NORTHBROOK LIFE INSURANCE COMPANY
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
SUPPLEMENT, DATED OCTOBER 30, 2000, TO THE
MORGAN STANLEY DEAN WITTER VARIABLE ANNUITY II
PROSPECTUS DATED MAY 2, 2000
This supplement describes the Income Benefit Combination Option 2 and the Income
and Death Benefit Combination Option 2 ("new Options") now available with the
Morgan Stanley Dean Witter Variable Annuity II contract ("Contract") offered by
Northbrook Life Insurance Company.
The new Options are available with Contracts issued on or after the date of this
supplement ("new Contracts"). The new Options are also available with Contracts
issued before the date of this supplement ("existing Contracts") subject to the
following limitations: the Income Benefit Combination Option 2 is not available
with existing Contracts if you elect or have elected an optional income or death
benefit; the Income and Death Benefit Combination Option 2 is not available with
existing Contracts if you elect or have elected the Performance Income Benefit
Option or the Performance Benefit Combination Option.
The Enhanced Death Benefit Option, the Performance Income Benefit Option, and
the Performance Benefit Combination Option described in the prospectus are not
available with new Contracts. If you are an existing Contract owner, and have
not elected these options, you may do so until January 31, 2001. Please keep
these limitations in mind when reading the prospectus and this supplement.
PLEASE KEEP IN MIND, ONCE YOU HAVE SELECTED AN OPTIONAL INCOME OR DEATH BENEFIT
(EACH AN "OPTION"), YOUR ABILITY TO SELECT A DIFFERENT OPTION MAY BE LIMITED.
PLEASE CONSULT WITH YOUR FINANCIAL ADVISOR CONCERNING ANY SUCH LIMITATIONS
BEFORE SELECTING ANY OPTION. FURTHER, IF YOU SELECT ANOTHER OPTION, THE
BENEFIT(S) UNDER THE NEW OPTION ON THE DATE WE ISSUE THE NEW OPTION WILL EQUAL
THE CONTRACT VALUE. YOU WILL NOT RETAIN OR TRANSFER THE BENEFITS FROM THE
EARLIER OPTION. PLEASE CONSULT WITH YOUR FINANCIAL ADVISOR CONCERNING THE
EFFECT OF SELECTING A DIFFERENT OPTION BEFORE DOING SO. WE MAY DISCONTINUE THE
OFFERING OF THESE OPTIONS AT ANYTIME.
Please keep this supplement for future reference together with your prospectus.
All capitalized terms have the same meaning as those included in the prospectus.
Your prospectus is amended as follows:
Page 4: Replace the first bullet in the section entitled "The Contract at a
Glance" under the "Expenses" heading with the following:
Total Variable Account annual fees equal to 1.35% of average daily net
assets (1.48% if you select the Enhanced Death Benefit Option, the
Performance Death Benefit Option, or the Performance Income Benefit
Option, 1.59% if you select the Performance Benefit Combination Option,
or the Death Benefit Combination Option, 1.65% if you select the Income
Benefit Combination Option 2, or 1.85% if you select the Income and
Death Benefit Combination Option 2). If you qualify for and elect the
Longevity Reward Rider, the annual fees are reduced by 0.07% under the
basic policy or any Option listed above. See the description of each
Option and the Rider for the availability of each.
1
<PAGE>
Page 7: Replace the "Variable Account Annual Expenses" table with the following:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
With the Enhanced
Death Benefit, With the Performance
Performance Death Benefit Combination
Benefit Option, or Option, or Death
Without any Optional Performance Income Benefit Combination
Option Benefit Option Option
Mortality and Expense Risk Charge 1.25% 1.38% 1.49%
Administrative Expense Charge 0.10% 0.10% 0.10%
Total Variable Account Annual Expenses 1.35% 1.48% 1.59%
-------------------------------------------- ------------------------------------ ------------------------------------
With the Income Benefit With the Income and Death Benefit
Combination Option 2 Combination Option 2
Mortality and Expense Risk Charge 1.55% 1.75%
Administrative Expense Charge 0.10% 0.10%
Total Variable Account Annual Expenses 1.65% 1.85%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 10: Replace "Example 1" with the following:
EXAMPLE 1
The example below shows the dollar amount of expenses that you would bear
directly or indirectly if you:
o invested $1,000 in a Variable Sub-Account,
o earned a 5% annual return on your investment,
o surrendered your Contract or you began receiving income payments
for a specified period of less than 120 months at the end of each time
period, and
o elected the Income and Death Benefit Combination Option 2.
