AMERICAN GENERAL LIFE INSURANCE CO SEPARATE ACCOUNT D, 485APOS, 1997-02-14

AMERICAN GENERAL LIFE INSURANCE CO SEPARATE ACCOUNT D
485APOS, 1997-02-14

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Registration Nos. 33-57730
811-2441

As filed with the Commission on February 14, 1997

--------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ] [ ]

Post-Effective Amendment No. [5] [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 57 X

AMERICAN GENERAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT D
(Exact Name of Registrant)

AMERICAN GENERAL LIFE INSURANCE COMPANY
(Name of Depositor)

2727-A Allen Parkway
Houston, Texas 77019-2191
(Address of Depositor's Principal Executive Officers) (Zip Code)
(713) 831-3632
(Depositor's Telephone Number, including Area Code)

Steven A. Glover, Esq.
Associate General Counsel and Assistant Secretary
American General Life Insurance Company
2727-A Allen Parkway, Houston, Texas 77019
(Name and Address of Agent for Service)

Copies of all communications to Freedman, Levy,
Kroll & Simonds 1050 Connecticut Avenue,
N.W., Suite 825
Washington, D.C. 20036
Attention: Gary O. Cohen, Esq.

<PAGE>

Approximate Date of Proposed Public Offering: April 15, 1997

It is proposed that this filing will become effective (check appropriate box)

[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] On ________________ pursuant to paragraph (b) of Rule 485
[X] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] On ________________ pursuant to paragraph (a)(1) of Rule 485

If appropriate, check the following:

[ ] This post-effective amendment designates a new effective date for a
previously filed post- effective amendment

Pursuant to the provisions of Rule 24f-2 under the Investment Company Act of
1940, Registrant has elected to register an indefinite number or amount of its
securities under the Securities Act of 1933. That election was previously
filed in Registrant's Form N-4 registration statement (File No. 2-49805).
Registrant filed a Rule 24f-2 Notice on February 21, 1996, for its fiscal year
ended December 31, 1995 and will file a Rule 24f-2 Notice on or before
February 28, 1997, for its fiscal year ended December 31, 1996.

<PAGE>

AMERICAN GENERAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT D
FORM N-4

Cross Reference Sheet
Pursuant to Rule 495(a)
Under the Securities Act of 1933

PART A
Showing Location of Information in Prospectus1

FORM N-4
ITEM NO. PROSPECTUS CAPTION

1. Cover Page . . . . . . . . . . . . . . . . . . . . Cover Page

2. Definitions. . . . . . . . . . . . . . . . . . . . . Glossary

3. Synopsis . . . . . . . . . . . . . . . . . . . . . . Synopsis of Contract
Provisions

4. Condensed Financial Information. . . . . . . . . . . Synopsis of Contract
Provisions - Financial
and Performance Infor-
mation; Cover Page;
Financial Information2

5. General Description of Registrant,
Depositor and Portfolio Companies. . . . . . . . . . AG Life; Separate Ac-
count D; The Portfo-
lios and the Fund3;
Cover Page

6. Deductions and Expenses. . . . . . . . . . . . . . . Charges Under the
Contracts; Long-Term
Care and Terminal Ill-
ness

- --------

1 This registration statement contains prospectuses that relate to two
versions of the same form of variable annuity contract. The two
versions differ with respect to underlying funds offered. Except as
otherwise noted, the information required by Part A of Form N-4 is
located under the captions identified below in each, prospectus
contained herein, except as otherwise noted.

2 Contained in the Prospectus relating to Contract Form No. 93011 (See
Part C, Item 24(b)(4)(a)).

3 Contained in the Prospectus relating to Contract Form No. 97010 and
Contract Form No. 97011 (See Part C, Item 24(b)(4)(f)(i) and (f)(ii).

(i)

<PAGE>

7. General Description of Variable
Annuity Contracts. . . . . . . . . . . . . . . . . Synopsis of Contract
Provisions - Communi-
cations to Us; Owner
Account Value; Trans-
fer, Surrender and Par-
tial Withdrawal of
Owner Account Value;
Owners, Annuitants
and Beneficiaries; As
signments; Rights Re-
served by Us

(ii)

<PAGE>

PART A

FORM N-4
ITEM NO. PROSPECTUS CAPTION

8. Annuity Period. . . . . . . . . . . . . . . . . . . Annuity Period and An-
nuity Payment Options

9. Death Benefit . . . . . . . . . . . . . . . . . . . Death Proceeds

10. Purchases and Contract Value. . . . . . . . . . . . Contract Issuance and
Purchase Payments;
Owner Account Value;
Distribution Arrange-
ments; One-Time Re-
instatement Privilege

11. Redemptions . . . . . . . . . . . . . . . . . . . . Transfer, Surrender and
Partial Withdrawal of
Owner Account Value;
Annuity Payment Op-
tions; Contract Issu-
ance and Purchase Pay-
ments; Synopsis of Con-
tract Provisions - Sur
renders, Withdrawals
and Cancellations;
Payment and Deferment

12. Taxes . . . . . . . . . . . . . . . . . . . . . . . Federal Income Tax
Matters; Synopsis of
Contract Provi sions -
Limitations Imposed by
Retirement Plans and
Employ ers

13. Legal Proceedings . . . . . . . . . . . . . . . . . Not Applicable

14. Table of Contents of Statement
of Additional Information . . . . . . . . . . . . Contents of Statement
of Additional Informa-
tion

(iii)

<PAGE>

PART B

Showing Location of Information in Statement of Additional Information4

CAPTION IN
FORM N-4 STATEMENT OF
ITEM NO. ADDITIONAL INFORMATION

15. Cover Page. . . . . . . . . . . . . . . . . . . . . Cover Page

16. Table of Contents . . . . . . . . . . . . . . . . . Cover Page

17. General Information and
History . . . . . . . . . . . . . . . . . . . . . General Information;
Regulation and Re-
serves

18. Services. . . . . . . . . . . . . . . . . . . . . . Independent Auditors;
Services

19. Purchase of Securities
Being Offered . . . . . . . . . . . . . . . . . . . Not Applicable5

20. Underwriters. . . . . . . . . . . . . . . . . . . . Principal Underwriter

21. Calculation of Performance
Data. . . . . . . . . . . . . . . . . . . . . . . Performance Data for
the Divisions

22. Annuity Payments. . . . . . . . . . . . . . . . . . Annuity Payments

23. Financial Statements. . . . . . . . . . . . . . . . Financial Statements

- --------------------

* All required information is included in Prospectus.

- --------

4 This registration statement contains two statements of additional
information (each an "SAI") that relate to two versions of the same
form of variable annuity contract. The two versions differ with
respect to underlying funds offered. Except as otherwise noted, the
information required by Part B of Form N-4 is located under the
captions identified below in each SAI contained herein.

5 All required information is included in the Prospectus.

(iv)

<PAGE>

PART C

Information required to be set forth in Part C is set forth under the
appropriate item, so numbered, in Part C of the Registration Statement.

(v)

<PAGE>

Registrant is filing this Post-Effective Amendment No. 5 for the principal
purpose of adding to the Registration Statement a prospectus and a statement
of additional information with respect to an enhanced version of the
Combination Fixed and Variable Annuity Contract offered by American General
Life Insurance Company (Contract Form No. 97010 and Contract Form No. 97011).

Registrant does not intend for this Post-Effective Amendment No. 5 to delete,
from the Registration Statement, any document included in the Registration
Statement, including any prospectus, statement of additional information or
supplement thereto relating to the original version of the Combination Fixed
and Variable Annuity Contract offered by American General Life Insurance
Company (Contract Form No. 93011).

(vi)

<PAGE>

COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS
OFFERED BY
AMERICAN GENERAL LIFE INSURANCE COMPANY
ANNUITY ADMINISTRATION DEPARTMENT
P.O. BOX 1401, HOUSTON, TEXAS 77251-1401
1-800-247-6584 713/831-3505

American General Life Insurance Company ("AGL") is offering the flexible
payment deferred individual annuity contracts (the "Contracts") described in
this Prospectus.

You may use AGL's Separate Account D for a variable investment return under
the Contracts based on one or more of the following mutual fund series of The
Sierra Variable Trust (the "Trust"): the Capital Growth Portfolio, the Growth
Portfolio, the Balanced Portfolio, the Value Portfolio, and the Income
Portfolio (the "Portfolios"), and the Global Money Fund (the "Fund").

You may also use AGL's guaranteed interest accumulation option. This option
has a one-year guarantee period with a guaranteed interest rate.

This Prospectus is designed to provide information about the Contracts that
you ought to know before investing. Please read it carefully and keep it for
future reference. Information about certain aspects of the Contracts, in
addition to that found in this Prospectus, has been filed with the Securities
and Exchange Commission in the Statement of Additional Information (the
"Statement"). The Statement, dated April 15, 1997, is incorporated by
reference into this Prospectus. The "Table of Contents" of the Statement
appears at page ___ of this Prospectus. You may obtain a free copy of the
Statement upon written or oral request to AGL's Annuity Administration
Department in our Home Office, which is located at 2727-A Allen Parkway,
Houston, Texas 77019-2191. The mailing address and telephone numbers are set
forth above.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND THE RELATED
STATEMENT (OR ANY SALES LITERATURE APPROVED BY AGL) IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THE
CONTRACTS ARE NOT AVAILABLE IN ALL STATES AND THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO WHOM SUCH OFFER WOULD
BE UNLAWFUL THEREIN.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED

(i)

<PAGE>

UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA TION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUS OF
THE SIERRA VARIABLE TRUSTAPPLICABLE TO THE FUND AND THE PORTFOLIOS.

Prospectus dated April 15, 1997

CONTENTS

Glossary......................................................................
Fee Table.....................................................................
Synopsis of Contract Provisions...............................................
AGL...........................................................................
Separate Account D............................................................
The Funds.....................................................................
The Fixed Account.............................................................
Contract Issuance and Purchase Payments.......................................
Owner Account Value...........................................................
Variable Account Value........................................................
Fixed Account Value...........................................................
Transfer, Surrender and Partial Withdrawal of Owner Account Value.............
Transfers.....................................................................
Surrenders and Partial Withdrawals..........................................
Annuity Period and Annuity Payment Options....................................
Annuity Commencement Date...................................................
Application of Owner Account Value..........................................
Fixed and Variable Annuity Payments.........................................
Annuity Payment Options.....................................................
Transfers...................................................................
Death Proceeds................................................................
Death Proceeds Prior to the Annuity Commencement Date.......................
Death Proceeds After the Annuity Commencement Date..........................
Proof of Death..............................................................
Charges Under the Contracts...................................................
Premium Taxes...............................................................
Surrender Charge............................................................
Transfer Charges............................................................
Charge to Separate Account D................................................
Miscellaneous...............................................................
One-Time Reinstatement Privilege............................................
Reduction in Surrender Charges or Administrative Charges....................
Long-Term Care and Terminal Illness...........................................
Long-Term Care..............................................................
Terminal Illness............................................................
Other Aspects of the Contracts................................................

<PAGE>

Owners, Annuitants and Beneficiaries; Assignments...........................
Reports.....................................................................
Rights Reserved by Us.......................................................
Payment and Deferment.......................................................
Federal Income Tax Matters....................................................
General.....................................................................
Non-Qualified Contracts.....................................................
Individual Retirement Annuities ("IRAs")....................................
Simplified Employee Pension Plans...........................................
Other Qualified Plans.......................................................
Private Employer Unfunded Deferred Compensation
Plans.....................................................................
Excess Distributions - 15% Tax..............................................
Federal Income Tax Withholding and Reporting................................
Taxes Payable by AGL and Separate Account D.................................
Distribution Arrangements.....................................................
Legal Matters.................................................................
Other Information on File.....................................................
Contents of Statement of Additional Information...............................

<PAGE>

GLOSSARY

WE, OUR AND US - American General Life Insurance Company ("AGL").

YOU AND YOUR - a reader of this Prospectus who is contemplating making
purchase payments or taking any other action in connection with a Contract.
This would generally be the Owner.

ACCOUNT VALUE - the sum of your Fixed Account Value and Variable Account
Value.

ACCUMULATION UNIT - a measuring unit used in calculating your interest in a
Division of Separate Account D prior to the Annuity Commencement Date.

ANNUITANT - the person named as such in the Contract and on whose life annuity
payments may be based.

ANNUITY COMMENCEMENT DATE - the date on which we begin making payments under
an Annuity Payment Option, unless a lump-sum distribution is elected instead.

ANNUITY PAYMENT OPTION - one of the several forms in which you can request us
to make annuity payments.

ANNUITY PERIOD - the period during which we make annuity payments under an
Annuity Payment Option.

ANNUITY UNIT - a measuring unit used in calculating the amount of Variable
Annuity Payments.

BENEFICIARY - the person that you designate to receive any proceeds due under
a Contract following the death of an Owner or an Annuitant.

CODE - the Internal Revenue Code of 1986, as amended.

CONTINGENT ANNUITANT - a person that you designate under a Non-Qualified
Contract to become the Annuitant if the Annuitant dies before the Annuity
Commencement Date and the Contingent Annuitant survives the Annuitant.

CONTINGENT BENEFICIARY - a person that you designate to receive any proceeds
due under a Contract following the death of an Owner or an Annuitant, if the
Beneficiary has died but the Contingent Beneficiary survives at the time such
proceeds become payable.

CONTRACT - an individual annuity Contract offered by this Prospectus.

CONTRACT ANNIVERSARY - each anniversary of the date of issue of the Contract.

CONTRACT YEAR - each year beginning with the date of issue of the Contract.

<PAGE>

DIVISION - one of the several different investment options into which Separate
Account D is divided.

FIXED ACCOUNT - the name of the investment alternative under which purchase
payments are allocated to AGL's General Account.

FIXED ACCOUNT VALUE - the amount of your Account Value which is in the Fixed
Account.

FIXED ANNUITY PAYMENTS - annuity payments that are fixed in amount and do not
vary with the investment experience of any Division of Separate Account D.

GENERAL ACCOUNT - all assets of AGL other than those in Separate Account D or
any other legally-segregated separate account established by AGL.

GUARANTEED INTEREST RATE - the rate of interest we credit during any Guarantee
Period, on an effective annual basis.

GUARANTEE PERIOD - the period for which a Guaranteed Interest Rate is
credited.

HOME OFFICE - our office at the following addresses and phone numbers:
American General Life Insurance Company, Annuity Administration Department,
2727-A Allen Parkway, Houston, Texas 77019-2191; mailing address - P.O. Box
1401, Houston, Texas 77251-1401; 1-800-247-6584 or 713-
831-3102.

INVESTMENT COMPANY ACT OF 1940, AS AMENDED ("1940 ACT") - a federal law
governing the operations of investment companies such as the Trust and
Separate Account D.

NON-QUALIFIED - not eligible for the special federal income tax treatment
applicable in connection with retirement plans pursuant to Sections 401, 403,
or 408 of the Code.

OWNER - the holder of record of a Contract, except that the employer or
trustee may be the Owner of the Contract in connection with a retirement plan.

QUALIFIED - eligible for the special federal income tax treatment applicable
in connection with retirement plans pursuant to sections 401, 403, or 408 of
the Code.

SEPARATE ACCOUNT D - the segregated asset account referred to as American
General Life Insurance Company Separate Account D established to receive and
invest purchase payments allocated to the Divisions under the Contracts.

<PAGE>

SERIES - An individual investment fund or portfolio available for investment
under the Contracts. Currently, the Series available under the Contracts are
the Fund and the Portfolios of The Sierra Variable Trust.

SURRENDER CHARGE - a charge for sales expenses that may be assessed upon
surrenders of and payments of certain other amounts from a Contract.

VALUATION DATE - all days on which we are open for business except, with
respect to any Division, days on which the related Fund does not value its
shares.

VALUATION PERIOD - the period that starts at the close of regular trading on
the New York Stock Exchange on a Valuation Date and ends at the close of
regular trading on the exchange on the next succeeding Valuation Date.

VARIABLE ANNUITY PAYMENTS - annuity payments that vary in amount based on the
investment experience of one or more of the Divisions of Separate Account D.

VARIABLE ACCOUNT VALUE - the amount of your Account Value that is in Separate
Account D.

WRITTEN - signed, dated, in form and substance satisfactory to us and received
at our Home Office. See "Synopsis of Contract Provisions - Communications to
Us." You must use special forms provided by us or your sales representative to
authorize telephone transfers, elect an Annuity Option or exercise your
one-time reinstatement privilege.

<PAGE>

FEE TABLE

The purpose of this Fee Table is to assist you in understanding the
various costs and expenses that you will bear directly or indirectly pursuant
to a Contract and in connection with the Fund and the Portfolios. The table
reflects expenses of Separate Account D as well as the Fund and the
Portfolios. Amounts for state premium taxes or similar assessments may also be
deducted, where applicable.

PARTICIPANT TRANSACTION CHARGES

Front-End Sales Charge Imposed on Purchases ....................... 0%
Maximum Surrender Charge1.......................................... 7.0%
(computed as a percentage of purchase payments)
Transfer Fee....................................................... $0 2

ANNUAL CONTRACT FEE(3).................................................. $ 35

SEPARATE ACCOUNT D ANNUAL EXPENSES (as a percentage of average daily net asset
value)

Mortality and Expense Risk Charge..................................1.25%
Administrative Expense Charge...................................... 15%
Total Separate Account D Annual Expenses.........................1.40%

- ------------------

1
This charge does not apply or is reduced under certain circumstances. See
"Surrender Charge."

This charge is $25 after the twelfth transfer (unless such transfer is
associated with the dollar cost averaging program; see "Transfers")
during each Contract Year prior to the Annuity Commencement Date.

3
This charge is waived for cumulative premiums of $50,000 or more and is
not imposed during the Annuity Period.

<PAGE>

THE SERIES' ANNUAL EXPENSES(1) (as a percentage of average net assets)
<TABLE>
<CAPTION>
Total Series
Management Other Expenses Operating Expenses
Fees After Expense After Expense After Expense
Reimbursement Reimbursement Reimbursement
and Waiver(2) and Waiver(2) and Waiver (2)
<S> <C> <C> <C>
Capital Growth Portfolio 1.29% .20% 1.49%
Growth Portfolio 1.26% .20% 1.46%
Balanced Portfolio 1.19% .20% 1.39%
Value Portfolio 1.11% .20% 1.31%
Income Portfolio 1.05% .20% 1.25%
Global Money Fund .15% .50% .65%
</TABLE>

-----------------------

1 Annual Expenses are presented on a unified basis that includes the
aggregate of the (i) Management Fees for a Portfolio and the Funds in
which that Portfolio invests and (ii) Other Expenses for a Portfolio and
the Funds in which that Portfolio invests. Management Fees and Other
Expenses for the Funds in which a Portfolio invests are based on
assumptions regarding the mix of individual Funds and, therefore, the
blend of the expense experience of such individual Funds. These
assumptions were derived by Sierra Investment Services Corporation, the
investment advisor to Sierra Variable Trust Portfolios, based on that
advisor's experience regarding a comparable mutual fund managed by the
investment advisor. Please refer to the Trust Prospectus for more
details. The Other Expenses for the Capital Growth, Growth, Balanced,
Value and Income Portfolios are estimated, because none of the Portfolios
has financial statements covering a period of at least ten months. The
Other Expenses for the Global Money Fund are based on 1996 operating
experience, which has been restated to reflect current expenses, the
modification of certain voluntary fee waivers and expense reimbursements,
and credits allowed by the custodian. Each Portfolio's Other Expenses
include a monthly fee at an effective annual rate of 0.15% of each
Portfolio's net assets. This fee is paid to Sierra Fund Administration
Corporation, which pays the fee to AGL for administration services
provided to the Portfolio.

2 If Expense Reimbursement and Waiver were terminated, the estimated Total
Series Operating Expenses would be 1.70%, 1.66%, 1.59%, 1.47%, and 1.39%,
for the Capital Growth, Growth, Balanced, Value, and Income Portfolios,
respectively, and the actual Total Series Operating Expenses would be
1.01% for the Global Money Fund. The investment advisor may, at its sole
discretion, vary the level of or eliminate its voluntary fee waivers and
expense reimbursement at any time.

The Management Fees for the Capital Growth, Growth, Balanced, Value and
Income Portfolios may be higher than shown, depending on the mix of Funds
in which a Portfolio invests. Absent any Expense Reimbursement and
Waiver, such Fees will never exceed 1.52%, 1.50%, 1.48%, 1.36% and 1.26%,
respectively. Other Expenses for the Portfolios are not expected to vary.
Please refer to the Trust Prospectus for more details.

EXAMPLE(3): If you surrender your Contract at the end of the applicable
time period, a $1,000 investment would be subject to the
following expenses, assuming a 5% annual return on assets:

If all amounts are invested in one of the following Series:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>

Capital Growth Portfolio $ 93 $137 N/A N/A
Growth Portfolio $ 93 $136 N/A N/A
Balanced Portfolio $ 92 $134 N/A N/A
Value Portfolio $ 91 $132 N/A N/A
Income Portfolio $ 91 $130 N/A N/A
Global Money Fund $ 85 $112 $150 $246
</TABLE>

<PAGE>

EXAMPLE(3): If you do NOT surrender your Contract or commence an Annuity
Payment Option, a $1,000 investment would be subject to the
following expenses, assuming a 5% annual return on assets:

If all amounts are invested in one of the following Series:

<TABLE>

<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Capital Growth Portfolio $ 30 $ 92 N/A N/A
Growth Portfolio $ 30 $ 91 N/A N/A
Balanced Portfolio $ 29 $ 89 N/A N/A
Value Portfolio $ 28 $ 87 N/A N/A
Income Portfolio $ 28 $ 85 N/A N/A
Global Money Fund $ 22 $ 67 $114 $246

</TABLE>

3 "N/A" indicates that SEC rules require that the Capital Growth, Growth,
Balanced, Value and Income Portfolios complete the Examples for only the
one and three year periods.

<PAGE>

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Similarly,
the assumed 5% annual rate of return is not an estimate or a guarantee of
future investment performance.

SYNOPSIS OF CONTRACT PROVISIONS

This synopsis should be read together with the other information set forth in
this Prospectus. Variations due to requirements particular to your state are
described in supplements which are attached to this Prospectus, or in
endorsements to your Contract, as appropriate.

