<PAGE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
PROSPECTUS SUPPLEMENT
DATED OCTOBER 2, 2000
These pages supplement General American Life Insurance Company's
prospectus, dated May 1, 2000, for the Flexible Premium Life Insurance
Policy. You should review this supplement and keep it with your
prospectus and other important papers related to your policy.
Capitalized terms in this supplement have the same meaning as set forth
in the prospectus unless otherwise defined herein. Please contact your
Agent/Registered Representative if you have any questions regarding this
information.
Effective immediately, General American Life Insurance Company Separate
Account Eleven (the "Separate Account") is increasing the number of
divisions available for the investment of funds under your policy.
Thirty new funds are now available. You can, therefore, transfer
existing cash value and/or direct future premium payments into these new
funds. These funds, along with the existing funds, which continue to be
available, are listed and described below. The information in this
supplement updates the information in the prospectus to include the
names, investment managers, investment objectives, and fees associated
with the new funds.
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THE FOLLOWING INFORMATION REPLACES THE PARAGRAPH AT THE BOTTOM OF THE
FIRST COLUMN OF THE INTRODUCTORY PAGE OF YOUR PROSPECTUS.
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Divisions of the Separate Account invest in corresponding Funds from the
following open-end, diversified management companies:
General American Capital Company
Russell Insurance Funds
American Century Variable Portfolios
J. P. Morgan Series Trust II
Fidelity Investments Variable Insurance Products Fund
Fidelity Investments Variable Insurance Products Fund II
Fidelity Investments Variable Insurance Products Fund III
Van Eck Worldwide Insurance Trust
SEI Insurance Products Trust
Metropolitan Series Fund, Inc.
New England Zenith Fund
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THE FOLLOWING INFORMATION REPLACES THE SECTION TITLED "THE SEPARATE
ACCOUNT" IN THE SUMMARY SECTION OF YOUR PROSPECTUS.
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THE SEPARATE ACCOUNT. The Separate Account consists of divisions, which
represent different types of investments. Each division may either make
money or lose money. Therefore if you invest in a division of the
Separate Account, you may either make money or lose money, depending on
the investment experience of that division. There is no guaranteed rate
of return in the Separate Account.
The divisions of the Separate Account represent investment funds run by
various investment companies. The investment companies hire advisers to
operate or advise on the day-to-day operation of the funds.
The following list shows the investment companies whose funds are
available under the policy, along with the managers or advisers and the
divisions that they oversee.
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INVESTMENT COMPANY INVESTMENT
MANAGER/ADVISER
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General American Capital Company Conning Asset Management Company
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Russell Insurance Funds Frank Russell Investment
Management Company
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American Century American Century
Variable Portfolios Investment Management, Inc.
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J.P. Morgan Series Trust II J.P. Morgan Investment
Management, Inc.
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Fidelity Investments Variable Fidelity Management
Insurance Products Fund & Research Company
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Fidelity Investments Variable Fidelity Management
Insurance Products Fund II & Research Company
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Fidelity Investments Variable Fidelity Management
Insurance Products Fund III & Research Company
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1
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<PAGE>
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INVESTMENT COMPANY INVESTMENT
MANAGER/ADVISER
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Van Eck Worldwide Insurance Trust Van Eck Associates Corporation
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SEI Insurance Products Trust SEI Investments Management Company
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Metropolitan Series Fund, Inc. Metropolitan Life Insurance Company
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New England Zenith Fund New England Investment Management, Inc.
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These investment funds have different investment goals and strategies,
which we have summarized in the following table. You should review the
prospectus of each fund, or seek professional guidance in determining
which fund(s) best meet your objectives.
<TABLE>
<CAPTION>
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INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
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<S> <C> <C> <C>
Conning Asset S&P 500 Index Fund Growth & Income To achieve a rate of return that
Management Company parallels the return of the stock market
as a whole, as represented by the
Standard and Poor's 500 Stock Index.
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Conning Asset Money Market Fund Money Market To obtain the highest level of current
Management Company income consistent with the preservation of
capital and maintenance of liquidity.
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Conning Asset Bond Index Fund Corporate Bonds To provide a rate of return that reflects
Management Company the performance of the bond market as a
whole, as measured by the Lehman Brothers
Government/Corporate Bond Index.
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Conning Asset Asset Allocation Fund Balanced To obtain a high rate of long-term return,
Management Company composed of capital growth and income.
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Conning Asset Managed Equity Fund Growth To obtain long-term capital growth
Management Company through investment in common stocks.
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Conning Asset International Index Fund Growth: To obtain investment results that parallel
Management Company International Stock the price and yield performance of
publicly-traded common stocks in the
Morgan Stanley Capital International,
Europe, Australia, and Far East Index
("EAFE Index").
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Conning Asset Mid-Cap Equity Fund Growth To obtain long-term capital appreciation
Management Company through investment primarily in common
stocks of U.S.-based, publicly traded
companies with medium market
capitalization, defined as within the
range of the S&P Mid-Cap 400 at the time
of the Fund's investment.
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Conning Asset Small-Cap Equity Fund Aggressive Growth To provide a high rate of return through
Management Company investment in the common stock of small
companies, making up, at one time, the
smallest 20% of U.S.-based companies on
the New York Stock Exchange.
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Fidelity Management & Growth Portfolio Growth To seek capital appreciation, normally
Research Company through purchases of common stocks,
although its investments are not
restricted to any one type of security.
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Fidelity Management & Equity-Income Portfolio Growth & Income To seek reasonable income by investing
Research Company primarily in income-producing equity
securities.
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2
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<CAPTION>
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INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
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<S> <C> <C> <C>
Fidelity Management & Overseas Portfolio Growth: To seek long-term growth of capital
Research Company International Stock primarily through investment in foreign
securities.
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Fidelity Management & Asset Manager Portfolio Balanced To seek a high total return with reduced
Research Company risk over the long-term by allocating
its assets among domestic and foreign
stocks, bonds, and short-term fixed
income instruments.
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Fidelity Management & High Income Portfolio High Yield Bond To seek a high level of current income by
Research Company investing primarily in high yielding,
lower-rated, fixed income securities,
while also considering growth of capital.
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Fidelity Management & Mid Cap Portfolio Long-Term Growth of Capital To seek long-term growth by investing
Research Company primarily in common stocks, with at least
65% of total assets in securities of
companies with medium market
capitalizations, similar to those in the
S&P MidCap 400. The fund may potentially
invest in domestic and foreign companies
with smaller or larger market
capitalizations, investing in "growth"
and/or "value" stocks.