THE EXAMPLE ASSUMES THAT ANY PORTFOLIO EXPENSE WAIVERS OR REIMBURSEMENT
ARRANGEMENTS DESCRIBED IN THE FOOTNOTES ABOVE ARE IN EFFECT FOR THE TIME PERIODS
PRESENTED BELOW. THE EXAMPLE DOES NOT INCLUDE ANY TAXES OR TAX PENALTIES YOU MAY
BE REQUIRED TO PAY IF YOU SURRENDER YOUR CONTRACT.
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Variable Sub-Account 1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS
AIM V.I. Capital Appreciation $69 $108 $150 $299
-------------------------------------------------------------------------------------------------------
AIM V.I. Growth $69 $108 $150 $299
-------------------------------------------------------------------------------------------------------
AIM V.I. Value $70 $109 $151 $302
-------------------------------------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCTS SERIES FUNDS
Alliance Growth $73 $120 $169 $337
-------------------------------------------------------------------------------------------------------
Alliance Growth and Income $72 $116 $162 $323
-------------------------------------------------------------------------------------------------------
Alliance Premier Growth $75 $125 $178 $353
-------------------------------------------------------------------------------------------------------
MORGAN STANLEY DEAN WITTER V.I.S
Money Market $67 $102 $139 $278
-------------------------------------------------------------------------------------------------------
Quality Income Plus $67 $102 $139 $278
-------------------------------------------------------------------------------------------------------
Short-Term Bond $68 $105 $144 $288
-------------------------------------------------------------------------------------------------------
High Yield $67 $102 $139 $279
-------------------------------------------------------------------------------------------------------
Utilities $69 $106 $147 $293
-------------------------------------------------------------------------------------------------------
Income Builder $70 $111 $154 $307
-------------------------------------------------------------------------------------------------------
Dividend Growth $67 $102 $139 $278
-------------------------------------------------------------------------------------------------------
Capital Growth $69 $108 $149 $298
-------------------------------------------------------------------------------------------------------
Global Dividend Growth $71 $111 $155 $309
-------------------------------------------------------------------------------------------------------
European Growth $73 $118 $165 $330
-------------------------------------------------------------------------------------------------------
Pacific Growth $77 $129 $184 $366
-------------------------------------------------------------------------------------------------------
Equity $67 $102 $138 $277
-------------------------------------------------------------------------------------------------------
S&P 500 Index $67 $101 $137 $274
-------------------------------------------------------------------------------------------------------
Competitive Edge "Best Ideas" $68 $103 $141 $282
-------------------------------------------------------------------------------------------------------
Strategist $67 $102 $139 $278
-------------------------------------------------------------------------------------------------------
Aggressive Equity $67 $102 $139 $278
-------------------------------------------------------------------------------------------------------
3
<PAGE>
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
U.S. Real Estate $73 $120 $168 $335
-------------------------------------------------------------------------------------------------------
International Magnum $74 $121 $171 $341
-------------------------------------------------------------------------------------------------------
Equity Growth $71 $112 $156 $311
-------------------------------------------------------------------------------------------------------
Emerging Markets Equity $80 $140 $202 $400
-------------------------------------------------------------------------------------------------------
Mid-Cap Value $72 $118 $166 $330
-------------------------------------------------------------------------------------------------------
PUTNAM VARIABLE TRUST
Putnam VT Growth and Income $69 $106 $146 $291
-------------------------------------------------------------------------------------------------------
Putnam VT International Growth $74 $122 $172 $342
-------------------------------------------------------------------------------------------------------
Putnam VT Voyager $69 $108 $149 $298
-------------------------------------------------------------------------------------------------------
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth $71 $112 $156 $311
-------------------------------------------------------------------------------------------------------
</TABLE>
Page 11: Replace "Example 2" with the following:
EXAMPLE 2
Same assumptions as Example 1 above, except that you decided not to
surrender your Contract, or you began receiving income payments (for at
least 120 months if under an Income Plan with a specified period), at
the end of each period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Variable Sub-Account 1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS
AIM V.I. Capital Appreciation $27 $ 83 $141 $299
-------------------------------------------------------------------------------------------------------
AIM V.I. Growth $27 $ 83 $141 $299
-------------------------------------------------------------------------------------------------------
AIM V.I. Value $27 $ 84 $143 $302
-------------------------------------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCTS SERIES FUNDS
Alliance Growth $31 $ 95 $161 $337
-------------------------------------------------------------------------------------------------------
Alliance Growth and Income $29 $ 90 $153 $323
-------------------------------------------------------------------------------------------------------
Alliance Premier Growth $33 $100 $169 $353
-------------------------------------------------------------------------------------------------------
MORGAN STANLEY DEAN WITTER V.I.S
Money Market $25 $ 76 $130 $278
-------------------------------------------------------------------------------------------------------
Quality Income Plus $25 $ 76 $130 $278
-------------------------------------------------------------------------------------------------------
Short-Term Bond $26 $ 79 $136 $288
-------------------------------------------------------------------------------------------------------
High Yield $25 $ 77 $131 $279
-------------------------------------------------------------------------------------------------------
Utilities $26 $ 81 $138 $293
-------------------------------------------------------------------------------------------------------
4
<PAGE>
Income Builder $28 $ 85 $145 $307
-------------------------------------------------------------------------------------------------------
Dividend Growth $25 $ 76 $130 $278
-------------------------------------------------------------------------------------------------------
Capital Growth $27 $ 82 $141 $298
-------------------------------------------------------------------------------------------------------
Global Dividend Growth $28 $ 86 $146 $309
-------------------------------------------------------------------------------------------------------
European Growth $30 $ 92 $157 $330
-------------------------------------------------------------------------------------------------------
Pacific Growth $34 $104 $176 $366
-------------------------------------------------------------------------------------------------------
Equity $25 $ 76 $130 $277
-------------------------------------------------------------------------------------------------------
S&P 500 Index $24 $ 75 $128 $274
-------------------------------------------------------------------------------------------------------
Competitive Edge "Best Ideas" $25 $ 78 $132 $282
-------------------------------------------------------------------------------------------------------
Strategist $25 $ 76 $130 $278
-------------------------------------------------------------------------------------------------------
Aggressive Equity $25 $ 76 $130 $278
-------------------------------------------------------------------------------------------------------
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
U.S. Real Estate $31 $ 94 $160 $335
-------------------------------------------------------------------------------------------------------
International Magnum $31 $ 96 $163 $341
-------------------------------------------------------------------------------------------------------
Equity Growth $28 $ 86 $147 $311
-------------------------------------------------------------------------------------------------------
Emerging Markets Equity $38 $115 $194 $400
-------------------------------------------------------------------------------------------------------
Mid-Cap Value $30 $ 93 $157 $330
-------------------------------------------------------------------------------------------------------
PUTNAM VARIABLE TRUST
Putnam VT Growth and Income $26 $ 80 $137 $291
-------------------------------------------------------------------------------------------------------
Putnam VT International Growth $31 $ 96 $163 $342
-------------------------------------------------------------------------------------------------------
Putnam VT Voyager $27 $ 82 $141 $298
-------------------------------------------------------------------------------------------------------
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth $28 $ 86 $147 $311
-------------------------------------------------------------------------------------------------------
</TABLE>
Replace the paragraph following "Example 2" with the following:
PLEASE REMEMBER THAT YOU ARE LOOKING AT EXAMPLES AND NOT A
REPRESENTATION OF PAST OR FUTURE EXPENSES. YOUR ACTUAL EXPENSES MAY BE
LOWER OR GREATER THAN THOSE SHOWN ABOVE. SIMILARLY, YOUR RATE OF RETURN
MAY BE LOWER OR GREATER THAN 5%, WHICH IS NOT GUARANTEED. THE ABOVE
EXAMPLES ASSUME THE ELECTION OF THE INCOME AND DEATH BENEFIT
COMBINATION OPTION 2, WITH A MORTALITY AND EXPENSE RISK CHARGE OF
1.75%. IF THAT OPTION WERE NOT ELECTED, THE EXPENSE FIGURES SHOWN ABOVE
WOULD BE SLIGHTLY LOWER. TO REFLECT THE CONTRACT MAINTENANCE CHARGE IN
THE EXAMPLES, WE ESTIMATED AN EQUIVALENT PERCENTAGE CHARGE, BASED ON AN
ASSUMED AVERAGE CONTRACT SIZE OF $45,000.