The Contracts are designed to provide retirement benefits through the
accumulation of purchase payments on a fixed or variable basis, and by the
application of such accumulations to provide Fixed or Variable Annuity
Payments.

MINIMUM INVESTMENT REQUIREMENTS

Your initial purchase payment must be at least $5,000 . The amount of any
subsequent purchase payment that you make must be at least $100.

<PAGE>

We may also transfer funds from a Division (other than the Global Money
Division) or from the Guarantee Period under your Contract without charge to
the Global Money Division if the Account Value of that Division or Guarantee
Period falls below $500. If your Account Value falls below $500, we may cancel
your interest in the Contract and treat it as a full surrender. See "Contract
Issuance and Purchase Payments."

PURCHASE PAYMENT ACCUMULATION

Purchase payments will be accumulated on a variable or fixed basis until the
Annuity Commencement Date. For variable accumulation, you may allocate part or
all of your Account Value to one or more of the six available Divisions of
Separate Account D. Each such Division invests solely in shares of one of six
corresponding Series of the Trust. See "The Series ." As the value of the
investments in a Series's shares increases or decreases, the value of
accumulated purchase payments allocated to the corresponding Division
increases or decreases, subject to applicable charges and deductions. See
"Variable Account Value."

For fixed accumulation, you may allocate part or all of your Account Value to
the Guarantee Period currently available in our Fixed Account. While allocated
to a Guarantee Period, the value of accumulated purchase payments increases at
the Guaranteed Interest Rate applicable to that Guarantee Period. See "The
Fixed Account."

FIXED AND VARIABLE ANNUITY PAYMENTS

You may elect to receive Fixed or Variable Annuity Payments, or a combination
thereof, commencing on the Annuity Commencement Date. Fixed Annuity Payments
are periodic payments from AGL, the amount of which is fixed and guaranteed by
AGL. The amount of the payments will depend on the Annuity Payment Option
chosen, the age and, in some cases, sex of the Annuitant, and the total amount
of Account Value applied to the fixed Annuity Payment Option.

Variable Annuity Payments are similar to Fixed Annuity Payments, except that
the amount of each periodic payment from AGL will vary reflecting the net
investment return of the Division or Divisions chosen in connection with a
variable Annuity Payment Option. If the net investment return for a given
month exceeds an annual rate of 3.5%, the monthly payment will be greater than
the previous payment. If the net investment return for a month is less than
3.5%, the monthly payment will be less than the previous payment. See "Annuity
Period and Annuity Payment Options."

CHANGES IN ALLOCATIONS AMONG DIVISIONS AND GUARANTEE PERIODS

Prior to the Annuity Commencement Date, you may modify your election with
respect to the allocation of future purchase payments to each of the various
Divisions and the Guarantee Period, without charge.

In addition, you may reallocate your Account Value among the Divisions and
Guarantee Period

<PAGE>

prior to the Annuity Commencement Date. Transfers out of the Guarantee Period,
however, are subject to limitations as to amount. For these and other terms
and conditions of transfer, see "Transfer, Surrender and Partial Withdrawal of
Owner Account Value - Transfers."

After the Annuity Commencement Date, you may make transfers among the
Divisions or to a fixed Annuity Payment Option, but you may not make transfers
from a fixed Annuity Payment Option. See "Annuity Period and Annuity Payment
Options - Transfers."

SURRENDERS, WITHDRAWALS AND CANCELLATIONS

You may make a total surrender of or partial withdrawal from your Contract at
any time prior to the Annuity Commencement Date, by Written request to us. A
Surrender Charge may be assessed and some surrenders and withdrawals may
subject you to tax penalties. See "Surrenders and Partial Withdrawals."

You may cancel your Contract by delivering it or mailing it with a Written
cancellation request to our Home Office or to the sales representative through
whom it was purchased, before the close of business on the tenth day after you
receive the Contract. (In some cases, the Contract may provide for a 20 or
30-day, rather than a ten-day, period). If the foregoing items are sent by
mail, properly addressed and postage prepaid, they will be deemed to be
received by us on the date actually received.

We will refund to you the Owner Account Value plus any premium taxes and
Annual Contract Fee that have been deducted. In states where the law so
requires, however, we will refund the greater of that amount or the amount of
your purchase payments, or, if the law permits, the amount of your purchase
payments.

DEATH PROCEEDS

In the event that the Annuitant or Owner dies prior to the Annuity
Commencement Date, a benefit may be payable to the Beneficiary. See "Death
Proceeds Prior to the Annuity Commencement Date."

LIMITATIONS IMPOSED BY RETIREMENT PLANS AND EMPLOYERS

Certain rights you would otherwise have under a Contract may be limited by the
terms of any applicable employee benefit plan. These limitations may restrict
such things as total and partial surrenders, the amount or timing of purchase
payments that may be made, when annuity payments must start and the type of
annuity options that may be selected. Accordingly, you should familiarize
yourself with these and all other aspects of any retirement plan in connection
with which a Contract is used. We are not responsible for monitoring or
assuring compliance with the provisions of any

<PAGE>

retirement plan.

COMMUNICATIONS TO US

All communications to us should include your Contract number, your name and,
if different, the

Annuitant's name. Communications may be directed to the addresses and phone
numbers on the cover of this Prospectus.

Except as otherwise specified in this Prospectus, purchase payments or other
communications are deemed received at our Home Office on the actual date of
receipt there in proper form unless received (1) after the close of regular
trading on The New York Stock Exchange or (2) on a date that is not a
Valuation Date. In either of these two cases, the date of receipt will be
deemed to be the next Valuation Date.

FINANCIAL AND PERFORMANCE INFORMATION

Financial statements of AGL and Separate Account D, including information
about the Divisions that invest in the Fund and the Portfolios of the Trust,
are included in the Statement of Additional Information. See "Contents of
Statement of Additional Information."

Advertising and other sales materials may include yield and total return
figures for the Divisions of Separate Account D. These figures are based on
historical results and are not intended to indicate future performance.
"Yield" is the return generated by an investment in a Division over a period
of time specified in the advertisement, excluding capital changes in the
corresponding Fund's investments. This rate of return is assumed to be earned
over a full year and is shown as a percentage of the investment. "Effective
yield" may also be quoted for the Global Money Division.

"Effective yield" is higher than "yield" because it assumes weekly compounding
over the course of the year.

Total return is the total change in value of an investment in the Division
over a period of time specified in the advertisement. The rate of "average
annual total return" shown would produce that change in value over the
specified period, if compounded annually. The rate of "aggregate total return"
is the cumulative amount of such change over the specified period, expressed
as a percentage of the initial investment.

Yield figures do not reflect the Surrender Charge, and yield and total return
figures do not reflect premium tax charges. Such total return figures may be
used together with total return figures that also exclude the Surrender
Charge. The exclusion of charges makes the performance shown more favorable. A
Fund's adviser may waive or reimburse certain fees or charges, which will
enhance the related Division's performance results. Additional information
concerning the Divisions' performance figures appears in the Statement of
Additional Information.

<PAGE>

AGL may also advertise or report to Owners its ratings as an insurance company
by the A. M. Best Company. Each year, A. M. Best reviews the financial status
of thousands of insurers, culminating in the assignment of Best's Ratings.
These ratings reflect their current opinion of the relative financial strength
and operating performance of an insurance company in comparison to the norms
of the life/health industry. Best's Ratings range from A++ to F. An A++ rating
means, in the opinion of A. M. Best, that the insurer has demonstrated the
strongest ability to meet its respective policyholder and other contractual
obligations. A. M. Best publishes Best's Insurance Reports, Life- Health
Edition. The 1996 Edition reaffirmed AGL's rating of A++ (Superior), as of
June 1996 for financial position and operating performance.

In addition, the claims-paying ability of AGL as measured by the Standard &
Poor's Corporation may be referred to in advertisements or in reports to
Owners. A Standard & Poor's insurance claims-paying ability rating is an
assessment of an operating insurance company's financial capacity to meet the
obligations of its insurance policies in accordance with their terms. Standard
& Poor's ratings range from AAA to D. The Company's claims paying ability
rating is AAA (Superior), reaffirmed as of November 1996.

AGL may additionally advertise its rating from Duff & Phelps Credit Rating Co.
A Duff & Phelps rating is an assessment of a company's insurance claims paying
ability. Duff & Phelps ratings range from AAA to CCC. Duff & Phelps rates the
claims paying ability of AGL as AAA, the highest level, reaffirmed as of
August 1996.

The ratings from A. M. Best, Standard & Poors, and Duff & Phelps reflect the
claims paying ability and financial strength of AGL and are not a rating of
investment performance that purchasers of insurance products have experienced
or are likely to experience in the future.

<PAGE>

AGL

AGL is a stock life insurance company organized under the laws of the State of
Texas, which is a successor in interest to a company originally organized
under the laws of the State of Delaware in 1917. AGL is an indirect,
wholly-owned subsidiary of American General Corporation (formerly American
General Insurance Company), a diversified financial services holding company
engaged primarily in the insurance business. The commitments under the
Contracts are AGL's, and American General Corporation has no legal obligation
to back those commitments.

SEPARATE ACCOUNT D

Separate Account D was originally established on November 19, 1973 and
consists of 42 Divisions, six of which are available under the Contracts
offered by this Prospectus. Separate Account D is registered with the
Securities and Exchange Commission as a unit investment trust under the 1940
Act.

Each Division of Separate Account D is part of AGL's general business and the
assets of Separate Account D belong to AGL. Under Texas law and the terms of
the Contracts, the assets of Separate Account D will not be chargeable with
liabilities arising out of any other business which AGL may conduct, but will
be held exclusively to meet AGL's obligations under variable annuity
contracts. Furthermore, the income, gains, and losses, whether or not
realized, from assets allocated to Separate Account D are, in accordance with
the Contracts, credited to or charged against the Separate Account without
regard to other income, gains, or losses of AGL.

THE SERIES

The variable benefits under the Contracts are funded by six Divisions of the
Separate Account. These Divisions invest in shares of six series (consisting
of the Fund and the five Portfolios) of the Trust. Series shares are sold,
without sales charges, exclusively to Separate Account D. In the future,
however, the Trust may offer its shares to separate accounts funding variable
annuities of insurance companies affiliated or unaffiliated with AGL and to
separate accounts which fund variable life insurance or other variable funding
arrangements. We do not see any conflict between Owners of Contracts and
owners of variable life insurance policies or variable annuity contracts
issued by insurance companies not affiliated with AGL. Nevertheless, the
Trust's Board of Trustees will monitor to identify any material irreconcilable
conflicts that may develop and determine what, if any, action should be taken
in response. If it becomes necessary for any separate account to replace
shares of any Series with another investment, the Series may have to liquidate
securities on a disadvantageous basis.

The investment adviser to the Fund is Sierra Investment Advisors Corporation.
("Sierra Advisors"). The investment adviser to the Portfolios is Sierra
Investment Services Corporation ("Sierra Services"). Neither Sierra Advisors
nor Sierra Services is affiliated with AGL.

<PAGE>

Any dividends or capital gain distributions attributable to Contracts are
automatically reinvested in shares of the Series from which they are received
at the Series' net asset value on the date payable. Such dividends and
distributions will have the effect of reducing the net asset value of each
share of the corresponding Series and increasing, by an equivalent value, the
number of shares outstanding of the Series. However, the value of your
interest in the corresponding Division will not change as a result of any such
dividends and distributions.

The names of the Series in which each available Division invests are as
follows:

Capital Growth Portfolio
Growth Portfolio
Balanced Portfolio
Value Portfolio
Income Portfolio
Global Money Fund

Before selecting any Division, you should carefully read the Trust prospectus,
which is attached at the end of this Prospectus. The Trust prospectus includes
more complete information about the Series in which each Division invests,
including investment objectives and policies, charges and expenses. Each
Portfolio will invest in different combinations of the nine other series of
the Trust, namely the Fund, the Short Term High Quality Bond Fund, the Short
Term Global Government Fund, the U.S. Government Fund, the Corporate Income
Fund, the Growth and Income Fund, the Growth Fund, the Emerging Growth Fund
and the International Growth Fund (collectively, the "Funds"). Please refer to
the Trust prospectus for more details. You may obtain additional copies of
such a prospectus by contacting AGL's Annuity Administration Department at the
addresses and phone number set forth on the cover page of this Prospectus.
When making your request, please specify the Series in which you are
interested.

Lower rated securities such as those in which the Growth, Emerging Growth, and
the Short Term Global Government Funds may invest up to 35%, 35% and 10%,
respectively, of their total assets are subject to greater market fluctuations
and risk of loss of income and principal than investments in lower yielding
fixed-income securities. Potential investors in these Divisions should
carefully read the prospectus and related statement of additional information
that pertains to these Funds and consider their ability to assume the risks of
making an investment in these Divisions.

VOTING PRIVILEGES

The Owner prior to the Annuity Commencement Date and the Annuitant or other
payee during the Annuity Period will be entitled to give us instructions as to
how Series shares held in the Divisions of Separate Account D attributable to
their Contract should be voted on matters pertaining to that Series at
meetings of shareholders of the Series. Those persons entitled to give voting
instructions and the number of votes for which they may give directions will
be determined as of the record date for a meeting. Separate Account D will
vote all shares of each Series that

<PAGE>

it holds of record in accordance with instructions received with respect to
all AGL annuity contracts participating in that Series.

Prior to the Annuity Commencement Date, the number of votes each Owner is
entitled to direct with respect to a particular Series is equal to (a) the
Owner's Variable Account Value attributable to that Series divided by (b) the
net asset value of one share of that Series. In determining the number of
votes, fractional votes will be recognized. While a variable Annuity Payment
Option is in effect, the number of votes an Annuitant or payee is entitled to
direct with respect to a particular Series will be computed in a comparable
manner, based on our liability for future Variable Annuity Payments with
respect to that Annuitant or payee as of the record date. Such liability for
future payments will be calculated on the basis of the mortality assumptions
and the assumed interest rate used in determining the number of Annuity Units
under a Contract and the applicable value of an Annuity Unit on the record
date.

Series shares held by insurance company separate accounts other than Separate
Account D will generally be voted in accordance with instructions of
participants in such other separate accounts.

We believe that the foregoing voting instruction procedures comply with
current federal securities law requirements and interpretations thereof.
However,AGL reserves the right to modify these procedures in any manner
consistent with applicable legal requirements and interpretations as in effect
from time to time.

THE FIXED ACCOUNT

AMOUNTS IN THE FIXED ACCOUNT OR SUPPORTING FIXED ANNUITY PAYMENTS BECOME PART
OF OUR GENERAL ACCOUNT. BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS,
INTERESTS IN THE GENERAL ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, NOR IS THE GENERAL ACCOUNT REGISTERED AS AN INVESTMENT COMPANY
UNDER THE 1940 ACT. WE HAVE BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND
EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURES IN THIS PROSPECTUS THAT
RELATE TO THE FIXED ACCOUNT OR FIXED ANNUITY PAYMENTS. DISCLOSURES REGARDING
THESE MATTERS, HOWEVER, MAY BE SUBJECT TO CERTAIN GENERALLY-APPLICABLE
PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND
COMPLETENESS OF STATEMENTS IN PROSPECTUSES.

Our obligations with respect to the Fixed Account are legal obligations of AGL
and are supported by our General Account assets, which also support
obligations incurred by us under other insurance and annuity contracts.
Investments purchased with amounts allocated to the Fixed Account are the
property of AGL, and Owners have no legal rights in such investments.

Account Value that is allocated by the Owner to the Fixed Account earns a
Guaranteed Interest Rate commencing with the date of such allocation. This
Guaranteed Interest Rate continues for the length of the Guarantee Period. At
the end of a Guarantee Period, the Owner's Account Value in that Guarantee
Period, including interest accrued thereon, will be allocated to a new
Guarantee Period of the same length unless AGL has received a Written request
from the Owner to allocate this amount to a different Guarantee Period or
periods or to one or more of the Divisions of

<PAGE>

Separate Account D. We must receive this Written request at least three
business days prior to the end of the Guarantee Period. If the Owner has not
provided such Written request and the renewed Guarantee Period would extend
beyond the scheduled Annuity Commencement Date, we will nevertheless contact
the Owner regarding the scheduled Annuity Commencement Date. (See "Annuity
Payment Options" and "Surrender Charge.") If the Owner does not elect to
annuitize on that scheduled date, the Annuity Commencement Date will be
extended to the earlier of (1) the end of the renewed Guarantee Period or (2)
the latest possible Annuity Commencement Date. (See "Annuity Commencement
Date.") The first day of the new Guarantee Period (or other reallocation) will
be the day after the end of the prior Guarantee Period. We will notify the
Owner at least 30 days and not more than 60 days prior to the end of any
Guarantee Period. If the Owner's Account Value in a Guarantee Period is less
than $500, we reserve the right, to without charge, automatically transfer the
balance to the Global Money Division at the end of that Guarantee Period,
unless we have received in good order Written instructions to transfer such
balance to a different Division.

We declare the Guaranteed Interest Rate from time to time as market conditions
dictate. We advise an Owner of the Guaranteed Interest Rate for a Guarantee
Period at the time a purchase payment is received, a transfer is effectuated
or a Guarantee Period is renewed. A different rate of interest may be credited
to one Guarantee Period than to another Guarantee Period that began on a
different date. The minimum Guaranteed Interest Rate is an effective annual
rate of 3%.

Each Guarantee Period has its own Guaranteed Interest Rate, which may differ
from those for other Guarantee Periods. From time to time we will, at our
discretion, change the Guaranteed Interest Rate for future Guarantee Periods
of various lengths. These changes will not affect the Guaranteed Interest
Rates being paid on Guarantee Periods that have already commenced. Each
allocation or transfer of an amount to a Guarantee Period commences the
running of a new Guarantee Period with respect to that amount, which will earn
a Guaranteed Interest Rate that will continue unchanged until the end of that
period. The Guaranteed Interest Rate will never be less than the minimum
Guaranteed Interest Rate shown in your Contract. Currently we make available a
one-year Guarantee Period and no others. However, we reserve the right to
change the Guarantee Periods that we are making available at any time.

AGL'S MANAGEMENT MAKES THE FINAL DETERMINATION OF THE GUARANTEED INTEREST
RATES TO BE DECLARED. AGL CANNOT PREDICT OR ASSURE THE LEVEL OF ANY FUTURE
GUARANTEED INTEREST RATES IN EXCESS OF THE MINIMUM GUARANTEED INTEREST RATE
STATED IN YOUR CONTRACT.

Information concerning the Guaranteed Interest Rates applicable to the various
Guarantee Periods at any time may be obtained from your sales representative
or from the addresses or phone numbers set forth on the cover page of this
Prospectus.

CONTRACT ISSUANCE AND PURCHASE PAYMENTS

The minimum initial purchase payment is $5,000

<PAGE>

The amount of any subsequent purchase payment must be at least $100 We reserve
the right to modify these minimums, at our discretion.

An application to purchase a Contract must be made by a signed written
application form provided by AGL or by such other medium or format as may be
agreed to by AGL and Sierra Investment Services Corporation, as distributor of
the Contracts. When a purchase payment accompanies an application to purchase
a Contract, and the application is properly completed, we will either process
the application, credit the purchase payment, and issue the Contract, or
reject the application and return the purchase payment within two Valuation
Dates after receipt of the application at our Home Office.

If the application is not in a proper form or does not include all necessary
information, we will request additional documents or information within five
Valuation Dates after receipt of the application at our Home Office. If the
application is not made proper and complete within this five day period, we
will return the purchase payment immediately unless the prospective purchaser
specifically consents to retention of the purchase payment until the
application is made proper and complete, in which case the initial purchase
payment is credited within two Valuation Dates after receipt of the last item
required to process the application. Subsequent purchase payments are credited
as of the end of the Valuation Period in which they and any required Written
identifying information, are received at our Home Office. We reserve the right
to reject any application or purchase payment for any reason.

If the Owner's Account Value in any Division (except the Global Money Fund
Division) falls below $500 because of a partial withdrawal from the Contract,
we reserve the right to transfer, without charge, the remaining balance to the
Global Money Division. If the Owner's Account Value in any Division falls
below $500 because of a transfer to another Division or to the Fixed Account,
we reserve the right to transfer the remaining balance in that Division,
without charge and pro rata, to the Division, Divisions or Fixed Account to
which the transfer was made. If the Owner's total Account Value falls below
$500, we may cancel the Contract. Such a cancellation would be considered a
full surrender of the Contract. We will provide you with 60 days' advance
notice of any such cancellation.

So long as the Account Value does not fall below $500, you need make no
further purchase payments. You may, however, elect to make subsequent purchase
payments at any time prior to the Annuity Commencement Date and while the
Owner and Annuitant are still living. Checks for subsequent purchase payments
should be made payable to American General Life Insurance Company and
forwarded directly to our Home Office. If we receive proper instructions, we
may also accept purchase payments by wire, by direct transfer from your
checking, savings or brokerage

<PAGE>

account, or by exchange from another insurance company. You may obtain further
information about how to make purchase payments by any of these methods from
your sales representative or from us at the addresses and telephone numbers on
the cover page of this Prospectus. Purchase payments pursuant to salary
reduction plans may be made only with our agreement.

Your purchase payments begin to earn a return in the Divisions of Separate
Account D or the Guarantee Period of the Fixed Account as of the date we
credit the purchase payments to your Contract. When you apply for a Contract,
you select (in whole percentages) the amount of each purchase payment that is
to be allocated to each Division and the Guarantee Period. You can change
these allocation percentages at any time by Written notice to us.

OWNER ACCOUNT VALUE
Prior to the Annuity Commencement Date, your Account Value under a Contract is
the sum of your Variable Account Value and Fixed Account Value, as discussed
below.

VARIABLE ACCOUNT VALUE

Your Variable Account Value as of any Valuation Date prior to the Annuity
Commencement Date is the sum of your Variable Account Values in each Division
of Separate Account D as of that date. Your Variable Account Value in any such
Division is the product of the number of your Accumulation Units in that
Division multiplied by the value of one such Accumulation Unit as of that
Valuation Date. There is no guaranteed minimum Variable Account Value. To the
extent that your Account Value is allocated to Separate Account D, you bear
the entire risk of investment losses.