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Van Eck Associates Worldwide Hard Assets Fund Aggressive Growth: To seek long-term capital appreciation by
Corporation Specialty investing in equity and debt securities
of companies engaged in the exploration,
development, production, and distribution
of gold and other natural resources such
as strategic and other metals, minerals,
forest products, oil, natural gas,
and coal.
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Van Eck Associates Worldwide Emerging Aggressive Growth: To obtain long-term capital appreciation by
Corporation Markets Fund International Stock investing in equity securities in emerging
markets around the world. The Fund
emphasizes primarily investment in
countries that, compared to the world's
major economies, exhibit relatively low
gross national product per capita, as
well as the potential for rapid economic
growth.
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Frank Russell Multi-Style Equity Fund Growth & Income To obtain income and capital growth by
Investment Management investing principally in equity securities.
Company
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Frank Russell Aggressive Equity Fund Aggressive Growth To provide capital appreciation by assuming
Investment Management a higher level of volatility than is
Company ordinarily expected from the Multi-Style
Equity Fund, by investing in equity
securities.
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Frank Russell Non-U.S. Fund Growth: To achieve favorable total return and
Investment Management International Stocks additional diversification for United
Company and Bonds States investors by investing primarily in
equity and debt securities of non-United
States companies and non-United States
governments.
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3
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<PAGE>
<CAPTION>
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INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
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<S> <C> <C> <C>
Frank Russell Core Bond Fund Growth & Income To maximize total return through capital
Investment Management appreciation and income by assuming a level
Company of volatility consistent with the broad
fixed-income market, by investing in fixed-
income securities.
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J.P. Morgan Investment Bond Portfolio Growth & Income To provide a high total return consistent
Management, Inc. with moderate risk of capital and
maintenance of liquidity.
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J.P. Morgan Investment Small Company Portfolio Aggressive Growth To provide high total return from a
Management, Inc. portfolio of equity securities of small
companies. The Fund invests at least
65% of the value of its total assets in
the common stock of small U.S. companies
primarily with market capitalizations
less than $1 billion.
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American Century Income & Growth Fund Growth & Income To attain long-term growth of capital as
Investment well as current income. The Fund pursues
Management, Inc. a total return and dividend yield that
exceeds those of the S&P 500 by investing
in stocks of companies with strong dividend
growth potential.
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American Century International Fund Aggressive Growth: To obtain capital growth over time by
Investment International Stock investing in common stocks of foreign
Management, Inc. companies considered to have better-than-
average prospects for appreciation.
Because this Fund invests in foreign
securities, a higher degree of short-term
price volatility, or risk, is expected
due to factors such as currency fluctuation
and political instability.
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American Century Value Fund Growth To attain long-term capital growth, with
Investment income as a secondary objective. The Fund
Management, Inc. invests primarily in equity securities of
well-established companies that are
believed by management to be undervalued at
the time of purchase.
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SEI Investments Large Cap Value Fund Long-Term Growth Utilizing multiple specialist sub-advisers
Management Corporation of Capital and Income that manage in a value style, the Fund
invests in large cap income-producing
U.S. common stocks.
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SEI Investments Large Cap Growth Fund Capital Appreciation Utilizing multiple specialist sub-advisers
Management Corporation that manage in a growth style, the Fund
invests in large cap U.S. common stocks.
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SEI Investments Small Cap Value Fund Capital Appreciation Utilizing multiple specialist sub-advisers
Management Corporation that manage in a value style, the Fund
invests in common stocks of smaller
U.S. companies.
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SEI Investments Small Cap Growth Fund Long-Term Capital Utilizing multiple specialist sub-advisers
Management Corporation Appreciation that manage in a growth style, the Fund
invests in common stocks of smaller
U.S. companies.
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SEI Investments International Capital Appreciation Utilizing multiple specialist sub-advisers,
Management Corporation Equity Fund the Fund invests in equity securities of
foreign companies.
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4
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<CAPTION>
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INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
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<S> <C> <C> <C>
SEI Investments Emerging Markets Capital Appreciation Utilizing multiple specialist sub-advisers,
Management Corporation Equity Fund the Fund invests in equity securities of
emerging markets companies.
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SEI Investments Core Fixed Income Fund Current Income and Utilizing multiple specialist sub-advisers
Management Corporation Preservation of Capital that have fixed income investment
expertise, the Fund invests in investment
grade U.S. fixed income securities.
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SEI Investments High Yield Bond Fund Total Return Utilizing a specialist sub-adviser that has
Management Corporation high yield investment expertise, the Fund
invests in high yield, high risk
securities.
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SEI Investments International Fixed Capital Appreciation Utilizing a specialist sub-adviser, the
Management Corporation Income Fund and Current Income Fund invests in investment grade fixed
income securities of foreign government and
corporate issuers.
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SEI Investments Emerging Markets Total Return Utilizing a specialist sub-adviser, the
Management Corporation Debt Fund Fund invests U.S. dollar denominated debt
in securities of emerging market issuers.
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Metropolitan Life Janus Mid-Cap Portfolio Long-Term Growth The Portfolio normally invests at least
Insurance Company of Capital 65% of its total assets in common stocks
of medium capitalization companies selected
for their growth potential. The portfolio
manager defines medium capitalization
("mid-cap") companies as those whose
market capitalization falls within the
range of companies included in the
S&P MidCap 400 Index at the time of the
purchase.
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Metropolitan Life T. Rowe Price Long-Term Growth The Portfolio normally invests at least
Insurance Company Large Cap of Capital and, 65% of its total assets in a diversified
Growth Portfolio Secondarily, group of large capitalization growth
Dividend Income companies. The portfolio managers define
large capitalization ("large-cap")
companies as those whose market
capitalization falls within the range
of the largest 300 companies included
in the Russell 3000 Index at the time of
the purchase.
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Metropolitan Life T. Rowe Price Long-Term Capital Growth The Portfolio normally invests at least
Insurance Company Small Cap 65% of its total assets in a diversified
Growth Portfolio group of small capitalization companies.
The portfolio manager defines small
capitalization ("small cap") companies
as those whose market capitalization
falls within the range of companies
included in the bottom 10% of the
S&P 500 Index at the time of the purchase.
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New England Investment Alger Equity Growth The Fund invests primarily in growth
Management, Inc. Growth Series stocks and will ordinarily invest at least
65% of Equity Growth's total assets in
equity securities of issues with market
capitalization of $1 billion or greater.
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</TABLE>
5
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You may change the investments that you want to use for your future
premiums by notifying our Home Office.