5
<PAGE>
Page 15: Replace the third paragraph under the section entitled "Accumulation
Unit Values" with the following:
We determine a separate Accumulation Unit Value for each Variable
Sub-Account on each Valuation Date. We also determine a separate set of
Accumulation Unit Values that reflect the cost of the Enhanced Death
Benefit Option, the Performance Death Benefit Option, or the
Performance Income Benefit Option, a third set of Accumulation Unit
Values for the Performance Benefit Combination Option or the Death
Benefit Combination Option, a fourth set of Accumulation Unit Values
for the Income Benefit Combination Option 2, and a fifth set of
Accumulation Unit Values that reflect the cost of the Income and Death
Benefit Combination Option 2.
Page 21: Replace the first sentence under the section entitled "Mortality and
Expense Risk Charge" with the following:
We deduct a mortality and expense risk charge daily at an annual rate
of 1.25% of the average daily net assets you have invested in the
Variable Sub-Accounts (1.38% if you select the Enhanced Death Benefit
Option, the Performance Death Benefit Option, or the Performance Income
Benefit Option, 1.49% if you select the Death Benefit Combination
Option or the Performance Benefit Combination Option, 1.55% if you
select the Income Benefit Combination Option 2, and 1.75% if you select
the Income and Death Benefit Combination Option 2).
Replace the last sentence under the section entitled "Mortality and
Expense Risk Charge" with the following:
We charge an additional amount for the above Options to compensate us
for the additional risk that we accept by providing these Options.
Page 25: Reminder: The Performance Income Benefit cannot be added to existing
Contracts after January 31, 2001. It is not available with new
Contracts.
Page 26: After the section entitled "Performance Income Benefit" add the
following:
INCOME BENEFIT COMBINATION OPTION 2
You have the option to add Income Benefit Combination Option 2 to your
Contract. This Option guarantees that the amount you apply to an Income
Plan will not be less than the income base ("Income Base") (which is
the greater of Income Base A or Income Base B), described below. We may
discontinue the offering of this Option at anytime.
Eligibility. If you select the Income Benefit Combination Option 2, the
maximum age of any owner or Annuitant on the date we issue the Contract
Rider is 75. The Income Benefit Combination Option 2 may not be
available in all states. To qualify for this benefit, you must meet the
following conditions as of the Payout Start Date:
You must elect a Payout Start Date that is on or after the 10th
anniversary of the date we issued the rider for this Option (the
"Rider Date");
The Payout Start Date must occur during the 30 day period
following a Contract Anniversary;
You must apply the Income Base to fixed income payments or
variable income payments as we may permit from time to time.
Currently, you may apply the Income Base only to provide fixed
income payments; and
The Income Plan you have selected must provide for payments
guaranteed for either a single life or joint lives with a
specified period of at least:
1. 10 years, if the youngest Annuitant's age is 80 or less on the
date the amount is applied; or
2. 5 years, if the youngest Annuitant's age is greater than 80 on the
date the amount is applied.
If your current Contract Value is higher than the value calculated
under Income Benefit Combination Option 2, you can apply the Contract
Value to any Income Plan. The Income Benefit Combination Option 2 may
not be available in all states.
6
<PAGE>
INCOME BASE
The Income Base is the greater of Income Base A or Income Base B.
The Income Base is used solely for the purpose of calculating the
guaranteed income benefit under this Option ("guaranteed income
benefit") and does not provide a Contract Value or guarantee
performance of any investment option.
INCOME BASE A
On the Rider Date, Income Base A is equal to the Contract Value. After
the Rider Date, we recalculate Income Base A as follows on the Contract
Anniversary and when a purchase payment or withdrawal is made.
o For purchase payments, Income Base A is equal to the most recently calculated
Income Base A plus the purchase payment.
o For withdrawals, Income Base A is equal to the most recently
calculated Income Base A reduced by a withdrawal adjustment
(described below).
o On each Contract Anniversary, Income Base A is equal to the
greater of the Contract Value or the most recently calculated
Income Base A.
