Supplement to Prospectus Dated May 1, 1998
Supplement dated November 16, 1998
This Supplement should be retained with the current Prospectus for your variable
annuity contract issued by American Skandia Life Assurance Corporation
("American Skandia"). If you do not have a current prospectus, please contact
American Skandia at 1-800-SKANDIA.
A. REDUCTION OF THE MINIMUM INITIAL PAYMENT
Application and Initial Payment
The section of the Prospectus entitled "Application and Initial Payment" is
amended as follows:
The minimum initial Purchase Payment we accept is decreased from $25,000 to
$15,000.
Skandia's Systematic Investment Plan ("bank drafting")
The section of the Prospectus entitled "Skandia's Systematic Investment Plan
("bank drafting") is amended as follows:
You may make Purchase Payments to your Annuity using bank drafting, but only for
allocations to variable investment options. However, you must pay at least one
prior Purchase Payment by check or wire transfer. We will accept an initial
Purchase Payment lower than our standard minimum Purchase Payment requirement of
$15,000 if you also furnish bank drafting instructions that provide amounts that
will meet a $15,000 minimum Purchase Payment requirement to be paid within 12
months. We reserve the right to suspend or cancel bank drafting privileges if
sufficient funds are not available from the applicable financial institution on
any date that a transaction is scheduled to occur.
B. SALE OF CONTRACTS TO RESIDENTS OF THE STATE OF NEW YORK
Some of the provisions of the Annuity are different for contracts offered to
residents of the State of New York. These provisions are as follows:
DEFINITIONS
MVA: For New York contracts, you may transfer or withdraw all or part of the
Account Value from a Fixed Allocation during the 30 days prior to the Maturity
Date of such Fixed Allocation without application of a market value adjustment.
INVESTMENT OPTIONS
Fixed Investment Options: The State of New York does not allow a Guarantee
Period to exceed ten years in duration. For New York contracts, the interest
rate we credit to the Fixed Allocation is subject to a minimum of 3%.
CHARGES ASSESSED OR ASSESSABLE AGAINST THE ANNUITY
Tax Charges: For New York contracts a charge for taxes may also be assessed
against the Sub-accounts and/or the Fixed Allocations.
PURCHASING ANNUITIES
Ownership, Annuitant and Beneficiary Designations: For contracts issued in the
State of New York, the designation of contingent Owner is not allowed.
Right to Return the Annuity: For New York contracts the "free-look" period is
within 21 days of receipt of the Annuity and within 10 days of receipt for IRAs.
The amount to be refunded for New York contracts is the Account Value in the
Sub-accounts plus the Interim Value of the Fixed Allocations and for IRAs the
amount to be refunded is the greater of Premium or Account Value.
ACCOUNT VALUE AND SURRENDER VALUE
Account Value of the Fixed Allocations: For annuities issued in New York, we
apply certain formulas to determine "I" and "J" when we do not offer Guarantee
Periods with a duration equal to the remaining period. These formulas are as
follows:
(a) If we offer Guarantee Periods to your class of Annuities with
durations that are both shorter and longer than the remaining
period, we interpolate a rate for "J" between our then current
interest rates for Guarantee Periods with the next shortest
and next longest durations then available for new Fixed
Allocations for your class of Annuities.
(b) If we no longer offer Guarantee Periods to your class of
Annuities with durations that are both longer and shorter than
the remaining period, we determine rates for "J" and, for
purposes of determining the MVA only, for "I" based on the
Moody's Corporate Bond Yield Average - Monthly average
Corporates (the "Average"), as published by Moody's Investor
Services, Inc., its successor, or an equivalent service should
such Average no longer be published by Moody's. For
determining I, we will use the Average published on or
immediately prior to the start of the applicable Guarantee
Period.
RIGHTS, BENEFITS AND SERVICES
Changing Revocable Designations: Unless you indicated that a prior choice was
irrevocable or your Annuity has been endorsed to limit certain changes, you may
request to change Owner, Annuitant and Beneficiary designations by sending a
request In Writing. Where allowed by law, such changes will be subject to our
acceptance. For New York contracts, some of the changes we will not accept
include, but are not limited to: (a) a new Owner subsequent to the death of the
Owner or the first of any joint Owners to die, except where a spouse-Beneficiary
has become the Owner as a result of an Owner's death and (b) a new Annuitant
prior to the Annuity Date if the Annuity is owned by an entity.
Allocation Rules: For New York contracts the minimum amount allowed in an
investment option is $500.
The following services which we may offer are not available for New York
contracts: (1) authorization of an independent third party to transact transfers
on your behalf and (2) market timing program.
Transfers: Your transfer request must be In Writing. For New York contracts, a
specific authorization form MUST be completed which authorizes us to accept
transfers via phone or through means such as electronic mail.
Renewals: For New York contracts we will notify you of the Guarantee Periods
available as of the date of such notice, at least 45 days and not more than 60
days prior to the Maturity Date. No MVA applies to any amounts allocated to a
particular Fixed Allocation if you withdraw all or part of the Account Value in
such Fixed Allocation within 30 days of maturity. If you are age 55 or older you
may invest in a Fixed Allocation with a Guarantee Period of less than five
years.
Minimum Distributions: For New York contracts the Minimum Distribution provision
is only available for annuities issued under Section 403(b) of the IRS Code or
for IRA's where Minimum Distributions are required. Minimum Distributions are
not available for any other contracts.
Death Benefit: For New York contracts paragraphs (2) and (3)(b) are amended as
follows: If that person's death occurs after the earlier of the decedent's age
90 or the tenth Annuity Year, the death benefit is your Account Value in the
Sub-accounts plus the Interim Value of any Fixed Allocation.
Annuity Payments: The Annuity Date must be the first or the fifteenth day of a
calendar month. However, for New York contracts, if the contract's accumulated
value, at the time of annuitization, is less than $2,000, or would provide an
income, the initial amount of which is less than $20 per month, in lieu of
commencing the annuity payments, we reserve the right to cancel the annuity and
pay you the total of the Account Value in any Sub-account plus the Interim Value
of any Fixed Allocation.
For New York contracts the Annuity Date may not exceed the first day of the
calendar month following the Annuitant's 90th birthday.
OTHER MATTERS
Deferral of Transactions: For New York contracts we may defer any distribution
or transfer from a Fixed Allocation or an annuity payout for a period not to
exceed 6 months. If we defer a distribution or transfer from any Fixed
Allocation or any fixed annuity payout for more than ten days, we pay interest
using our then current crediting rate for this purpose, which is not less than
3% per year on the amount deferred.
Modification: In addition to obtaining prior approval from the insurance
department of our state of domicile before making such a substitution, deletion
or addition, we will also obtain prior approval from the Superintendent of
Insurance for New York.
Misstatement of Age or Sex: For New York contracts the following provision (c)
is added:
(c) as to any annuity payments, we shall credit or charge interest
using our then current crediting rate for this purpose, which is not greater
than 6% interest per year, calculated from the date of any underpayment or
overpayment to the date actual payment is made.
ASL (11/98)
