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Prospectus Supplement - May 1, 1995
IDS Life Account RE - Real Estate Variable Annuity (the Account)
(April 28, 1995) Form No. S-6170J (4/95)
The prospectus is supplemented as follows:
Effective May 1, 1995, IDS Life Insurance Company (IDS Life) will
discontinue new contract sales of the Account. IDS Life will
continue to accept and process additional purchase payments into
existing contracts in amounts specified in the Prospectus, whether
by means of previously established bank authorizations or
otherwise. IDS Life also will continue to service existing
contracts and honor any surrender requests.
IDS Life will purchase accumulation units in order to maintain the
Account and to increase its liquidity. IDS Life will make these
payments so that no contract holder is disadvantaged because sales
of new contracts have been discontinued. The initial payments for
accumulation units that IDS Life makes into the Account will be
used to pay off the amount that the Account has borrowed under its
revolving line of credit. Thereafter, IDS Life will make
additional payments into the Account for accumulation units as
needed in order to fund all of the Account's obligations under the
contracts such as paying death benefits and surrenders.
By purchasing accumulation units, IDS Life will have an ownership
interest in the Account. Since IDS Life will not actually purchase
a contract, it will not be subject to surrender charges. However,
IDS Life, as holder of accumulation units, will participate in the
increase or decrease in the value of the Account's investments just
as other owners of accumulation units do. IDS Life may realize a
gain or loss on its accumulation units when redeemed.
IDS Life currently expects to hold the accumulation units it
purchases until the surrender of all outstanding contracts or until
the Account's liquidity improves (through, for example, one or more
sales of real estate related investments), thereby permitting the
Account to satisfy its anticipated contract obligations. Because
IDS Life may purchase a significant amount of accumulation units,
IDS Life may be subject to certain conflicts of interest it would
not otherwise have if it had not purchased such accumulation units,
including, among other things, a conflict in approving periodic
valuations of real estate related investments made by the
Investment Adviser.
Since the Account has experienced substantial net contract
terminations over the past several years, the Account does not
intend to acquire additional real estate related investments.
Further, the Account intends to liquidate the real estate related
investments that it currently holds when it becomes advantageous or
necessary to do so.
Although additional purchase payments may be made into existing
contracts, prior to making any additional purchase payment an
existing contract owner should bear in mind that the Account
intends to liquidate its real estate related investments over time.
Moreover, the Account will not be acquiring any new or additional
real estate related investments with the cash flow or proceeds<PAGE>
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generated by the operations or sales of its existing real estate
related investments. Such funds, to the extent not used to pay the
Account's obligations under existing contracts or the redemption of
accumulation units purchased by IDS Life, will be invested in
short-term debt instruments and possibly intermediate-term bonds
with maturities of up to five years. Accordingly, an existing
contract owner should carefully consider these facts in light of
his or her own investment objectives before making any additional
purchase payment into an existing contract.
If you wish to make a full surrender of your existing contract
between May 1, 1995 and December 31, 1995, you will not be assessed
any surrender charge. Although IDS Life will not assess the
surrender charge, you still may be subject to a 10 percent IRS
penalty on investment earnings, in addition to the tax on the
investment earnings, if you are under age 59-1/2 when you surrender
your contract. Please see the section in your Prospectus entitled
"Certain Federal Income Tax Considerations" and consult your tax
adviser for further information.
You can make an election to surrender your contract by sending a
written request to:
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
Please include your name, Social Security Number and Contract
Number with your written request.
This Supplement modifies or supersedes substantial portions of the
Prospectus, including, among others, the Investment Objectives of
the Account, Other Investment Policies, Risk Factors - Continuous
Offering and - Size of Account and The Contract - Accumulation
Period sections of the Prospectus.
Please contact IDS Life at (612) 671-3733 if you have any
questions.