In the absence of any withdrawals or purchase payments, Income Base A
will be the greatest of the Contract Value on the Rider Date and all
Contract Anniversary Contract Values between the Rider Date and the
Payout Start Date.
We will recalculate Income Base A as described above until the first
Contract Anniversary after the 85th birthday of the oldest Contract
owner or Annuitant (if the Contract owner is not a natural person).
After age 85, we will only recalculate Income Base A to reflect
additional purchase payments and withdrawals.
INCOME BASE B
On the Rider Date, Income Base B is equal to the Contract Value. After
the Rider Date, Income Base B plus any subsequent purchase payments and
less a withdrawal adjustment (described below) for any subsequent
withdrawals will accumulate daily at a rate equivalent to 5% per year
until the first Contract Anniversary after the 85th birthday of the
oldest Contract owner or Annuitant (if the Contract owner is not a
natural person).
WITHDRAWAL ADJUSTMENT. The withdrawal adjustment is equal to (1)
divided by (2), with the result multiplied by (3) where:
(1) = the withdrawal amount
(2) = the Contract Value immediately prior to the withdrawal, and
(3) = the most recently calculated Income Base
GUARANTEED INCOME BENEFIT. The guaranteed income benefit amount is
determined by applying the Income Base less any applicable taxes to the
guaranteed rates for the Income Plan you elect. The Income Plan you
elect must satisfy the conditions described above.
As described above, you may currently apply the Income Base only to
receive period certain fixed income payments. If, however, you apply
the Contract Value and not the Income Base to an Income Plan, then you
may select fixed and/or variable income payments under any Income Plan
we offer at that time. If you expect to apply your Contract Value to
provide fixed and/or variable income payments, or you expect to apply
your Contract Value to current annuity payment rates then in effect,
electing the Income Benefit Combination Option 2 may not be
appropriate.
Page 26: Add "the Income and Death Benefit Combination Option 2" to the list of
death benefit options in the first sentence under the heading
"Death Benefit Options."
7
<PAGE>
Page 26: Reminder: The Enhanced Death Benefit Option cannot be added to existing
Contracts after January 31, 2001. It is not available with new
Contracts.
Page 27: Reminder: The Performance Benefit Combination Option cannot be added to
existing Contracts after January 31, 2001. It is not available
with new Contracts.
Page 27: After the section entitled "Performance Benefit Combination Option" add
the following:
INCOME AND DEATH BENEFIT COMBINATION OPTION 2.
You may also elect the Income and Death Benefit Combination Option 2,
which combines the features of the Income Benefit Combination
(described on page 6 of this supplement) with the features of the
Death Benefit Combination (described on page 27 of the prospectus)
with the following modifications. Under the Income and Death Benefit
Combination Option 2, the death benefit payable will be the greater of
the death benefits provided by the Enhanced Death Benefit or the
Performance Death Benefit (both calculated until the first Contract
Anniversary after the oldest Contract owner, or annuitant if the
Contract owner is a non-natural person, attains age 85). In
calculating the death benefit payable provided by the Enhanced Death
Benefit, for all ages, withdrawals will reduce the Enhanced Death
Benefit by an amount equal to: (i) the Enhanced Death Benefit
immediately before the withdrawal, multiplied by (ii) the ratio of the
withdrawal amount to the Contract Value just before the withdrawal.
If you select the Income and Death Benefit Combination Option 2, the
maximum age of any owner or Annuitant on the date we issue the Contract
Rider is 75. The Income and Death Benefit Combination Option 2 may not
be available in all states. We may discontinue the offering of this
Option at anytime.
Page 28: Replace the third paragraph under the heading "Longevity Reward Rider"
with the following:
MORTALITY AND EXPENSE RISK CHARGE If you elect the Rider, then
commencing on the Rider Date, we will reduce the maximum mortality and
expense risk charge (M&E charge) by 0.07%. That means your M&E charge
will never be greater than 1.18% (1.31% if you select the Enhanced
Death Benefit Option, the Performance Death Benefit Option, or the
Performance Income Benefit Option, 1.42% if you select the Performance
Benefit Combination Option, or the Death Benefit Combination Option,
1.48% if you select the Income Benefit Combination Option 2, and 1.68%
if you select the Income and Death Benefit Combination Option 2). The
0.10% administrative expense charge remains unchanged under the Rider.
