<PAGE>
Supplement Dated August 28, 2000 to
Prospectus Dated May 1, 2000 for
Pacific Select Variable Annuity, a variable annuity contract
issued by Pacific Life Insurance Company
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Termination of the The assets of Pacific Select Fund Bond and Income
Bond and Portfolio, the underlying Portfolio for the Bond
Income Investment and Income Variable Account, are scheduled to be
Option transferred to the Pacific Select Fund Managed Bond
Portfolio in exchange for shares of the Managed
Other terms of your Bond Portfolio (the "reorganization") on September
policy will not change 22, 2000, at or about 4:00 p.m. Eastern time (the
as a result of the "reorganization date"). At the same time that this
transaction described reorganization occurs, the corresponding
in this supplement. Accumulation Units and Subaccount Annuity Units of
the Bond and Income Variable Account will
automatically be transferred to the Managed Bond
Variable Account in exchange for corresponding
units of that Investment Option. The Bond and
Income Variable Account will cease to exist.
You need not take any action regarding the
reorganization. The transfer of your units will
occur automatically on the reorganization date.
If you do not wish to participate in the Managed
Bond Investment Option, you can transfer among the
Investment Options as usual. There will be no
charge on transfers for at least 60 days from the
reorganization date. Thereafter, Pacific Life
reserves the right to impose transfer fees for
transfers as stated in the Prospectus, but there is
no current plan to do so. Any transfer made during
this time will not count toward any limitation we
may impose on the number of transfers you may make
annually.
Unless you instruct us otherwise, to the extent any
outstanding instruction you have on file with us
designates the Bond and Income Variable Account,
the instruction will be deemed an instruction for
the Managed Bond Variable Account. Instructions
include, but are not limited to instructions for
Purchase Payment allocations, any transfer or
exchange instructions, including instructions under
the Portfolio Rebalancing, Dollar Cost Averaging,
and Partial Withdrawal instructions.
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Postponement of the The reorganization date may be postponed if:
Transaction
. the New York Stock Exchange or another primary
If the reorganization trading market for Portfolio securities of the
date of the Bond and Bond and Income Portfolio and/or the Managed Bond
Income Portfolio is Portfolio is closed to trading or otherwise
postponed, the restricted, or
corresponding transfer
from the Bond and . trading or the reporting of trading on the New
Income Variable York Stock Exchange or other primary trading
Account to the Managed market is disrupted and the Fund's board of
Bond Variable Account trustees believes the value of the net assets in
will also be either Portfolio cannot be accurately appraised.
postponed.
If either of these events occur, the transaction
described above will be postponed until the first
business day after trading is fully resumed and
reporting has been restored.
<PAGE>
This supplement changes page 7 of the Prospectus with
the following:
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Other Expenses
An Overview of The table also shows the Fund expenses for each
Pacific Select Portfolio based on expenses in 1999, adjusted to
Variable Annuity: reflect recently reduced custody fees. To help limit
Fees and Expenses Fund expenses, effective July 1, 2000 we have
Paid by the Pacific contractually agreed to waive all or part of our
Select Fund: investment advisory fees or otherwise reimburse each
Other Expenses is Portfolio for operating expenses (including
replaced organizational expenses, but not including advisory
fees, additional costs associated with foreign
investing and extraordinary expenses) that exceed an
annual rate of 0.10% of its average daily net assets.
Such waiver or reimbursement is subject to repayment to
us to the extent such expenses fall below the 0.10%
expense cap. For each Portfolio, our right to repayment
is limited to amounts waived and/or reimbursed that
exceed the new 0.10% expense cap, but do not exceed the
previously established 0.25% expense cap. Any amounts
repaid to us will have the effect of increasing
expenses of the Portfolio, but not above the 0.10%
expense cap. There is no guarantee that we will
continue to cap expenses after December 31, 2001. In
1999, Pacific Life reimbursed the Small-Cap Index
Portfolio $96,949.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Less
Advisory Other Total adviser's Total net
Portfolio fee expenses expenses+ reimbursement expenses
--------------------------------------------------------------------------------
As an annual % of average daily net assets
<S> <C> <C> <C> <C> <C>
Aggressive Equity 0.80 0.04 0.84 -- 0.84
Emerging Markets/1/ 1.10 0.19 1.29 -- 1.29
Diversified Research/2/ 0.90 0.05 0.95 -- 0.95
Small-Cap Equity 0.65 0.04 0.69 -- 0.69
International Large-Cap/2/ 1.05 0.10 1.15 -- 1.15
Bond and Income 0.60 0.05 0.65 -- 0.65
Equity 0.65 0.03 0.68 -- 0.68
I-Net Tollkeeper/2/ 1.50 0.14 1.64 (0.04) 1.60
Multi-Strategy 0.65 0.04 0.69 -- 0.69
Equity Income 0.65 0.04 0.69 -- 0.69
Growth LT 0.75 0.03 0.78 -- 0.78
Mid-Cap Value 0.85 0.07 0.92 -- 0.92
Equity Index/3/ 0.25 0.04 0.29 -- 0.29
Small-Cap Index 0.50 0.30 0.80 (0.20) 0.60
REIT 1.10 0.15 1.25 (0.05) 1.20
International Value 0.85 0.09 0.94 -- 0.94
Government Securities 0.60 0.05 0.65 -- 0.65
Managed Bond/1/ 0.60 0.05 0.65 -- 0.65
Money Market/1/ 0.35 0.04 0.39 -- 0.39
High Yield Bond/1/ 0.60 0.05 0.65 -- 0.65
Large-Cap Value 0.85 0.08 0.93 -- 0.93
--------------------------------------------------------------------------------
</TABLE>
/1/ Total adjusted net expenses for these Portfolios in
1999, after deduction of an offset for custodian
credits were: 1.28% for Emerging Markets Portfolio,
0.64% for Managed Bond Portfolio, 0.38% for Money
Market Portfolio, and 0.64% for High Yield Bond
Portfolio.