You may transfer your cash value among the various investment funds, and
you may withdraw money, but there are certain rules. We don't charge
you a transaction fee for the first twelve transfers or withdrawals in a
policy year, but we charge a $25 fee for each transfer or withdrawal
after the first twelve. (A policy year is measured beginning on the
anniversary of the date that the policy was issued, and ending on the
day before the next anniversary.)
We have the right to change or eliminate transfers in the future,
although we don't currently intend to do so.
6
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THE FOLLOWING INFORMATION REPLACES THE TABLE TITLED "ANNUAL FUND
OPERATING EXPENSES" IN THE SUMMARY SECTION OF YOUR PROSPECTUS.
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The following chart shows the operating expenses of the funds as
reported for the fiscal year ending December 31, 1999. For the Capital
Company's S&P 500 Index Fund and Small-Cap Equity Fund, the chart shows
first what the fees would have been had the current fee structure been
in place for 1999, and then shows the actual fees incurred under the fee
structure that was then in effect. The investment advisory fees for the
Capital Company's Managed Equity Fund, Asset Allocation Fund, and Mid-
Cap Equity Fund will change effective January 6, 2002. These scheduled
changes are described in the footnotes following the chart.
<TABLE>
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ANNUAL FUND OPERATING EXPENSES<F1>
As a Percentage of Average Net Assets
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<CAPTION>
INVESTMENT
FUND ADVISORY / OTHER EXPENSES TOTAL
MANAGEMENT
FEE
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GENERAL AMERICAN CAPITAL COMPANY
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<S> <C> <C> <C>
S&P 500 Index Fund .0825% .05% .1325% <F2>
(.25% for 1999) (.30% for 1999)
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Money Market Fund .125% .08% .205%
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Bond Index Fund .25% .05% .30%
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Managed Equity Fund .29% .10% .39% <F3>
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Asset Allocation Fund .50% .10% .60% <F4>
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International Index Fund .49% .30% .79% <F5>
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Mid-Cap Equity Fund .54% .10% .64% <F6>
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Small-Cap Equity Fund .75% .05% .80% <F7>
(.25% for 1999) (.30% for 1999)
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<CAPTION>
RUSSELL INSURANCE FUNDS
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<S> <C> <C> <C>
Multi-Style Equity Fund .74% .18% .92% <F8>
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Aggressive Equity Fund .86% .39% 1.25% <F9>
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Non-U.S. Fund .75% .55% 1.30% <F10>
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Core Bond Fund .54% .26% .80% <F11>
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<CAPTION>
AMERICAN CENTURY VARIABLE PORTFOLIOS
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<S> <C> <C> <C>
Income & Growth Fund .70% .00% .70%
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International Fund 1.37% .00% 1.37%
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Value Fund 1.00% .00% 1.00%
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<CAPTION>
J.P. MORGAN SERIES TRUST II
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bond Portfolio .30% .45% .75%
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Small Company Portfolio .60% .55% 1.15%
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<CAPTION>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity-Income Portfolio .48% .08% .56%
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Growth Portfolio .58% .07% .65%
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Overseas Portfolio .73% .14% .87%
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High Income Portfolio .58% .11% .69%
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<CAPTION>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asset Manager .53% .09% .62%
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<PAGE>
<CAPTION>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mid Cap Portfolio .97% .00% .97%
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7
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<PAGE>
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<CAPTION>
VAN ECK WORLDWIDE INSURANCE TRUST
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Worldwide Hard Assets Fund 1.00% .34% 1.34%
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Worldwide Emerging Markets Fund 1.00% .26% 1.26%
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<CAPTION>
SEI INSURANCE PRODUCTS TRUST
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Large Cap Value Fund .35% .50% .85% <F12>
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Large Cap Growth Fund .40% .45% .85% <F12>
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Small Cap Value Fund .65% .45% 1.10% <F12>
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Small Cap Growth Fund .65% .45% 1.10% <F12>
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International Equity Fund .51% .77% 1.28% <F12>
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Emerging Markets Equity Fund 1.05% .90% 1.95% <F12>
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Core Fixed Income Fund .28% .32% .60% <F12>
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High Yield Bond Fund .49% .36% .85% <F12>
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International Fixed Income Fund .40% .60% 1.00% <F12>
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Emerging Markets Debt Fund .85% .50% 1.35% <F12>
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<CAPTION>
METROPOLITAN SERIES FUND, INC.
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Janus Mid-Cap Portfolio .67% .04% .71%
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T. Rowe Price Large Cap Growth Portfolio .69% .24% .93%
-------------------------------------------------------------------------------------------------------------------
T. Rowe Price Small Cap Growth Portfolio .52% .09% .61%
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<CAPTION>
NEW ENGLAND ZENITH FUND
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alger Equity Growth Series .80% .00% .80%
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<FN>
<F1> The Fund expenses shown above are collected from the underlying
Fund, and are not direct charges against the Separate Account assets
or reductions from the Policy's Cash Value. These underlying Fund
Expenses are taken into consideration in computing each Fund's net
asset value, which is used to calculate the unit values in the Separate
Account. The management fees and other expenses are more fully
described in the prospectus of each individual Fund. The information
relating to the Fund expenses was provided by the Fund and was not
independently verified by General American. Except as otherwise
specifically noted, the management fees and other expenses are not
currently subject to fee waivers or expense reimbursements.
<F2> The investment management / advisory fees charged by the S&P 500
Index Fund are stated as a series of annual percentages of the average
daily value of the net assets of the Funds. The percentages decrease
with respect to assets of the Fund above certain amounts, as follows:
first $500 million, 0.10%; next $250 million, 0.08%; balance over $750
million, 0.05%.
<F3> The investment management / advisory fees charged by the Managed
Equity Fund are stated as a series of annual percentages of the average
daily value of the net assets of the Fund. The percentages decrease
with respect to assets of the Fund above certain amounts, as follows:
first $10 million, 0.40%; next $20 million, 0.30%; balance over $30
million, 0.25%. Effective January 6, 2002, the investment management /
advisory fees will be: first $250 million, 0.50%; next $500 million,
0.45%; balance over $750 million, 0.35%.
<F4> The investment management / advisory fees charged by the Asset
Allocation Fund 0.50%. Effective January 6, 2002 the fee will be stated
as a series of annual percentages of the average daily value of the net
assets of the Fund. The percentages will decrease with respect to
assets of the Fund above certain amounts, as follows: first $500
million, 0.55%; next $500 million, 0.45%; balance over $1 billion,
0.40%.