8
<PAGE>
PART B
NORTHBROOK LIFE INSURANCE COMPANY
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
SUPPLEMENT, DATED OCTOBER 30, 2000, TO THE
MORGAN STANLEY DEAN WITTER VARIABLE ANNUITY II
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 2, 2000
This supplement amends the statement of additional information, dated May 2,
2000, for the Morgan Stanley Dean Witter Variable Annuity II Contracts as
follows:
Add the following to the fifth paragraph under "Standardized Total Returns":
Contracts with the Income Benefit Combination Option 2 and the Income and
Death Benefit Combination Option 2 were first offered to the public as of
November 6, 2000. The Variable Sub-Accounts were available for investment
prior to that date. Accordingly, performance figures for Variable
Sub-Accounts for periods prior to the availability of the Income Benefit
Combination Option 2 and the Income and Death Benefit Combination Option 2
reflect the historical performance of the Variable Sub-Accounts, adjusted
to reflect the current charge for such features as if they had been
available throughout the periods shown, as well as the withdrawal and
contract maintenance charge.
Add the following tables to the performance tables for "Variable Annuity II
Contracts" under "Standardized Total Returns":
(WITH THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
10 Years or
Variable Sub-Account One Year Five Years Since Inception
---------------------------------------------------------------------------------------------------------------------------
Aggressive Equity* N/A N/A 39.14%
Capital Growth 26.55% 21.84% 13.19%
Competitive Edge ("Best Ideas") 19.48% N/A 9.40%
Dividend Growth -8.48% 16.39% 14.15%
Emerging Growth 96.34% N/A 37.85%
Emerging Markets Equity 86.83% N/A 9.13%
Equity 51.38% 33.14% 24.46%
Equity Growth 32.59% N/A 27.27%
European Growth 22.44% 22.47% 17.46%
Global Dividend Growth 8.25% 13.49% 11.12%
High Yield -7.44% 3.73% 9.42%
Income Builder 0.80% N/A 7.74%
International Magnum 18.60% N/A 10.39%
Pacific Growth 58.75% -1.53% -2.93%
Quality Income Plus -10.37% 5.74% 6.16%
Short Term Bond* N/A N/A -4.84%
Strategist 10.90% 13.97% 12.56%
S&P 500 Index 13.20% N/A 15.31%
U.S. Real Estate -7.58% N/A -2.72%
Utilities 6.35% 17.57% 13.23%
*Performance shown is not annualized.
</TABLE>
(WITH THE INCOME BENEFIT COMBINATION OPTION 2)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
10 Years or
Variable Sub-Account One Year Five Years Since Inception
---------------------------------------------------------------------------------------------------------------------------
Aggressive Equity* N/A N/A 39.94%
Capital Growth 26.81% 22.08% 13.41%
Competitive Edge ("Best Ideas") 19.73% N/A 9.63%
Dividend Growth -8.29% 16.62% 14.38%
Emerging Growth 96.74% N/A 38.12%
Emerging Markets Equity 87.22% N/A 9.35%
Equity 51.70% 33.40% 24.71%
Equity Growth 32.86% N/A 27.53%
European Growth 22.70% 22.72% 17.69%
Global Dividend Growth 8.47% 13.71% 11.34%
High Yield -7.25% 3.94% 9.64%
Income Builder 1.01% N/A 7.96%
International Magnum 18.84% N/A 10.62%
Pacific Growth 59.08% -1.33% -2.73%
Quality Income Plus -10.19% 5.96% 6.38%
Short Term Bond* N/A N/A -4.70%
Strategist 11.13% 14.20% 12.79%
S&P 500 Index 13.44% N/A 15.55%
U.S. Real Estate -7.39% N/A -2.52%
Utilities 6.57% 17.81% 13.46%
*Performance shown is not annualized.
