registration  statements to be filed under the
1933 Act and the rules and regulations of the SEC issued thereunder,  as well as
with respect to any other filing made under any state or federal law.

RESOLVED,  that the above AAL Officers (and such other officers and employees of
AAL as the  President  of AAL may  designate),  and  each of  them,  are  hereby
authorized,  for and on behalf of AAL, now and in the future, to take such other
and  further  action  and  to  execute  such  other  and  further   instruments,
amendments,   exhibits,  and  other  supporting  documents  (including,  without
limitation,  a distribution agreement with a principal underwriter in compliance
with the Securities Exchange Act of 1934, with respect to sale of the contracts)
as they,  or any of them,  may deem  necessary or  appropriate  to carry out the
purposes of the foregoing resolutions or to comply with applicable law.



                              JOHN E. DOE
                                 JANUARY 6, 1999
                                     1234567

                         AID ASSOCIATION FOR LUTHERANS
                           A FRATERNAL BENEFIT SOCIETY


                                 SINGLE PREMIUM
                           IMMEDIATE VARIABLE ANNUITY

ANNUITY  PAYMENTS AND DEATH PROCEEDS UNDER THIS  CERTIFICATE,  WHEN BASED ON THE
PERFORMANCE OF THE VARIABLE  ACCOUNT,  MAY INCREASE OR DECREASE DAILY.  THEY ARE
NOT GUARANTEED AS TO DOLLAR AMOUNT.

CERTIFICATE BENEFITS ARE VARIABLE. SEE SECTION 3 PAYMENT OF CERTIFICATE PROCEEDS
AND SECTION 5 FIXED AND VARIABLE ACCOUNTS.

- -  Single premium
- -  Periodic payments
- -  Participating

This is Your  certificate of membership and single  premium  immediate  variable
annuity with Aid Association for Lutherans (AAL). It is a legal contract between
You and AAL.

This  certificate is issued in  consideration of the application and the payment
of the first premium.


                                NOTICE OF 10 DAY
                                 RIGHT TO CANCEL
READ  THIS  CERTIFICATE  CAREFULLY.  Within  10  days  after  You  receive  this
certificate, You may cancel it for any reason. The certificate must be delivered
or mailed with a written  request to Your AAL  district  representative  or AALs
service center.  Within 7 days after AAL receives Your request for cancellation,
AAL will  refund  the free look value of this  certificate.  If  returned,  this
certificate will be void from the beginning.

Signed for Aid  Association  for  Lutherans at the home office,  4321 N. Ballard
Road, Appleton, WI 54919. AAL's telephone number is: (800) 225- 5225.

                                             Secretary            President


             AID ASSOCIATION FOR LUTHERANS

<PAGE>


                         TABLE OF CERTIFICATE PROVISIONS

1.       General Provisions
1.1      Definitions
1.2      Entire Contract
1.3      Change of Contract
1.4      Incontestability
1.5      Age and Sex
1.6      Maintenance of Solvency
1.7      Report

2.       Membership, Ownership and Assignment
2.1      Membership
2.2      Ownership
2.3      Assignment
2.4      Protection from Creditors

3.       Payment of Certificate Proceeds
3.1      Annuity Payment
3.2      Calculation of Variable Annuity Payments
3.3      Number of Annuity Units
3.4      Annuity Unit Value
3.5      Change in Annuity Unit Allocation
3.6      Death Proceeds
3.7      Evidence of Age or Survival
3.8      Filing a Death Claim

4.       Surplus Refunds
4.1      Surplus Refunds

5.       Fixed and Variable Accounts
5.1      Fixed Account
5.2      Variable Account
5.3      Change of Portfolio or Investment Policy


6.       Surrender
6.1      Surrender
6.2      Delay of Payment

7.       Beneficiary
7.1      Beneficiary Designation
7.2      Order of Payment
7.3      Change of Beneficiary Designation

A copy of the application follows Section 7.


<PAGE>


1.  GENERAL PROVISIONS

1.1  DEFINITIONS    As used in this certificate:

                    "AAL" means Aid Association for Lutherans.

                    "AAL's service center" is the location where  administration
                    of this certificate will occur.

                    "Annuitant"  means the  person(s)  on whose life the annuity
                    payments are based. The annuitant(s) is shown on page 3.

                    "Annuity  payment period" is the period during which annuity
                    payments are made.

                    "Annuity unit" is an accounting unit of measure.  It is used
                    to calculate the amount of the annuity payment.