<F5> The investment management / advisory fees charged by the
International Index Fund are stated as a series of annual percentages of
the average daily value of the net assets of the Funds. The percentages
decrease with respect to assets of the Fund above certain amounts, as
follows: First $10 million, 0.50%; Next $20 million, 0.40%; Balance
over $20 million, 0.30%.
<PAGE>
<F6> The investment management / advisory fees charged by the Mid-Cap
Equity Fund are stated as a series of annual percentages of the average
daily value of the net assets of the Fund. The percentages decrease
8
<PAGE>
<PAGE>
with respect to assets of the Fund above certain amounts, as follows:
first $10 million, 0.55%; next $10 million, 0.45%; balance over $20
million, 0.40%. Effective January 6, 2002, the investment management /
advisory fees will be: first $250 million, 0.55%; next $500 million,
0.50%; balance over $750 million, 0.45%.
<F7> The investment management / advisory fees charged by the Small-Cap
Equity Fund are stated as a series of annual percentages of the average
daily value of the net assets of the Funds. The percentages decrease
with respect to assets of the Fund above certain amounts, as follows:
first $250 million, 0.75%; next $500 million, 0.65%; balance over $750
million, 0.60%.
<F8> The Manager has voluntarily agreed to waive a portion of its 0.78%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 0.92% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 0.92% of
average daily net assets on an annual basis. The management fee waivers
and reimbursements are intended to be in effect for 2000, but may be
revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been
0.78%, and total Fund expenses would have been 0.96% of average daily
net assets.
<F9> The Manager has voluntarily agreed to waive a portion of its 0.95%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 1.25% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 1.25% of
average daily net assets on an annual basis. The management fee waivers
and reimbursements are intended to be in effect for 2000, but may be
revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been
0.95%, and total Fund expenses would have been 1.34% of average daily
net assets.
<F10> The Manager has voluntarily agreed to waive a portion of its
0.95% management fee, up to the full amount of that fee, equal to the
amount by which the Fund's total operating expenses exceed 1.30% of the
Fund's average daily net assets on an annual basis, and to reimburse the
Fund for all remaining expenses after fee waivers which exceed 1.30% of
average daily net assets on an annual basis. The management fee waivers
and reimbursements are intended to be in effect for 2000, but may be
revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been
0.95%, and total Fund expenses would have been 1.50% of average daily
net assets.
<F11> The Manager has voluntarily agreed to waive a portion of its
0.60% management fee, up to the full amount of that fee, equal to the
amount by which the Fund's total operating expenses exceed 0.80% of the
Fund's average daily net assets on an annual basis, and to reimburse the
Fund for all remaining expenses after fee waivers which exceed 0.80% of
average daily net assets on an annual basis. The management fee waivers
and reimbursements are intended to be in effect for 2000, but may be
revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been
0.60%, and total Fund expenses would have been 0.86% of average daily
net assets.
<F12> The SEI VP Funds' total actual annual fund operating expenses for
the current fiscal year are expected to be less than the maximum amount
allowed because the Adviser will voluntarily waive a portion of its fee
in order to keep total operating expenses at a specified level. The
Adviser may discontinue all or part of its waiver at any time. With
this fee waiver, the Funds' actual total operating expenses are expected
to be the amounts shown in the table above. Absent the fee waiver, the
Funds' total operating expenses would be: Large Cap Value Fund, 0.95%;
Large Cap Growth Fund, 1.00%; Small Cap Value Fund, 1.20%; Small Cap
Growth Fund, 1.20%; International Equity Fund, 1.41%; Emerging Markets
Equity Fund, 2.34%; Core Fixed Income Fund, 0.70%; High Yield Bond Fund,
0.99%; International Fixed Income Fund, 1.31%; Emerging Markets Debt
Fund, 1.95%.
</TABLE>
9
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THE FOLLOWING INFORMATION REPLACES THE CORRESPONDING INFORMATION IN THE
"DEFINITIONS" SECTION OF YOUR PROSPECTUS.
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DIVISION - A subaccount of the Separate Account. Each Division invests
exclusively in the shares of a corresponding Fund.
FUND - A separate investment portfolio of a registered open-end
investment company. Although sometimes referred to elsewhere as
"portfolios," they are referred to in this prospectus as "Funds," except
where "Portfolio" is part of their name.
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THE FOLLOWING INFORMATION REPLACES THE INFORMATION TITLED "THE SEPARATE
ACCOUNT" IN THE SECTION OF YOUR PROSPECTUS TITLED "THE COMPANY AND THE
SEPARATE ACCOUNT."
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THE SEPARATE ACCOUNT
-------------------------------------------------------------------------
General American Life Insurance Company Separate Account Eleven ("the
Separate Account") was established by General American as a separate
investment account on January 24, 1985 under Missouri law. The Separate
Account will receive and invest the Net Premiums paid under this Policy
and allocated to it. In addition, the Separate Account currently
receives and invests Net Premiums for other classes of flexible premium
variable life insurance policies and might do so for additional classes
in the future.
The Separate Account has been registered with the SEC as a unit
investment trust under the Investment Company Act of 1940 ("the 1940
Act") and meets the definition of a "separate account" under Federal
securities laws. Registration with the SEC does not involve supervision
of the management or investment practices or policies of the Separate
Account or General American by the SEC.
The Separate Account is divided into Divisions. Divisions invest in
corresponding Funds from various open-end, diversified management
investment companies. Income and both realized and unrealized gains or
losses from the assets of each Division of the Separate Account are
credited to or charged against that Division without regard to income,
gains, or losses from any other Division of the Separate Account or
arising out of any other business General American may conduct.
Although the assets of the Separate Account are the property of General
American, the assets in the Separate Account equal to the reserves and
other liabilities of the Separate Account are not chargeable with
liabilities arising out of any other business which General American may
conduct. The assets of the Separate Account are available to cover the
general liabilities of General American only to the extent that the
Separate Account's assets exceed its liabilities arising under the
Policies. From time to time, the Company may transfer to its General
Account any assets of the Separate Account that exceed the reserves and
the Policy liabilities of the Separate Account (which will always be at
least equal to the aggregate Policy value allocated to the Separate
Account under the Policies). Before making any such transfers, General
American will consider any possible adverse impact the transfer may have
on the Separate Account.