/2/ Expenses are estimated. There were no actual
advisory fees or expenses for these Portfolios in
1999 because the Portfolios started after December
31, 1999.
/3/ Total adjusted net expenses for the Equity Index
Portfolio in 1999, after deduction of an offset for
custodian credits, were 0.28%. The advisory fee for
the Portfolio has also been adjusted to reflect the
advisory fee increase effective January 1, 2000.
The actual advisory fee and total adjusted net
expenses for this Portfolio in 1999, after
deduction of an offset for custodian credits, were
0.16% and 0.19%, respectively.
+ The Fund has adopted a brokerage enhancement 12b-1
plan, under which brokerage transactions may be
placed with broker-dealers in return for credits,
cash, or other compensation that may be used to
help promote distribution of Fund shares. There are
no fees or charges to any Portfolio under this
plan, although the Fund's distributor may defray
expenses of up to approximately $300,000 for the
year 2000, which it might otherwise incur for
distribution. If such defrayed amount were
considered a Fund expense, it would represent
approximately .0023% or less of any Portfolio's
average daily net assets.
2
<PAGE>
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Examples is amended
The following is added to Examples on page 8 of the
Prospectus:
Different examples are presented below that show
expenses that an Owner of a Contract with Accumulated
Value allocated to a Variable Account would pay at the
end of one, three, five or ten years if, at the end of
those time periods, the Contract is (1) surrendered,
(2) annuitized, (3) not surrendered or annuitized. The
examples assume a $1000 investment and a 5% annual rate
of return. In addition, the examples reflect an average
initial premium of approximately $45,000 and a prorata
portion of the annual Maintenance Fee. Each example
shows expenses based upon allocation to each of the
Variable Accounts.
The examples below should not be considered a
representation of past or future expenses. Actual
expenses may be greater or lesser than those shown. The
5% return assumed in the examples is hypothetical and
should not be considered a representation of past or
future actual returns, which may be greater or lesser
than the assumed amount.
<TABLE>
<CAPTION>
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Contract not
Surrendered or
Annuitized and
Contract Surrendered Contract Annuitized Remains in Force at
at End of Time at End of Time End of Time
Period ($) Period* ($) Period ($)
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Variable Account 1 yr 3 yr 5 yr 10 yr 1 yr 3 yr 5 yr 10 yr 1 yr 3 yr 5 yr 10 yr
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Equity 77 117 150 263 77 72 123 263 23 72 123 263
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Emerging Markets 82 130 172 306 82 85 145 306 28 85 145 306
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Diversified Research 78 120 156 274 78 75 129 274 24 75 129 274
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Small-Cap Equity 76 112 142 248 76 67 115 248 22 67 115 248
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Bond and Income 76 113 143 249 76 68 116 249 22 68 116 249
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International Large-Cap 80 126 166 294 80 81 139 294 26 81 139 294
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Equity 76 112 142 247 76 67 115 247 22 67 115 247
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I-Net Tollkeeper 85 140 188 337 85 95 161 337 31 95 161 337
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Multi-Strategy 76 112 142 248 76 67 115 248 22 67 115 248
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Equity Income 76 112 142 248 76 67 115 248 22 67 115 248
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Growth LT 77 115 147 257 77 70 120 257 23 70 120 257
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Mid-Cap Value 78 119 154 271 78 74 127 271 24 74 127 271
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Equity Index 72 100 121 204 72 55 94 204 18 55 94 204
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Small-Cap Index 75 110 138 238 75 65 111 238 21 65 111 238
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REIT 81 128 168 299 81 83 141 299 27 83 141 299
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International Value 78 120 155 273 78 75 128 273 24 75 128 273
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Government Securities 75 111 140 243 75 66 113 243 21 66 113 243
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Managed Bond 75 111 140 242 75 66 113 242 21 66 113 242
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Money Market 73 103 127 215 73 58 100 215 19 58 100 215
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High Yield Bond 75 111 140 242 75 66 113 242 21 66 113 242
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Large-Cap Value 78 120 155 272 78 75 128 272 24 75 128 272
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</TABLE>
* In this example, it is assumed that an Annuity Option
has been selected that provides for annuity payments
that continue for at least five years, in which case
the withdrawal charge would not be assessed if the
Contract was in force during the Accumulation Period
for at least two Contract Years.
3