                    "Assumed  investment  return" is the investment  return upon
                    which the variable  annuity payments in this certificate are
                    based.

                    "Commuted  Value" means the present value of future payments
                    for the remaining  guaranteed  payment period.  The interest
                    rate used to discount the  remaining  payments will be equal
                    to the maximum  valuation  interest rate for Single  Premium
                    Immediate Annuities, as prescribed by the standard valuation
                    law, for the year the contract was issued, plus 2%.

                    "Fixed  account"  is part of  AAL's  general  account  which
                    includes  all  of  AAL's  assets  other  than  those  in any
                    separate account of AAL.

                    "Free look  value" is the value of the annuity  units,  that
                    were  purchased  by the  single  premium,  on the day AAL is
                    notified  of Your  desire to cancel  this  certificate.  Any
                    annuity  payments  that have been made will be deducted from
                    this value.

                    "Fund" means the AAL Variable  Product Series Fund, Inc. The
                    fund  has  portfolios   that   correspond  to  each  of  the
                    subaccounts of the variable account.  The current portfolios
                    are shown on page 3.

                    "Net asset value"  means the value of any fund  portfolio as
                    computed for any  valuation  period as described in the fund
                    prospectus.


<PAGE>

                    "Payee" means the person(s) who receives  periodic  payments
                    under the certificate. The payee is shown on page 3.

                    "Proof  of  Death"  means  a  certified  copy  of the  death
                    certificate,  a  certified  decree  of a court of  competent
                    jurisdiction as to the finding of death, a written statement
                    by a medical doctor who attended the deceased,  or any other
                    proof satisfactory to AAL.

                    "Subaccount"  means a subdivision  of the variable  account.
                    Each  subaccount  invests  exclusively  in the  shares  of a
                    corresponding portfolio of the fund. The current subaccounts
                    are shown on page 3.

                    "Valuation date" means every day the New York Stock Exchange
                    is open for regular trading and AAL is open for business.

                    "Valuation  period" means the period of time from the end of
                    one valuation date to the end of the next valuation date.

                    "Variable  account" means the AAL Variable  Annuity  Account
                    II. It is a separate account of AAL.

                    "Written Request" means a written request signed by You that
                    is satisfactory in form and content to AAL.

                    "You" or "Your" means the owner(s) of this certificate.

1.2  ENTIRE CONTRACT     

                    The entire contract is made up of:

                    This  certificate,  including any attached  endorsements  or
                    amendments;

                    The attached application; and

                    The AAL Articles of Incorporation and Bylaws.

1.3  CHANGE OF  CONTRACT  

                    Any changes to the Articles of Incorporation and Bylaws made
                    after  this  certificate  is  issued  will  not  reduce  the
                    benefits AAL promises to pay.

                    No  representative  of  AAL,  except  the  president  or the
                    secretary, may change any part of this certificate on behalf
                    of AAL.


<PAGE>




To continue treatment of this certificate as an annuity,  AAL reserves the right
to amend this  certificate  at any time without  Your consent if AAL  determines
that  such  amendment  is  necessary  for the  certificate  to  comply  with the
provisions of the Internal Revenue Code or any regulation or ruling  thereunder,
or with any other applicable federal or state law, rule or regulation.

1.4  INCONTESTABILITY

                    This certificate will be incontestable from its issue date.



1.5  AGE AND SEX    The issue  age(s) is the age  nearest  the  birthday  of the
                    annuitant(s) on the issue date. This is based on the date of
                    birth given in the application. The issue age(s) is shown on
                    page 3.

                    The values of this  certificate are based on the age and sex
                    of the  annuitant(s)  on the date of  issue.  If the date of
                    birth or sex of the  annuitant(s)  is  incorrect as shown in
                    the  application,  AAL will  adjust  any  amount  payable to
                    conform to the  correct  date of birth or sex on the date of
                    issue


1.6  MAINTENANCE OF SOLVENCY

                    This provision applies only to values in the fixed account.

                    If  AAL's  reserves  for any  class of  certificates  become
                    impaired,  You may be  required  to make an  extra  payment.
                    AAL's Board of Directors  will  determine  the amount of any
                    extra  payment  based  on each  member's  fair  share of the
                    deficiency.

                    If the  payment  is not  made,  it  will  be  charged  as an
                    indebtedness  against this  certificate  with  interest at a
                    rate of 5% per year, compounded annually.  You may choose an
                    equivalent   reduction   in  benefits   instead  of,  or  in
                    combination with, the payment or indebtedness.

