VIP *P2
Supplement Dated December 1, 1998
to the Prospectus Dated May 1, 1998
of
FRANKLIN TEMPLETON VALUEMARK(R) INCOME PLUS
Individual Immediate Variable Annuity
Allianz Life Variable Account B
A. The following information replaces the section entitled "Contract Owner
Transaction Fees" under the section entitled "Allianz Life Variable Account B
Fee Table" contained in the Prospectus:
Contract Owner Transaction Fees
Commutation Fee*
(as a percentage of the Total Liquidation Value liquidated)
Contract Year Charge
- --------------------------------------------------------------------------------
1 5%
2 5%
3 4%
4 3%
5 2%
6 (& thereafter) 1%
*After the first Contract Year, a Contract Owner may request one liquidation
from the Contract each Contract year if Annuity Options 2 or 4 have been
selected. If Annuity Option 6 has been selected, the Contract Owner may
request a liquidation once each Contract Year beginning in the first year. See
also "Annuity Provisions - Contract Liquidations (Withdrawals)".
B. The portfolio expense table, which appears in the section entitled "Allianz
Life Variable Account B Fee Table" in the annuity prospectus, is amended by:
1) Restating certain Portfolios' "Management and Portfolio Administration Fees"
and the "Other Expenses" as indicated below. The Portfolio Administration Fees
for these Portfolios were inadvertently included under "Other Expenses" rather
than under "Management and Portfolio Administration Fees." Please note that
"Total Annual Expenses" for each Portfolio shown below are the same as in the
May 1, 1998 prospectus.
<TABLE>
<CAPTION>
Management
and Portfolio Other Total Annual
Portfolio Administration Fees Expenses Expenses
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mutual Discovery Securities Fund .............................. .95%* .11% 1.06%
Mutual Shares Securities Fund ................................. .75%* .05% .80%
Templeton Global Asset Allocation Fund ........................ .80%* .14% .94%
Templeton International Smaller Companies Fund ................ 1.00%* .06% 1.06%
<FN>
*Includes a .15% Administration Fee which is a direct expense of the Portfolio.
</FN>
</TABLE>
2) Adding the following language:
Franklin Advisory Services, Inc. and Franklin Templeton Services, Inc. have
agreed in advance to waive or limit their Management and Portfolio
Administration Fees and to assume as their own expense certain expenses
otherwise payable by the new Value Securities Fund as necessary so that
through at least December 31, 1998, Total Annual Expenses do not exceed 1.00%
of its average net assets. As noted in the May 1, 1998 prospectus, estimated
total annual expenses are not anticipated to exceed 1.00% of its average net
assets.