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GENERAL AMERICAN CAPITAL COMPANY
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General American Capital Company (the "Capital Company") is an open-end,
diversified management investment company which was incorporated in
Maryland on November 15, 1985, and commenced operations on October 1,
1987. Only the Funds described in this section of the Prospectus are
currently available as investment choices for this Policy even though
additional Funds may be described in the prospectus for the Capital
Company. Shares of Capital Company are currently offered to separate
accounts established by General American Life Insurance Company and
affiliates. The Capital Company's investment adviser is Conning Asset
Management Company ("the Advisor"), an indirect, majority-owned
subsidiary of General American. The adviser selects investments for the
Funds.
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The investment objectives and policies of each Fund are summarized
below:
S&P 500 INDEX FUND: The investment objective of this Fund is to
provide investment results that parallel the price and yield
performance of publicly-traded common stocks in the aggregate. The
Fund uses the Standard & Poor's Composite Index of 500 Stocks ("the
S&P Index") as its standard for performance comparison. The Fund
attempts to duplicate the performance of the S&P Index and includes
dividend income as a component of the Fund's total return. The Fund
is not managed by Standard & Poor's.
THE MONEY MARKET FUND: The investment objective of the Money Market
Fund is to obtain the highest level of current income which is
consistent with the preservation of capital and maintenance of
liquidity. The Fund invests primarily in high-quality, short-term
money market instruments. An investment in the Money Market Fund is
neither insured nor guaranteed by the U. S. Government.
BOND INDEX FUND: The investment objective of this Fund is to provide
a rate of return that reflects the performance of the publicly-traded
bond market as a whole. The Fund uses the Lehman Brothers
Government/Corporate Bond Index as its standard for performance
comparison.
MANAGED EQUITY FUND: The investment objective of this Fund is long-
term growth of capital, obtained by investing primarily in common
stocks. Securing moderate current income is a secondary objective.
ASSET ALLOCATION FUND: The investment objective of this Fund is a
high rate of long-term total return composed of capital growth and
income payments. Preservation of capital is the secondary objective
and chief limit on investment risk. The Fund will invest only in
those types of securities that the other Capital Company Funds may
invest in. The Asset Allocation Fund invests in a combination of
common stocks, bonds, or money market instruments in accordance with
guidelines established from time to time by Capital Company's Board
of Directors.
INTERNATIONAL INDEX FUND: The investment objective of this Fund is to
obtain investment results that parallel the price and yield
performance of publicly-traded common stocks in the Morgan Stanley
Capital International ("MSCI") Europe, Australia and Far East Index
("EAFE").
MID-CAP EQUITY FUND: The investment objective of this Fund is capital
appreciation. It pursues this objective by investing primarily in
common stocks of United States-based, publicly traded companies with
medium market capitalizations falling within the capitalization range
of the S&P Mid-Cap 400 at the time of the Fund's investment.
SMALL-CAP EQUITY FUND: The investment objective of this Fund is to
provide a rate of return that corresponds to the performance of the
common stock of small companies, while incurring a level of risk that
is generally equal to the risks associated with small company common
stock. The Fund attempts to duplicate the performance of the
smallest 20% of companies, based on capitalization size, that are
based in the United States and listed on the New York Stock Exchange
("NYSE").
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RUSSELL INSURANCE FUNDS
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Russell Insurance Funds ("RIF") is organized as a Massachusetts business
trust under a Master Trust Agreement dated July 11, 1996. RIF is
authorized to issue an unlimited number of shares evidencing beneficial
interests in different investment Funds, which interests may be offered
in one or more classes. RIF is a diversified open end management
investment company, commonly known as a "mutual fund." Frank Russell
Company, which is a consultant to RIF, has been primarily engaged since
1969 in providing asset management consulting services to large
corporate employee benefit funds. Major components of its consulting
services are: (i) quantitative and qualitative research and evaluation
aimed at identifying the most appropriate investment management firms to
invest large pools of assets in accord with specific investment
objectives and styles; and (ii) the development of strategies for
investing assets using "multi-style, multi-manager diversification."
This is a method for investing
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large pools of assets by dividing the assets into segments to be invested
using different investment styles, and selecting money managers for each
segment based upon their expertise in that style of investment. General
management of RIF is provided by Frank Russell Investment Management Company,
a wholly-owned subsidiary of Frank Russell Company, which furnishes
officers and staff required to manage and administer RIF on a day-to-day
basis.
The investment objectives and policies of each Fund are summarized
below:
MULTI-STYLE EQUITY FUND: The investment objective of this Fund is to
provide income and capital growth by investing principally in equity
securities.
AGGRESSIVE EQUITY FUND: This Fund seeks to provide capital
appreciation by assuming a higher level of volatility than is
ordinarily expected from the Multi-Style Equity Fund while still
investing in equity securities.
NON-U.S. FUND: This Fund's objective is to provide favorable total
return and additional diversification for U.S. investors by
investing primarily in equity and fixed-income securities of non-U.S.
companies, and securities issued by non-U.S. governments.
CORE BOND FUND: This Fund's objective is to maximize total return,
through capital appreciation and income, by assuming a level of
volatility consistent with the broad fixed-income market. The Fund
invests in fixed-income securities.
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AMERICAN CENTURY VARIABLE PORTFOLIOS
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American Century Variable Portfolios, Inc., a part of American Century
Investments, was organized as a Maryland corporation on June 4, 1987.
It is a diversified, open-end management investment company. Its
business and affairs are managed by its officers under the direction of
its Board of Directors. American Century Investment Management, Inc.
serves as the investment manager of the fund.
The investment objective and policies of the Funds are summarized below:
INCOME & GROWTH FUND: The investment objective of this Fund is to
attain long-term growth of capital as well as current income. The
Fund pursues a total return and dividend yield that exceed those of
the S&P 500 by investing in stocks of companies with strong dividend
growth potential. Dividends are paid monthly.
INTERNATIONAL FUND: This Fund seeks capital growth over time by
investing in common stocks of foreign companies considered to have
better-than-average prospects for appreciation. Because the Fund
invests in foreign securities, a higher degree of short-term price
volatility, or risk, is expected due to factors such as currency
fluctuation and political instability.
VALUE FUND: This Fund is a core equity fund that seeks long-term
capital growth. Income is a secondary objective. To pursue its
objectives, the fund invests primarily in equity securities of well-
established companies that are believed by management to be
undervalued at the time of purchase.
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J.P. MORGAN SERIES TRUST II
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J.P. Morgan Series Trust II is an open-end diversified management
investment company organized as a Delaware Business Trust. The Trust's
investment adviser is J.P. Morgan Investment Management, Inc., a
registered investment adviser and a wholly owned subsidiary of J.P.
Morgan & Co., Incorporated, a bank holding company organized under the
laws of Delaware.