</TABLE>
Add the following to the seventh paragraph under "Non-Standardized Total
Returns":
Contracts with the Income Benefit Combination Option 2 and the Income
and Death Benefit Combination Option 2 were first offered to the
public as of November 6, 2000. The Variable Sub-Accounts were
available for investment prior to that date. Accordingly, performance
figures for Variable Sub-Accounts for periods prior to the
availability of the Income Benefit Combination Option 2 and the Income
and Death Benefit Combination Option 2 reflect the historical
performance of the Variable Sub-Accounts, adjusted to reflect the
current charge for such features as if they had been available
throughout the periods shown, but not the withdrawal and contract
maintenance charge.
Add the following tables to the performance tables for "Variable Annuity II
Contracts" under "Non-Standardized Total Returns":
(WITH THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
10 Years or
Variable Sub-Account One Year Five Years Since Inception
-------------------------------------------------------------------------------------------
Aggressive Equity* N/A N/A 44.30%
Capital Growth 30.86% 21.95% 13.22%
Competitive Edge ("Best Ideas") 23.79% N/A 11.92%
Dividend Growth -4.18% 16.52% 14.17%
Emerging Growth 100.64% N/A 37.98%
Emerging Markets Equity 91.14% N/A 9.85%
Equity 55.69% 33.23% 24.48%
Equity Growth 36.90% N/A 28.00%
European Growth 26.75% 22.59% 17.48%
Global Dividend Growth 12.55% 13.63% 11.24%
High Yield -3.14% 3.92% 9.45%
Income Builder 5.10% N/A 8.77%
International Magnum 22.90% N/A 11.36%
Pacific Growth 63.06% -1.28% -2.69%
Quality Income Plus -6.07% 5.92% 6.20%
Short Term Bond* N/A N/A 0.32%
Strategist 15.20% 14.12% 12.59%
S&P 500 Index 17.50% N/A 17.74%
U.S. Real Estate -3.28% N/A -1.42%
Utilities 10.65% 17.70% 13.26%
*Performance shown is not annualized.
</TABLE>
(WITH THE INCOME BENEFIT COMBINATION OPTION 2)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
10 Years or
Variable Sub-Account One Year Five Years Since Inception
---------------------------------------------------------------------------------------------
Aggressive Equity* N/A N/A 44.49%
Capital Growth 31.12% 22.20% 13.44%
Competitive Edge ("Best Ideas") 24.03% N/A 12.15%
Dividend Growth -3.99% 16.75% 14.40%
Emerging Growth 101.04% N/A 38.26%
Emerging Markets Equity 91.52% N/A 10.07%
Equity 56.00% 33.49% 24.73%
Equity Growth 37.17% N/A 28.25%
European Growth 27.00% 22.83% 17.71%
Global Dividend Growth 12.78% 13.86% 11.46%
High Yield -2.95% 4.13% 9.67%
Income Builder 5.31% N/A 8.99%
International Magnum 23.15% N/A 11.58%
Pacific Growth 63.38% -1.08% -2.49%
Quality Income Plus -5.88% 6.14% 6.42%
Short Term Bond* N/A N/A 0.45%
Strategist 15.43% 14.35% 12.82%
S&P 500 Index 17.74% N/A 17.98%
U.S. Real Estate -3.08% N/A -1.22%
Utilities 10.87% 17.94% 13.49%
*Perforamnce shown is not annualized.
</TABLE>
Replace the second paragraph under "Adjusted Historical Total Returns" with the
following:
The adjusted historical total returns for the Variable Sub-Accounts for
the periods ended December 31, 1999 are set out below. No adjusted
historical total returns are shown for the Money Market Variable
Sub-Account. Where the returns included in the following tables give
effect to the Enhanced Death Benefit Option, the Performance Death
Benefit Option, the Performance Income Benefit Option, the Performance
Benefit Combination Option, the Death Benefit Combination Option, the
Income Benefit Combination Option 2, or the Income and Death Benefit
Combination Option 2, the performance figures have been adjusted to
reflect the current charge for the feature as if that feature had been
available throughout the periods shown.