Accumulation Units in a Division are credited to you when you allocate
purchase payments or transferred amounts to that Division. Similarly, such
Accumulation Units are cancelled to the extent you transfer or withdraw
amounts from a Division or to the extent necessary to pay certain charges
under the Contract. The crediting or cancellation of Accumulation Units is
based on the value of such Accumulation Units at the end of the Valuation Date
as of which the related amounts are being credited to or charged against your
Variable Account Value, as the case may be.

The value of an Accumulation Unit for a Division on any Valuation Date is
equal to the previous value of that Division's Accumulation Unit multiplied by
that Division's net investment factor for the Valuation Period ending on that
Valuation Date.

The net investment factor for a Division is determined by dividing (1) the net
asset value per share of the Series shares held by the Division, determined at
the end of the current Valuation Period, plus the per share amount of any
dividend or capital gains distribution made with respect to the Series shares
held by the Division during the current Valuation Period, by (2) the net asset
value per share of the Series shares held in the Division as determined at the
end of the previous Valuation Period, and subtracting from that result a
factor representing the mortality risk,

<PAGE>

expense risk and administrative expense charge.

FIXED ACCOUNT VALUE

Your Fixed Account Value as of any Valuation Date prior to the Annuity
Commencement Date is your Fixed Account Value in the Guarantee Period as of
that date. Your Fixed Account Value in the Guarantee Period is equal to the
following amounts, in each case increased by accrued interest at the
applicable Guaranteed Interest Rate: (1) the amount of net purchase payments,
renewals and transferred amounts allocated to the Guarantee Period less (2)
the amount of any transfers or withdrawals out of the Guarantee Period,
including withdrawals to pay applicable charges.

Your Fixed Account Value is guaranteed by AGL. Therefore, AGL bears the
investment risk with respect to amounts allocated to the Fixed Account, except
to the extent that AGL may vary the Guaranteed Interest Rate for future
Guarantee Periods (subject to the 3% effective annual minimum).

TRANSFER, SURRENDER AND PARTIAL WITHDRAWAL
OF OWNER ACCOUNT VALUE

TRANSFERS

Commencing 30 days after the Contract's date of issue and prior to the Annuity
Commencement Date, you may transfer your Account Value at any time among the
available Divisions of Separate Account D and the Guarantee Period, subject to
the conditions described below. Such transfers will be effective at the end of
the Valuation Period in which we receive your Written or telephone transfer
request.

If a transfer would cause your Account Value in any Division or the Guarantee
Period to fall below $500, we reserve the right to also transfer the remaining
balance in that Division or the Guarantee Period in the same proportions as
the transfer request.

Prior to the Annuity Commencement Date and after the first 30 days following
the date the Contract was issued, you may make up to twelve transfers each
Contract Year without charge, but each additional transfer will be subject to
a $25 charge.

No more than 25% of the Account Value you allocated to the Guarantee Period at
its inception may be transferred during any Contract Year. This 25% limitation
does not apply to transfers within 15

<PAGE>

days before or after the end of the Guarantee Period in which the transferred
amounts were being held.

Subject to the above general rules concerning transfers including transfer
charges, you may establish an automatic transfer plan, whereby amounts are
automatically transferred by us from the Global Money Division to one or more
other Divisions or the Guarantee Period on a monthly, quarterly, semi-annual
or annual basis. Transfers under the such automatic transfer plan will not
count toward the twelve free transfers each Contract Year nor incur the $25
charge on additional transfers, nor will such transfers from the Guarantee
Period be subject to the 25% limitation or the Contract value minimum
requirement described above. You may obtain additional information about how
to establish an automatic transfer program from your sales representative or
from us at the telephone numbers and addresses on the front cover of this
Prospectus.

If the person or persons who are entitled to make transfers have provided a
Written request for telephone transfer authorization that is on file with us,
transfers may be made pursuant to telephone instructions, subject to the above
terms and the terms of the telephone transfer authorization. . We will honor
telephone transfer instructions from any person who provides the correct
information, so there is a risk of possible loss to you if unauthorized
persons use this service in your name. Currently we attempt to limit the
availability of telephone transfer instructions only to the Owner of the
Contract for which instruction is received. Under a telephone transfer
authorization we are not liable for any acts or omissions based upon
instructions that we reasonably believe to be genuine, including losses
arising from errors in the communication of transfer instructions. We have
established procedures for accepting telephone transfer instructions, which
include verification of the Contract number, the identity of the caller, both
the annuitant's and Owner's names, and a form of personal identification from
the caller. We will mail to the Owner a written confirmation of the
transaction. If several persons seek to effect telephone transfers at or about
the same time, or if our recording equipment malfunctions, it may be
impossible for you to make a telephone transfer at the time you wish. If this
occurs, you should submit a Written transfer request. Also, if, due to
malfunction or other circumstances, the recording of your telephone request is
incomplete or not fully comprehensible, we will not process the transaction.
The phone number for telephone

<PAGE>
exchanges is 1-800-247-6584.

The Contracts are not designed for professional market timing organizations or
other entities utilizing programmed and frequent transfers. We reserve the
right to restrict or terminate transfers at any time.

SURRENDERS AND PARTIAL WITHDRAWALS At any time prior to the Annuity
Commencement Date and while the Annuitant is still living, the Owner may make
a full surrender of or partial withdrawal from his or her Contract.

The amount payable to the Owner upon full surrender is the Owner's Account
Value at the end of the Valuation Period in which we receive a Written
surrender request in good order, minus any applicable Surrender Charge minus
the amount of any Contract Fee (See "Annual Contract Fee") and minus any
applicable premium tax. Our current practice is to require that you return the
Contract with any request for a full surrender. After a full surrender, or if
the Owner's Account Value falls to zero, all rights of the Owner, Annuitant or
any other person with respect to the Contract will terminate subject to a
right to reinstate (See "One-Time Reinstatement Privilege"). All collateral
assignees of record must consent to any full surrender or partial withdrawal.

Your Written request for a partial withdrawal should specify the Divisions of
Separate Account D, or the Guarantee Period of the Fixed Account, from which
you wish the partial withdrawal to be made. If you do not specify, or if the
withdrawal cannot be made in accordance with your specification, to the extent
necessary the withdrawal will be taken pro-rata from the Divisions and the
Guarantee Period, based on your Account Value in each. Partial withdrawal
requests must be for at least $100 or, if less, all of your Account Value. If
your remaining Account Value in the Division or Guarantee Period would be less
than $500 (except for the Global Money Division), we reserve the right to
transfer, without charge, the remaining balance to the Global Money Division.
Unless you request otherwise, upon a partial withdrawal, your Accumulation
Units and Fixed Account interests that are cancelled will have a total value
equal to the amount of the withdrawal request, and the amount payable to you
will be the amount of the withdrawal request less any Surrender Charge, and
premium tax if applicable, payable upon the partial withdrawal.

We also make available a systematic withdrawal plan under which you may make
automatic partial withdrawals at periodic intervals in a specified amount,
subject to the terms and conditions applicable to other partial withdrawals.
Additional information about how to establish such a systematic withdrawal
program may be obtained from your sales representative or from us at the
addresses and phone numbers set forth on the cover page of this Prospectus. We
reserve the right to modify or terminate our procedures for systematic
withdrawals at any time.

The Code provides that a penalty tax will be imposed on certain premature
surrenders or withdrawals. For a discussion of this and other tax implications
of total surrenders and systematic and other partial withdrawals, including
withholding requirements, see "Federal Income Tax Matters."

<PAGE>

ANNUITY PERIOD AND ANNUITY PAYMENT OPTIONS

ANNUITY COMMENCEMENT DATE

The Owner may elect to have annuity payments made beginning on the Annuity
Commencement Date under any one of the Annuity Payment Options described
below. We will notify the Owner 60 to 90 days prior to the scheduled Annuity
Commencement Date that the Contract is scheduled to mature, and the request
the an Annuity Payment Option be selected. If the Owner has not selected an
Annuity Payment Option ten days prior to the Annuity Commencement Date, we
will proceed as follows: (1) if scheduled Annuity Commencement Date is any
date prior to the Annuitant's one hundredth birthday, we will extend the
Annuity Commencement Date to the Annuitant's one hundredth birthday; or (2) if
the schedule Annuity Commencement Date is the Annuitant's one hundredth
birthday, the Account Value less any applicable charges and premium taxes will
be paid in one sum to the Owner. This procedure is different in Pennsylvania
because the Annuity Commencement Date cannot exceed age 90. The Owner may
select the Annuity Commencement Date when applying to purchase a Contract and
may change a previously-selected date at any time prior to the beginning of an
Annuity Payment Option by submitting a written request, subject to Company
approval. The Annuity Commencement Date specified at the time of application
may be any day of any month up to Annuitant's 100th birthday inclusive.
(Pennsylvania has special limitations which may require the Annuity
Commencement Date to be as early as age 85 but in no event beyond age 90.) See
"Federal Income Tax Matters" for a description of the penalties that may
attach to distributions prior to the Annuitant's attaining age 59 1/2 under
any Contract or after April 1 of the year following the calendar year in which
the Annuitant attains age 70 1/2 under Qualified Contracts.

APPLICATION OF OWNER ACCOUNT VALUE

We will automatically apply your Variable Account Value in any Division to
provide Variable Annuity Payments based on that Division and your Fixed
Account Value to provide Fixed Annuity Payments. However, if you give us other
Written instructions at least thirty days prior to the Annuity Commencement
Date, we will apply your Account Value in different proportions.

We deduct any applicable state and local premium taxes from the amount of
Account Value being applied to an Annuity Payment Option. In some cases, we
may deduct a Surrender Charge from the amount being applied. See "Surrender
Charge." Subject to any such adjustments, your Variable and Fixed Account
Value are applied to an Annuity Payment Option, as discussed below, as of the
end of the Valuation Period that contains the tenth day prior to the Annuity
Commencement Date.

FIXED AND VARIABLE ANNUITY PAYMENTS

The amount of the first monthly Fixed or Variable Annuity Payment will be at
least as favorable as that produced by the annuity tables set forth in the
Contract, based on the amount of your Account

<PAGE>

Value that is applied to provide the Fixed or Variable Annuity Payments.
Thereafter, the amount of each monthly Fixed Annuity Payment is fixed and
specified by the terms of the Annuity Payment Option selected.

Account Value that is applied to provide Variable Annuity Payments is
converted to a number of Annuity Units by dividing the amount of the first
Variable Annuity Payment by the value of an Annuity Unit of the relevant
Division as of the end of the Valuation Period that includes the tenth day
prior to the Annuity Commencement Date. This number of Annuity Units
thereafter remains constant with respect to any Annuitant, and the amount of
each subsequent Variable Annuity Payment is determined by multiplying this
number by the value of an Annuity Unit as of the end of the Valuation Period
that contains the tenth day prior to the date of each payment. If the Variable
Annuity Payments are based on more than one Division, these calculations are
performed separately for each Division. The value of an Annuity Unit at the
end of a Valuation Period is the value of the Annuity Unit at the end of the
previous Valuation Period, multiplied by the net investment factor (see
"Variable Account Value") for the Valuation Period, with an offset for the
3.5% assumed interest rate used in the Contract's annuity tables.

As a result of the foregoing computations, if the net investment return for a
Division for any month is at an annual rate of more than 3.5%, any Variable
Annuity Payment based on that Division will be greater than the Variable
Annuity Payment based on that Division for the previous month. If the net
investment return for a Division for any month is at an annual rate of less
than 3.5%, any variable annuity payment based on that Division will be less
than the Variable Annuity Payment based on that Division for the previous
month.

ANNUITY PAYMENT OPTIONS

The Annuity Commencement Data will be extended to the Annuitant's Age one
hundred unless otherwise requested. The Code imposes minimum distribution
requirements that have a bearing on the Annuity Payment Option that should be
chosen in connection with Qualified Contracts. See "Federal Income Tax
Matters." We are not responsible for monitoring or advising Owners as to
whether the minimum distribution requirements are being met, unless we have
received a specific Written request to do so.

No election of any Annuity Payment Option may be made unless an initial
annuity payment of at

<PAGE>

least $100 would be provided, where only a Fixed or only Variable Annuity
Payments are elected, and $50 on each basis when a combination of Variable and
Fixed Annuity Payments is elected. If these minimums are not met, we will
first reduce the frequency of annuity payments, and if the minimums are still
not met, we will make a lump-sum payment to the Annuitant or other
properly-designated payee in the amount of the Owner's Account Value, less any
applicable Surrender Charge, any uncollected Annual Contract Fee, and any
applicable premium tax.

Within 60 days after the death of the Owner or Annuitant, the Owner, or if the
Owner has not done so, the Beneficiary, may elect that any amount due to the
Beneficiary be applied under any option described below, subject to certain
tax law requirements. See "Death Proceeds." Thereafter, the Beneficiary will
have all the remaining rights and powers under the Contract and be subject to
all the terms and conditions thereof. The first annuity payment will be made
at the beginning of the second month following the month in which we approve
the settlement request. Annuity Units will be credited based on Annuity Unit
Values at the end of the Valuation Period that contains the tenth day prior to
the beginning of said second month.

When an Annuity Payment Option becomes effective, the Contract must be
delivered to our Home Office, in exchange for a payment contract providing for
the option elected.

Information about the relationship between the Annuitant's sex and the amount
of annuity payments, including requirements for gender-neutral annuity rates
in certain states and in connection with certain employee benefit plans is set
forth under "Gender of Annuitant" in the Statement of Additional Information.
See "Contents of Statement of Additional Information."

OPTION 1 - LIFE ANNUITY - Annuity payments are payable monthly during the
lifetime of the Annuitant, ceasing with the last payment due prior to the
death of the Annuitant. It would be possible under this arrangement for the
Annuitant or other payee to receive only one annuity payment if the Annuitant
died prior to the second annuity payment, since no minimum number of payments
is guaranteed.

OPTION 2 - LIFE ANNUITY WITH 120, 180, OR 240 MONTHLY PAYMENTS CERTAIN -
Annuity payments are payable monthly during the lifetime of an Annuitant;
provided, that if the Annuitant dies during the period certain, the
Beneficiary is entitled to receive monthly payments for the remainder of the
period certain.

OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY - Annuity payments are payable
monthly during the lifetime of the Annuitant and another payee and continue
during the lifetime of the survivor, ceasing with the last payment prior to
the death of the survivor. It is possible under this option for the Annuitant
or other payee to receive only one annuity payment if both die before the
second annuity payment, since no minimum number of payments is guaranteed. If
one of these persons dies before the Annuity Commencement Date, the election
of this option is revoked, the survivor becomes the sole Annuitant, and no
death proceeds are payable by virtue of the death of the other Annuitant.

OPTION 4 - PAYMENTS FOR DESIGNATED PERIOD - Annuity payments are payable
monthly to an Annuitant or other properly-designated payee, or at his or her
death, the Beneficiary, for a selected number of years ranging from five to
forty. However, the designated period may not exceed the life expectancy of
such Annuitant or other properly-designated payee.

OPTION 5 - PAYMENTS OF A SPECIFIC DOLLAR AMOUNT - The amount due is paid in
equal monthly

<PAGE>

installments of a designated dollar amount (not less than $125 nor more than
$200 per annum per $1,000 of the original amount due) until the remaining
balance is less than the amount of one installment. If the person receiving
these payments dies, the remaining payments continue to be made to the
Beneficiary. Payments under this option are available on a fixed basis only.
To determine the remaining balance at the end of any month, such balance at
the end of the previous month is decreased by the amount of any installment
paid during the month and the result will be accumulated at an interest rate
not less than 3.5% compounded annually. If the remaining balance at any time
is less than the amount of one installment, such balance will be paid and will
be the final payment under the option.

Under the fourth option there is no mortality guarantee by us, even though
Variable Annuity Payments will be reduced as a result of a charge to Separate
Account D which is partially for mortality risks. See "Charge to Separate
Account D."

A payee receiving Variable (but not Fixed) Annuity Payments under the fourth
option can elect at any time to commute (terminate) such option and receive
the current value of the annuity, which would be based on the values next
determined after the Written request for payment is received by us. The
current value of the annuity under the fourth option is the value of all
remaining annuity payments, assumed to be level, discounted to present value
at an annual rate of 3.5%. Other than by election of such a lump-sum payment
under the fourth option, an Annuity Payment Option may not be terminated once
annuity payments have commenced.

Under federal tax regulations, the election of the fourth or fifth options may
be treated in the same manner as a surrender of the total account. For tax
consequences of such treatment, see "Federal Income Tax Matters." Also, in
such a case, tax-deferred treatment of subsequent earnings may not be
available.

ALTERNATIVE AMOUNT UNDER FIXED LIFE ANNUITY OPTIONS - Each Contract provides
that when Fixed Annuity Payments are to be made under one of the first three
Annuity Payment Options described above, the Owner (or if the Owner has not
elected a payment option, the Beneficiary) may elect monthly payments to the
Annuitant or other properly-designated payee equal to the monthly payment
available under similar circumstances based on single payment immediate fixed
annuity rates then in use by us. The purpose of this provision is to assure
the Annuitant that, at retirement, if the fixed annuity purchase rate then
offered by us for new single payment immediate annuity contracts is more
favorable than the annuity rates guaranteed by the Contract, the Annuitant or
other properly- designated payee will be given the benefit of the new annuity
rates.

In lieu of monthly payments, payments may be elected on a quarterly,
semi-annual or annual basis, in which case the amount of each annuity payment
will be determined on a basis consistent with that described above for monthly
payments.

TRANSFERS

After the Annuity Commencement Date, the Annuitant or other
properly-designated payee may make one transfer every 180 days among the
available Divisions of Separate Account D or from the Divisions to a fixed
Annuity Payment Option. No charge will be assessed for such transfer. No
transfers from a fixed to a variable Annuity Payment Option are permitted.

<PAGE>

If a transfer would cause the value that is attributable to a Contract in any
Division to fall below $500, we reserve the right to transfer the remaining
balance in that Division in the same proportion as the transfer request.
Transfers will be effected at the end of the Valuation Period in which we
receive the Written transfer request at our Home Office. We reserve the right
to terminate or restrict transfers at any time. DEATH PROCEEDS

DEATH PROCEEDS PRIOR TO THE ANNUITY COMMENCEMENT DATE

The death proceeds described below are payable to the Beneficiary under
the Contract if, prior to the Annuity Commencement Date, any of the following
events occurs: (a) the Annuitant dies and no Contingent Annuitant has been
named under a Non-Qualified Contract; (b) the Annuitant dies and we also
receive proof of death of any named Contingent Annuitant; or (c ) the Owner
(including the first to die in the case of joint Owners) of a Non-Qualified
Contract dies, regardless of whether said deceased Owner was also the
Annuitant (however, if the Beneficiary is the Owner's surviving spouse, the
Beneficiary may elect to continue the Contract as described in the second
paragraph below). The death proceeds, prior to deduction of any applicable
premium taxes, will equal the greatest of (1) the sum of all net purchase
payments made (less any previously-deducted premium taxes and all prior
partial withdrawals), (2) the Owner's Account Value as of the end of the
Valuation Period in which we receive, at our Home Office, proof of death and
the Written request as to the manner of payment, or (3) the Highest
Anniversary Value prior to the date of death, as defined below.

The Highest Anniversary Value prior to the date of death will be determined as
follows:

First, we will calculate the Account Values at the end of each of
the past Contract

<PAGE>

Anniversaries that occurred prior to the decreased's 81st birthday;

Second, each of the Account Values will be increased by the amount
of net purchase payments made since the end of such Contract Years;
and

Third, the result will be reduced by the amount of any withdrawals
made since the end of such Contract years.

The Highest Anniversary Value will be an amount equal to the highest of such
values. The Highest Anniversary Value will not be calculated after the 81st
birthday. Net purchase payments are purchase payments less applicable minimum
tax.

If the Owner has not already done so, the Beneficiary may, within sixty days
after the date the proceeds become payable, elect to receive the death
proceeds as a lump sum or in the form of one of the Annuity Payment Options
provided in the Contract. See "Annuity Payment Options." If we receive no
request as to the manner of payment, we will make a lump-sum payment, based on
values determined at that time.

If the Owner, including the first to die in the case of joint owners, under a
Non-Qualified Contract dies prior to the Annuity Commencement Date, the Code
requires that all amounts payable under the Contract be distributed (a) within
five years of the date of death or (b) as annuity payments beginning within
one year of the date of death and continuing over a period not extending
beyond the life expectancy of the Beneficiary. If the Beneficiary is the
Owner's surviving spouse, the spouse may elect to continue the Contract as the
new Owner and, if the original Owner was the Annuitant, as the new Annuitant.
If the Owner is not a natural person, these requirements apply upon the death
of the primary Annuitant within the meaning of the Code. Failure to satisfy
these Code distribution requirements may result in serious adverse tax
consequences. Under a parallel section of the Code, similar requirements apply
to retirement plans in connection with which Qualified Contracts are issued.

DEATH PROCEEDS AFTER THE ANNUITY COMMENCEMENT DATE

If the Annuitant dies following the Annuity Commencement Date, the only
amounts payable to the Beneficiary or other properly-designated payee are any
continuing payments provided for under the Annuity Payment Option selected.
See "Annuity Payment Options." In such a case, the payee will have all the
remaining rights and powers under a Contract and be subject to all the terms
and conditions thereof. Also, if the Annuitant dies following the Annuity
Commencement Date, no Contingent Annuitant can become the Annuitant.

If the payee under a Non-Qualified Contract dies after the Annuity
Commencement Date, any remaining amounts payable under the terms of the
Annuity Payment Option must be distributed at least as rapidly as under the
method of distribution then in effect. If the payee is not a natural person,
this requirement applies upon the death of the primary Annuitant within the
meaning of the Code. Failure to satisfy these requirements of the Code may
result in serious adverse tax consequences. Under a parallel section of the
Code, similar requirements apply to the retirement

<PAGE>
plans in connection with which Qualified Contracts are issued.

PROOF OF DEATH

We accept the following as proof of any person's death: a copy of a certified
death certificate; a copy of a certified decree of a court of competent
jurisdiction as to the finding of death; a written statement by a medical
doctor who attended the deceased at the time of death; or any other proof
satisfactory to us.

Once we have paid the death proceeds, the Contract terminates and we have no
further obligations thereunder.

CHARGES UNDER THE CONTRACTS

PREMIUM TAXES

When applicable, we will deduct an amount to cover premium taxes imposed by
certain states. We may deduct such amount either at the time the tax is
imposed or later. Such deduction may be made, in accordance with applicable
state law:

(1) from purchase payment(s) when received: or

(2) from the Owner's Account Value at the time annuity payments begin; or

(3) from the amount of any partial withdrawal; or

(4) from proceeds payable upon termination of the Contract for any other
reason, including death of the Annuitant or Owner, or surrender of the
Contract.