                    Any   indebtedness   and  interest   charged   against  this
                    certificate,  or any  agreement for a reduction in benefits,
                    shall  have  priority  over  the  interest  of any  owner or
                    beneficiary under this certificate.

1.7  REPORT         AAL will send a report to You at least once each certificate
                    year or upon  request.  The  report  will show the values of
                    this certificate and any additional  information required by
                    law.



<PAGE>




2.  MEMBERSHIP, OWNERSHIP AND ASSIGNMENT

2.1  MEMBERSHIP     If this certificate was issued as an adult certificate,  the
                    person(s) who applied for this  certificate and is listed as
                    the member(s) on the  application is a benefit  member(s) of
                    AAL.

                    If this  certificate  was issued as a juvenile  certificate,
                    the  annuitant  will  become a benefit  member of AAL on the
                    anniversary  of the  issue  date of this  certificate  on or
                    following the annuitant's 16th birthday.

                    This  membership  cannot be  transferred.  The privileges of
                    membership  are stated in the AAL Articles of  Incorporation
                    and Bylaws.

2.2  OWNERSHIP 

                    The owner of this  certificate  may exercise every right and
                    enjoy every benefit provided in this certificate.

                    If this certificate was issued as an adult certificate,  the
                    owner of this  certificate is the person or entity listed as
                    owner on the application. The owner is shown on page 3.

                    If this  certificate  was issued as a juvenile  certificate,
                    the  annuitant  shown  on  page  3  is  the  owner  of  this
                    certificate.  However,  because of age, the annuitant cannot
                    exercise  the  rights  of  ownership  in  this  certificate.
                    Therefore,  the person who applied for this  certificate  as
                    applicant/controller  will have control of it. Control means
                    having the ability to exercise  the rights of  ownership  on
                    behalf of the  annuitant.  The  person who has  control  may
                    transfer control to another eligible person as determined by
                    AAL, but cannot transfer ownership.

                    The annuitant will obtain control of this certificate on the
                    earliest of the following dates:

                    On the date of death of the person  who has  control if that
                    person dies after the  anniversary of the issue date of this
                    certificate on or following the  annuitant's  16th birthday;
                    or

                    On the date  the  person  who has  control  transfers  it in
                    writing to the annuitant, after the anniversary of the issue
                    date of this  certificate  on or following  the  annuitant's
                    16th birthday; or


<PAGE>

                    On the anniversary of the issue date of this  certificate on
                    or following the annuitant's 21st birthday.

                    If the  person  who has  control  of this  certificate  dies
                    before the annuitant reaches annuity age 16. control will be
                    vested in an eligible person according to the Bylaws of AAL.

                    If AAL determines that it is best for the annuitant, control
                    of  this  certificate  may  be  transferred  to  some  other
                    eligible person according to the Bylaws of AAL.



<PAGE>


2.3  ASSIGNMENT     This  certificate  or  its  periodic  payments  may  not  be
                    assigned.


2.4  PROTECTION FROM CREDITORS

                    The  initial   amount  and  all  payments  made  under  this
                    certificate  will be exempt from creditors'  claims and from
                    legal process to the extent permitted by law.


3. PAYMENT OF CERTIFICATE PROCEEDS

3.1  ANNUITY PAYMENTS                        

                    AAL will  make  payments  to the  payee  while at least  one
                    annuitant  is alive as  shown on page 3. The  first  payment
                    will  be made  on the  first  payment  date.  Payments  will
                    continue to be made as shown.  The amount of each payment is
                    the  guaranteed  periodic  payment  plus any surplus  refund
                    payable  according to Section 4. The first  payment date and
                    the guaranteed periodic payment are as shown.

3.2  CALCULATION OF VARIABLE ANNUITY PAYMENTS


                    If a variable settlement option is selected, each payment is
                    defined in terms of annuity units.  The total amount payable
                    is the sum of the payments  attributable to each subaccount.
                    This  amount is  determined  by  multiplying  the  number of
                    annuity units attributable to each subaccount by the annuity
                    unit value of the subaccount.  The first payment is based on
                    the annuity unit value as of the issue date.

                    For the second and subsequent payments, the payment is based
                    on the annuity  unit value as of the annuity  payment  date.
                    The net  performance of the underlying  subaccounts  will be
                    compared  to the assumed  investment  return and the payment
                    will be  adjusted  accordingly.  If the net  performance  is
                    greater than the assumed investment return, the payment will
                    increase; if it is the same, the payment will not change; if
                    it is less, the payment will decrease.

