SUPPLEMENT TO PROSPECTUS DATED MAY 3, 1999
SUPPLEMENT DATED JANUARY 3, 2000
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. ADDITIONAL VARIABLE INVESTMENT OPTION
THE UNDERLYING PORTFOLIO SHOWN BELOW IS BEING OFFERED AS A NEW SUB-ACCOUNT UNDER
YOUR ANNUITY AS OF JANUARY 3, 2000.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
UNDERLYING MUTUAL FUND PORTFOLIO ANNUAL EXPENSES
(as a percentage of the average net assets of the underlying Portfolios)
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ----------
MANAGEMENT OTHER ESTIMATED TOTAL Annual Fee Net
Fees Expenses Distribution Portfolio Waivers and Annual
UNDERLYING PORTFOLIO and Service Operating Expense Fund
(12b-1) Expenses Reimbursement Operating
FEES(1) Expenses
- --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ----------
- --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
AST ALGER ALL-CAP GROWTH(2) 0.95% 0.22% 0.06% 1.23% N/A 1.23%
- --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ----------
1 American Skandia Trust (the "Trust") adopted a Distribution Plan (the
"Distribution Plan") under Rule 12b-1 of the Investment Company Act of 1940
to permit an affiliate of the Trust's Investment Manager to receive
brokerage commissions in connection with purchases and sales of securities
held by Portfolios of the Trust, and to use these commissions to promote
the sale of shares of such Portfolios. The staff of the Securities and
Exchange Commission takes the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of
the Portfolios. The Portfolios would pay the same or comparable commission
amounts irrespective of the Distribution Plan; accordingly, total returns
for the Portfolios are not expected to be adversely affected. The
Distribution Fee estimate is derived from data regarding other similar
Portfolio's brokerage transactions, and the proportions of such
transactions directed to selling dealers, for the period ended June 30,
1999. However, it is not possible to determine with accuracy actual amounts
that will be received under the Distribution Plan. Such amounts will vary
based upon the level of a Portfolio's brokerage activity, the proportion of
such activity directed under the Distribution Plan, and other factors.
2 This Portfolio commenced operations as of December 30, 1999. "Other
expenses" shown are based on estimated amounts for the fiscal year ending
December 31, 2000.
</TABLE>
EXPENSE EXAMPLES
THE EXPENSE EXAMPLE SHOWN BELOW IS BEING ADDED WITH RESPECT TO THE NEW PORTFOLIO
THAT IS BEING OFFERED AS A SUB-ACCOUNT UNDER YOUR ANNUITY AS OF JANUARY 3, 2000.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSE EXAMPLES
(amounts shown are rounded to the nearest dollar)
- ------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------- ---- ------------------------------------
If you surrender your Annuity at the end If you do not surrender your Annuity at the end
of the applicable time period, you would of the applicable time period or begin taking
pay the following expenses on a $1,000 annuity payments at such time, you would pay the
investment, assuming 5% annual return on following expenses on a $1,000 investment,
assets: assuming 5% annual return on assets:
-------------------------------------------- ----- ----------------------------------------
AFTER: AFTER:
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUB-ACCOUNT: 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ------
AST Alger All-Cap Growth 103 145 184 304 28 85 144 304
- -------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ------
</TABLE>
<PAGE>
THE FOLLOWING UNDERLYING PORTFOLIO IS BEING ADDED TO THE SECTION ENTITLED "WHAT
ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?"
INVESTMENT OPTIONS
<TABLE>
<CAPTION>
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?
- ------------------- ------------------------------------------------------------------------------------------------ ---------------
<S> <C> <C> <C>
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ ---------------
- ------------------- ------------------------------------------------------------------------------------------------ ---------------
AST ALGER ALL-CAP GROWTH: SEEKS LONG-TERM CAPITAL GROWTH.
The Portfolio invests primarily in equity securities, such
as common or preferred stocks, that are listed on U.S. Fred Alger
GROWTH exchanges or in the over-the-counter market. The Portfolio Management, Inc.
may invest in the equity securities of companies of all
sizes, and may emphasize either larger or smaller companies
at a given time based on the Sub-advisor's assessment of
particular companies and market conditions.
- ------------------- ------------------------------------------------------------------------------------------------ ---------------
</TABLE>
B. SUB-ACCOUNT CLOSING
AST JANUS SMALL-CAP GROWTH PORTFOLIO/SUB-ACCOUNT
American Skandia Trust is closing the AST Janus Small-Cap Growth portfolio to
new allocations effective on the close of business, January 18, 2000. Except as
indicated below, the AST Janus Small-Cap Growth portfolio will no longer be
offered as a Sub-account under Annuities issued after January 18, 2000.
Contracts issued on or before January 18, 2000 will not be allowed to allocate
additional Account Value or make transfers into the AST Janus Small-Cap Growth
Sub-account. Contracts issued after January 18, 2000 on applications received by
American Skandia on or before January 18, 2000 will be allowed to make an
initial allocation to the AST Janus Small-Cap Growth Sub-account if elected on
the application but will not be allowed to make additional allocations. Bank
drafting, dollar cost averaging, asset allocation and rebalancing programs that
were effective on or before January 18, 2000 and included the AST Janus
Small-Cap Growth Sub-account will be allowed to continue. However, no changes
involving the AST Janus Small-Cap Growth Sub-account may be made to such
programs.
The Portfolio may be offered to new and existing Contract Owners as a
Sub-account at some future date. However, at the present time, American Skandia
has no intention to do so.
ASAP2-SUPP. (01/03/2000)R VAASAP2 01/03R