If premium tax is paid, AGL may reimburse itself for such tax when deduction
is being made under items 2, 3, or 4 above calculated by multiplying the sum
of Purchase Payments being withdrawn by the applicable premium tax percentage.

Applicable premium tax rates depend upon the Owner's then-current place of
residence. Applicable rates currently range from 0% to 3.5% and are subject to
change by legislation, administrative interpretations or judicial acts. We
will not make a profit on this charge.

SURRENDER CHARGE

The Surrender Charge reimburses us for part of our expenses related to
distributing the Contracts. We believe, however, that the amount of such
expenses will exceed the amount of revenues generated by the Surrender Charge.
We will pay such excess out of our general surplus, which might include
profits from the charge for the assumption of mortality and expense risks.

Unless a withdrawal is exempt from the Surrender Charge (as discussed below),
the Surrender Charge is a percentage of the amount of each purchase payment
that is withdrawn during the seven years after it was received. The percentage
declines depending on how many years have passed since the withdrawn purchase
payment was originally credited to your Account Value, as follows:

<TABLE>
<CAPTION>
Surrender Charge as a
Years Elapsed Percentage of Purchase
Since Received Payment Withdrawn
<S> <C>

Less than 1 7%
1 or more, but less than 2 6%
2 or more, but less than 4 5%
4 or more, but less than 5 4%
5 or more, but less than 6 3%
6 or more, but less than 7 2%
7 or more 0%

</TABLE>

Only for the purpose of computing the Surrender Charge, the earliest purchase
payments are deemed to be withdrawn first, and before any amounts in excess of
purchase payments are withdrawn from your Account Value. The following
transactions will be considered as withdrawals, for purposes of assessing the
Surrender Charge: total surrender, partial withdrawal, commencement of an
Annuity Payment Option, and termination due to insufficient Account Value.

Nevertheless, the Surrender Charge will NOT apply:

<PAGE>

To amount of withdrawals that exceeds the cumulative amount of your
purchase payments;

Upon the death of the Annuitant, at any age, after the Annuity
Commencement Date;

Upon the death of the Annuitant, at any age, prior to the Annuity
Commencement Date, provided no Contingent Annuitant survives;

Upon the death of the Owner, including the first to die in the case of
joint Owners of a Non-Qualified Contract, unless the Contract is being
continued under the special rule for a surviving spouse as defined in the
Code.

Upon annuitization over at least 10 years, or life contingent
annuitization where the life expectancy is at least 10 years;

Within the 30 day window under the One-Time Reinstatement Privilege;

If the Annuitant has been confined to a long-term care facility or is
subject to a terminal illness (to the extent that the rider for these
matters is available in your state), as set forth under "Long-Term Care
and Terminal Illness".

The Surrender Charge does NOT apply to the portion of your first withdrawal or
total surrender in any Contract Year that does not exceed 10% of the amount of
your purchase payments that (a) have not previously been withdrawn and (b)
have been credited to the Contract for at least one year, provided that this
one year requirement does not apply if the withdrawal is pursuant to an
automatic withdrawal arrangement established with us. Unused portions of this
10% free withdrawal amount are carried forward during the year ONLY in
connection with automatic withdrawal arrangements established with us. Any
unused portion of the 10% free withdrawal amount never carries forward from
one year to another. If an automatic withdrawal arrangement is established
with us after a non-automatic withdrawal of less than the full 10% free
withdrawal amount has been made in the same Contract Year, the balance of 10%
will be available for automatic withdrawals during the remainder of that
Contract Year. However, once an automatic withdrawal has been made during any
Contract Year in reliance on the 10% free withdrawal privilege, no
non-automatic withdrawal may rely on that privilege during the balance of that
Contract Year.

The Surrender Charge will not apply to any amounts withdrawn which are in
excess of the amount permitted by the 10% free withdrawal privilege, described
above, if such amounts are required to be withdrawn to obtain or retain
favorable tax treatment. This exception is subject to our approval.

A free withdrawal pursuant to any of the foregoing Surrender Charge exceptions
is not deemed to be a withdrawal of purchase payments, except for purposes of
computing the 10% free withdrawal

<PAGE>

described in the preceding paragraph. See "Penalty Tax on Premature
Distributions."

TRANSFER CHARGES

The charges to defray the expense of effecting transfers are described under
"Transfer, Surrender and Partial Withdrawal of Owner Account Value -
Transfers" and "Annuity Period and Annuity Payment Options - Transfers." These
charges are designed not to yield a profit to us.

ANNUAL CONTRACT FEE

An Annual Contract Fee of $35 will be deducted from each Owner's Account
Value at the end of each Contract Year prior to the Annuity Commencement Date.
This Fee is for administrative expenses (which do not include expenses of
distributing the Contracts), and we do not expect that the revenues we will
derive from this Fee will exceed such expenses. Unless paid directly, the Fee
will be allocated among the Guarantee Period and Divisions in proportion to
your Account Value in each. The entire Fee for the year will be deducted from
the proceeds of any full surrender. We reserve the right to waive the Fee.

CHARGE TO SEPARATE ACCOUNT D

To cover administrative expenses and to compensate us for assuming mortality
and expense risks under the Contracts, Separate Account D will incur a daily
charge at an annualized rate of 1.40% of the average daily net asset value of
Separate Account D attributable to the Contracts. Of this amount, .15% is for
administrative expenses and 1.25% is for the assumption of mortality and
expense risks. We do not expect to earn a profit on that portion of the charge
which is for administrative expenses, but we do expect to derive a profit from
the portion which is for the assumption of mortality and expense risks. There
is no necessary relationship between the amount of administrative charges
imposed on a given Contract and the amount of expenses actually attributable
to that Contract.

In assuming the mortality risk, we are subject to the risk that our actuarial
estimate of mortality rates may prove erroneous and that Annuitants will live
longer than expected, or that more Owners or Annuitants than expected will die
at a time when the death benefit guaranteed by us is higher than the net
surrender value of their interests in the Contracts.

MISCELLANEOUS

Charges and expenses are paid out of the assets of each Fund as described in
the prospectus of the Trust that is attached at the end of this Prospectus. We
reserve the right to impose charges or establish reserves for any federal or
local taxes incurred or that may be incurred by us, and that may be deemed
attributable to the Contracts.

<PAGE>

SYSTEMATIC WITHDRAWAL PLAN

Automatic partial withdrawals, with minimum payments of $100, may be made
at periodic intervals through a systematic withdrawal program and the Contract
Owner may choose from payment schedules of monthly, quarterly, semi-annually,
or annually, and may start, stop, increase or decrease payments. The minimum
payment is $100. Withdrawals may start as early as 30 days after the issue
date of the Contract and may be taken from the Fixed Account or any Division,
as specified by the owner. Systematic withdrawals are subject to the terms and
conditions applicable to other partial withdrawals, including Surrender
Charges and exceptions to Surrender Charges.

ONE-TIME REINSTATEMENT PRIVILEGE

If the Account Value is at least $500, the Owner may elect to reinvest
all of the proceeds that were previously liquidated from the Contract within
the past 30 days and have the Surrender Charge and any Annual Contract Fee not
then due credited back to the Contract. The funds will be reinvested at the
value next following the date of receipt of the reinstated Account Value.
Unless you request otherwise, the reinstated Account Value will be allocated
among the Divisions and the Guarantee Period (or Guarantee Periods) in the
same proportions as the prior surrender. You may use this privilege only once.

REDUCTION IN SURRENDER CHARGES OR ADMINISTRATIVE CHARGES

We may reduce the surrender charges or administrative charges imposed under
certain Qualified Contracts in connection with employer-sponsored plans. Any
such reductions will reflect differences in costs or services (due to such
factors as reduced sales expenses or administrative efficiencies relating to
serving a large number of employees of a single employer and functions assumed
by the employer that we otherwise would have to perform) and will not be
unfairly discriminatory as to any person.

LONG-TERM CARE AND TERMINAL ILLNESS

<PAGE>

THE RIDER DESCRIBED BELOW IS NOT AVAILABLE IN ALL STATES, AND YOU SHOULD
THEREFORE CONSULT YOUR SALES REPRESENTATIVE OR OUR HOME OFFICE AS TO WHETHER
IT WILL APPLY TO YOU. THERE IS NO SEPARATE CHARGE FOR THIS RIDER.

LONG-TERM CARE

Pursuant to a special Contract rider, no Surrender Charge will apply to a
partial withdrawal or total surrender made during any period of time that the
Annuitant is confined for 30 days or more (or within 30 days after discharge)
in a hospital or state-licensed in-patient nursing facility. We must receive
Written proof of such confinement that is satisfactory to us.

TERMINAL ILLNESS

The rider also provides that no Surrender Charge will apply to a partial
withdrawal or total surrender made if we have received a physician's Written
certification that the Annuitant is terminally ill and not expected to live
more than twelve months and have waived or exercised our right to a second
physician's opinion.

OTHER ASPECTS OF THE CONTRACTS

Only an officer of AGL can agree to change or waive the provisions of any
Contract. The Contracts are non-participating and are not entitled to share in
any dividends, profits or surplus of AGL.

OWNERS, ANNUITANTS, AND BENEFICIARIES; ASSIGNMENTS

The Owner of a Contract will be the same as the Annuitant, unless the
purchaser designates a different Owner when applying to purchase a Contract.
In the case of joint ownership, both Owners must join in the exercise of any
rights or privileges under the Contract. The Annuitant and any Contingent
Annuitant are designated by the purchaser when applying for a Contract and may
not thereafter be changed.

The Beneficiary and, under a Non-Qualified Contract, any Contingent
Beneficiary are designated by the purchaser when applying for a Contract. A
Beneficiary or Contingent Beneficiary may be changed by the Owner prior to the
Annuity Commencement Date, while the Annuitant is still alive, and by the
payee following the Annuity Commencement Date. Any designation of a new
Beneficiary or Contingent Beneficiary is effective as of the date it is
signed, but will not affect any payments we make or action we take before
receiving the Written request. We also need the Written consent of any
irrevocably-named Beneficiary or Contingent Beneficiary before making a
change. Under certain retirement programs, spousal consent may be required to
name a Beneficiary other than the spouse, or to change a Beneficiary to a
person other than the spouse. We are not responsible for the validity of any
designation of a Beneficiary or Contingent Beneficiary.

<PAGE>

If no named Beneficiary or Contingent Beneficiary is living at the time any
payment is to be made, the Owner will be the Beneficiary, or if the Owner is
not then living, the Owner's estate will be the Beneficiary.

Rights under a Qualified Contract may be assigned only in certain narrow
circumstances referred to therein. Owners and other payees may assign their
rights under Non-Qualified Contracts, including their ownership rights. We
take no responsibility for the validity of any assignment. A change in
ownership rights must be made in Writing and a copy must be sent to our Home
Office. The change will be effective on the date it was made, although we are
not bound by a change until the date we record it. The rights under a Contract
are subject to any assignment of record at our Home Office. An assignment or
pledge of a Contract may have adverse tax consequences. See "Federal Income
Tax Matters."

REPORTS

We will mail to Owners (or persons receiving payments following the Annuity
Commencement Date), at their last known address of record, any reports and
communications required by applicable law or regulation. You should therefore
give us prompt written notice of any address change.

RIGHTS RESERVED BY US

Upon notice to the Owner, a Contract may be modified by us, to the extent
necessary in order to (1) operate Separate Account D in any form permitted
under the 1940 Act or in any other form permitted by law; (2) transfer any
assets in any Division to another Division, or to one or more separate
accounts, or the Fixed Account; (3) add, combine or remove Divisions in
Separate Account D or combine the Separate Account with another separate
account; (4) add, restrict or remove Guarantee Periods of the Fixed Account;
(5) make any new Division available to you on a basis to be determined by us;
(6) substitute, for the shares held in any Division, the shares of another
Fund or Portfolio or the shares of another investment company or any other
investment permitted by law; (7) make any changes required by the Code or by
any other applicable law, regulation or interpretation in order to continue
treatment of the Contract as an annuity; (8) commence deducting premium taxes
or adjust the amount of premium taxes deducted in accordance with applicable
state law; or (9) make any changes required to comply with the rules of any
Fund or Portfolio. When required by law, we will obtain your approval of
changes and the approval of any appropriate regulatory authority.

PAYMENT AND DEFERMENT

Amounts surrendered or withdrawn from a Contract will normally be paid within
seven calendar days after the end of the Valuation Period in which we receive
the Written surrender or withdrawal request in good order. In the case of
payment of death proceeds, if we do not receive a Written request as to the
manner of payment within 60 days after the death of the Owner or Annuitant,
any death benefit proceeds will be paid as a lump sum, normally within seven
calendar days after the end of the Valuation Period that contains the last day
of said 60 day period. We

<PAGE>

reserve the right, however, to defer payment or transfers of amounts out of
the Fixed Account for up to six months. Also, we reserve the right to defer
payment of that portion of your Account Value that is attributable to a
purchase payment made by check for a reasonable period of time (not to exceed
15 days) to allow the check to clear the banking system.

Finally, we reserve the right to defer payment of any surrender and annuity
payment amounts or death benefit amounts of any portion of the Variable
Account Value if (a) the New York Stock Exchange is closed other than
customary weekend and holiday closings, or trading on the New York Stock
Exchange is restricted; (b) an emergency exists, as a result of which disposal
of securities is not reasonably practicable or it is not reasonably
practicable to fairly determine the Variable Account Value; or (c) the
Securities and Exchange Commission by order permits the delay for the
protection of Owners. Transfers and allocations of Account Value among the
Divisions and the Fixed Account may also be postponed under these
circumstances.

FEDERAL INCOME TAX MATTERS

GENERAL

It is not possible to comment on all of the federal income tax consequences
associated with the Contracts. Federal income tax law is complex and its
application to a particular person may vary according to facts peculiar to
such person. Consequently, this discussion is not intended as tax advice, and
you should consult with a competent tax adviser before purchasing a Contract.

The discussion is based on the law, regulations and interpretations existing
on the date of this Prospectus. These authorities, however, are subject to
change by Congress, the Treasury Department and judicial decisions.

The discussion does not address state or local tax or estate and gift tax
consequences associated with the Contracts.

NON-QUALIFIED CONTRACTS

PURCHASE PAYMENTS. Purchasers of a Contract that does not qualify for special
tax treatment and is therefore "Non-Qualified" may not deduct from their gross
income the amount of purchase payments made.

TAX DEFERRAL PRIOR TO ANNUITY COMMENCEMENT DATE. Owners who are natural
persons are not taxed currently on increases in their Account Value resulting
from interest earned in the Fixed Account or, if certain diversification
requirements are met, the investment experience of Separate Account D. This
treatment applies to Separate Account D only if the Fund and the Portfolios in
which it invests are "adequately diversified" in accordance with Treasury
Department regulations. Although we do not control the Fund or the Portfolios,
the investment advisers to the Fund and the Portfolios have undertaken to
operate the Fund and the Portfolios in compliance with

<PAGE>

these diversification requirements. A Contract investing in a Fund or
Portfolio that failed to meet the diversification requirements would, unless
and until the failure can be corrected in a procedure afforded by the Internal
Revenue Service, subject Owners to taxation of income in the Contract for that
or any subsequent period. Income means the excess of the Account Value over
the Owner's investment in the Contract (discussed below).

Current regulations do not provide guidance as to any circumstances in which
control over allocation of values among different investment alternatives may
cause Owners or persons receiving annuity payments to be treated as the owners
of Separate Account D assets for tax purposes. We reserve the right to amend
the Contracts in any way necessary to avoid any such result. The Treasury
Department has stated that it may establish standards in this regard through
regulations or rulings. Such standards may apply only prospectively, although
retroactive application is possible if such standards are considered not to
embody a new position.

Owners that are not natural persons -- that is, Owners such as corporations --
are taxable currently on annual increases in their Account Value unless an
exception applies. Exceptions exist for, among other things, Owners that are
not natural persons but that hold the Contract as an agent for a natural
person.

TAXATION OF ANNUITY PAYMENTS. Each annuity payment received after the Annuity
Commencement Date is excludible from gross income in part. In the case of
Fixed Annuity Payments, the excludible portion is determined by multiplying
the amount paid by the ratio of the investment in the Contract (discussed
below) to the expected return under the fixed Annuity Payment Option. In the
case of Variable Annuity Payments, the amount paid is multiplied by the ratio
of the investment in the Contract to the number of expected payments. In both
cases, the remaining portion of each annuity payment, and all payments made
after the investment in the Contract has been reduced to zero, are included in
the payee's income. Should annuity payments cease on account of the death of
the Annuitant before the investment in the Contract has been fully recovered,
the payee is allowed a deduction for the unrecovered amount. If the payee is
the Annuitant, the deduction is taken on the final tax return. If the payee is
a Beneficiary, that Beneficiary may recover the balance of the total
investment as payments are made or on the Beneficiary's final tax return. An
Owner's "investment in the Contract" is the amount equal to the portions of
purchase payments made by or on behalf of the Owner that have not been
excluded or deducted from the individual's gross income, less amounts
previously received under the Contract that were not included in income.

TAXATION OF PARTIAL WITHDRAWALS AND TOTAL SURRENDERS. Partial withdrawals from
a Contract are includible in income to the extent that the Owner's Account
Value exceeds the investment in the Contract. In the event a Contract is
surrendered in its entirety, any amount received in excess of the investment
in the Contract is includible in income, and any remaining amount received is
excludible from income. All annuity contracts issued by us to the same Owner
during any calendar year are to be aggregated for purposes of determining the
amount of any distribution that is includible in gross income.

PENALTY TAX ON PREMATURE DISTRIBUTIONS. A penalty tax is imposed on
distributions under a Contract equal to 10% of the amount includable in
income. The penalty tax will not apply, however,

<PAGE>

to (1) distributions made after the recipient attains age 59 1/2, (2)
distributions on account of the recipient's becoming disabled, (3)
distributions that are made after the death of the Owner prior to the Annuity
Commencement Date or the payee after the Annuity Commencement Date (or if such
person is not a natural person, that are made after the death of the primary
Annuitant, as defined in the Code), and (4) distributions that are part of a
series of substantially equal periodic payments made over the life (or life
expectancy) of the Annuitant or the joint life (or joint life expectancies) of
the Annuitant and the Beneficiary. Premature distributions may result, for
example, from an early Annuity Commencement Date, an early surrender, partial
withdrawal from or assignment of a Contract, or the early death of an
Annuitant, unless clause (3) above applies.

PAYMENT OF DEATH PROCEEDS. Special rules apply to the distribution of any
death proceeds payable under the Contract. See "Death Proceeds."

ASSIGNMENTS AND LOANS. An assignment, loan, or pledge with respect to a
Non-Qualified Contract is taxed in the same manner as a partial withdrawal, as
described above. Repayment of a loan or release of an assignment or pledge is
treated as a new purchase payment.

INDIVIDUAL RETIREMENT ANNUITIES ("IRAS")

PURCHASE PAYMENTS. Individuals who are not active participants in a
tax-qualified retirement plan may, in any year, deduct from their taxable
income purchase payments for an IRA equal to the lesser of $2,000 or 100% of
the individual's earned income. In the case of married individuals filing a
joint return, the deduction will, in general, be the lesser of $4,000 or 100%
of the combined earned income of both spouses, reduced by any deduction for
any IRA purchase payment allowed to the spouse. Single persons who participate
in a tax-qualified retirement plan and who have adjusted gross income not in
excess of $25,000 may fully deduct their IRA purchase payments. Those who have
adjusted gross income in excess of $35,000 will not be able to deduct purchase
payments, and for those with adjusted gross income between $25,000 and $35,000
the deduction is phased out based on the amount of income. Similarly, the
otherwise deductible portion of an IRA purchase payment will be phased out, in
the case of married individuals filing joint tax returns, with adjusted gross
income between $40,000 and $50,000, and in the case of married individuals
filing separately, with adjusted gross income between $0 and $10,000.
Individuals who are precluded from deducting all or a portion of their
purchase payments because of participation in a tax-qualified retirement plan
may still make non-deductible contributions on which earnings will be tax
deferred. The total of deductible and non-deductible contributions may not
exceed the lesser of $2,000 or 100% of earned income, or, in the case of
married individuals filing a joint return, the lesser of $4,000 or 100% of the
combined earned income of both spouses.

DISTRIBUTIONS FROM AN IRA. Amounts received under an IRA as annuity payments,
upon partial withdrawal or total surrender, or on the death of the Annuitant,
are included in the Annuitant's or other recipient's income. If nondeductible
purchase payments have been made, a pro rata portion of such distributions may
not be included in income. A 10% penalty tax is imposed on the amount
includible in gross income from distributions that occur before the Annuitant
attains age 59 1/2 and

<PAGE>

that are not made on account of death or disability, with certain exceptions.
These exceptions include distributions that are part of a series of
substantially equal periodic payments made over the life (or life expectancy)
of the Annuitant or the joint lives (or joint life expectancies) of the
Annuitant and the Beneficiary. Distributions of minimum amounts specified by
the Code must commence by April 1 of the calendar year following the calendar
year in which the Annuitant attains age 70 1/2. Additional distribution rules
apply after the death of the Annuitant. These rules are similar to those
governing distributions on the death of an Owner (or other payee during the
Annuity Period) under a Non-Qualified Contract. See "Death Proceeds." Failure
to comply with the minimum distribution rules will result in the imposition of
a penalty tax of 50% of the amount by which the minimum distribution required
exceeds the actual distribution.

TAX FREE ROLLOVERS. Amounts may be transferred in a tax-free rollover from a
tax-qualified plan to an IRA (and from one IRA to another IRA) if certain
conditions are met. All taxable distributions ("eligible rollover
distributions") from tax qualified plans are eligible to be rolled over with
the exception of (1) annuities paid over a life or life expectancy, (2)
installments for a period of ten years or more, and (3) required minimum
distributions under section 401(a)(9) of the Code.

Rollovers may be accomplished in two ways. First, an eligible rollover
distribution may be paid directly to an IRA (a "direct rollover"). Second, the
distribution may be paid directly to the Annuitant and then, within 60 days of
receipt, the amount may be rolled over to an IRA. However, any amount that was
not distributed as a direct rollover will be subject to 20% income tax
withholding.