3.3  NUMBER OF ANNUITY UNITS               

                    The number of annuity units  payable from any  subaccount is
                    determined  on the issue date.  The number of annuity  units
                    remains unchanged during the annuity payment period,  unless
                    you make a change in annuity unit  allocation or a reduction
                    factor is indicated on page 3.

3.4  ANNUITY UNIT VALUE                    

                    For each subaccount,  the annuity unit value is set when the
                    subaccount  was  established.  The  annuity  unit  value may
                    increase or decrease from one valuation period to the next.

                    On  any  valuation  date,  the  annuity  unit  value  for  a
                    subaccount is equal to:

                    The annuity unit value for the  subaccount at the end of the
                    prior   valuation   date;   multiplied  by  The   subaccount
                    investment factor; multiplied by

                    A discount  factor  which  adjusts the annuity unit value to
                    reflect the assumed investment return.

                    The subaccount investment factor is equal to:

                    The net asset value of the  corresponding  fund portfolio at
                    the end of the valuation period;

                    Plus  the  amount  of any  dividend,  capital  gain or other
                    distribution made by the fund portfolio if the "ex-dividend"
                    date occurs during the valuation period;

                    Plus or minus any  cumulative  charge  or  credit  for taxes
                    reserved  which is  determined  by AAL to have resulted from
                    the operation of the portfolio;

                    Divided  by the net asset  value of the  corresponding  fund
                    portfolio at the beginning of the valuation period;

                    Minus the  mortality and expense risk charge AAL deducts for
                    each day in the valuation period. This mortality and expense
                    risk charge is guaranteed not to exceed, on an annual basis,
                    1.25% of the daily value of the subaccount.


<PAGE>


3.5  CHANGE IN ANNUITY UNIT ALLOCATION

                    The   allocation   of  annuity   units  among  the  variable
                    subaccounts  and fixed  account  may be  changed  during the
                    annuity  payment  period.  A written request must be sent to
                    AAL's service center.  The selected payment option will stay
                    the same.  Reallocation  of annuity units is allowed between
                    the variable  subaccounts  and from variable  subaccounts to
                    the  fixed  account.  However,  annuity  units in the  fixed
                    account cannot be reallocated to the variable subaccounts.

                    Any change in annuity  unit  allocation  will affect  future
                    annuity  payments.  The change will be effective and amounts
                    will  be  reallocated  at the  end of the  valuation  period
                    during  which  Your  written  request is  received  at AAL's
                    service center.

                    If the  reallocation is between  variable  subaccounts,  the
                    change will be made on the basis of annuity unit values. The
                    number of annuity units from the existing subaccount will be
                    changed to a number of annuity units in the new  subaccount.
                    At the time of  reallocation,  the number of  annuity  units
                    will be set equal to the number of units which are needed to
                    pay  the  same  amount  from  the  new   subaccount.   After
                    reallocation, annuity payments will reflect the annuity unit
                    value of the newly selected subaccount.

                    If the reallocation is from a variable  subaccount(s) to the
                    fixed account,  the amounts held by AAL as a reserve for the
                    portion  being  reallocated  will  be  used  to fund a fixed
                    income. The appropriate annuity payment rate will be applied
                    to the reserve amount to determine the annuity payment.  The
                    annuity  payment rate will be based on the nearest  attained
                    age of the  annuitant(s)  at the time of  reallocation,  and
                    will reflect the current payment rates at that time.

                    You may make two changes in annuity unit  allocation in each
                    certificate year without charge. Thereafter,  each change in
                    a  certificate  year will be subject to a $25  charge.  This
                    charge will be deducted from the first annuity  payment made
                    after the reallocation.

3.6  DEATH PROCEEDS

                    AAL will make payments to the beneficiary  upon the death of
                    the last  surviving  annuitant if the annuitant  dies within
                    the  guaranteed   payment  period.  The  guaranteed  payment
                    period, as shown on page 3, is measured from the issue date.
                    AAL  will  pay the  guaranteed  periodic  payment  plus  any
                    surplus  refund  payable.  Surplus  refunds are described in
                    Section 4.1.  Payments will be made at the payment frequency
                    then  in  effect  until  the end of the  guaranteed  payment
                    period, at which time this certificate shall terminate.

                    Instead of receiving  these  payments,  the  beneficiary may
                    take the commuted value as a single payment.



