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Rule 497(e)
File No. 333-34199
AIG LIFE INSURANCE COMPANY
VARIABLE ACCOUNT II
PROSPECTUS SUPPLEMENT
December 11, 1997
Supplement to the Group Flexible Premium Variable Universal Life Insurance
Policies Prospectus dated October 27, 1997.
This supplement provides information regarding changes in the investment
options available under the Policy. The following portfolios are no longer
available to Owners as investment options for future premium allocation:
Growth Investors Portfolio and Conservative Investors Portfolio of the
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.; Worldwide Balanced Fund of
the VAN ECK WORLDWIDE INSURANCE TRUST; VIP Overseas Portfolio of the
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND II; and the Short-
Term Retirement Portfolio, Medium-Term Retirement Portfolio and Long-Term
Retirement Portfolio of the TOMORROW FUNDS RETIREMENT TRUST.
At any time, the Owner may transfer remaining Policy Account Value from the
above portfolios to any other investment options available under the
Policy.
This supplement also provides information regarding the following
investment options that are now available to Owners:
Capital Appreciation Fund and International Equity Fund of the AIM VARIABLE
INSURANCE FUNDS, INC. ("AIM Funds"); the Global Bond Portfolio and Premier
Growth Portfolio of the ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
("Alliance Fund"); the VIP II Contrafund Portfolio of the FIDELITY
INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND II ("Fidelity Fund II"); the
Worldwide Emerging Markets Fund of the VAN ECK WORLDWIDE INSURANCE TRUST
("Van Eck Funds").<PAGE>
This supplement adds the following information to the Prospectus under the
headings indicated:
- PERFORMANCE INFORMATION
AVERAGE ANNUAL TOTAL RETURNS*
As of December 31, 1996
<TABLE>
<CAPTION>
Since
Portfolio Inception Date 1 Year 3 Years 5 Years Inception
<S> <C> <C> <C> <C> <C>
AIM
Capital Appreciation 05/05/93 17.56% 17.81% N/A 20.10%
International Equity 05/05/93 20.05% 11.46% N/A 14.60%
ALLIANCE
Global Bond . . . . 07/15/91 6.21% 7.91% 7.93% 9.29%
Premier Growth . . 06/26/92 22.70% 19.92% N/A 19.18%
FIDELITY
VIP II Contrafund . 01/03/95 21.22% N/A N/A 30.19%
VAN ECK
Worldwide Emerging
Markets . . . . . 12/21/95 26.82% N/A N/A 25.00%
</TABLE>
* This performance information reflects the total of the income generated
by the portfolio net of the total portfolio operating expenses, plus
capital gains and losses, realized or unrealized, and net of the
mortality and expense risk charge. The performance results do not
reflect: monthly deductions; cost of insurance; surrender charges; sales
loads and any state or local premium taxes (see "Charges and Deductions"
in the Prospectus). If these charges were included, the total return
figures would be lower. The data assumes the Subaccounts under the
Policy were in existence on the portfolio's inception date.
- The Funds and the Investment Advisors
Under "ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.," the following
language is added:
Global Bond Portfolio - seeks a high level of return from a combination of
current income and capital appreciation by investing in a globally
diversified portfolio of high quality debt securities denominated in the
U.S. Dollar and a range of foreign currencies.
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Premier Growth Portfolio - seeks growth of capital rather than current
income. In pursuing its investment objectives, the Portfolio will employ
aggressive investment policies. Since investments will be made based upon
the potential for capital appreciation, current income will be incidental
to the objective of capital growth. The Portfolio is not intended for
investors whose principal objective is assured income or preservation of
capital.
Under "FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND II," the
following language is added:
VIP II Contrafund Portfolio - seeks to increase the value of your
investment over the long term by investing mainly in equity securities of
companies that are undervalued or out-of-favor.
Under "VAN ECK WORLDWIDE INSURANCE TRUST," the following language is added:
Worldwide Emerging Markets Fund - seeks long-term capital appreciation by
investing primarily in equity securities in emerging markets around the
world.
The following language is added as a new paragraph:
AIM VARIABLE INSURANCE FUNDS, INC.
Capital Appreciation Fund - seeks to provide capital appreciation through
investments in common stocks, with emphasis on medium-sized and smaller
emerging growth companies.
International Equity Fund ("International Fund") - seeks to provide long-
term growth of capital by investing in international equity securities, the
issuers of which are considered by AIM Advisors Inc. to have strong
earnings momentum.
AIM Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173,
serves as the investment advisor to the AIM Funds pursuant to a new master
investor advisory agreement. More detailed information regarding management
of the Funds, investment objectives, investment advisory fees and other
charges assessed by the AIM Funds are contained in the prospectus for the
Funds included with this Prospectus.
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