ANCHOR NATIONAL LIFE INSURANCE COMPANY
VARIABLE SEPARATE ACCOUNT
_________________________________________________________
SUPPLEMENT TO AMERICAN PATHWAY II PROSPECTUS
DATED JANUARY 28, 1997
Anchor National Life Insurance Company (the "Company") is offering an
optional enhanced guaranteed minimum death benefit (the "enhanced death
benefit") as an additional selection within your American Pathway II variable
annuity contract (the "Contract") which is an alternative to the death
benefit described on page 13 of the prospectus under the subheading "DEATH
BENEFIT - Before the Annuity Date". The enhanced death benefit is not yet
available in all states.
Enhanced Death Benefit. Under the enhanced death benefit, if the Annuitant
dies prior to the Annuity Date, the Company will pay to the Beneficiary, upon
receipt by the Company of Due Proof of Death of the Annuitant, the greater
of: (a) the Contract Value as of the day on which the Company receives Due
Proof of Death; or (b) the maximum Contract anniversary value between the
date the enhanced death benefit takes effect and the Annuitant's 75th
birthday. A Contract anniversary value is equal to the Contract Value on a
Contract anniversary, increased by any Purchase Payments and reduced by any
withdrawals and partial annuitizations since that anniversary, as of the day
on which the Company receives Due Proof of Death of the Annuitant. If the
enhanced death benefit is elected prior to May 31, 1998, the Company will pay
the greater of (a) the Contract Value as of the day on which the Company
receives Due Proof of Death; or (b) the maximum Contract anniversary value
between the date one year prior to the election of the enhanced death benefit
and the Annuitant's 75th birthday.
Election Procedures. Contract Owners may elect the enhanced death benefit by
completing the Optional Enhanced Guaranteed Minimum Death Benefit Election
Form provided by the Company. If the enhanced death benefit is elected prior
to May 31, 1998, it will take effect on the date of election. If the
enhanced death benefit is elected on or after May 31, 1998, it will take
effect on the Contract anniversary following election, or on the Contract
anniversary date if election occurs on a Contract anniversary. The Company
will transfer the Accumulation Units in each Variable Account to
corresponding Accumulation Units of that Variable Account with the enhanced
death benefit and begin deducting the charge described below on the Contract
anniversary following election of the enhanced death benefit.
Contract Owners may cancel the enhanced death benefit at any time by sending
a written request to the Company. If canceled, the enhanced death benefit
will terminate on the next Contract anniversary and the original death
benefit, as described on page 13 of the prospectus under the subheading
"DEATH BENEFIT - Before the Annuity Date", will be reinstated. If the
enhanced death benefit is canceled on a Contract anniversary, the
cancellation will take effect on that date. The Company will also cease
deducting the charge for the enhanced death benefit upon cancellation and
transfer the Accumulation Units in each Variable Account to corresponding
Accumulation Units of that Variable Account without the enhanced death
benefit. Once canceled, the enhanced death benefit cannot be reinstated.
Charges and Deductions. There is a daily charge for the enhanced death
benefit so long as the enhanced death benefit is elected and remains in
effect. If the enhanced death benefit is elected prior to May 31, 1998, the
daily charge for the enhanced death benefit will be waived until the Contract
anniversary following election. This charge is equal to the annual rate of
0.10% of the daily net asset value of the Separate Account and is in addition
to the charges described on page 3 of the prospectus under the subheading
"SUMMARY OF THE CONTRACTS - Charges and Deductions" and on page 5 of the
prospectus under the heading "Separate Account Annual Fees and Charges". See
"Examples" below for more information on the fees and expenses for a Contract
with the enhanced death benefit.
Separate Account Annual Fees and Charges for Contracts with the Enhanced
Death Benefit. The fees and charges described on page 5 of the prospectus
under the heading "Separate Account Annual Fees and Charges" shows the fees
and charges applicable to a Contract without the enhanced death benefit. The
same charges and fees apply to a Contract with the enhanced death benefit,
except that an additional charge is deducted from the Separate Account for
this benefit. The annual Separate Account expenses for a Contract with the
enhanced death benefit are set forth below to show all applicable Separate
Account fees and charges:
Separate Account annual expenses (as a percentage of total net
assets):
Mortality Risk Charge 0.80%
Expense Risk Charge 0.35%
Distribution Expense Charge 0.15%
Enhanced Death Benefit Charge 0.10%
-----
Total fees and expenses 1.40%
Examples. The following examples show fees and expenses for a Contract with
the enhanced death benefit. The examples do not reflect any transfer fees or
premium taxes. The examples should not be considered a representation of
past or future expenses. Actual expenses may be greater or less than those
shown.
If you elect the enhanced death benefit and surrender your Contract at the
end of the applicable time period, you would pay the following expenses on a
$1,000 investment, assuming 5% annual return on assets:
<TABLE>
<CAPTION>
SERIES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------ ------ ------- ------- --------
<S> <C> <C> <C> <C>
Growth $70 $113 $158 $234
International $75 $127 $182 $282
Growth-Income $70 $113 $158 $234
Asset Allocation $71 $114 $160 $237
High-Yield Bond $71 $114 $160 $237
U.S. Gov't/AAA $71 $114 $160 $238
Cash Management $71 $114 $160 $237
</TABLE>
If you elect the enhanced death benefit and do not surrender your Contract at
the end of the applicable time period, you would pay the following expenses
on a $1,000 investment, assuming 5% annual return on assets:
<TABLE>
<CAPTION>
SERIES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------ ------ ------- ------- --------
<S> <C> <C> <C> <C>
Growth $20 $63 $108 $234
International $25 $77 $132 $282
Growth-Income $20 $63 $108 $234
Asset Allocation $21 $64 $110 $237
High-Yield Bond $21 $64 $110 $237
U.S. Gov't/AAA $21 $64 $110 $238
Cash Management $21 $64 $110 $237
</TABLE>
Date: August 29, 1997
Please keep this supplement with your prospectus.