SIMPLIFIED EMPLOYEE PENSION PLANS

Employees and employers may establish an IRA plan known as a simplified
employee pension plan ("SEP") if certain requirements are met. An employee may
make contributions to a SEP in accordance with the rules applicable to IRAs
discussed above. Employer contributions to an employee's SEP are deductible by
the employer and are not currently includible in the taxable income of the
employee. However, total employer contributions are limited to 15% of an
employee's compensation or $30,000, whichever is less.

SIMPLE RETIREMENT ACCOUNTs

Employees and employers may establish an IRA plan known as a simple
retirement account ("SRA"), if certain requirements are met. Under an SRA, the
employer contributes elective employee compensation deferrals up to a maximum
of $6,000 a year. The employer must, in general, make a fully vested matching
contribution for employee deferrals up to 3% of compensation.

OTHER QUALIFIED PLANS

<PAGE>

PURCHASE PAYMENTS. Purchase payments made by an employer under a pension,
profit-sharing, or annuity plan qualified under section 401 or 403(a) of the
Code, not in excess of certain limits, are deductible by the employer. Such
purchase payments are also excluded from the current income of the employee.

DISTRIBUTIONS PRIOR TO THE ANNUITY COMMENCEMENT DATE. To the extent that
purchase payments are includible in an employee's taxable income, they (less
any amounts previously received that were not includible in the employee's
taxable income) represent his or her "investment in the Contract." Amounts
received prior to the Annuity Commencement Date under a Contract in connection
with a section 401 or 403(a) plan are generally allocated on a pro-rata basis
between the employee's investment in the Contract and other amounts. With
respect to the taxable portion of a lump-sum distribution (as defined in the
Code), an averaging rule may be applicable that allows computation of tax as
if the amount were received over a period of five years. A lump-sum
distribution will not be includible in income in the year of distribution if
the employee transfers, within 60 days of receipt, all amounts received, less
the employee's investment in the Contract, to another tax-qualified plan or to
an individual retirement account or an IRA in accordance with the rollover
rules under the Code. However, any amount that is not distributed as a direct
rollover will be subject to 20% income tax withholding. See "Tax Free
Rollovers." Special tax treatment may be available in the case of certain
lump-sum distributions that are not rolled over to another plan or IRA.

A 10% penalty tax is imposed on the amount includible in gross income from
distributions that occur before the employee's attaining age 59 1/2 and that
are not made on account of death or disability, with certain exceptions. These
exceptions include distributions that are (1) part of a series of
substantially equal periodic payments beginning after the employee separates
from service and made over the life (or life expectancy) of the employee or
the joint lives (or joint life expectancies) of the employee and the
Beneficiary, (2) made after the employee's separation from service on account
of early retirement after age 55, or (3) made to an alternate payee pursuant
to a qualified domestic relations order.

ANNUITY PAYMENTS. A portion of annuity payments received under Contracts in
connection with section 401 and 403(a) plans after the Annuity Commencement
Date may be excludible from the employee's income, in the manner discussed
above, in connection with Variable Annuity Payments under "Non-Qualified
Contracts - Taxation of Annuity Payments, except that the number of expected
payments is determined under a provision in the code." Distributions of
minimum amounts specified by the Code generally must commence by April 1 of
the calendar year following the calendar year in which the employee attains
age 70 1/2 or retires, if later. Failure to comply with the minimum
distribution rules will result in the imposition of a penalty tax of 50% of
the amount by which the minimum distribution required exceeds the actual
distribution.

SELF-EMPLOYED INDIVIDUALS. Various special rules apply to tax-qualified plans
established by self- employed individuals.

PRIVATE EMPLOYER UNFUNDED DEFERRED COMPENSATION PLANS

PURCHASE PAYMENTS. Private taxable employers may establish unfunded,
Non-Qualified deferred compensation plans for a select group of management or
highly compensated employees and/or for

independent contractors. These types of programs allow individuals to defer
receipt of up to 100% of compensation that would otherwise be includible in
income and therefore to defer the payment of federal income taxes on such
amounts, as well as earnings thereon. Purchase payments made by the employer,
however, are not immediately deductible by the employer, and the employer is
currently taxed on any increase in Account Value.

Deferred compensation plans represent a contractual promise on the part of the
employer to pay current compensation at some future time. The Contract is
owned by the employer and is subject to the claims of the employer's
creditors. The individual has no right or interest in the Contract and is
entitled only to payment from the employer's general assets in accordance with
plan provisions.

TAXATION OF DISTRIBUTIONS. Amounts received by an individual from a private
employer deferred compensation plan are includible in gross income for the
taxable year in which such amounts are paid or otherwise made available.

EXCESS DISTRIBUTIONS - 15% TAX

Certain persons, particularly those who participate in more than one
tax-qualified retirement plan, may be subject to an additional tax of 15% on
certain excess aggregate distributions from those plans. In general, excess
distributions are taxable distributions for all tax qualified plans in excess
of a specified annual limit for payments made in the form of an annuity
(currently $160,000) or five times the annual limit for lump-sum
distributions. The additional tax on excess distributions does not apply to
distributions in 1997, 1998, and 1999.

FEDERAL INCOME TAX WITHHOLDING AND REPORTING

Amounts distributed from a Contract, to the extent includible in taxable
income, are subject to federal income tax withholding. The payee may, however,
elect to have no income tax withheld by submitting a withholding exemption
certificate to us.

In some cases, if you own more than one Qualified annuity contract, such
contracts may be aggregated for purposes of determining whether the federal
tax law requirement for minimum distributions after age 70 1/2, or retirement,
in appropriate circumstances, has been satisfied. If, under this aggregation
procedure, you are relying on distributions pursuant to another annuity
contract to satisfy the minimum distribution requirement under a Qualified
Contract issued by us, you must sign a waiver releasing us from any liability
to you for not calculating and reporting the amount of taxes and penalties
payable for failure to make required minimum distributions under the Contract.

TAXES PAYABLE BY AGL AND SEPARATE ACCOUNT D

AGL is taxed as a life insurance company under the Code. The operations of
Separate Account D are part of the total operations of AGL and are not taxed
separately. Under existing federal income tax laws, AGL is not taxed on
investment income derived by Separate Account D (including realized and
unrealized capital gains) with respect to the Contracts.

<PAGE>

AGL reserves the right to allocate to the Contracts any federal, state or
other tax liability that may result in the future from maintenance of Separate
Account D or the Contracts.

Certain Series may make an election to pass through to AGL any taxes withheld
by foreign taxing jurisdictions on foreign source income. Such an election
will result in additional taxable income and income tax to AGL. The amount of
additional income tax, however, may be more than offset by credits for the
foreign taxes withheld, which are also passed through. These credits may
provide a benefit to AGL.

DISTRIBUTION ARRANGEMENTS

The Contracts will be sold by individuals who, in addition to being licensed
by state insurance authorities to sell the Contracts of AGL, are also
registered representatives of American General Securities Incorporated
("AGSI"), the principal underwriter of the Contracts, or registered
representatives of Sierra Investment Services Corporation ("Sierra Services")
or other broker-dealer firms or representatives of other firms that are exempt
from broker-dealer regulation. AGSI, Sierra Services and any such other
broker-dealer firms are registered with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 as broker-dealers and are members of
the National Association of Securities Dealers, Inc. AGSI is a wholly-owned
subsidiary of AGL.

<PAGE>

AGSI's principal business address is the same as that of our Home Office. The
interests under the Contracts are offered on a continuous basis. AGSI and
Sierra Services have entered into certain revenue and cost-sharing
arrangements in connection with the marketing of the Contracts.

AGL compensates Sierra Services and other broker-dealers that sell the
Contracts according to one or more compensation schedules. The schedules
provide for commissions ranging from 3.50% up to 6.25% of first year purchase
payments received pursuant to the Contracts. In addition, depending on the
schedule selected, AGL may pay continuing "trail" commissions ranging from
0.25% to 0.50% of Contract Account Value. AGL also has agreed to pay Sierra
Services for its promotional activities such as the solicitation of selling
group agreements between broker-dealers and AGL, agent appointments with AGL,
printing and development of sales literature to be used by AGL appointed
agents as well as related marketing support and related special promotional
campaigns. These distribution expenses do not result in any additional charges
under the Contracts that are not described under "Charges under the
Contracts".

LEGAL MATTERS

The legality of the Contracts described in this Prospectus has been passed
upon by Steven A. Glover, Esquire, with the law department of AGL. Freedman,
Levy, Kroll & Simonds, Washington, D.C., has advised AGL on certain federal
securities law matters.

OTHER INFORMATION ON FILE

A Registration Statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933 with respect to the Contracts
discussed in this Prospectus. Not all of the information set forth in the
Registration Statement and exhibits thereto has been included in this
Prospectus. Statements contained in this Prospectus concerning the Contracts
and other legal instruments are intended to be summaries. For a complete
statement of the terms of these documents, reference should be made to the
instruments filed with the Securities and Exchange Commission.

A Statement of Additional Information is available from us on request. Its
contents are as follows:

CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

<PAGE>

Misstatement of Age or Sex and Other Errors.................................
Change of Investment Adviser or Investment Policy.............................
Terms of Exemptive Relief in Connection with Mortality
and Expense Risk Charge.....................................................
Performance Data for the Divisions............................................
Financial Statements..........................................................
Index to Financial Statements.................................................

<PAGE>

(THIS DOCUMENT IS NOT PART OF A PROSPECTUS)

INDIVIDUAL RETIREMENT ANNUITY DISCLOSURE STATEMENT
INTRODUCTION

THIS DISCLOSURE STATEMENT IS DESIGNED FOR OWNERS OF IRAS ISSUED BY AMERICAN
GENERAL LIFE INSURANCE COMPANY AFTER DECEMBER 31, 1996.

This Disclosure Statement is not part of your contract but contains general
and standardized information which must be furnished to each person who is
issued an Individual Retirement Annuity. You must refer to your policy to
determine your specific rights and obligations thereunder.

REVOCATION

If you are purchasing a new or rollover IRA, then if for any reason you, as a
recipient of this Disclosure Statement, decide within 20 days from the date
your policy is delivered that you do not desire to retain your IRA, written
notification to the Company must be mailed, together with your policy, within
that period. If such notice is mailed within 20 days, all contributions,
without adjustments for any applicable sales commissions or administrative
expenses, will be refunded.

MAIL NOTIFICATION OF REVOCATION AND YOUR POLICY TO:

American General Life Insurance Company
Annuity Administration Department
P. O. Box 1401
Houston, Texas 77251-1401
(Phone No. (800) 247-6584).

ELIGIBILITY

Under Internal Revenue Code ("Code") Section 219, if you are not an active
participant (see A. below), you may make a contribution of up to the lesser of
$2,000 or 100% of compensation and take a deduction for the entire amount
contributed. If you are a married individual filing a joint return, and your
compensation is less than your spouse's, the deduction will, in general, be
the lesser of $4,000 or 100% of the combined earned income of both spouses,
reduced by any deduction for an IRA purchase payment allowed to your spouse.
If you are an active participant, but have an adjusted gross income (AGI)
below a certain level (see B. below), you may still make a deductible
contribution. If, however, you or your spouse is an active participant and
your combined AGI is above the specified level, the amount of the deductible
contribution you may make to an IRA will be phased down and eventually
eliminated.

A. ACTIVE PARTICIPANT

Page 1

<PAGE>

You are an "active participant" for a year if you are covered by a retirement
plan. You are covered by a "retirement plan" for a year if your employer or
union has a retirement plan under which money is added to your account or you
are eligible to earn retirement credits. For example, if you are covered under
a profit-sharing plan, certain government plans, a salary reduction
arrangement (such as a tax sheltered annuity arrangement or a 401(k) plan), a
Simplified Employee Pension program (SEP), any Simple Retirement Account or a
plan which promises you a retirement benefit which is based upon the number of
years of service you have with the employer, you are likely to be an active
participant. Your Form W-2 for the year should indicate your participation
status.

You are an active participant for a year even if you are not yet vested in
your retirement benefit. Also, if you make required contributions or voluntary
employee contributions to a retirement plan, you are an active participant. In
certain plans, you may be an active participant even if you were only with the
employer for part of the year.

You are not considered an active participant if you are covered in a plan only
because of your service as 1) an Armed Forces Reservist for less than 90 days
of active service, or 2) a volunteer firefighter covered for firefighting
service by a government plan. Of course, if you are covered in any other plan,
these exceptions do not apply.

If you are married, filed a separate tax return, and did not live with your
spouse at any time during the year, your spouse's active participation will
not affect your ability to make deductible contributions.

B. ADJUSTED GROSS INCOME (AGI)

If you are an active participant, you must look at your Adjusted Gross Income
for the year (if you and your spouse file a joint tax return, you use your
combined AGI) to determine whether you can make a deductible IRA contribution.
Your tax return will show you how to calculate your AGI for this purpose. If
you are at or below a certain AGI level, called the Threshold Level, you are
treated as if you were not an active participant and can make a deductible
contribution under the same rules as a person who is not an active
participant.

If you are single, your Threshold AGI Level is $25,000. The Threshold Level if
you are married and file a joint tax return is $40,000, and if you are married
but file a separate tax return, the Threshold Level is $0.

If your AGI is less than $10,000 above your Threshold Level, you will still be
able to make a deductible contribution, but it will be limited in amount. The
amount by which your AGI exceeds your Threshold Level (AGI - Threshold Level)
is called your Excess AGI. The Maximum Allowable Deduction is $2,000 (or
$4,000 if you are married, file a joint return and earn less compensation than
your spouse). You can estimate your Deduction Limit as follows:

(Your Deduction Limit may be slightly higher if you use this formula rather
than the table provided by the IRS.)

$10,000 - Excess AGI
x Maximum Allowable Deduction = Deduction Limit

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<PAGE>

$10,000

You must round up the result to the next highest $10 level (the next highest
number which ends in zero). For example, if the result is $1,525, you must
round it up to $1,530. If the final result is below $200 but above zero, your
Deduction Limit is $200. Your Deduction Limit cannot, in any event, exceed
100% of your compensation.

EXAMPLE 1: Ms. Smith, a single person, is an active participant and has
an AGI of $31,619. She calculates her deductible IRA contribution as
follows:

Her AGI is $31,619
Her Threshold Level is $25,000
Her Excess AGI is (AGI - Threshold Level) or ($31,619-$25,000)
= $6,619
Her Maximum Allowable Deduction is $2,000

So, her IRA deduction limit is:

$10,000 - $1,500
---------------- x $2,000 = $676 (rounded to $680)
$10,000

EXAMPLE 2: Mr. and Mrs. Young file a joint tax return. Each spouse earns
more than $2,000 and one is an active participant. They have a combined
AGI of $44,255. They may each contribute to an IRA and calculate their
deductible contributions to each IRA as follows:

Their AGI is $44,255
Their Threshold Level is $40,000
Their Excess AGI is (AGI - Threshold Level) or ($44,255 -
$40,000) = $4,255
The Maximum Allowable Deduction for each spouse is $2,000
So, each spouse may compute his or her IRA deduction limit as
follows:

$10,000 - 4,255
--------------- x $2,000 = $1,149 (rounded to $1,150)
$10,000

EXAMPLE 3: If, in Example 2, Mr. Young did not earn any compensation,
each spouse may still contribute to an IRA and calculate their deductible
contribution to each IRA as in Example 2.

EXAMPLE 4: Mr. Jones, a married person, files a separate tax return and
is an active participant. He has $1,500 of compensation and wishes to
make a deductible contribution to an IRA.

His AGI is $1,500
His Threshold Level is $0
His Excess AGI is (AGI - Threshold Level) or $1,500-$0) =
$1,500
His Maximum Allowable Deduction is $2,000
So, his IRA deduction limit is:

$10,000 - $1,500
---------------- x $2,000 = $1,700
$10,000

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<PAGE>

Even though his IRA deduction limit under the formula is $1,700,
Mr. Jones may not deduct an amount in excess of his
compensation, so, his actual deduction is limited to $1,500.

NON-DEDUCTIBLE CONTRIBUTIONS TO IRAS

Even if you are above the Threshold Level and thus may not make a deductible
contribution of up to $2,000 (or up to $4,000 in the case of married
individuals filing a joint return), you may still contribute up to the lesser
of 100% of compensation or $2,000 to an IRA ($4,000 in the case of married
individuals filing a joint return). The amount of your contribution which is
not deductible will be a non-deductible contribution to the IRA. You may also
choose to make a contribution non-deductible even if you could have deducted
part or all of the contribution. Interest or other earnings on your IRA
contribution, whether from deductible or non-deductible contributions, will
not be taxed until taken out of your IRA and distributed to you.

If you make a non-deductible contribution to an IRA, you must report the
amount of the non-deductible contribution to the IRS on Form 8606 as a part of
your tax return for the year.

You may make a $2,000 contribution at any time during the year, if your
compensation for the year will be at least $2,000, without having to know how
much will be deductible. When you fill out your return, you may then figure
out how much is deductible.

You may withdraw an IRA contribution made for a year any time before April 15
of the following year. If you do so, you must also withdraw the earnings
attributable to that portion and report the earnings as income for the year
for which the contribution was made. If some portion of your contribution is
not deductible, you may decide either to withdraw the non-deductible amount,
or to leave it in the IRA and designate that portion as a non-deductible
contribution on your tax return.

IRA DISTRIBUTIONS

Generally, IRA distributions which are not rolled over (see "Rollover IRA
Rules," below) are included in your gross income in the year they are
received. Non-deductible IRA contributions, however, are made using income
which has already been taxed (that is, they are not deductible contributions).
Thus, the portion of the IRA distributions consisting of non-deductible
contributions will not be taxed again when received by you. If you make any
non-deductible IRA contributions, each distribution from your IRA(s) will
consist of a non-taxable portion (return of deductible contributions, if any,
and account earnings).

Thus, you may not take a distribution which is entirely tax-free. The
following formula is used to determine the non-taxable portion of your
distributions for a taxable year:

Remaining
Non-Deductible Contributions
---------------------------- x Total Distributions = Nontaxable Distributions
Year-End Total IRA Balances (for the year) (for the year)

Page 4

<PAGE>

To figure the year-end total IRA balance, you treat all of your IRAs as a
single IRA. This includes all regular IRAs (whether accounts or annuities), as
well as Simplified Employee Pension (SEP) IRAs, and Rollover IRAs. You also
add back the distributions taken during the year.

EXAMPLE: An individual makes the following contributions to his or her IRA(s).

YEAR DEDUCTIBLE NON-DEDUCTIBLE

1986 $ 2,000
1987 1,800
1990 1,000 $ 1,000
1992 600 1,400
------- -------
$ 5,400 $ 2,400

Deductible Contributions: $ 5,400
Non-Deductible Contributions: 2,400
Earnings on IRAs: 1,200
-------

Total Account Balance of IRA(s) as of 12/31/95: $ 9,000
(before distributions in 1995).

In 1995, the individual takes a distribution of $3,000. The total account
balance in the IRAs on 12/31/95 before 1995 distributions is $9,000. The
non-taxable portion of the distributions for 1995 is figured as follows:

Total non-deductible contributions $2,400
------ x $3,000 = $800
Total account balance in the IRAs, before distributions $9,000

Thus, $800 of the $3,000 distribution in 1995 will not be included in the
individual's taxable income. The remaining $2,200 will be taxable for 1995.

ROLLOVER IRA RULES

1. IRA TO IRA

You may withdraw, tax-free, all or part of the assets from an IRA and reinvest
them in one or more IRAs. The reinvestment must be completed within 60 days of
the withdrawal. No IRA deduction is allowed for the reinvestment. Amounts
required to be distributed because the individual has reached age 70 1/2 may
not be rolled over.

2. EMPLOYER PLAN DISTRIBUTIONS TO IRA

All taxable distributions (known as "eligible rollover distributions") from
qualified pension, profit-sharing, stock bonus and tax sheltered annuity plans
may be rolled over to an IRA, with the exception of (1) annuities paid over a
life or life expectancy, (2) installments for a period of ten years or more,
and (3) required minimum distributions under section 401(a)(9).

Rollovers may be accomplished in two ways. First, you may elect to have an
eligible rollover distribution paid directly to an IRA (a"direct rollover").
Second, you may receive the distribution directly and then, within 60 days of
receipt, roll the amount over to an IRA. Under the law,

Page 5

<PAGE>

however, any amount that you elect not to have distributed as a direct
rollover will be subject to 20 percentincome tax withholding, and, if you are
younger than age 59 1/2, may result in a 10% excise tax on any amount of the
distribution that is included in income. Questions regarding distribution
options under the Act should be directed to your Plan Trustee or Plan
Administrator, or may be answered by consulting IRS Regulations
ss.1.401(a)(31)-1, ss.1.402(c)-2T and ss.31.3405(c)-1.

PENALTIES FOR PREMATURE DISTRIBUTIONS

If you receive a distribution from your IRA before you reach age 59 1/2, an
additional tax of 10 percent will be imposed under Code ss.72(t), unless the
distribution (a) occurs because of your death or disability, (b) is for
certain medical care expenses or to an unemployed individual for health
insurance premiums, (c) is received as a part of a series of substantially
equal payments over your life or life expectancy, (d) is received as a part of
a series of substantially equal payments over the lives or life expectancy of
you and your beneficiary, or (e) the distribution is contributed to a rollover
IRA.

MINIMUM DISTRIBUTIONS

Under the rules set forth in Code ss.408(b)(3) and ss.401(a)(9), you may not
leave the funds in your contract indefinitely. Certain minimum distributions
are required. These required distributions may be taken in one of two ways:
(a) by withdrawing the balance of your contract by a "required beginning
date," usually April 1 of the year following the date at which you reach age
70 1/2; or (b) by withdrawing periodic distributions of the balance in your
contract by the required beginning date. These periodic distributions may be
taken over (a) your life; (b) the lives of you and your named beneficiary; (c)
a period not extending beyond your life expectancy; or (d) a period not
extending beyond the joint life expectancy of you and your named beneficiary.

If you do not satisfy the minimum distribution requirements, then, pursuant to
Code ss.4974, you may have to pay a 50% excise tax on the amount not
distributed as required that year.

The foregoing minimum distribution rules are discussed in detail in IRS
Publication 590, "Individual Retirement Arrangements."

