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Supplement to Statement of Additional Information Dated July 8, 1996
Separate Account VA-P
Separate Account VA-K (DM)
Allmerica Select Separate Account
of
Allmerica Financial Life Insurance and Annuity Company
VARIABLE CONTRACT EXCHANGE OFFER
The Company will permit Owners of certain variable annuity contracts issued by
Allmerica Financial Life Insurance and Annuity Company, described below, to
exchange their contracts at net asset value for the variable annuity contracts
described in the Prospectus, which are issued on Form No. A3025-96 or a state
variation thereof ("new Contracts"). The Company reserves the right to suspend
this exchange offer at any time.
This offer applies to the exchange of the Allmerica Financial Life Insurance and
Annuity Company's Elective Payment Variable Annuity contracts issued on Forms
A3012-79 and A3013-79 ("Elective Payment Exchanged Contracts"; all such
contracts have numbers preceded by a "JQ" or "JN" prefix) and Single Payment
Variable Annuity contracts issued on Forms A3014-79 and A3015-79 ("Single
Payment Exchanged Contracts"; all such contracts have numbers preceded by a "KN"
or "KQ" prefix). These contracts are referred to collectively as the "Exchanged
Contracts." To effect an exchange, the Company should receive (1) a completed
application for the Contract; (2) the contract being exchanged and (3) a signed
Letter of Awareness.
CONTINGENT DEFERRED SALES CHARGE COMPUTATION. No surrender charge otherwise
applicable to the Exchanged Contracts will be assessed as a result of the
exchange. Instead, the contingent deferred sales charge under the new Contract
will be computed as if the payments that had been made to the Exchanged Contract
were made to the new Contract, as of the date of issue of the Exchanged
Contract. Any additional payments to the new Contract after the exchange will
be subject to the contingent sales charge computation outlined in the new
Contract and Prospectus; i.e., the charge will be computed based on the number
of years that the additional payment (or portion of that payment) that is being
withdrawn has been credited to the new Contract.
SUMMARY OF DIFFERENCES BETWEEN EXCHANGED CONTRACTS AND THE NEW CONTRACT. The
new Contract and the Exchanged Contracts differ substantially as summarized
below. There may be additional differences important to a person considering an
exchange and the Prospectuses for the new Contract and the Exchanged Contract
should be reviewed carefully before the exchange request is submitted to the
Company.
CONTINGENT DEFERRED SALES CHARGE. The contingent deferred sales charge under the
new Contract, as described in the Prospectus, imposes higher charge percentages
against the excess amount redeemed than the Single Payment Exchanged Contracts.
In addition, if an Elective Payment Exchanged Contract was issued more than 9
years before the date of an exchange under this offer, additional payments to
the Exchanged Contract would not be subject to a surrender charge. New payments
to the new Contract may be subject to a charge if withdrawn prior to the
surrender charge period described in the prospectus.
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CONTRACT FEE. Under the new Contract, the Company deducts a $30 fee on each
contract anniversary and at surrender if the Accumulated Value is $50,000 or
less. This fee is waived if the contract is part of a 401(k) plan. No contract
fees are charged on the Single Payment Exchanged Contracts. A $9 semi-annual
fee is charged on the Elective Payment Variable Exchanged Contracts if the
Accumulated Value is $10,000 or less.
VARIABLE ACCOUNT ADMINISTRATIVE EXPENSE CHARGE. Under the new Contract, the
Company assesses each Sub-Account a daily administrative expense charge at an
annual rate of 0.15% of the average daily net assets of the Sub-Account. No
administrative expense charge based on a percentage of Sub-Account assets is
imposed under the Exchanged Contracts.
TRANSFER CHARGE. No charge for transfers is imposed under the Exchanged
Contracts. Currently, no transfer charge is imposed under the new Contract;
however, the Company reserves the right to assess a charge not to exceed $25 for
each transfer after the twelfth in any contract year.
DEATH BENEFIT. The Exchanged Contracts offer a death benefit that is guaranteed
to be the greater of a contract's accumulated value or gross payments made (less
withdrawals). At the time an exchange is processed, the accumulated value of
the Exchanged Contract becomes the "payment" for the new Contract. Therefore,
the prior purchase payments made under the Exchanged Contract (if higher than
the Exchanged Contract's accumulated value) is no longer a basis for determining
the death benefit under the new Contract. Consequently, whether the initial
minimum death benefit under the new Contract is greater than, equal to or less
than the death benefit of the Exchanged Contract depends on whether the
accumulated value transferred to the Contract is greater than, equal to or less
than the gross payments under the Exchanged Contract. In addition, under the
Exchanged Contract, the amount of any prior withdrawals are subtracted from the
value of the death benefit. Under the new Contract, where there is a reduction
in the death benefit amount due to a prior withdrawal, the value of the death
benefit is reduced in the same proportion that the new Contract's accumulated
value was reduced on the date of the withdrawal.
ANNUITY TABLES. The Exchanged Contracts contain higher guaranteed annuity
rates.
INVESTMENTS. Accumulated Values and payments under the new Contract may be
allocated to significantly more investment options than those available under
the Exchanged Contracts.
Supplement Dated August 1, 1996