<PAGE>


3.7  EVIDENCE OF AGE OR SURVIVAL                               

                    AAL may require  satisfactory proof of correct age or sex at
                    any time. If any payment under this contract  depends on the
                    annuitant being alive, AAL may require satisfactory proof of
                    survival.  If such proof is not  furnished,  AAL may suspend
                    payments.


3.8  FILING A DEATH CLAIM


                    Written  notice  of death  must be given to AAL at the AAL's
                    service center.  Notice should include the annuitant's  name
                    and the certificate  number. Help may be obtained through an
                    AAL district representative.

                    A claim  form will be sent upon  receiving  the death  claim
                    notice. Complete the claim form and send it to AAL's service
                    center along with a certified copy of the death  certificate
                    or other legal proof of death.  Processing of the claim will
                    begin as soon as these items are received.


4.  SURPLUS REFUNDS

4.1  SURPLUS REFUNDS                                          

                    This is a participating  certificate.  Premiums allocated to
                    the fixed account will share in any surplus refunds declared
                    annually by the AAL Board of Directors.  Surplus refunds, if
                    any,  are  payable  in cash  with each  guaranteed  periodic
                    payment as shown on page 3.

5.  FIXED AND VARIABLE ACCOUNTS

5.1  FIXED ACCOUNT


                    Premiums allocated to the fixed account and transfers from a
                    subaccount to the fixed  account  become part of the general
                    account assets of AAL. The general  account  includes all of
                    AAL's assets, except those assets segregated in the variable
                    account or any other separate account of AAL.



<PAGE>


5.2  VARIABLE ACCOUNT                         

                    The AAL Variable Annuity Account I is a separate  investment
                    account established by AAL under Wisconsin law. The variable
                    account  is  registered  with the  Securities  and  Exchange
                    Commission as a unit  investment  trust under the Investment
                    Company Act of 1940.

                    AAL uses the assets of the variable account to buy shares in
                    the AAL  Variable  Product  Series  Fund,  Inc.  The fund is
                    registered with the Securities and Exchange Commission under
                    the Investment Company Act of 1940 as a diversified open-end
                    management  investment  company.  The  variable  account has
                    subaccounts  which are  invested in  corresponding  specific
                    portfolios of the fund. These subaccounts and portfolios are
                    shown on page 3.

                    AAL, consistent with then applicable law, may:

                    Create new separate accounts;

                    Combine  with  another  separate   account,   operate  as  a
                    management  investment company,  deregister as an investment
                    company or modify the variable account;

                    Restrict or eliminate any voting  rights of contract  owners
                    or other  persons who have voting  rights as to the variable
                    account;

                    Add, delete, combine or modify subaccounts;

                    Invest the assets of any new  subaccount  in a new portfolio
                    of the fund, a different  investment company or in any other
                    investment; and

                    Make any new  subaccount  available  to you on a basis to be
                    determined by AAL.

                    AAL  reserves  the  right to  substitute  the  shares of any
                    registered  investment  company  already  purchased or to be
                    purchased  in the future by the  variable  account  provided
                    that the  substitution  has been approved by the  Securities
                    and Exchange Commission.

                    AAL owns the assets of the  variable  account and keeps them
                    legally  segregated from the assets of the general  account.
                    The assets of the variable account shall, at the time during
                    the year that  adjustments in the reserves are made,  have a
                    value at least  equal to the  reserves  and  other  contract
                    liabilities with respect to the variable account and, at all
                    other times, shall have a value approximately equal to or in
                    excess of such  reserves and  liabilities,  and shall not be
                    chargeable  with  liabilities   arising  out  of  any  other
                    business  AAL may  conduct,  except to the  extent  that the
                    assets of the variable account exceed the reserves and other
                    contract  liabilities of the variable  account arising under
                    the certificates supported by the variable account.


<PAGE>




                    Income, gains and losses, whether or not realized,  from the
                    assets in each subaccount are credited to or charged against
                    that subaccount without regard to any of AAL's other income,
                    gains or  losses.  The value of the  assets in the  variable
                    account is determined at the end of each valuation date.