REPORTING

You are required to report penalty taxes due on excess contributions, excess
accumulations, premature distributions, and prohibited transactions.
Currently, IRS Form 5329 is used to report such information to the Internal
Revenue Service.

PROHIBITED TRANSACTIONS

Neither you nor your beneficiary may engage in a prohibited transaction, as
that term is defined in Code ss.4975.

Borrowing any money from this IRA would, under Code ss.408(e)(3), cause the
contract to cease to be an Individual Retirement Annuity and would result in
the value of the annuity being included in the owner's gross income in the
taxable year in which such loan is made.

Use of this contract as security for a loan from the Company, if such loan
were otherwise permitted, would, under Code ss.408(e)(4), cause the portion so
used to be treated as a taxable distribution.

Page 6

<PAGE>

EXCESS CONTRIBUTIONS

Tax Code ss.4973 imposes a 6 percent excise tax as a penalty for an excess
contribution to an IRA. An excess contribution is the excess of the deductible
and nondeductible amounts contributed by the Owner to an IRA for that year
over the lesser of his or her taxable compensation or $2,000. (Different
limits apply in the case of a spousal IRA arrangement.) If the excess
contribution is not withdrawn by the due date of your tax return (including
extensions) you will be subject to the penalty.

IRS APPROVAL

Your contract and IRA endorsement have been approved by the Internal Revenue
Service as a tax qualified Individual Retirement Annuity. Such approval by the
Internal Revenue Service is a determination only as to the form of the annuity
and does not represent a determination of the merits of such annuity.

This disclosure statement is intended to provide an overview of the applicable
tax laws relating to Individual Retirement Arrangements. It is not intended to
constitute a comprehensive explanation as to the tax consequences of your IRA.
AS WITH ALL SIGNIFICANT TRANSACTIONS SUCH AS THE ESTABLISHMENT OR MAINTENANCE
OF, OR WITHDRAWAL FROM AN IRA, APPROPRIATE TAX AND LEGAL COUNSEL SHOULD BE
CONSULTED. Further information may also be acquired by contacting your IRS
District Office or consulting IRS Publication 590.

FINANCIAL DISCLOSURE

( _______________ VARIABLE ANNUITY, FORM NOS. 97010 AND 97011 )

This Financial Disclosure is applicable to IRAs using a _______________
Variable Annuity (contract form numbers 97010 or 97011 ) purchased from
American General Life Insurance Company on or after April 15, 1997.

Earnings under variable annuities are not guaranteed, and depend on the
performance of the investment option(s) selected. As such, earnings cannot be
projected. Set forth below are the charges associated with such annuities.

CHARGES:

(a) A maximum annual contract maintenance charge of $35 deducted at the
end of each contract year.

(b) A maximum charge of $25 for each transfer, in excess of 12 free
transfers annually, of contract value between divisions of the
Separate Account.

Page 7

<PAGE>

(c) To compensate for mortality and expense risks assumed under the
contract, variable divisions only will incur a daily charge at an
annualized rate of 1.25% of the average Separate Account Value of the
contract during both the Accumulation and the Payout Phase.

(d) Premium taxes, if applicable, may be charged against Accumulation
Value at time of annuitization, a full or partial surrender or upon
the death of the Annuitant. If a jurisdiction imposes premium taxes
at the time purchase payments are made, the Company may deduct a
charge at that time.

(e) If the contract is surrendered, or if a withdrawal is made, there may
be a Surrender Charge. The Surrender Charge equals the sum of the
following:

7% of purchase payments for surrenders and withdrawals made
during the first contract year following receipt of the
purchase payments surrendered;

6% of purchase payments for surrenders and withdrawals made
during the second contract year following receipt of the
purchase payments surrendered;

5% of purchase payments for surrenders and withdrawals made
during the third contract year following receipt of the
purchase payments surrendered;

5% of purchase payments for surrenders and withdrawals made
during the fourth contract year following receipt of the
purchase payments surrendered;

4% of purchase payments for surrenders and withdrawals made
during the fifth contract year following receipt of the
purchase payments surrendered;

3% of purchase payments for surrenders and withdrawals made
during the sixth contract year following receipt of the
purchase payments surrendered;

2% of purchase payments for surrenders and withdrawals made
during the seventh contract year following receipt of the
purchase payments surrendered.

There will be no charge imposed for surrenders and withdrawals
made during the eighth and subsequent contract years following
receipt of the purchase payments surrendered.

Under certain circumstances described in the contract, portions
of a partial withdrawal may be exempt from the Surrender Charge.

(f) To compensate for administrative expenses, a daily charge will be
incurred at an annualized rate of .15% of the average Separate
Account Value of the contract during the Accumulation and the Payout
Phase.

(g) Each variable division will be charged a fee for asset management
and other expenses deducted directly from the underlying fund during
the Accumulation and Payout Phase. Total fees will range between
1.20% and 1.72%.

Page 8

<PAGE>

AMERICAN GENERAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT D

COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS

OFFERED BY

AMERICAN GENERAL LIFE INSURANCE COMPANY

ANNUITY ADMINISTRATION DEPARTMENT

P.O. BOX 1401, HOUSTON, TEXAS 77251-1401

1-800-247-6584 713-831-3505

STATEMENT OF ADDITIONAL INFORMATION

Dated April 15, 1997

This Statement of Additional Information ("Statement") is not a
prospectus. It should be read with the Prospectus for American General Life
Insurance Company Separate Account D ("Separate Account D") concerning
flexible premium deferred annuity Contracts investing in certain mutual fund
Series of The Sierra Variable Trust, dated April _____, 1997. You can obtain a
copy of the Prospectus for the Contracts by contacting American General Life
Insurance Company ("AGL") at the address or telephone numbers given above. You
have the option of receiving benefits on a fixed basis through AGL's Fixed
Account or through AGL's Separate Account D. Terms used in this Statement have
the same meanings as are defined in the Prospectus under the heading
"Glossary."

TABLE OF CONTENTS

General Information...........................................................
Regulation and Reserves.......................................................
Independent Auditors..........................................................
Services......................................................................
Principal Underwriter.........................................................
Annuity Payments..............................................................
Gender of Annuitant..........................................................
Misstatement of Age or Sex and Other Errors..................................
Change of Investment Adviser or Investment Policy.............................
Terms of Exemptive Relief in Connection With Mortality
and Expense Risk Charge......................................................
Performance Data for the Divisions............................................
Financial Statements..........................................................

<PAGE>

Index to Financial Statements.................................................

GENERAL INFORMATION

AGL (formerly American General Life Insurance Company of Delaware) is a
successor in interest to a company previously organized as a Delaware
corporation in 1917. Effective December 31, 1991,AGL redomesticated as a Texas
insurer and changed its name to American General Life Insurance Company. AGL
is a wholly-owned subsidiary of AGC Life Insurance Company, a Missouri
corporation ("AG Missouri") engaged primarily in the life insurance business
and annuity business. AG Missouri, in turn, is a wholly-owned subsidiary of
American General Corporation, a Texas holding corporation engaged primarily in
the insurance business.

REGULATION AND RESERVES

AGL is subject to regulation and supervision by the insurance departments of
the states in which it is licensed to do business. This regulation covers a
variety of areas, including benefit reserve requirements, adequacy of
insurance company capital and surplus, various operational standards, and
accounting and financial reporting procedures. AGL's operations and accounts
are subject to periodic examination by insurance regulatory authorities.

Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed up to prescribed limits for insurance contract losses,
if covered, incurred by insolvent insurance companies. The amount of any
future assessments of AGL under these laws cannot be reasonably estimated.
Most of these laws do provide, however, that an assessment may be excused or
deferred if it would threaten an insurer's own financial strength.

Although the federal government generally has not directly regulated the
business of insurance, federal initiatives often have an impact on the
business in a variety of ways. Federal measures that may adversely affect the
insurance business include employee benefit regulation, tax law changes
affecting the taxation of insurance companies or of insurance products,
changes in the relative desirability of various personal investment vehicles,
and removal of impediments on the entry of banking institutions into the
business of insurance. Also, both the executive and legislative branches of
the federal government have under consideration various insurance regulatory
matters, which could ultimately result in direct federal regulation of some
aspects of the insurance business. It is not possible to predict whether this
will occur or, if so, what the effect on AGL would be.

Pursuant to state insurance laws and regulations,AGL is obligated to carry on
its books, as liabilities, reserves to meet its obligations under outstanding
insurance contracts. These reserves are based on assumptions about, among
other things, future claims experience and investment returns. Neither the
reserve requirements nor the other aspects of state insurance regulation
provide absolute protection to holders of insurance contracts, including the
Contracts, if AGL were to incur claims or expenses at rates significantly
higher than expected, for example, due to acquired immune

<PAGE>

deficiency syndrome or other infectious diseases or catastrophes, or
significant unexpected losses on its investments.

INDEPENDENT AUDITORS

The consolidated financial statements of AGL and the financial statements of
the Sierra Advantage Divisions of Separate Account D appearing in this
Statement of Additional Information ("Statement") have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein. Such financial statements have been included in
this Statement of Additional Information ("Statement") in reliance upon such
reports of Ernst & Young LLP given upon the authority of such firm as experts
in accounting and auditing. Ernst & Young LLP is located at One Houston
Center, Suite 2400, 1221 McKinney Street, Houston, TX 77010- 2007.

SERVICES

A Service Agreement exists between AGL and Continuum Computer Systems, Inc.
("Continuum") to provide certain services in connection with Separate Account
D. Continuum has developed a computerized data processing record keeping
system for annuity accounting and has the necessary data processing equipment
and personnel to provide and support remote terminal access to its system for
the maintenance of annuity records, processing information, and the generation
of output with respect to the records and information. AGL has contracted with
Continuum for the right to use Continuum's system. For these services AGL paid
Continuum $____________ in 1996, $28,080 in 1995, and $78,840 in 1994.

PRINCIPAL UNDERWRITER

American General Securities Incorporated ("AGSI") is the principal underwriter
with respect to the Contracts. AGSI also serves as principal underwriter to
American General Life Insurance Company of New York Separate Account E and
AGL's Separate Account A, both of which are unit investment trusts registered
under the Investment Company Act of 1940, as amended.

As principal underwriter with respect to Separate Account D, AGSI has received
from AGL less than $1,000 of compensation for each of the past three years.

ANNUITY PAYMENTS

GENDER OF ANNUITANT

When annuity payments are based on life expectancy, the amount of each annuity
payment ordinarily will be higher if the Annuitant or other measuring life is
a male, as compared with a female under an otherwise identical Contract. This
is because, statistically, females tend to have longer life expectancies than
males.

<PAGE>

However, there will be no differences between males and females in any
jurisdiction, including Montana, where such differences are not permitted. We
will also make available Contracts with no such differences in connection with
certain employer-sponsored benefit plans. Employers should be aware that,
under most such plans, Contracts that make distinctions based on gender are
prohibited by law.

MISSTATEMENT OF AGE OR SEX AND OTHER ERRORS

If the age or sex of an Annuitant has been misstated to us, any amount payable
will be that which the purchase payments paid would have purchased at the
correct age and sex. If we made any overpayments because of incorrect
information about age or sex, or any error or miscalculation, we will deduct
the overpayment from the next payment or payments due. We will add any
underpayments to the next payment. The amount of any adjustment will be
credited or charged with interest at the assumed interest rate used in the
Contract's annuity tables.

CHANGE OF INVESTMENT ADVISER OR INVESTMENT POLICY

Unless otherwise required by law or regulation, neither the investment adviser
to any Fund nor any investment policy may be changed without the consent of
AGL. If required, approval of or change of any investment objective will be
filed with the insurance department of each state where a Contract has been
delivered. The Owner (or, after annuity payments start, the payee) will be
notified of any material investment policy change that has been approved. You
will be notified of any investment policy change prior to its implementation
by Separate Account D if your comment or vote is required for such change.

<PAGE>

PERFORMANCE DATA FOR THE DIVISIONS

Investment results for the available Divisions of Separate Account D may
be quoted from time to time. Such results will not be an estimate or guarantee
of future investment performance, and will not represent the actual experience
of amounts invested by a particular Owner. Performance figures will be carried
to the nearest one-hundredth of one percent and may include the effect of
voluntary fee waivers and expense reimbursements in favor of the Funds from
their investment adviser and administrator.

AVERAGE ANNUAL TOTAL RETURN CALCULATIONS

Each Division may advertise its average annual total return. Each
Division's average annual total return quotation is computed in accordance
with a standard method prescribed by the Securities and Exchange Commission
("SEC"). The average annual total return for a Division for a specific period
is found by first taking a hypothetical $1,000 investment in the Division's
Accumulation Units on the first day of the period at the then-applicable
Accumulation Unit value per unit ("initial investment"), and computing the
ending redeemable value ("redeemable value") of that investment at the end of
the period. The redeemable value reflects the effect of the applicable
Surrender Charge that may be imposed at the end of the period as well as all
other recurring charges and fees applicable under the Contract to all Owner
accounts. Such other charges and fees include the mortality and expense risk
charge, the administrative expense charge and the Annual Contract Fee, but do
not include the charges for any applicable premium taxes. The redeemable value
is then divided by the initial investment, and this quotient is taken to the
Nth root (N represents the number of years in the period) and 1 is subtracted
from the result, which is then expressed as a percentage.

<PAGE>

TOTAL RETURN CALCULATIONS (WITHOUT SURRENDER CHARGE OR ANNUAL CONTRACT FEE)

Each Division may also advertise its non-standardized total return, which
is calculated in the same manner and for the same time periods as the
standardized average annual total returns described immediately above, except
that the redeemable value does not reflect the deduction of any applicable
Surrender Charge that may be imposed at the end of the period, or the
deduction of the Annual Contract Fee or the deduction of any premium taxes. If
reflected, these charges would reduce the performance results presented.

CUMULATIVE TOTAL RETURN CALCULATIONS

No standardized formula has been prescribed by the SEC for calculating
cumulative total return performance. Cumulative total return performance is
the compound rate of return on a hypothetical initial investment of $1,000 in
each Division's Accumulation Units on the first day of the period at the
maximum offering price, which is the Accumulation Unit value per unit
("initial investment"). Cumulative total return figures (and the related
"Growth of a $1,000 Investment" figures set forth below) do not include the
effect of any premium taxes or any applicable Surrender Charge or the Annual
Contract Fee. Cumulative total return quotations reflect changes in
Accumulation Unit value

<PAGE>

and are calculated by finding the cumulative rates of return of the
hypothetical initial investment over various periods, according to the
following formula, and then expressing that as a percentage:

C = (ERV/P) - 1

Where:
C = cumulative total return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: i.e., the value at the end of the
applicable period of a hypothetical $1,000 investment made at
the beginning of the applicable period.

HYPOTHETICAL PERFORMANCE

The tables below provide hypothetical performance information for the
Global Money Fund Division of Separate Account D based on the actual
historical performance of the corresponding Series in which the Division
invests. This information reflects all actual charges and deductions of the
Series and all Separate Account charges and deductions, with respect to the
Contracts, that hypothetically would have been made had the Separate Account,
with respect to the Contracts, been invested in the Series for all the periods
indicated. This information has been provided only with respect to the Global
Money Fund Division because the other Divisions available under the Contract
had not commenced operations as of the date of this Statement.

HYPOTHETICAL HISTORICAL AVERAGE ANNUAL TOTAL RETURNS
(THROUGH DECEMBER 31, 1996)

Since
Series
Investment Division One Year Inception

Global Money Fund (3.58)% 1.61%

HYPOTHETICAL HISTORICAL TOTAL RETURNS
(THROUGH DECEMBER 31, 1996)

Since
Series
Investment Division One Year Inception

Global Money Fund 3.51% 2.87%

<PAGE>

HYPOTHETICAL HISTORICAL CUMULATIVE TOTAL RETURNS
(THROUGH DECEMBER 31, 1996)

Since
Series
Investment Division One Year Inception

Global Money Fund 3.51% 10.86%

HYPOTHETICAL HISTORICAL GROWTH OF A $1,000 INVESTMENT IN THE DIVISION
(THROUGH DECEMBER 31, 1996)

Since
Series
Investment Division One Year Inception

Global Money Fund $1,035.15 $1,108.58

<PAGE>

YIELD CALCULATIONS

<PAGE>

The yield quotation is computed by dividing the net investment income per
Accumulation Unit earned during the specified one month or 30-day period by
the Accumulation Unit value on the last day of the period, according to the
following formula that assumes a semi-annual reinvestment of income:

a - b
YIELD = 2[(-------+1)6 - 1]
cd

Where:
a = Net dividends and interest earned during the
period by the Fund attributable to the Division.

b = Expenses accrued for the period (net of
reimbursements).

c = The average daily number of Accumulation Units
outstanding during the period.

d = The Accumulation Unit value per unit on the last
day of the period.

The yield of each Division reflects the deduction of all recurring fees and
charges applicable to each Division, such as the mortality and expense risk
charge and the administrative expense charge, but does not reflect the
deduction of Surrender Charges or the charge for any applicable premium taxes.

GLOBAL MONEY FUND DIVISION YIELD AND EFFECTIVE YIELD CALCULATIONS

The Global Money Fund Division's yield will be computed in accordance
with a standard method prescribed by the SEC. Under that method, the current
yield quotation is based on a seven-day period and computed as follows: the
net change in the Accumulation Unit value during the period is divided by the
Accumulation Unit value at the beginning of the period to obtain the base
period return; the base period return is then multiplied by the fraction 365/7
to obtain the current yield figure. Realized capital gains or losses and
unrealized appreciation or depreciation of the Global Money Fund's assets will
not be included in the calculation.

The Global Money Fund Division's effective yield will be determined by
taking the base period return (computed as described above) and calculating
the effect of assumed compounding. The formula for the effective yield is:
(base period return +1)365/7-1.

<PAGE>

Yield and effective yield do not reflect the deduction of Surrender Charges or
the charges for any applicable premium taxes.

PERFORMANCE COMPARISONS

The performance of any or all of the Divisions of Separate Account D may
be compared in advertisements and sales literature to the performance of other
variable annuity issuers in general or to the performance of particular types
of variable annuities investing in mutual funds, or series of mutual funds,
with investment objectives similar to each of the Divisions of Separate
Account D. Lipper Analytical Services, Inc. ("Lipper") and the Variable
Annuity Research and Data Service ("VARDSR") are independent services which
monitor and rank the performance of variable annuity issuers in each of the
major categories of investment objectives on an industry-wide basis. Lipper's
rankings include variable life issuers as well as variable annuity issuers.
VARDSR rankings compare only variable annuity issuers. The performance
analyses prepared by Lipper and VARDSR rank such issuers on the basis of total
return, assuming reinvestment of dividends and distributions, but do not take
sales charges, redemption fees or certain expense deductions at the separate
account level into consideration. In addition, VARDSR prepares risk adjusted
rankings, which consider the effects of market risk on total return
performance.

In addition, each Division's performance may be compared in
advertisements and sales literature to the following benchmarks: (1) the
Standard & Poor's 500 Composite Stock Price Index, an unmanaged weighted index
of 500 leading domestic companies that represents approximately 80% of the
market capitalization of the United States equity market; (2) the Dow Jones
Industrial Average, an unmanaged unweighted average of thirty blue chip
industrial corporations listed on the New York Stock Exchange and generally
considered representative of the United States stock market; (3) the Consumer
Price Index, published by the U.S. Bureau of Labor Statistics, a statistical
measure of change, over time, in the prices of goods and services in major
expenditure groups and generally considered to be a measure of inflation; (4)
the Lehman Brothers Government and Corporate Bond Index, the Salomon Brothers
High Grade Corporate Bond Index, and the Merrill Lynch Government/Corporate
Master Index, unmanaged indices that are generally considered to represent the
performance of intermediate and long term bonds during various market cycles;
and (5) the Morgan Stanley Capital International Europe Australia Far East
Index, an unmanaged index that is considered to be generally representative of
major non-United States stock markets.

EFFECT OF TAX-DEFERRED ACCUMULATIONS

The charts below compare accumulations attributable to a single initial
contribution of $100,000, compounded annually, to (1) investments on which
earnings are not taxed until withdrawn, and (2) investments on which earnings
are taxed currently.
<TABLE>
<CAPTION>
5 Years 10 Years 20 Years
(7.125% earnings rate)
<S> <C> <C> <C>
Tax-Deferred.................... $141,076 $199,025 $396,111
</TABLE>

<PAGE>

<TABLE>
<S> <C> <C> <C>
Tax-Deferred (after taxes)...... $128,343 $168,327 $304,316
Taxable Investment.............. $127,120 $161,595 $261,129

(10.00% earnings rate)
Tax-Deferred.................... $161,051 $259,374 $672,750
Tax-Deferred (after taxes)...... $142,125 $209,968 $495,197
Taxable Investment.............. $139,601 $194,884 $379,799
</TABLE>

These hypothetical charts assume a 31% tax rate. The charts also assume that
no fees or charges are deducted from any of the investments. In the case of
the Contracts, the annual mortality and expense risk charge is 1.25 %, the
maximum surrender charge is 7% for withdrawals within the first seven years,
the annual administrative expense is .15% and the annual contract fee is $35.
The currently taxable investments may incur comparable fees and charges. The
application of fees and charges would reduce the performance of the Contracts
or any other investment. Taxes are payable upon withdrawal under the
Contracts, either at one time in the case of a lump sum withdrawal, or on each
payment in the case of annuitization. An additional 10% penalty may apply to
withdrawals before age 59 1/2.

This information is for illustrative purposes only and is not a guarantee of
future return.

FINANCIAL STATEMENTS

Separate Account D has a total of forty-two Divisions. The financial
statements for Separate Account D that are included herein relate to nine of
its Divisions, of which only one is available pursuant to the Contracts that
are the subject of this Statement; however, the fee structure for such
Division is different under such Contracts. Twenty eight Divisions are not
available under the Contracts that are the subject of this Statement. None of
the remaining five Divisions, all of which are available under Contracts that
are the subject of this Statement, has commenced operations as of the date of
this Statement.

The financial statements of AGL that are included in this Statement of
Additional Information ("Statement") should be considered primarily as bearing
on the ability of AGL to meet its obligations under the Contracts.

<PAGE>

INDEX TO
FINANCIAL STATEMENTS

PAGE NO.

I. Sierra Advantage Divisions of Separate Account D
Financial Statements

Report of Ernst & Young LLP, Independent Auditors..........................

