<PAGE> 1
The attached are incorporated by reference herein to the annual reports filed
by and on behalf of the following:
The Alger American Fund, filed February 23, 1998
Portfolios which include: Alger American Small Capitalization; Alger
American Growth; Alger American MidCap Growth; and Alger American
Leveraged AllCap
Berger Institutional Products Trust, filed February 27, 1998
Portfolios which include: Berger/BIAM IPT-International Fund
Canada Life of America Series Fund, Inc., filed March 3, 1998
Portfolios which include: Money Market; Managed; Bond; Value Equity,
International Equity; and Capital.
Dreyfus Variable Investment Fund, filed March 3, 1998
Portfolios which include: Dreyfus Growth and Income
The Dreyfus Socially Responsible Growth Fund, Inc., filed March 3, 1998
Portfolios which include: Dreyfus Socially Responsible
Fidelity Investments Variable Insurance Products Fund, filed February, 24, 1998
Portfolios which include: Fidelity VIP Growth; Fidelity VIP High Income;
and Fidelity VIP Overseas
Fidelity Investments Variable Insurance Products Fund II, filed February 24,
1998
Portfolios which include: Fidelity VIP II Asset Manager; and Fidelity VIP
II Index 500
Seligman Portfolios, Inc., filed March 2, 1998
Portfolios which include: Communications and Information; and Frontier
The Montgomery Funds III, filed February 11, 1998
Portfolios which include; Montgomery Variable Series Emerging Markets Fund;
and Montgomery Variable Series Growth Fund
<PAGE> 2
[CANADA LIFE LETTERHEAD]
CANADA LIFE INSURANCE
COMPANY OF AMERICA
March 1998 P.O. BOX 105662
ATLANTA, GA 30348-5662
(770) 953-1959
(800) 905-1959
FAX: (888) 670-4836
Dear VariFund (TM) Policyowner:
Enclosed for your review are the Canada Life of America Series Fund Annual
Report, the Annual Reports for the Fidelity Investment Variable Insurance
Products Fund and Fidelity Investments Variable Insurance Products II, the
Seligman Portfolios Inc., the Dreyfus Variable Investment Fund, the Montgomery
Variable Funds III, the Berger/BIAM Fund and the Alger American Fund for the
period ending December 31, 1997. We encourage you to review this information and
refer to it as needed throughout the year.
Also we are pleased to provide you with the enclosed two supplements to the
VariFund Variable Annuity prospectus dated May 1, 1997. The first supplement
provides the information on amended tax laws that allow for the use of both
Simple IRAs and Roth IRAs. For more information on the new IRA plans, please
contact your Registered Representative. The second supplement announces a
manager change for the Canada Life of America Series Fund Capital Portfolio.
For your convenience, the tear-off form below is provided to allow you to make
an additional payment to your VariFund contract. A postage paid envelope is
also enclosed.
Sincerely,
/s/Alex Sywak
Alex J. Sywak
Senior Marketing Coordinator
- -------------------------------------------------------------------------------
Policyowner(s): Policy Number
----------------------- ----------------------
If you are changing allocation, please complete the following:
This payment only
- ----
This payment and all future payments
- ----
Re-allocate all current assets
- ----
<TABLE>
<S> <C>
% Money Market % Fidelity VIP Overseas
- --- ---
% Managed % Fidelity VIP II Asset Manager
- --- ---
% Bond % Fidelity Index 500
- --- ---
% Value Equity % Dreyfus Growth & Income
- --- ---
% Capital % Dreyfus Socially Responsible
- --- ---
% International Equity % Alger Small Cap
- --- ---
% Seligman Frontier % Alger Growth
- --- ---
% Seligman Communication & Information % Alger MidCap
- --- ---
% Fidelity VIP Growth % Alga Leveraged AllCap
- --- ---
% Fidelity VIP High Income % Montgomery Emerging Markets
- --- ---
% Fixed Account (Specify 1, 3, 5, 7 or 10 Years*) % Montgomery Growth
- --- ---
% Berger/BIAM IPT International
- ---
</TABLE>