The investment objective and policies of the Funds are summarized below:
BOND PORTFOLIO: This Fund seeks to provide a high total return
consistent with moderate risk of capital and maintenance of
liquidity. The Fund is designed for investors who seek a total
return over time that is higher than that generally available from a
portfolio of short-term obligations while acknowledging the greater
price fluctuation of longer-term instruments.
SMALL COMPANY PORTFOLIO: The investment objective of this Fund is to
provide high total return from a portfolio of equity securities of
small companies. The Fund
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invests at least 65% of the value of its total assets in the common
stock of small U.S. companies primarily with market capitalizations
less than $1 billion. The Fund is designed for investors who are
willing to assume the somewhat higher risk of investing in small
companies in order to seek a higher return over time than might be
expected from a portfolio of stocks of large companies.
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FIDELITY VARIABLE INSURANCE PRODUCTS FUND
-------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund ("VIP") is an open-end,
diversified management investment company organized as a Massachusetts
business trust on November 13, 1981. Only the Funds described in this
section of the Prospectus are currently available as investment choices
for this Policy even though additional Funds may be described in the
prospectus for VIP. VIP shares are purchased by insurance companies to
fund benefits under variable insurance and annuity policies. Fidelity
Management & Research Company ("FMR") of Boston, Massachusetts is the
Funds' Manager.
The investment objectives and policies of each Fund are summarized
below:
EQUITY-INCOME PORTFOLIO: The investment objective of this Fund is
income, obtained by investing primarily in income-producing equity
securities. In choosing these securities, FMR will also consider the
potential for capital appreciation. The Fund's goal is to achieve a
yield which exceeds the composite yield on the securities comprising
the Standard & Poor's Composite Index of 500 Stocks.
GROWTH PORTFOLIO: The investment objective of this Fund is capital
appreciation. The Fund normally purchases common stocks, although
its investments are not restricted to any one type of security.
Capital appreciation may also be obtained from other types of
securities, including bonds and preferred stocks.
OVERSEAS PORTFOLIO: The investment objective of this Fund is long-
term growth of capital. The Fund invests primarily in foreign
securities. The Overseas Portfolio provides a means for investors to
diversify their own portfolios by participation in companies and
economies outside of the United States.
HIGH INCOME PORTFOLIO: The investment objective of this Fund is a
high level of current income. The Fund seeks to fulfill the
objective by investing primarily in high-yielding, lower-rated,
fixed-income securities, while also considering growth of capital.
Lower-rated securities, commonly referred to as "junk bonds," involve
greater risk of default or price change than securities assigned a
higher quality rating.
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FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
-------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund II ("VIP II") is an open-end,
diversified management investment company organized as a Massachusetts
business trust on March 21, 1988. Only the Fund described in this
section of the Prospectus is currently available as an investment choice
for this Policy even though additional Funds may be described in the
prospectus for VIP II. VIP II shares are purchased by insurance
companies to fund benefits under variable insurance and annuity
policies. FMR is the Fund's manager.
The investment objective and policies of the Funds are summarized below:
ASSET MANAGER: The investment objective of this Fund is to seek a
high total return with reduced risk over the long-term by allocating
its assets among domestic and foreign stocks, bonds, and short-term
fixed income instruments.
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FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
-------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund III ("VIP III") is an open-
end, diversified management investment company organized as a
Massachusetts business trust. Only the Fund described in this section
of the Prospectus is currently available as an investment choice for
this Policy even though additional Funds may be described in the
prospectus for VIP III. VIP III shares are purchased by insurance
companies to fund benefits under variable insurance and annuity
policies. FMR is the Fund's manager.
The investment objective and policies of the Fund are summarized below:
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MID CAP EQUITY FUND: This Fund seeks long-term capital growth by
investing primarily in common stocks, with at least 65% of total
assets in securities of companies with medium market capitalizations,
similar to those in the S&P MidCap 400. The fund may potentially
invest in domestic and foreign companies with smaller or larger
market capitalizations, investing in either "growth" or "value"
stocks or both. The fund selects investments by using fundamental
analysis of each issuer's financial condition and industry position
and market and economic conditions.
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VAN ECK WORLDWIDE INSURANCE TRUST
-------------------------------------------------------------------------
Van Eck Worldwide Insurance Trust ("Van Eck") is an open-end management
investment company organized as a Massachusetts business trust on
January 7, 1987. Only the Funds described in this section of the
Prospectus are currently available as an investment choice for this
Policy even though additional Funds may be described in the prospectus
for Van Eck. Shares of Van Eck are offered only to separate accounts of
various insurance companies to support benefits of variable insurance
and annuity policies. The assets of Van Eck are managed by Van Eck
Associates Corporation of New York, New York.
The investment objectives and policies of the Fund are summarized below:
WORLDWIDE HARD ASSETS FUND: The investment objective of the Fund is
to seek long-term capital appreciation by investing in equity and
debt securities of companies engaged in the exploration, development,
production, and distribution of one or more of the following: (i)
precious metals, (ii) ferrous and non-ferrous metals, (iii) oil and
gas, (iv) forest products, (v) real estate, and (vi) other basic non-
agricultural commodities (together, "Hard Assets"). Current income
is not an objective.
WORLDWIDE EMERGING MARKETS FUND: The investment objective of this
Fund is to obtain long-term capital appreciation by investing in
equity securities in emerging markets around the world. The Fund
emphasizes primarily investment in countries that, compared to the
world's major economies, exhibit relatively low gross national
product per capita, as well as the potential for rapid economic
growth.
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SEI INSURANCE PRODUCTS TRUST
-------------------------------------------------------------------------
SEI Investments is a publicly-traded, diversified financial services
firm dedicated to helping investors more effectively manage their
financial assets. SEI Investments was incorporated in Pennsylvania in
1968 under the original name of Simulated Environments, Inc. SEI
Investments Management Corporation (SIMC), SEI Investments Distribution
Company (SIDCO), and SEI Trust Company are the principal wholly-owned
subsidiaries of SEI Investments. SIMC is an investment advisor
registered with the Securities and Exchange Commission (SEC) under the
Investment Advisers Act of 1940. SIDCO is a broker-dealer registered
with the SEC under the Securities Exchange Act of 1934 and a member of
the National Association of Securities Dealers, Inc.
SEI Insurance Products Trust is a mutual fund family that offers shares
in separate investment portfolios (Funds). The Funds have individual
investment goals and strategies and are designed exclusively as funding
vehicles for variable life insurance and variable annuity contracts.