Statement of Net Assets ...................................................

Statement of Operations....................................................

Statement of Changes in Net Assets.........................................

Notes to Financial Statements..............................................

II.AGL Consolidated Financial Statements

Report of Ernst & Young LLP, Independent Auditors..........................

Consolidated Balance Sheets................................................

Consolidated Statements of Income..........................................

Consolidated Statements of Shareholder's Equity............................

Consolidated Statements of Cash Flows......................................

Notes to Consolidated Financial Statements.................................

<PAGE>

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

PART A: None

PART B:

Financial Statements of the Sierra Advantage Divisions of
American General Life Insurance Company Separate Account D (To
be filed by Amendment)

Report of Ernst & Young LLP, independent auditors
Statement of Net Assets as of December 31, 1996
Statement of Operations for the year ended December 31, 1996
Statement of Changes in Net Assets for the years ended
December 31, 1996 and 1995
Notes to Audited Financial Statements

Consolidated Financial Statements of American General Life
Insurance Company (To be filed by Amendment)

Report of Ernst & Young LLP, independent auditors
Consolidated Balance Sheets as of December 31, 1996 and 1995
Consolidated Statements of Income for the years ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Shareholder's Equity for the
years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows for the years
ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements

PART C: None

(b) Exhibits

1(a) American General Life Insurance Company of Delaware Board of
Directors resolution authorizing the establishment of Separate
Account D1

(b) Resolution of the Board of Directors of American General Life
Insurance Company of Delaware authorizing, among other things, the
redomestication of that company in Texas and the renaming of that
company as American General Life Insurance Company2

C-1

<PAGE>

(c) Resolution of the Board of Directors of American General Life
Insurance Company of Delaware providing, inter alia, for Registered
Separate Accounts' Standards of Conduct3

2 None

3(a)(i) Distribution Agreement dated March 24, 1993 between American General
Securities Incorporated and American General Life Insurance Company4

(ii) Form of Distribution Agreement, by and among American General Life
Insurance Company, American General Securities Incorporated and
Sierra Investment Services Corporation (To be filed by Amendement)

(b)(i) Selling/Master General Agent Agreement among American General Life
Insurance Company, American General Securities Incorporated and
Sierra Investment Services Corporation5

(ii) Form of Selling Group Agreement, by and among American General Life
Insurance Company, American General Securities Incorporated and
Sierra Investment Services Corporation (To be filed by Amendment)

(c)(i) Trust Participation Agreement5

(ii) Form of (Amended) Trust Participation Agreement by and among
American General Life Insurance Company, American General Securities
Incorporated, Sierra Investment Services Corporation and Sierra
Investment Advisors Corporation (To be filed by Amendment)

(d) Agreement respecting certain indemnification given by Sierra
Investment Advisors Corporation and Sierra Investment Services
Corporation to American General Life Insurance Company and American
General Securities Incorporated5

4(a) Specimen form of Combination Fixed and Variable Annuity Contract
(Form No.93011)4

(b) Form of Waiver of Surrender Charge Rider6

(d)(i)(A) Specimen form of Individual Retirement Annuity Financial Disclosure
available under Contract Form No.930117

(B) Specimen form of Individual Retirement Annuity Disclosure Statement
and additional specialized forms available under Contract Form
No.97010 and Contract Form No. 970117

(ii) Specimen form of Individual Retirement Annuity Endorsement4

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(iii) Specimen form of IRA Instruction Form6

(e) Form of Amendment to Combination Fixed and Variable Annuity
Contract6

(f)(i) Specimen form of Combination Fixed and Variable Annuity Contract
(Form No. 97010)

(ii) Specimen form of Combination Fixed and Variable Annuity Contract
(Form No. 97011)

(iii) Specimen form of Waiver of Surrender Charge Rider for Contract Form
No. 97010 and Contract Form No. 97011.

5(a)(i) Specimen form of Application for Contract Form No. 930011(9)

(ii) Specimen form of Application for Contract Form No. 930011, revised
October, 1993(5)

(iii) Specimen form of SNAP Annuity Ticket application for Contract Form
No. 930011(6)

(iv) Specimen form of Application for Contract Form No. 930011, revised
April, 1995(6)

(v) Specimen form of Application for Contract Form No. 97010 and for
Contract Form No. 970011

( b)(i) Election of Annuity Payment Option/Change Form5

(ii) Specimen form of Absolute Assignment to Effect Section 1035(a)
Exchange and Rollover of a Life Insurance Policy or Annuity
Contract6

(c)(i)(A) Contract Service Request, including telephone transfer
authorization5

(c)(i)(B) Contract Service Request, including telephone transfer
authorization, revised January, 1996

(ii) Form of Authorization Limited to Execution of Transaction Requests
for Contract4

(iii) Form of Transaction Request Form6

6(a) Amended and Restated Articles of Incorporation of American General
Life Insurance Company, effective December 31, 19912

(b) Bylaws of American General Life Insurance Company, adopted January
22, 199210

7 None

8 Form of Sierra Asset Management Program Agreement and Disclosure
Statement11

9 Opinion and consent of Counsel4

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10 Consent of Independent Auditors

11 None

12 None

13(a)(i) Computations of Average Annual Total Returns for each Division
available under Contract Form No. 93011 for the Period Ended
December 31, 19946

(ii) Computations of Cumulative Total Returns (Without Surrender Charge)
for each Division available under Contract Form No. 93011for the
Period Ended December 31, 19946

(iii) Computations of Aggregate Cumulative Total Return for each Division
available under Contract Form No. 93011for the Periods Ended
December 31, 19946

(iv) Computation of 7 Day Yield for the Global Money Division for the
Period Ended December 31, 19946

(b)(i) Computations of hypothetical historical standardized average annual
total returns for the Global Money Fund Division, available under
Contract Form No. 97010 and Contract Form No. 97011 for the one year
period ended December 31, 1996

(ii) Computations of hypothetical historical non-standardized total
returns for the Global Money Fund Division, available under Contract
Form No. 97010 and Contract Form No. 97011 for the one year period
ended December 31, 1996, and since inception

(iii) Computations of hypothetical historical non-standardized cumulative
total returns for the Global Money Fund Division, available under
Contract Form No. 97010 and Contract Form No. 97011 for the one year
period ended December 31, 1996, and since inception

(iv) Computations of hypothetical historical seven day yield and
effective yield for the Global Money Fund Division, available under
Contract Form No. 97010 and Contract Form No. 97011 for the seven
day period ended December 31, 1996

14 A Financial Data Schedule for the Sierra Advantage Divisions meeting
the requirements of Rule 483(e) of the Securities Act of 1933 is
being filed as Exhibit 27 hereof (To be filed by Amendment)

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15(a) Power of Attorney with respect to Registration Statements and
Amendments thereto signed by the following persons in their
capacities as directors and, where applicable, officers of American
General Life Insurance Company: Messrs. Devlin, Rashid, and Luther6

(b) Power of Attorney with respect to Registration Statements and
Amendments thereto signed by Robert S. Cauthen, Jr. in his capacity
as a director and officer of American General Life Insurance
Company6

(c) Power of Attorney with respect to Registration Statements and
Amendments thereto signed by James R. Tuerff in his capacity as a
director of American General Life Insurance Company, filed as part
of Post-Effective Amendment No. 1 to this Form N-4 Registration
Statement on October 18, 19935

(d) Power of Attorney with respect to Registration Statements and
Amendments thereto signed by Peter V. Tuters in his capacity as a
director or officer of American General Life Insurance Company6

(e) Power of Attorney with respect to Registration Statements and
Amendments thereto signed by the following persons in their
capacities as directors and, where applicable, officers of American
General Life Insurance Company: Messrs. Kelley, Pulliam, and Young6

(f) Power of Attorney with respect to Registration Statements and
Amendments thereto signed by the following persons in their
capacities as directors and, where applicable, officers of American
General Life Insurance Company: Messrs. Atnip and Newton8

(g) Power of Attorney with respect to Registration Statements and
Amendments thereto signed by the following persons in their
capacities as directors and, where applicable, officers of American
General Life Insurance Company: Messrs. Fravel and LaGrasse.

16 Statement concerning applicable SEC Exemptive Order 9

27 Financial Data Schedule (To be filed by Amendment)

----------------------

1 Incorporated herein by reference to the initial filing of Registrant's
Form S-6 Registration Statement (File No. 2-49805), filed on December 6,
1973.

2 Incorporated herein by reference to the initial filing of Separate
Account D's Form N-4 Registration Statement (File No. 33-43390), filed on
October 16, 1991.

3 Incorporated herein by reference to Pre-Effective Amendment No. 1 to
Separate Account D's Form N-4 Registration Statement (File No. 33-43390),
filed on December 31, 1991.

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4 Previously filed in Pre-Effective Amendment No. 1 to this Form N-4
Registration Statement (File No. 33- 57730), filed on March 29, 1993.

5 Previously filed in Post-Effective Amendment No. 1 to this Form N-4
Registration Statement (File No. 33-57730), filed on October 18, 1993.

6 Previously filed in Post-Effective Amendment No. 3 to this Form N-4
Registration Statement (File No. 33-57730), filed on April 28, 1995.

7 Filed as part of Part A of this Amendment.

8 Previously filed in Post-Effective Amendment No. 4 to this Form N-4
Registration Statement (Form No. 33-57730), filed on April 29, 1996.

9 Previously filed as part of the initial filing of this Form N-4
Registration Statement (File No. 33-57730), filed on February 1, 1993.

10 Incorporated herein by reference to Post-Effective Amendment No. 1 to
Separate Account D's Registration Statement (File No. 33-43390), filed on
April 30, 1992.

11 Previously filed in Post-Effective Amendment No. 2 to this Form N-4
Registration Statement ( File No. 33-57730), filed on April 29, 1994.

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

The directors, executive officers, and, to the extent responsible for
variable annuity operations, other officers of the depositor are listed
below.

POSITIONS AND OFFICES
NAME AND PRINCIPAL WITH THE
BUSINESS ADDRESS DEPOSITOR

Harold S. Hook Senior Chairman
2929 Allen Parkway
Houston, TX 77019

Robert M. Devlin Chairman
2929 Allen Parkway
Houston, TX 77019

Jon P. Newton Vice Chairman
2929 Allen Parkway
Houston, TX 77019

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Rodney O. Martin, Jr. Director, President & Chief
2727-A Allen Parkway Executive Officer

Houston, TX 77019

Michael G. Atnip Director
2929 Allen Parkway
Houston, TX 77019

David A. Fravel Director & Senior Vice
2727-A Allen Parkway President, Insurance
Houston, TX. 77019 Operations

Robert F. Herbert, Jr. Director, Senior Vice
2727-A Allen Parkway President Chief Financial
Houston, TX 77019 Officer, Treasurer &
Controller

John V. LaGrasse Director, Senior Vice
2727-A Allen Parkway President & Chief Systems
Houston, TX 77019 Officer

Bill B. Luther Director & Senior Vice
2727-A Allen Parkway President, Administration
Houston, TX 77019

Peter V. Tuters Director, Vice President &
2929 Allen Parkway Chief Investment Officer
Houston, TX 77019

Philip K. Polkingorn Senior Vice President &
2727-A Allen Parkway Chief Marketing Officer
Houston, TX 77019

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Wayne A. Barnard Vice President & Chief
2727-A Allen Parkway Actuary
Houston, TX 77019

Thomas B. Phillips Vice President, General
2727-A Allen Parkway Counsel & Secretary
Houston, TX 77019

Dennis H. Roberts Vice President
2727-A Allen Parkway
Houston, TX 77019

Timothy W. Still Vice President
2727-A Allen Parkway
Houston, TX 77019

Steven A. Glover Associate General Counsel &
2727-A Allen Parkway Assistant Secretary
Houston, TX 77019

Joyce R. Bilski Administrative Officer
2727-A Allen Parkway
Houston, TX 77019

Farideh Farrokhi Assistant Controller
2727-A Allen Parkway
Houston, TX 77019

Kenneth D. Nunley Associate Tax Officer
2727-A Allen Parkway
Houston, TX 77019

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT

The following is a list of American General Corporation's subsidiaries as of
December 31, 1996. All subsidiaries listed are corporations. Subsidiaries of
subsidiaries are indicated by indentations and unless otherwise indicated, all
subsidiaries are wholly owned. Inactive subsidiaries are denoted by an (*).

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NAME JURISDICTION OF
INCORPORATION
AGC Life Insurance Company3 . . . . . . . . . . . . . . . . . . . Missouri
The Franklin Life Insurance Company . . . . . . . . . . . . . . Illinois
The American Franklin Life Insurance Company . . . . . . . . Illinois
Franklin Financial Services Corporation . . . . . . . . . . . Delaware
American General Life and Accident Insurance Company . . . . . Tennessee
American General Exchange, Inc. . . . . . . . . . . . . . . . Tennessee
Southern Educators Life Insurance Company . . . . . . . . . . Georgia
American General Life Insurance Company
(Registrant is a separate account of
American General Life Insurance Company). . . . . . . . . . Texas
American General Annuity Service Corporation . . . . . . . . Texas
American General Life Insurance Company of New York . . . . . New York

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The Winchester Agency Ltd . . . . . . . . . . . . . . . . . . New York
American General Securities Incorporated4 . . . . . . . . . . . Texas
American General Insurance Agency, Inc. . . . . . . . . . . . Missouri
American General Insurance Agency of Hawaii, Inc. . . . . . . Hawaii
American General Insurance Agency of Massachusetts, Inc.. . . Mass.
The Variable Annuity Life Insurance Company . . . . . . . . . . Texas
The Variable Annuity Marketing Company. . . . . . . . . . . . Texas
VALIC Investment Services Company . . . . . . . . . . . . . . Texas
VALIC Retirement Services Company . . . . . . . . . . . . . . Texas
The Independent Life and Accident Insurance Company . . . . . . Florida
Independent Fire Insurance Company. . . . . . . . . . . . . . Florida
Independent Fire Insurance Company of Florida . . . . . . . . Florida
Old Faithful General Agency, Inc. . . . . . . . . . . . . . . Texas
Thomas Jefferson Insurance Company . . . . . . . . . . . . . Florida
Independent Property & Casualty Insurance Company . . . . . . . Florida
Allen Property Company. . . . . . . . . . . . . . . . . . . . . . Delaware
Florida Westchase Corporation . . . . . . . . . . . . . . . . . Delaware
Greatwood Development, Inc. . . . . . . . . . . . . . . . . . . Delaware
Greatwood Golf Club, Inc. . . . . . . . . . . . . . . . . . . . Delaware
Highland Creek Golf Club, Inc.. . . . . . . . . . . . . . . . . No. Carolina
Hunter's Creek Communications Corporation . . . . . . . . . . . Florida
Pebble Creek Corporation . . . . . . . . . . . . . . . . . . . Delaware
Pebble Creek Development Corporation. . . . . . . . . . . . . . Florida
Westchase Development Corporation . . . . . . . . . . . . . . . Delaware
Westchase Golf Corporation. . . . . . . . . . . . . . . . . . . Florida
American General Capital Services, Inc. . . . . . . . . . . . . . Delaware
American General Delaware Management Corporation1 . . . . . . . . Delaware
American General Finance, Inc. . . . . . . . . . . . . . . . . . Indiana
AGF Investment Corp.. . . . . . . . . . . . . . . . . . . . . . Indiana
American General Auto Finance, Inc. . . . . . . . . . . . . . . Delaware
American General Finance Corporation5 . . . . . . . . . . . . . Indiana
American General Finance Group, Inc.. . . . . . . . . . . . . Delaware
American General Financial Services, Inc.6. . . . . . . . . Delaware
The National Life and Accident Insurance Company. . . . . Texas
Merit Life Insurance Co.. . . . . . . . . . . . . . . . . . . Indiana
Yosemite Insurance Company. . . . . . . . . . . . . . . . . . California
American General Finance, Inc.. . . . . . . . . . . . . . . . . Alabama
American General Financial Center . . . . . . . . . . . . . . . Utah
American General Financial Center, Inc.* . . . . . . . . . . . Indiana
American General Financial Center, Incorporated*. . . . . . . . Indiana
American General Financial Center Thrift Company* . . . . . . . California
Thrift, Incorporated* . . . . . . . . . . . . . . . . . . . . . Indiana
American General Realty Investment Corporation. . . . . . . . . . Texas

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American General Mortgage Company . . . . . . . . . . . . . . . Delaware
Ontario Vineyard Corporation. . . . . . . . . . . . . . . . . . Delaware
Pebble Creek Country Club Corporation . . . . . . . . . . . . . Florida
Pebble Creek Service Corporation. . . . . . . . . . . . . . . . Florida
SR/HP/CM Corporation. . . . . . . . . . . . . . . . . . . . . . Texas
American General Mortgage and Land Development, Inc . . . . . . . Delaware
American General Land Development, Inc. . . . . . . . . . . . . Delaware
American General Realty Advisors, Inc.. . . . . . . . . . . . . Delaware
American General Property Insurance Company . . . . . . . . . . . Tennessee
Bayou Property Company. . . . . . . . . . . . . . . . . . . . . . Delaware
AGLL Corporation7 . . . . . . . . . . . . . . . . . . . . . . . Delaware
American General Land Holding Company . . . . . . . . . . . . . Delaware
AG Land Associates, LLC7. . . . . . . . . . . . . . . . . . . California
Hunter's Creek Realty, Inc.*. . . . . . . . . . . . . . . . . Florida
Summit Realty Company, Inc. . . . . . . . . . . . . . . . . . So. Carolina
Lincoln American Corporation. . . . . . . . . . . . . . . . . . Delaware
Financial Life Assurance Company of Canada. . . . . . . . . . . . Canada
Florida GL Corporation. . . . . . . . . . . . . . . . . . . . . . Delaware
GPC Property Company. . . . . . . . . . . . . . . . . . . . . . . Delaware
Cinco Ranch Development Corporation . . . . . . . . . . . . . . Delaware
Cinco Ranch East Development, Inc.. . . . . . . . . . . . . . . Delaware
Cinco Ranch West Development, Inc.. . . . . . . . . . . . . . . Delaware
The Colonies Development, Inc.. . . . . . . . . . . . . . . . . Delaware
Fieldstone Farms Development, Inc.. . . . . . . . . . . . . . . Delaware
Hickory Downs Development, Inc. . . . . . . . . . . . . . . . . Delaware
Lake Houston Development, Inc.. . . . . . . . . . . . . . . . . Delaware
South Padre Development, Inc. . . . . . . . . . . . . . . . . . Delaware
Green Hills Corporation . . . . . . . . . . . . . . . . . . . . . Delaware
INFL Corporation. . . . . . . . . . . . . . . . . . . . . . . . . Delaware
Knickerbocker Corporation . . . . . . . . . . . . . . . . . . . . Texas
American Athletic Club, Inc.. . . . . . . . . . . . . . . . . . Texas
Pavilions Corporation . . . . . . . . . . . . . . . . . . . . . . Delaware

American General Finance Foundation, Inc. is not included on this list. It is
a non-profit corporation.

NOTES

1 The following limited liability companies were formed in the State of
Delaware on March 28, 1995. The limited liability interests of each are
jointly owned by AGC and AGDMC and the business and affairs of each are
managed by AGDMC:

American General Capital, L.L.C.
American General Delaware, L.L.C.

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2 On November 26, 1996, American General Institutional Capital A ("AG Cap
Trust"), a Delaware business trust, was created. AG Cap Trust's business
and affairs are conducted through its trustees: Bankers Trust Company and
Bankers Trust (Delaware). Capital securities of AG Cap Trust are held by
non-affiliated third party investors and common securities of AG Cap
Trust are held by AGC.

3 On December 23, 1994, AGCL became the owner of approximately 40% of the
shares of common stock of Western National Corporation ("WNC") (the
percentage of ownership by the American General insurance holding company
system will increase to approximately 46% upon conversion of WNC's Series
A Convertible Preferred Stock which AGCL also owns). WNC, a Delaware
corporation, owns the following companies:

WNL Holding Corporation
Western National Life Insurance Company (TX)
WesternSave (401K Plan)
Independent Advantage Financial & Insurance Services, Inc.
WNL Investment Advisory Services, Inc.
Conseco Annuity Guarantee Corp.
WNL Brokerage Services, Inc.
WNL Insurance Services, Inc.

However, AGCL (1) holds the direct interest in WNC and the indirect
interests in WNC's subsidiaries for investment purposes; (2) does not
direct the operations of WNC or WNL; (3) has no representatives on the
Board of Directors of WNC; and (4) is restricted, pursuant to a
Shareholder's Agreement between WNC and AGCL, in its right to vote its
shares against the slate of directors proposed by WNC's Board of
Directors. Accordingly, although WNC and its subsidiaries technically are
members of the American General insurance holding company system under
insurance holding company laws, AGCL does not direct and control WNC or
its subsidiaries.

4 The following companies are indirectly controlled by, or related to,
AGSI:

American General Insurance Agency of Ohio, Inc.
American General Insurance Agency of Texas, Inc.
American General Insurance Agency of Oklahoma, Inc.
Insurance Masters Agency, Inc.

5 American General Finance Corporation is the parent of an additional 41
wholly owned subsidiaries incorporated in 26 states for the purpose of
conducting its consumer finance operations.

6 American General Financial Services, Inc. is the parent of an additional
7 wholly owned subsidiaries incorporated in 4 states and Puerto Rico for
the purpose of conducting its consumer finance operations.

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7 AG Land Associates, LLC is jointly owned by AGLH and AGLL. AGLH holds a
98.75% managing interest and AGLL owns a 1.25% managing interest.

All of the subsidiaries of AGL are included in its consolidated financial
statements, which are filed in Part B of this Registration Statement.

ITEM 27. NUMBER OF CONTRACT OWNERS

As of December 31, 1996 there were 9,712 owners of Contracts of the class
covered by this registration statement.

ITEM 28. INDEMNIFICATION

Article VII, section 1, of the Company's By-Laws provides, in part, that the
Company shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any proceeding (other than an action by or in
the right of the Company) by reason of the fact that such person is or was
serving at the request of the Company, against expenses, judgments, fines,
settlements, and other amounts actually and reasonably incurred in connection
with such proceeding if such person acted in good faith and in a manner such
person reasonably believed to be in the best interest of the Company and, in
the case of a criminal proceeding, had no reasonable cause to believe the
conduct of such person was unlawful.

