AIG Life Insurance Company
Variable Account II
PROSPECTUS SUPPLEMENT
Dated March 19, 1999
Supplement to the Group Flexible Premium Variable Universal Life Insurance
Policy Prospectus dated July 2, 1998.
This Supplement provides information regarding a change in the
investment options available under the Contract. The VIP Money Market Portfolio
of Variable Insurance Products Fund is no longer available as an investment
option. The Money Market Portfolio of the Morgan Stanley Dean Witter Universal
Funds, Inc. is available to Contract Owners in addition to the Morgan Stanley
Dean Witter Portfolios offered in the Prospectus. All references to Money Market
Portfolio now refer to the Money Market Portfolio of the Morgan Stanley Dean
Witter Universal Funds, Inc.
This Supplement amends the contents of the Prospectus, under the
headings indicated, as follows:
PORTFOLIO EXPENSES
As of December 31, 1997
Total
Management Other Operating
Portfolio Fee Expenses 12b-1 Fees Expenses
MORGAN STANLEY
Money Market* 0.08 0.47 0.00 0.55%
* As disclosed in the 1997 Annual Report, the management fee has been reduced to
reflect the voluntary waiver of a portion or all of the management fee and the
reimbursement by the adviser to the extent "Total Fund Operating Expenses"
exceed the percentages set forth above. The adviser can terminate this voluntary
waiver at any time in its sole discretion. Absent such reductions, "Total Fund
Operating Expenses" and "Management Fees" respectively, would be 0.77% and .30%
for the period ending December 31, 1997 (expenses and fees for the Money Market
Portfolio are based on estimates assuming the average daily net assets of the
Portfolio will be not more than $50,000,000).
AVERAGE ANNUAL TOTAL RETURNS
As of December 31, 1997
Inception Since
Portfolio Date 1 Year 3 Years 5 Years 10 Years Inception
- ------------------ --------- ------ ------- ------- -------- ---------
MORGAN STANLEY
Money Market* N/A N/A N/A N/A N/A N/A
* Performance information is not included because as of December 31, 1997, the
Portfolio was not available under the Policy.
MORGAN STANLEY FUNDS
This Portfolio seeks to maximize current income and preserve capital
while maintaining high levels of liquidity through investing in high quality
money market instruments with remaining maturities of one year or less. While
the portfolio is managed with the goal of keeping its share price stable at
$1.00, there can be no assurance this goal will be achieved. The rate of income
will vary from day to day, generally reflecting short-term interest rates.