Total must equal 100%. Please make checks payable to Canada Life Insurance
Company of America
- ---------------------- ----------------------------------------
Date Contract Owner Signature
*3,5,7 and 10 Years are subject to state approvals
6201 POWERS FERRY RD., NW ATLANTA, GA 30339
<PAGE> 3
<TABLE>
<CAPTION>
V A R I F U N D(TM) A N N U I T Y
===================================================================================================================================
VARIABLE SUB-ACCOUNT PERFORMANCE AVERAGE ANNUAL TOTAL RETURNS FOR PERIOD ENDING DECEMBER 31, 1997
ASSUMING CONTRACT CONTINUES
ONE THREE FIVE TEN SINCE INCEPTION
PORTFOLIO TYPE PORTFOLIO YEAR YEAR YEAR YEAR INCEPTION DATE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY PORTFOLIOS Alger American Growth 23.90% 23.00% 17.57% N/A 17.71% 01/08/89
Alger American Leveraged All Cap 17.92% N/A N/A N/A 31.65% 01/25/95
Alger American MidCap Growth 13.31% 21.18% N/A N/A 20.34% 05/03/93
Alger American Small Capitalization 9.75% 17.04% 11.02% N/A 17.52% 09/20/88
CLASF Capital 19.23% 20.45% N/A N/A 13.87% 04/23/93
CLASF Value Equity 25.13% 17.11% 10.95% N/A 10.71% 12/04/89
Dreyfus Growth & Income 14.50% 28.87% N/A N/A 21.85% 05/02/94
Dreyfus Socially Responsible 26.55% 26.12% N/A N/A 19.77% 10/07/93
Fidelity Index 500 30.75% 28.88% 18.18% N/A 18.14% 08/27/92
Fidelity VIP Growth 21.67% 22.42% 16.29% 15.49% 13.90% 10/09/86
Montgomery Growth 26.68% N/A N/A N/A 28.35% 02/09/96
Seligman Frontier 14.62% 22.53% N/A N/A 22.65% 10/11/94
-----------------------------------------------------------------------------------------------------------
INTERNATIONAL Berger-IPT International N/A N/A N/A N/A (2.97)%" 05/01/97
CLASF International Equity 2.78% N/A N/A N/A 9.17% 04/24/95
Fidelity VIP Overseas 9.91% 9.79% 12.44% 8.02% 6.64% 01/28/87
Montgomery Emerging Markets (2.05)% N/A N/A N/A 1.66% 02/02/96
-----------------------------------------------------------------------------------------------------------
SPECIALTY PORTFOLIO Seligman Communications & 20.43% 20.78% N/A N/A 20.55% 10/11/94
Information
-----------------------------------------------------------------------------------------------------------
BALANCED CLASF Managed 15.92% 13.21% 8.79% N/A 8.88% 12/04/89
Fidelity VIP II Asset Manager 18.88% 15.66% 11.32% N/A 11.10% 09/06/89
-----------------------------------------------------------------------------------------------------------
FIXED INCOME PORTFOLIOS CLASF Bond 6.49% 8.12% 5.43% N/A 6.27% 12/04/89
Fidelity VIP High Income 15.94% 15.68% 12.26% 11.18% 10.83% 09/19/85
-----------------------------------------------------------------------------------------------------------
MONEY MARKETS CLASF Money Markets 3.42% 3.32% 2.58% N/A 2.94% 12/04/89
</TABLE>
CLASF Money Market Portfolio current yield (annualized yield for a seven day
period ended December 31, 1997) is 5.43%. VariFund Fixed Accounts rate was
4.75% as of January 1, 1998. The performance data quoted is after the deduction
of all fees and charges, except for possible surrender charges. For performance
figures after the deduction of all fees and charges, including the maximum
possible surrender charge, please see the reverse side. Performance data
represents past performance and is not a guarantee of future results.
Investment returns and principal value may fluctuate so that an investor's
shares, when redeemed, may be more or less than his or her original cost.
Performance figures for portfolios with inception dates prior to December 4,
1989 reflect performance if Varifund existed at the inception of those
portfolios. Contact your registered representative or call Canada Life
Insurance Company of America at (800) 905-1959 for a prospectus containing full
details including information on fees and charges. Please read the prospectus
carefully before investing or sending money. Actual cumulative return since
inception.
