ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Supplement Dated October 6, 1997 to
Prospectus Dated May 1, 1997
The following information replaces the section entitled "Annuity Provisions -
Annuity Options" contained in the Prospectus:
Annuity Options
Instead of having the proceeds paid in one sum, the Contract Owner may
select an Annuity Option. The Annuity Options are available on a fixed or
variable basis or a combination fixed and variable basis. If the Contract Owner
does not choose an Annuity Option, Option 2 with 60 monthly annuity payments
guaranteed will automatically be applied. The following Annuity Options are
available or any other Annuity Option acceptable to the Company:
OPTION 1. LIFE ANNUITY. The Company will make monthly annuity payments
during the life of the Annuitant, ceasing with the last annuity payment
due prior to the Annuitant's death.
OPTION 2. LIFE ANNUITY WITH 60, 120, 180 OR 240 MONTHLY ANNUITY PAYMENTS
GUARANTEED. The Company will make monthly annuity payments during the
life of the Annuitant with a guarantee that if at the Annuitant's death,
payments have been made for less than the guaranteed period selected,
monthly annuity payments will continue for the remainder of the
guaranteed period. The Contract Owner may elect to have the present
value of the guaranteed monthly annuity payments remaining, as of the
date of the Company receives proof of the claim, commuted and paid in a
lump sum as set forth in the Contract.
OPTION 3. JOINT AND LAST SURVIVOR ANNUITY. The Company will make monthly
annuity payments during the joint lifetime of the Annuitant and the
joint Annuitant. When the Annuitant dies, if the joint Annuitant is then
living, annuity payments will continue to be paid during the remaining
lifetime of the joint Annuitant at a level of 100%, 75% or 50% of the
previous level, as selected. Monthly annuity payments will cease with
the final annuity payment due prior to the last survivor's death.
OPTION 4. JOINT AND LAST SURVIVOR ANNUITY WITH 60, 120, 180 OR 240
MONTHLY ANNUITY PAYMENTS GUARANTEED. The Company will make monthly
annuity payments during the joint lifetime of the Annuitant and the
joint Annuitant. When the Annuitant dies, if the joint Annuitant is then
living, annuity payments will continue to be paid during the remaining
lifetime of the joint Annuitant at 100% of the previous level. If, when
the last surviving Annuitant dies, annuity payments have been made for
less than the selected guaranteed period, monthly annuity payments will
continue to be made for the remainder of the guaranteed period. The
Contract Owner may elect to have the present value of the guaranteed
monthly annuity payments remaining, as of the date the Company receives
proof of the claim, commuted and paid in a lump sum as set forth in the
Contract.
OPTION 5. REFUND LIFE ANNUITY. The Company will make monthly annuity
payments during the lifetime of the Annuitant ceasing with the last
annuity payment due prior to the Annuitant's death. If, at the
Annuitant's death, the value of the annuity payments made is less than
the value annuitized, the Contract Owner will receive a refund. For a
fixed annuity, the amount of the refund will be any excess of the amount
of the adjusted Contract Value applied under this annuity option over
the total of all annuity payments made under this option. For a variable
annuity, the amount of the refund will be the then dollar value of the
number of annuity units equal to the adjusted Contract Value applied to
this annuity option divided by the annuity unit value used to determine
the first annuity payment, minus the product of the number of the
annuity units represented by each monthly annuity payment and the number
of payments made.
The Prospectus is revised so that the Contract Owner remains the Contract Owner
after the Income Date.
The "Death of the Contract Owner Before the Income Date" section is revised
regarding the determination of the amount of the death benefit as follows:
The guaranteed death benefit is the value of the death benefit at the
time the elected option is processed which is guaranteed to be at least
the larger of the Surrender Value or the Guaranteed Minimum Death
Benefit. The Guaranteed Minimum Death Benefit will be the greater of
(a) or (b) below:
(a) the sum of all purchase payments made less any surrenders and any
Contingent Deferred Sales Charge paid on such surrenders, accumulated
at 5% each Contract Anniversary prior to the earlier of the Contract
Owner's 81st birthday or the date of death.
(b) the greatest sixth Contract anniversary value for Contract
anniversaries prior to the earlier of the Contract Owner's 81st
birthday or the date of death. The sixth Contract anniversary value is
equal to the Contract Value on a sixth Contract anniversary (i.e., 6th,
12th, 18th, etc.) increased by the dollar amount of any purchase
payments made since that anniversary, and decreased by the dollar
amount of any surrenders and Contingent Deferred Sales Charges paid on
such surrenders since that anniversary.
Upon the earlier of the Owner's 81st birthday or the date of death, and
thereafter, the Guaranteed Minimum Death Benefit will only be increased
by subsequent purchase payments and decreased by subsequent surrenders
and any Contingent Deferred Sales Charge paid on such surrenders. If
there are multiple Contract Owners, the age of the oldest Joint Owner
will be used in determining the Guaranteed Minimum Death Benefit.
The following provision is added to the Prospectus after "Death of the Contract
Owner Before the Income Date" :
Death of Contract Owner after the Income Date
If the Contract Owner or any Joint Owner die after the Income Date, any
remaining payments under the Annuity Option elected will continue at least as
rapidly as under the method of distribution in effect at such Contract Owner's
death. Upon the death of the Contract Owner after the Income Date, the
Beneficiary becomes the Contract Owner.
The "Death of the Annuitant Prior to the Income Date" and the "Death
of the Annuitant After the Income Date" sections are deleted and replaced with
the following section:
Death of the Annuitant
If the Annuitant who is not the Contract Owner dies before the Income
Date, the Contract Owner will become the Annuitant unless the Contract Owner
designates a new Annuitant (subject to the Company's underwriting rules then in
effect). If the Contract Owner is a non-natural person, the death of the
Annuitant will be treated as the death of the Contract Owner and a new Annuitant
may not be designated. If the Annuitant dies after the Income Date, the death
benefit, if any, will be specified in the Annuity Option selected. Death
benefits will be paid at least as rapidly as under the method of distribution in
effect at the Annuitant's death.
These options may not be available in all states. See your investment
representative for information.