<PAGE>


5.3  CHANGE OF PORTFOLIO OR INVESTMENT POLICY

                    AAL may  determine  that a portfolio  of a fund is no longer
                    desirable for  investment by a subaccount or the shares of a
                    portfolio are no longer  available for  investment.  If that
                    occurs, AAL has the right to substitute another portfolio of
                    the fund, or to invest in another investment  company.  This
                    change  would be subject to any required  prior  approval by
                    the  Securities  and Exchange  Commission  and the insurance
                    supervisory officials in the state where this certificate is
                    delivered.  Any  change  in  the  investment  policy  of the
                    variable  account  will be  subject  to any  required  prior
                    approval by the insurance supervisory officials of the state
                    of Wisconsin.  AAL will notify You of any material change in
                    investment policy.


6.  WITHDRAWALS AND SURRENDER

6.1  SURRENDER                              

                    Unless  this  certificate  and its  payments  are  shown  as
                    irrevocable on page 3, You may surrender this certificate at
                    any time while the annuitant(s) is alive. The surrender will
                    be  effective  on the date Your request is received at AAL's
                    service center.  AAL will pay You the commuted  value.  Upon
                    payment  of  the  commuted  value,   this  certificate  will
                    terminate.

6.2  WITHDRAWALS                             

                    Unless  this  certificate  and its  payments  are  shown  as
                    irrevocable  on  page  3,  you  may  make   withdrawals  not
                    exceeding the commuted value while the annuitant(s) is alive
                    and during the  guaranteed  payment  period.  The withdrawal
                    will be  effective  on the date Your  request is received at
                    AAL's  service  center.  You  may  select  the  source  of a
                    withdrawal  by  specifically  indicating  the  Subaccount or
                    Fixed Account.  However, we must agree to any selection.  If
                    you  request a  withdrawal  and do not specify the source of
                    the  withdrawal,  we will take the  withdrawal on a pro rata
                    basis from each  Subaccount and the Fixed  Account.  You may
                    not withdraw less than $1000.  If you take a withdrawal,  we
                    will issue you a  supplemental  contract  for the  remaining
                    annuity payments.

6.3  DELAY OF PAYMENT                        

                    Payment of any commuted value normally will be made within 7
                    days after Your written request is received at AAL's service
                    center. However, AAL may delay payment of any commuted value
                    for up to 6 months after Your written request is received at
                    the AAL's service center.

7.  BENEFICIARY

7.1  BENEFICIARY DESIGNATION

                    You may designate one or more  beneficiaries  to receive the
                    death  proceeds as defined in Section 3.6.  The  beneficiary
                    designation is made at the time of  application.  The Bylaws
                    of   AAL   list   those   eligible   to  be   beneficiaries.
                    Beneficiaries  are  designated  as  first,  second  or third
                    class.


<PAGE>




7.2  ORDER OF PAYMENT

                    Unless   You   indicate   otherwise   in   the   beneficiary
                    designation,  AAL will pay the death  proceeds  as  follows:
                    Equally to the  beneficiaries in the first class who survive
                    the  annuitant(s).  If none in the first  class  survive the
                    annuitant(s), then;

                    Equally to the beneficiaries in the second class who survive
                    the  annuitant(s).  If none in the second class  survive the
                    annuitant(s), then;

                    Equally to the  beneficiaries in the third class who survive
                    the annuitant(s), however;

                    If  any   beneficiary   dies  at  the   same   time  as  the
                    annuitant(s),  or within 15 days after the annuitant(s) dies
                    but before  the death  proceeds  are paid,  AAL will pay the
                    death  proceeds as though that  beneficiary  had died before
                    the annuitant(s).

                    If no  beneficiary  has  been  designated  or  survives  the
                    annuitant(s), AAL will pay the death proceeds to You or Your
                    estate.



<PAGE>


7.3  CHANGE OF BENEFICIARY DESIGNATION

                    You may  change  the  beneficiary  designation  by sending a
                    written request to AAL's service center.  AAL will provide a
                    form  for  You to use to make  this  request.  Your  written
                    request must be received  and approved at the AAL's  service
                    center before it is  effective.  Once  approved,  the change
                    will take effect as of the date You signed the  request.  If
                    no date appears on the request,  the change will take effect
                    on the date it was  received  at the AAL's  service  center,
                    provided  the request was mailed or  actually  delivered  to
                    AAL's service  center while the annuitant was alive.  AAL is
                    not  liable  for any  payment  made or  action  taken by AAL
                    before  receiving  and approving the change at AAL's service
                    center.





SINGLE PREMIUM
IMMEDIATE VARIABLE ANNUITY


- -  Single premium
- -  Periodic payments
- -  Participating





AID ASSOCIATION FOR LUTHERANS
4321 N. Ballard Road, Appleton, WI 54919-0001





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