SEI Investments Management Corporation is the Investment Adviser to SEI
Insurance Products Trust.
The investment objectives and policies of the Funds are summarized
below.
LARGE CAP VALUE FUND: This Fund invests primarily in common stocks
of U.S. companies with market capitalizations of more than $1
billion. The Fund uses a multi-manager approach, relying on sub-
advisers to manage the Fund's portfolio under the general supervision
of SIMC. Each sub-adviser, in managing its portions of the Fund's
assets, selects stocks it believes are undervalued in light of such
fundamental characteristics as earnings, book value or return on
equity. The Fund's portfolio is diversified as to issuers and
industries.
LARGE CAP GROWTH FUND: This Fund invests primarily in common stocks
of U.S. companies with market capitalizations of
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more than $1 billion. The Fund uses a multi-manager approach, relying
on sub-advisers to manage the Fund's portfolio under the general
supervision of SIMC. Each sub-adviser, in managing its portion of the
Fund's assets, selects stocks it believes have significant growth
potential in light of such characteristics as revenue and earnings
growth and positive earnings surprises. The Fund's portfolio is
diversified as to issuers and industries.
SMALL CAP VALUE FUND: This Fund invests primarily in common stocks
of U.S. companies with market capitalizations of less than $2
billion. The Fund uses a multi-manager approach, relying on sub-
advisers to manage the Fund's portfolio under the general supervision
of SIMC. Each sub-adviser, in managing its portions of the Funds'
assets, selects stocks it believes are undervalued in light of such
fundamental characteristics as earnings, book value or return on
equity. The Fund's portfolio is diversified as to issuers and
industries.
SMALL CAP GROWTH FUND: This Fund invests primarily in common stocks
of U.S. companies with market capitalizations of less than $2
billion. The Fund uses a multi-manager approach, relying on sub-
advisers to manage the Fund's portfolio under the general supervision
of SIMC. Each sub-adviser, in managing its portion of the Fund's
assets, selects stocks it believes have significant growth potential
in light of such characteristics as revenue and earnings growth and
positive earnings surprises. The Fund's portfolio is diversified as
to issuers and industries.
INTERNATIONAL EQUITY FUND: This Fund invests primarily in common
stocks and other equity securities of foreign companies. The Fund
uses a multi-manager approach, relying on sub-advisers to manage the
Fund's portfolio under the general supervision of SIMC. The Fund's
portfolio is diversified as to issuers, markets capitalization,
industry and country. The Fund primarily invests in companies
located in developed countries, but may also invest in companies
located in emerging markets.
EMERGING MARKETS EQUITY FUND: This Fund invests primarily in common
stocks and other equity securities of foreign companies located in
emerging markets countries. The fund uses a multi-manager approach,
relying on sub-advisers to manage the Fund's portfolio under the
general supervision of SIMC. The Fund is diversified as to issuers,
market capitalization, industry and country.
CORE FIXED INCOME FUND: This Fund invests primarily in investment
grade U.S. corporate and government fixed income securities,
including mortgage-backed securities. The Fund uses a multi-manager
approach, relying on sub-advisers to manage the Fund's portfolio
under the general supervision of SIMC. Sub-advisers are selected for
their expertise in managing various kinds of fixed income securities,
and each Sub-advisers make investment decisions based on an analysis
of yield trends, credit ratings and other factors in accordance with
their particular discipline. While each sub-adviser chooses
securities of different types and maturities, the Fund in the
aggregate generally will have a dollar-weighted average duration that
is consistent with that of the broad U.S. fixed income market.
HIGH YIELD BOND FUND: This Fund invests primarily in fixed income
securities rated below investment grade ("junk bonds"), including
corporate bonds and debentures, convertible and preferred securities,
and zero coupon obligations. The sub-adviser chooses securities that
offer a high current yield as well as total return potential. The
Fund's securities are diversified as to issuers and industries. The
Fund's average weighted maturity may vary, and will generally not
exceed ten years. There is no limit on the maturity or on the credit
quality of any security.
INTERNATIONAL FIXED INCOME FUND: This Fund invests primarily in
foreign government, corporate, and mortgage-backed securities. In
selecting investments for the Fund, the sub-adviser chooses
investment grade securities issued by corporations and governments
located in various developed foreign countries, looking for
opportunities for capital appreciation and gain, as well as current
income. There are no restrictions on the Fund's average
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portfolio maturity or on the maturity of any specific security.
EMERGING MARKETS DEBT FUND: This Fund invests primarily in U.S.
dollar denominated debt securities of government, government-related
and corporate issuers in emerging markets countries, as well as
entities organized to restructure the outstanding debt of such
issuers. The sub-advisor will spread the Fund's holdings across a
number of countries and industries to limit its exposure to a single
emerging market economy. There are no restrictions on the Fund's
average portfolio maturity, or on the maturity of any specific
security. There is no minimum rating standard for the Fund's
securities, and the Fund's securities will generally be in the lower
or lowest rating categories.
------------------------------------------------------------------------
METROPOLITAN SERIES FUND
------------------------------------------------------------------------
The Metropolitan Series Fund, Inc. ("Metropolitan") is an open-end
management investment company registered under the 1940 Act.
Metropolitan is divided into portfolios, each of which represents a
different class of stock in which a corresponding investment division
of the Separate Account invests.
The investment objectives and policies of the Funds available under
your Policy are summarized below:
JANUS MID CAP PORTFOLIO: The Portfolio seeks long-term growth of
capital. It normally invests at least 65% of its total assets in
common stocks of medium capitalization companies selected for their
growth potential. The portfolio manager defines medium
capitalization ("mid-cap") companies as those whose market
capitalization falls within the range of companies included in the
S&P MidCap 400 Index at the time of the purchase. The Portfolio is
non-diversified, so that it can own larger positions in a smaller
number of issuers. This means that appreciation or depreciation of a
single investment can have a greater impact on the Portfolio's share
price. The portfolio manager generally takes a "bottom up" approach
to building the Portfolio by identifying the companies with earnings
growth potential that may not be recognized by the market at large,
without regard to any industry sector or other similar selection
procedure.
T. ROWE PRICE LARGE CAP GROWTH PORTFOLIO: This Portfolio seeks long-
term growth of capital, with dividend income as a secondary goal. It
normally invests at least 65% of its total assets in a diversified
group of large capitalization growth companies. The portfolio
managers define large capitalization ("large-cap") companies as those
whose market capitalization falls within the range of the largest 300
companies included in the Russell 3000 Index at the time of the
purchase. The Portfolio generally looks for companies with above-
average growth in earnings and cash flow; the ability to sustain
earnings momentum even during economic slowdowns by operating in
industries or service sectors where earnings and dividends can
outpace inflation and the overall economy; or that have a lucrative
niche in the economy where profit margins widen due to economic
factors (rather than one-time events such as lower taxes). The
Portfolio expects to invest in common stocks of companies that
normally (but not always) pay dividends that are generally expected
to rise in future years as earnings rise.