Add the following tables to the performance tables for "Variable Annuity II
Contracts" under "Adjusted Historical Total Returns":
(WITH THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
10 Years or
Variable Sub-Account One Year 5 Years Since Inception
----------------------------------------------------------------------------------------
Aggressive Equity** N/A N/A 39.14%
AIM V.I. Capital Appreciation 37.66% 22.45% 19.53%
AIM V.I. Growth 28.45% 25.39% 19.38%
AIM V.I. Value 23.21% 23.56% 19.89%
Alliance Growth* 27.70% 28.86% 28.18%
Alliance Growth and Income* 5.02% 21.54% 13.33%
Alliance Premier Growth* N/A N/A 6.98%
Capital Growth 26.55% 21.84% 13.19%
Competitive Edge ("Best Ideas") 19.48% N/A 9.40%
Dividend Growth -8.48% 16.39% 10.93%
Emerging Growth 96.34% N/A 37.85%
Emerging Markets Equity 86.83% N/A 9.13%
Equity 51.38% 33.14% 20.60%
Equity Growth 32.59% N/A 27.27%
European Growth 22.44% 22.47% 17.46%
Global Dividend Growth 8.25% 13.49% 11.12%
High Yield -7.44% 3.73% 6.26%
Income Builder 0.80% N/A 7.74%
International Magnum 18.60% N/A 10.39%
Mid-Cap Value 14.08% N/A 21.22%
Pacific Growth 58.75% -1.53% -2.93%
Putnam VT Growth and Income* -4.70% 16.92% 11.66%
Putnam VT International Growth* 52.81% N/A 26.98%
Putnam VT Voyager* 50.82% 28.96% 19.71%
Quality Income Plus -10.37% 5.74% 5.77%
Short Term Bond** N/A N/A -4.84%
Strategist 10.90% 13.97% 10.88%
S&P 500 Index 13.20% N/A 15.31%
U.S. Real Estate -7.58% N/A -2.72%
Utilities 6.35% 17.57% 12.11%
+Please refer to the table at the beginning of this section for the inception
dates of the Portfolios.
*The performance shown for the Portfolios' 12b-1 class is based on the
performance of the non 12b-1 class, as described in the table at the beginning
of this section.
**Performance shown is not annualized.
---------------------------------------------------------------------------------------------
</TABLE>
(WITH THE INCOME BENEFIT COMBINATION OPTION 2)
10 Years or
Since
Variable Sub-Acount One Year 5 Years Inception
-------------------------------------------------------------------------------
Aggressive Equity N/A N/A 39.62%
AIM V.I. Capital Appreciation 37.95% 22.70% 19.77%
AIM V.I. Growth 28.72% 25.65% 19.62%
AIM V.I. Value 23.47% 23.81% 20.13%
Alliance Growth* 27.97% 29.12% 28.44%
Alliance Growth and Income* 5.24% 21.78% 13.56%
Alliance Premier Growth* N/A N/A 7.08%
Capital Growth 26.81% 22.08% 13.41%
Competitive Edge ("Best ideas") 19.73% N/A 9.63%
Dividend Growth -8.29% 16.62% 11.15%
Emerging Growth 96.74% N/A 38.12%
Emerging Markets Equity 87.22% N/A 9.35%
Equity 51.70% 33.40% 20.84%
Equity Growth 32.86% N/A 27.53%
European Growth 22.70% 22.72% 17.69%
Global Dividend Growth 8.47% 13.71% 11.34%
High Yield -7.25% 3.94% 6.48%
Income Builder 1.01% N/A 7.96%
International Magnum 18.84% N/A 10.62%
Mid-Cap Value 14.32% N/A 21.47%
Pacific Growth 59.08% -1.33% -2.73%
Putnam VT Growth and Income* -4.50% 17.16% 11.88%
Putnam VT International Growth* 53.12% N/A 27.24%
Putnam VT Voyager* -4.30% -0.23% 1.88%
Quality Income Plus -10.19% 5.96% 5.98%
Short Term Bond N/A N/A -4.50%
Strategist 11.13% 14.20% 11.10%
S&P 500 Index 13.44% N/A 15.55%
U.S. Real Estate -7.39% N/A -2.52%
Utilities 6.57% 17.81% 12.34%
+ Please refer to the table at the beginning of this section for the inception
dates of the Portfolios.
* The peformance shown for the Portfolios' 12b-1 class is based on the
performance of the non 12b-1 class, as described in the table at the beginning
of this section.
**Performance shown is not annualized.
-------------------------------------------------------------------------------