<PAGE> 4
VARIABLE SUB-ACCOUNT PERFORMANCE
--------------------------------
Average Annual Total Returns For Periods Ending December 31, 1997 - Assuming
Contract Is Surrendered At End Of Period
<TABLE>
<CAPTION>
PORTFOLIO TYPE PORTFOLIO ONE THREE
YEAR YEAR
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Portfolios Alger American Growth 18.50% 22.00%
Alger American Leveraged AllCap 12.52% N/A
Alger American MidCap Growth 7.91% 20.15%
Alger American Small Capitalization 4.35% 15.93%
CLASF Capital 13.83% 19.41%
CLASF Value Equity 19.73% 16.01%
Dreyfus Growth & Income 9.10% 27.96%
Dreyfus Socially Responsible 21.15% 25.17%
Fidelity Index 500 25.35% 27.97%
Fidelity VIP Growth 16.27% 21.41%
Montgomery Growth 21.28% N/A
Seligman Frontier 9.22% 21.52%
------------------------------------------------------------------
International Berger-IPT International N/A N/A
CLASF International Equity (2.62)% N/A
Fidelity VIP Overseas 4.51% 8.53%
Montgomery Emerging Markets (7.45)% N/A
------------------------------------------------------------------
Speciality Portfolio Seligman Communications & Information 15.03% 19.74%
------------------------------------------------------------------
Balanced CLASF Managed 10.52% 12.03%
Fidelity VIP II Asset Manager 13.48% 14.53%
------------------------------------------------------------------
Fixed Income Portfolios CLASF Bond 1.09% 6.82%
Fidelity VIP High Income 10.54% 14.55%
------------------------------------------------------------------
Money Market CLASF Money Market (1.98%) 1.90%
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO TYPE PORTFOLIO FIVE TEN SINCE INCEPTION
YEAR YEAR INCEPTION DATE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Portfolios Alger American Growth 17.28% N/A 17.71% 01/08/89
Alger American Leveraged AllCap N/A N/A 30.74% 01/25/95
Alger American MidCap Growth N/A N/A 19.95% 05/03/93
Alger American Small Capitalization 10.66% N/A 17.52% 09/20/88
CLASF Capital N/A N/A 13.39% 04/23/93
CLASF Value Equity 10.59% N/A 10.71% 12/04/89
Dreyfus Growth & Income N/A N/A 21.12% 05/02/94
Dreyfus Socially Responsible N/A N/A 19.29% 10/07/93
Fidelity Index 500 17.91% N/A 17.90% 08/27/92
Fidelity VIP Growth 16.00% 15.49% 13.90% 10/09/86
Montgomery Growth N/A N/A 26.05% 02/09/96
Seligman Frontier N/A N/A 21.76% 10/11/94
-----------------------------------------------------------------------------------------------
International Berger-IPT International N/A N/A (8.37)%* 05/01/97
CLASF International Equity N/A N/A 7.71% 04/24/95
Fidelity VIP Overseas 12.10% 8.02% 6.64% 01/28/87
Montgomery Emerging Markets N/A N/A (1.16)% 02/02/96
-----------------------------------------------------------------------------------------------
Speciality Portfolio Seligman Communications & Information N/A N/A 19.63% 10/11/94
-----------------------------------------------------------------------------------------------
Balanced CLASF Managed 8.40% N/A 8.88% 12/04/89
Fidelity VIP II Asset Manager 10.97% N/A 11.00% 09/06/89
-----------------------------------------------------------------------------------------------
Fixed Income Portfolios CLASF Bond 4.99% N/A 6.27% 12/04/89
Fidelity VIP High Income 11.91% 11.18% 10.83% 09/19/85
-----------------------------------------------------------------------------------------------
Money Market CLASF Money Market 2.08% N/A 2.94% 12/04/89
</TABLE>
The above figures are SEC required "standardized" performance returns which
include the deduction of all fees and charges, including the maximum possible
sales charge. These figures may not be applicable to your contract, since you
may not have to pay these early withdrawal charges. Please see the prospectus
for more details. CLASF refers to Canada Life Of America Series Fund, Inc.
Fidelity VIP and Fidelity VIP II refer to Fidelity Investments Variable
Insurance Products Fund and Fidelity Variable Insurance Products Fund II.
*Actual cumulative return since inception less the maximum possible sales
charge.
Annuities are not deposits of, obligations of, or guaranteed by any depository
institution. They are not insured by FDIC or any federal agency, and as such are
subject to investment risk including possible loss of principal invested. The
FIXED account portion of a variable annuity (NOT the separate accounts) are
backed by the issuing insurance company.
Issued By: Canada Life Insurance Company of America, 6201 Powers Ferry Road,
N.W. Atlanta, GA 30339
Distributed By: Canada Life of America Financial Services, Inc. 6201 Powers
Ferry Road, N.W. Atlanta, GA 30339