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO: The investment objective
of this Portfolio is long-term capital growth. The Portfolio
normally invests at least 65% of its total assets in a diversified
group of small capitalization companies. The portfolio manager
defines small capitalization ("small cap") companies as those whose
market capitalization falls within the range of companies included in
the bottom 10% of the S&P 500 Index at the time of the purchase. The
Portfolio expects to invest primarily in common stocks and
convertible securities of companies in the development stage of their
corporate life cycle with potential to achieve long-term earnings
growth faster than the overall market.
------------------------------------------------------------------------
NEW ENGLAND ZENITH FUND
------------------------------------------------------------------------
New England Zenith Fund is an open-end diversified management
investment company, more commonly known as a mutual fund, consisting
of multiple investment portfolios, known as the "Series." New
England Investment
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Management, Inc. (NEIM) was organized in 1994 by New England Financial
to serve as the investment adviser to the Series.
The investment objectives and policies of the Fund available under
your Policy are summarized below:
ALGER EQUITY GROWTH SERIES: The Fund primarily in growth stocks and
will ordinarily invest at least 65% of its total assets in equity
securities of issues with market capitalization of $1 billion or
greater. The Fund seeks out and invests primarily in companies that
are traded on domestic stock exchanges or in the domestic over-the-
counter market. The Fund may purchase equity securities of companies
that are still in the development stage. The Fund may purchase
securities of older companies appear to be entering a new stage of
growth progress due to factors like management changes or development
of new technologies, products or markets, or that provide products or
services with a high unit volume growth rate. The Fund focuses on
fundamental characteristics of individual companies and does not
allocate assets based on specific industry sectors.
THERE IS NO ASSURANCE THAT ANY OF THE FUNDS WILL ACHIEVE ITS STATED
OBJECTIVE. It is conceivable that in the future it may be
disadvantageous for Funds to offer shares to separate accounts of
various insurance companies to serve as the investment medium for
their variable products or for both variable life and annuity
separate accounts to invest simultaneously in a Fund. The Boards of
Trustees, the Boards of Directors, and the respective Advisors of
each Fund, and the Company and any other insurance companies
participating in the Funds are required to monitor events to identify
any material irreconcilable conflicts that may possibly arise, and to
determine what action, if any, should be taken in response to those
events or conflicts. A more detailed description of the Funds, their
investment policies, restrictions, risks, and charges is in the
prospectuses for each Fund, which must accompany or precede this
Prospectus and which should be read carefully.
-------------------------------------------------------------------------
ADDITION, DELETION, OR SUBSTITUTION OF INVESTMENTS
-------------------------------------------------------------------------
The Company reserves the right, subject to compliance with applicable
law, to make additions to, deletions from, or substitutions for the
shares that are held by the Separate Account or that the Separate
Account may purchase. The Company reserves the right to eliminate the
shares of any of the Funds and to substitute shares of another Fund if
the shares of a Fund are no longer available for investment or if in its
judgment further investment in any Fund becomes inappropriate in view of
the purposes of the Separate Account. The Company will not substitute
any shares attributable to an Owner's interest in a Division of the
Separate Account without notice to the Owner and prior approval of the
SEC, to the extent required by the 1940 Act or other applicable law.
Nothing contained in this Prospectus shall prevent the Separate Account
from purchasing other securities for other series or classes of
policies, or from permitting a conversion between series or classes of
policies on the basis of requests made by Owners.
The Company also reserves the right to establish additional Divisions of
the Separate Account, each of which would invest in a new Fund with a
specified investment objective. New Divisions may be established when,
in the sole discretion of the Company, marketing needs or investment
conditions warrant. Any new Division will be made available to existing
Owners on a basis to be determined by the Company. To the extent
approved by the SEC, the Company may also eliminate or combine one or
more Divisions, substitute one Division for another Division, or
transfer assets between Divisions if, in its sole discretion, marketing,
tax, or investment conditions warrant.
In the event of a substitution or change, the Company may, if it
considers it necessary, make such changes in the Policy by appropriate
endorsement and offer conversion options required by law, if any. The
Company will notify all Owners of any such changes.
If deemed by the Company to be in the best interests of persons having
voting rights under the Policy, and to the extent any necessary SEC
approvals or Owner votes are obtained, the Separate Account may be: (a)
operated as a management company under the 1940 Act; (b)
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de-registered under that Act in the event such registration is no longer
required; or (c) combined with other separate accounts of the Company.
To the extent permitted by applicable law, the Company may also transfer
the assets of the Separate Account associated with the Policy to another
separate account.
-------------------------------------------------------------------------
THE FOLLOWING INFORMATION REPLACES THE CORRESPONDING INFORMATION IN THE
"DEFINITIONS" SECTION OF YOUR PROSPECTUS.
-------------------------------------------------------------------------
MORTALITY AND EXPENSE RISK CHARGE. General American will deduct a
daily charge from the Separate Account at a rate not exceeding
.0019111% of the average net assets of each Division of the Separate
Account which equals an effective annual rate of .70% of those net
assets. This deduction is guaranteed not to exceed .70% while the
Policy is in force. The actual charge may vary among the Divisions
of the Separate Account. General American may realize a profit from
this charge.
The mortality risk assumed by General American is that Insureds may
die sooner than anticipated and that therefore General American will
pay an aggregate amount of death benefits greater than anticipated.
The expense risk assumed is that expenses incurred in issuing and
administering the Policy will exceed the amounts realized from the
administrative charges assessed against the Policy.
-------------------------------------------------------------------------
THE FOLLOWING INFORMATION REPLACES THE FOURTH PARAGRAPH IN THE "TAX
STATUS OF THE POLICY" SECTION OF YOUR PROSPECTUS.
-------------------------------------------------------------------------
Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the Separate Account to
be "adequately diversified" in order for the Policy to be treated as a
life insurance contract for Federal tax purposes. The Separate Account,
intends to comply with the diversification requirements prescribed by
the Treasury in Regulation Section 1.817-5, which affect how assets may
be invested. Although General American does not control the Funds, it
has entered into agreements, which require these investment companies to
be operated in compliance with the requirements prescribed by the
Treasury.
18
