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SUPPLEMENT TO PROSPECTUS FOR
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA SEPARATE ACCOUNT A
DATED MAY 1, 1998
I. DEATH BENEFIT BEFORE MATURITY DATE - PAYMENT OF DEATH BENEFIT
Item (5) of the second paragraph under the heading "Death Benefit Before
Maturity Date - Payment of Death Benefit" is amended and restated as follows:
(5) If the owner's spouse is the beneficiary, the spouse continues the contract
as the new owner. In such a case, the distribution rules described in "(4)"
applicable when a contract owner dies will apply when the spouse, as the owner,
dies. In addition, a death benefit will be paid upon the death of the spouse.
For purposes of calculating the death benefit payable upon the death of the
spouse, the death benefit paid upon the first owner's death will be treated as a
purchase payment to the contract. In addition, the death benefit on the last day
of the previous contract year (or the last day of the contract year ending just
prior to the owner's 81st birthday, if applicable) shall be set to zero as of
the date of the first owner's death.
II. NEW INVESTMENT PORTFOLIOS
Effective July 20, 1998 the variable portion of your contract will contain
three additional investment options. Each new portfolio is a series of Merrill
Lynch Variable Series Funds, Inc. ("Merrill Variable Funds"). Set forth below is
a brief description of each portfolio's investment objective and certain
policies relating to that objective and a schedule of fees applicable to that
portfolio.
The portfolios are only available through certain broker dealer firms.
Please call your broker dealer representative for eligibility.
INVESTMENT OBJECTIVE AND POLICIES
The MERRILL LYNCH SPECIAL VALUE FOCUS FUND seeks long-term growth of
capital by investing in a diversified portfolio of securities, primarily common
stocks, of relatively small companies that management of Merrill Variable Funds
believes have special investment value, and of emerging growth companies
regardless of size.
The MERRILL LYNCH BASIC VALUE FOCUS FUND seeks capital appreciation and,
secondarily, income by investing in securities, primarily equities, that
management of the portfolio believes are undervalued and therefore represent
basic investment value.
The MERRILL LYNCH DEVELOPING CAPITAL MARKETS FOCUS FUND seeks long-term
capital appreciation by investing in securities, principally equities, of
issuers in countries having smaller capital markets. For purposes of its
objective, the portfolio considers countries having smaller capital markets to
be all countries other than the four countries having the largest equity market
capitalizations.
The Merrill Lynch Developing Capital Markets Focus Fund may invest in high
yield securities, commonly known as "junk bonds" which also present a high
degree of risk. The risks of these securities include price volatility and risk
of default in the payment of interest and principal. See "Risks of High Yield
Securities" in the Merrill Variable Funds' prospectus dated April 16, 1998. The
Merrill Lynch Developing Capital Markets Focus Fund may also invest up to 100%
of its assets in foreign securities which present additional risks. See "Other
Portfolio Strategies - Foreign Securities" in the Merrill Variable Funds'
prospectus dated April 16, 1998.
For more information on the new portfolios and their investment adviser,
see the Merrill Variable Funds' prospectus dated April 16, 1998.
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FEE TABLE AND EXAMPLE
The contract owner Transaction Expenses, Annual Contract Fee and Separate
Account Annual Expenses are as set forth in the current Fee Table with respect
to existing portfolios. Annual Expenses and Example are amended to include the
following portfolios:
ANNUAL EXPENSES: CLASS B SHARES
(as a percentage of average net assets and after waivers and reimbursements)
<TABLE>
<CAPTION>
Other Expenses Total Company
(After Expense Annual Expenses (After
Management Reimbursement) Expense Reimbursement
Expenses 12b-1 Fees and Waiver and Waiver)
---------- ---------- -------------- ----------------------
<S> <C> <C> <C> <C>
Merrill Lynch Special Value Focus Fund 0.75% 0.15% 0.06%* 0.96%
Merrill Lynch Basic Value Focus Fund 0.60% 0.15% 0.07%* 0.82%
Merrill Lynch Developing Capital Markets Focus Fund 0.81% 0.15% 0.43%* 1.39%
</TABLE>
*Note that these are the expenses for the fiscal year ended December 31, 1997.
Merrill Lynch Asset Management, L.P. ("MLAM") and Merrill Lynch Life
Agency, Inc. have entered into a Reimbursement Agreement that limits the
operating expenses, exclusive of any distribution fees imposed on shares of
Class B Common Stock, paid by each portfolio in a given year to 1.25% of its
average net assets. This Reimbursement Agreement is expected to remain in effect
for the current year. During 1997, MLAM waived management fees for the
Developing Capital Markets Focus Fund in the amount totaling 0.19% of that
Fund's average daily net assets of Class B shares; absent this waiver, the total
expenses for Class B shares of this Fund would have been 1.58%.
EXAMPLE
A contract owner would pay the following expenses on a $1,000 investment,
assuming a 3% payment enhancement and a 5% annual return on assets, if the
contract owner surrendered the contract at the end of the applicable time
period:
Portfolio 1 Year 3 Years
--------- ------ -------
Merrill Lynch Special Value Focus Fund $108 $163
Merrill Lynch Basic Value Focus Fund $107 $159
Merrill Lynch Developing Capital Markets Focus Fund $112 $175
A contract owner would pay the following expenses on a $1,000 investment,
assuming a 3% payment enhancement and a 5% annual return on assets, if the
contract owner annuitized as provided in the contract or did not surrender the
contract at the end of the applicable time period:
Portfolio 1 Year 3 Years
--------- ------ -------
Merrill Lynch Special Value Focus Fund $27 $83
Merrill Lynch Basic Value Focus Fund $25 $79
Merrill Lynch Developing Capital Markets Focus Fund $31 $96
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
Merrill Variable Funds is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end management investment company.
Each of the portfolios is diversified for purposes of the 1940 Act, with the
exception of the Developing Capital Markets Focus Fund which is non-diversified.
Merrill Variable Funds receive investment advisory services from MLAM. The
Merrill Variable Funds Class B shares are subject to a Rule 12b-1 fee of up to
.15% of a portfolio's Class B net assets.
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A full description of Merrill Variable Funds, including the investment
objectives, policies and restrictions of each portfolio is contained in Merrill
Variable Funds' prospectus and should be read by a prospective purchaser before
investing. Shares of Merrill Variable Funds are not deposits or obligations of,
or guaranteed or endorsed by, any bank, and the shares are not federally insured
by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency.
PLEASE NOTE THE MERRILL VARIABLE FUNDS ARE NOT AVAILABLE FOR ERISA GOVERNED
PLANS.
SUPPLEMENT DATED JULY 13, 1998
VTG20.SUP798
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