Article VII, section 1 (in part), section 2, and section 3, provide that the
Company shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action
by or in the right of the Company to procure a judgment in its favor by reason
of the fact that such person is or was acting on behalf of the Company,
against expenses actually and reasonably incurred by such person in connection
with the defense or settlement of such action if such person acted in good
faith, in a manner such person believed to be in the best interests of the
Company, and with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar circumstances.

No indemnification shall be made under Article VII, section 1: (a) in respect
of any claim, issue, or matter as to which such person shall have been
adjudged to be liable to the Company, unless and only to the extent that the
court in which such action was brought shall determine upon application that,
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for the expenses which such court shall
determine; (b) of amounts paid in settling or otherwise disposing of a
threatened or pending action with or without court approval; or (c) of expense
incurred in defending a threatened or pending action which is settled or
otherwise disposed of without court approval.

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Article VII, section 3, provides that, with certain exceptions, any
indemnification under Article VII shall be made by the Company only if
authorized in the specific case, upon a determination that indemnification of
the person is proper in the circumstances because the person has met the
applicable standard of conduct set forth in section 1 of Article VII by; (a) a
majority vote of a quorum consisting of directors who are not parties to such
proceeding; (b) approval of the shareholders, with the shares owned by the
person to be indemnified not being entitled to vote thereon; or (c) the court
in which such proceeding is or was pending upon application made by the
Company or the indemnified person or the attorney or other persons rendering
services in connection with the defense, whether or not such application by
the attorney or indemnified person is opposed by the Company.

Article VII, section 7, provides that for purposes of Article VII, those
persons subject to indemnification include any person who is or was a
director, officer, or employee of the Company, or is or was serving at the
request of the Company as a director, officer, or employee of another foreign
or domestic corporation which was a predecessor corporation of the Company or
of another enterprise at the request of such predecessor corporation.

CONTRACT FORM NO. 93011

Section 12 of the Trust Participation Agreement that is filed as Exhibit
3(c)(i) to this Registration Statement is hereby incorporated by reference in
response to this item. Section 12.1 thereof provides that the Company will
indemnify The Sierra Variable Trust (the "Trust") and Sierra Investment
Services Corporation (the "Distributor") and their directors, trustees,
officers and controlling persons from losses and costs due to any
misstatements or omissions of material facts for which the Company is
responsible in this Registration Statement or otherwise or due to the
Company's failure to meet its obligations under the Trust Participation
Agreement. Section 12.2 thereof provides that the Distributor will indemnify
the Trust, the Company, American General Securities Incorporated ("AGSI") and
their officers, trustees, employees and controlling persons from losses and
costs due to any misstatements or omissions of material facts for which the
Distributor or its affiliates are responsible in this Registration Statement
or otherwise or as a result of any failure by the Trust or the Distributor to
meet its obligations under the Trust Participation Agreement.

Section 5 of the Selling Agreement that is filed as Exhibit 3(b)(i) to this
Registration Statement is hereby incorporated by reference in response to this
item. Paragraphs 5.1 and 5.4 thereof provide that the Company and AGSI will
indemnify the Distributor and any other broker-dealer appointed by the
Distributor to sell the Contracts, and their officers, directors and
controlling persons from losses and costs due to any misstatements or
omissions of material facts for which the Company or AGSI is responsible in
this Registration Statement or due to any negligent, illegal or fraudulent
acts of the Company or AGSI. Paragraphs 5.2 and 5.3 provide that the
Distributor will indemnify the Company and AGSI, and their officers, directors
and controlling persons from losses and costs due to any misstatements or
omissions of material facts for which the Distributor or its affiliates are
responsible in this Registration Statement, or as a result of any negligent,
illegal or fraudulent acts or omissions by the Distributor.

The Agreement filed as Exhibit 3(d) to this Registration Statement is hereby
incorporated by reference in response to this item. Pursuant to that
Agreement, the Distributor and Sierra Investment Advisors Corporation ("SIAC")
agree to indemnify the Company and AGSI with respect to liabilities arising
out of the negligence or bad faith of the Distributor, SIAC or any
sub-investment adviser to the Trust in performing their obligations to the
Trust, including the obligations of SIAC and the sub- investment advisers to
operate the Trust in compliance with Sub-Chapter M and Section 817(h) of the
Internal Revenue Code of 1986, as amended. The Distributor and the Adviser
also agree to

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indemnify the Company and AGSI for 50% of any other liabilities or costs that
they incur as a result of any failure of the Trust to comply with Sub-Chapter
M or Section 817(h) that does not result from such negligence or bad faith.

The Distribution Agreement filed as Exhibit 3(a)(i) to this Registration
Statement is hereby incorporated by reference in response to this item. Under
part EIGHTH of that agreement, the Company agrees to indemnify AGSI from
liabilities and costs that it may incur as a result of any misstatements or
omissions of material facts in this Registration Statement or otherwise for
which the Company is responsible; and AGSI agrees to indemnify the Company
against costs and liabilities that the Company may incur as a result of any
act of an employee of AGSI.

CONTRACT FORM NO. 97010 AND CONTRACT FORM NO. 97011
(To Be Filed by Amendment)

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) Registrant's principal underwriter, American General Securities
Incorporated, also acts as principal underwriter for American
General Life Insurance Company of New York Separate Account E and
American General Life Insurance Company Separate Account A.

(b) The directors and principal officers of the principal underwriter
are:

NAME AND PRINCIPAL POSITION AND OFFICES WITH UNDERWRITER,
BUSINESS ADDRESS GENERAL SECURITIES INCORPORATED

F. Paul Kovach, Jr. Director & President
American General Securities
Incorporated
2727 Allen Parkway
Houston, TX 77019

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Robert F. Herbert Director & Associate Tax Officer
American General Life
2727-A Allen Parkway
Houston, Texas 77019

John V. LaGrasse Director & Vice President
American General Life
2727-A Allen Parkway
Houston, TX 77019

Bill B. Luther Director & Vice President
American General Life
2727-A Allen Parkway
Houston, TX 77019

Thomas B. Phillips Director & Secretary
American General Life
2727-A Allen Parkway
Houston, TX 77019

Rodney O. Martin, Jr. Director
American General Life
2727-A Allen Parkway
Houston, TX 77019

Fred G. Fram Vice President
American General Securities
Incorporated
2727 Allen Parkway
Houston, TX 77019

Steven A. Glover Assistant Secretary
American General Life
2727-A Allen Parkway
Houston, TX 77019

Carole D. Hlozek Administrative Officer
American General Securities
Incorporated
2727 Allen Parkway
Houston, TX 77019

J. Andrew Kalbaugh Administrative Officer
American General Securities
Incorporated

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2727 Allen Parkway
Houston, TX 77019

Kenneth D. Nunley Associate Tax Officer
2727-A Allen Parkway
Houston, TX 77019

ITEM 30. LOCATION OF RECORDS

All records referenced under Section 31(a) of the 1940 Act, and Rules 31a-1
through 31a-3 thereunder, are maintained and in the custody of American
General Life Insurance Company at its principal executive office located at
2727-A Allen Parkway, Houston, TX 77019.

ITEM 31. MANAGEMENT SERVICES

None.

ITEM 32. UNDERTAKINGS

The Registrant undertakes: A) to file a post-effective amendment to this
registration as frequently as is necessary to ensure that the audited
financial statements in the Registration Statement are never more than 16
months old for so long as payments under the Contracts may be accepted; B) to
include either (1) as part of any application to purchase a Contract offered
by these prospectuses, a space that an applicant can check to request a
Statement of Additional Information ("Statement"), or (2) a toll-free number
or a post card or similar written communication affixed to or included in the
applicable prospectus that the applicant can remove to send for a Statement of
Additional Information ("Statement"); C) to deliver any Statement of
Additional Information ("Statement") and any financial statements required to
be made available under this form promptly upon written or oral request.

REPRESENTATION REGARDING REASONABLENESS OF AGGREGATE FEES AND CHARGES DEDUCTED
UNDER THE CONTRACTS PURSUANT TO SECTION 26(C)(2)(A) OF THE INVESTMENT COMPANY
ACT OF 1940

AGL represents that the fees and charges deducted under the Contracts that are
identified as Contract Form No. 97010 and Contract Form No. 97011 and
described in this Registration Statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and
the risks assumed by AGL under the Contracts. AGL bases its representation on
its assessment of all of the facts and circumstances, including such relevant
factors as: the nature and extent of such services, expenses and risks; the
need for AGL to earn a profit; the degree to which the Contracts include
innovative features; and the regulatory standards for the grant of exemptive
relief under the Investment

C-19

<PAGE>

Company Act of 1940 used prior to October 1996, including the range of
industry practice.

C-20

<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant, American General Life Insurance Company Separate
Account D, certifies that it meets the requirements of Securities Act Rule
485(a), for effectiveness of this Amendment to the Registration Statement and
has duly caused this Amendment to the Registration Statement to be signed on
its behalf, in the City of Houston, and State of Texas on this 12th day of
February, 1997.

AMERICAN GENERAL LIFE INSURANCE AMERICAN GENERAL LIFE INSURANCE
COMPANY SEPARATE ACCOUNT D COMPANY
(Registrant) (Depositor)

By:/s/ROBERT F. HERBERT, JR. By:/s/ROBERT F. HERBERT, JR.
------------------------- -------------------------
ROBERT F. HERBERT, JR. ROBERT F. HERBERT, JR.
Senior Vice President of Senior Vice President
American General Life
Insurance Company

As required by the Securities Act of 1933, this Amendment to the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE

RODNEY O. MARTIN, JR.* Principal Executive February 12, 1997
----------------------- Officer
(Rodney O. Martin, Jr.)

ROBERT F. HERBERT, JR.* Principal Financial and February 12, 1997
----------------------- Accounting Officer
(Robert F. Herbert, Jr)

DIRECTORS

ROBERT F. HERBERT, JR*
----------------------- -----------------------
(Harold S. Hook) (Robert F. Herbert, Jr)

RODNEY O. MARTIN, JR.* JOHN V. LAGRASSE*
----------------------- -----------------------
(Rodney O. Martin, Jr.) (John V. LaGrasse)

MICHAEL G. ATNIP* BILL B. LUTHER*
----------------------- -----------------------
(Michael G. Atnip) (Bill B. Luther)

ROBERT M. DEVLIN* JON P. NEWTON*
----------------------- -----------------------
(Robert M. Devlin) (Jon P. Newton)

DAVID A. FRAVEL* PETER V. TUTERS*
----------------------- -----------------------
(David A. Fravel) (Peter V. Tuters)

/s/STEVEN A. GLOVER February 12, 1997
--------------------------------------

*By Steven A. Glover, Attorney-in-Fact

<PAGE>

EXHIBIT INDEX

4 (f)(i) Specimen form of Combination Fixed and Variable Annuity Contract
(Form No.97010)

(ii) Specimen form of Combination Fixed and Variable Annuity Contract
(Form No.97011)

(iii) Specimen form of Waiver of Surrender Charge Rider for Contract Form
No. 97010 and Contract Form No. 97011

5 (a)(v) Specimen form of Application for Contract Form No. 97010 and
Contract Form No. 97011

13(b)(i) Computations of hypothetical historical standardized average annual
total returns for the Global Money Fund Division, available under
Contract Form No. 97010 and Contract Form No. 97011 for the one year
period ended December 31, 1996

15(g) Power of Attorney with respect to Registration Statements and
Amendments thereto signed by the following persons in their
capacities as directors and, where applicable, officers of American
General Life Insurance Company: Messrs. Fravel and LaGrasse.

C-21

EXHIBIT 4(f)(i)

AMERICAN GENERAL LIFE
INSURANCE COMPANY

Unless otherwise directed by the Owner, we will pay a monthly income to the
Annuitant if living on the Annuity Commencement Date. The dollar amounts of
such payments will be determined on the basis of the provisions of this
Contract. The first payment will be payable on the Annuity Commencement Date.
Subsequent payments will be payable on the corresponding day of each month
thereafter in accordance with the provisions of this Contract.

ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE, MAY INCREASE OR
DECREASE AND ARE NOT GUARANTEED AS TO AMOUNT. SEE THE "SEPARATE ACCOUNT" AND
"VARIABLE ANNUITY PAYMENTS" PROVISIONS IN THIS CONTRACT.

CANCELLATION RIGHT. You may return this Contract for cancellation to us or to
the sales representative through whom it was purchased, within 10 days after
delivery. Upon surrender of this Contract within the 10 day period, we will
refund the sum of your Account Value at the end of the Valuation Period in
which your request is received, plus any premium taxes and Annual Contract Fee
that have been deducted.

This is a FLEXIBLE PAYMENT VARIABLE and FIXED INDIVIDUAL DEFERRED ANNUITY
CONTRACT. NONPARTICIPATING -- NOT ELIGIBLE FOR DIVIDENDS.

SIGNED AT THE HOME OFFICE ON THE DATE OF ISSUE.

/s/ /s/
--------------------- -----------------------
Secretary President

READ YOUR CONTRACT CAREFULLY

[American General Logo]
A STOCK COMPANY
---------------------------------------------
A Subsidiary of American General Corporation
---------------------------------------------
Home Office: Houston, Texas
2727-A Allen Parkway P.O. Box 1401 Houston, TX 77251-1401 (713) 831-3505

<PAGE>

INDEX
PAGE

Account Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Allocation of Purchase Payments. . . . . . . . . . . . . . . . . . . . . . 7

Annuity Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Annuity Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Annuity Units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Change of Investment Advisor or
Investment Policy . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Contingent Annuitant . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Contract Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Death Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Division Accumulation Units. . . . . . . . . . . . . . . . . . . . . . . . 11

Divisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Fixed Account Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Guaranteed Interest Rates. . . . . . . . . . . . . . . . . . . . . . . . . 10

Guarantee Periods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Net Investment Factor. . . . . . . . . . . . . . . . . . . . . . . . . . . 11

One-Time Reinstatement Privilege. . . . . . . . . . . . . . . . . . . . . 15

Ownership Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Payment of Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Premium Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Purchase Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Schedule Page. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Separate Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Surrenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Full Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Partial Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Surrender Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Surrender Charge Exceptions. . . . . . . . . . . . . . . . . . . . . . . . 14

Ten Percent Free Withdrawal Privilege. . . . . . . . . . . . . . . . . . . 15

Tax Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Variable Annuity Payments. . . . . . . . . . . . . . . . . . . . . . . . . 19

Page 2

<PAGE>

[Sierra Advantage II]
issued by
American General Life Insurance Company

SCHEDULE PAGE

INITIAL PURCHASE PAYMENT: $5,000

MINIMUM ADDITIONAL PURCHASE PAYMENTS: $ 100

ADDITIONAL BENEFITS: NONE

MAXIMUM ASSET CHARGE FACTORS (Separate Account Only) ANNUAL RATE: 1.40%

MAXIMUM ANNUAL CONTRACT FEE: $ 35

TRANSFER CHARGE (After first 12 in a Contract Year): $ 25

ISSUE AGE: 35

ANNUITY COMMENCEMENT DATE: JANUARY 1, 2027

[INITIAL ALLOCATION:
<TABLE>
<CAPTION>
NET DOLLAR
AMOUNT OF
PERCENTAGE ALLOCATIONS
<S> <C> <C>
Capital Growth Portfolio 100% $ 5,000
Growth Portfolio xx% $ xxx
Balanced Portfolio xx% $ xxx
Value Portfolio xx% $ xxx
Income Portfolio xx% $ xxx
Global Money Fund xx% $ xxx
Fixed Account
1 Year Guarantee Period xx% $ xxx
DCA Fixed Account xx% $ xxx
---- --------
TOTAL ALLOCATIONS 100% $ 5,000]
</TABLE>

ANNUITANT: JOHN DOE CONTRACT NUMBER: 123456

CONTRACT OWNER: JOHN DOE DATE OF ISSUE: JANUARY 1, 1997

CONTRACT JURISDICTION: (STATE NAME)

Page 3

<PAGE>
DEFINITIONS

"WE", "OUR", "US", OR "COMPANY". American General Life Insurance Company.

YOU, YOUR, OWNER. The Owner of this Contract. The "Owner" is the person,
persons or entity entitled to the ownership rights stated in this Contract.
The Owner may designate a trustee or custodian of a retirement plan which
meets the requirements of Section 401, Section 408(c), or Section 408(k) of
the Internal Revenue Code to serve as legal owner of assets of a retirement
plan, but the term "Owner" as used herein, shall refer to the organization
entering into this Contract.

ACCOUNT. Any of the Divisions or the Fixed Account.

Account Value. The sum of the Fixed Account Value and the Separate Account
Value after deduction of any fees. The Fixed Account Value is the sum of Net
Purchase Payments and transfers into the Fixed Account, plus accumulated
interest, less any partial withdrawals and transfers out of the Fixed Account.
The Separate Account Value is the sum of the values of the Separate Account
Divisions. The value of a Separate Account Division is the value of a
Division's Accumulation Unit multiplied by the number of Accumulation Units in
that Division.

ACCUMULATION PERIOD. The period during which Net Purchase Payments are
applied.

ACCUMULATION UNIT. An accounting unit of measure used to calculate the value
of a Division of this Contract before annuity payments begin.

AGE. Age last birthday unless otherwise stated.

ANNUITANT. The person upon whose date of birth income payments are based. The
Annuitant's name is shown on Page 3.

ANNUITY UNIT. A unit of measurement to calculate variable annuity payments.

BENEFICIARY. The person entitled to receive benefits in the event the Owner or
Annuitant dies. If no named Beneficiary is living at the time any payment is
to be made, the Owner shall be the Beneficiary, or if the Owner is not living,
the Owner's estate shall be the Beneficiary.

CONTINGENT ANNUITANT. A person named by the Owner of a Non-Qualified contract
to become the Annuitant if: (1) the Annuitant dies before the Annuity
Commencement Date; and (2) the Contingent Annuitant is then living. A
Contingent Annuitant may not be named except at the time of application. Once
named, the choice may not be revoked or replaced. If a Contingent Annuitant
dies, a new Contingent Annuitant may not be named. After Annuity Payments
start, a Contingent Annuitant may not become the Annuitant.

CONTINGENT BENEFICIARY. A person named by the Owner to receive benefits in the
event a designated Beneficiary is not living at the time of the Owner's or
Annuitant's death.

CONTRACT YEAR. A period of 12 consecutive months beginning on the Date of
Issue or any anniversary thereof.

CONTRACT ANNIVERSARY. Each anniversary of the Date of Issue of this Contract.

DATE OF ISSUE. The date on which this Contract becomes effective as shown on
Page 3.

DIVISION. The subdivisions of the Separate Account which are used to determine
how the Owner's Account is allocated among the Variable Funds.

FIXED ANNUITY OPTION. An Annuity Option with payments which do not vary with
investment performance as to dollar amount.

GUARANTEE PERIOD. The period for which a Guaranteed Interest Rate is
credited.

Page 4

<PAGE>

GUARANTEED INTEREST RATE. The minimum rate we may use to credit interest on an
effective annual basis during any Guarantee Period.

HOME OFFICE. Our office at 2727-A Allen Parkway, Houston, Texas 77019;
1-713-831-3505; Mailing Address P.O. Box 1401, Houston, Texas 77251-1401.

ISSUE AGE. Age last birthday on the Date of Issue. (If the Date of Issue
occurs on the Annuitant's birthday, "last birthday" will mean the birthday
occurring on the Date of Issue).

NET ASSET VALUE PER SHARE. The net assets of a Variable Fund divided by the
number of shares in the Variable Fund.

NET PURCHASE PAYMENT. The gross amount of a Purchase Payment less any Premium
Taxes deducted at the time a Purchase Payment is made.

NON-QUALIFIED CONTRACT. A Contract that does not qualify for the special
federal income tax treatment applicable in connection with certain retirement
plans.

OWNER'S ACCOUNT. An account established for each Owner to which each Purchase
Payment is credited.

PAYOUT PERIOD. The period, starting with the Annuity Commencement Date, during
which Annuity Payments are made by the Company.

PREMIUM TAX. The amount of tax, if any, charged by a state or municipality on
Purchase Payments or Contract values.

PURCHASE PAYMENT. An amount paid to the Company as consideration for the
benefits described herein.

QUALIFIED CONTRACT. A Contract that is qualified for the special federal
income tax treatment applicable in connection with certain retirement plans.

SEPARATE ACCOUNT. A segregated investment account entitled "Separate Account
D" established by the Company to separate the assets funding the variable
benefits for the class of contracts to which this Contract belongs from the
other assets of the Company. That portion of the assets of the Separate
Account equal to the reserves and other contract liabilities with respect to
the Separate Account shall not be chargeable with liabilities arising out of
any other business we may conduct. Income, gains and losses, whether or not
realized, from assets allocable to the Separate Account, are credited to or
charged against such account without regard to our other income, gains or
losses.

UNIT VALUE. The value of: (1) an Accumulation Unit as described in the
"Division Accumulation Units" provision; or (2) an Annuity Unit as described
in the "Annuity Units" provision.

VALUATION DATE. Any day on which we are open for business except, with respect
to any Division, a day on which the related Variable Fund does not value its
shares.

VALUATION PERIOD. The period that starts at the close of regular trading on
the New York Stock Exchange on a Valuation Date and ends at the close of
regular trading on the Exchange on the next Valuation Date.

VARIABLE ANNUITY OPTION. An Annuity Option under which we promise to pay the
Annuitant or other properly-designated Payee one or more payments which vary
in amount in accordance with the net investment experience of the applicable
Divisions selected to measure the value of this Contract.

VARIABLE FUND. An individual investment fund or series in which a Division
invests.

WRITTEN, IN WRITING. A written request or notice in acceptable form and
content, which is signed and dated, and received at our Home Office. 97010

Page 5

<PAGE>

GENERAL PROVISIONS

ENTIRE CONTRACT This Contract, endorsements if any, and a copy of the
Application, if attached, is the entire Contract. All
statements made by the Contract Owner or Annuitant
will be deemed representations and not warranties. No
statement will be used to reduce a claim under this
Contract unless it is in writing and made a part of
this Contract.

NOT CONTESTABLE This Contract is not contestable.

GUARANTEES Subject to the Net Investment Factor provision of
this Contract, we guarantee that the dollar amount of
Variable Annuity Payments made during the lifetime of
the Payee(s) will not be adversely affected by our
actual mortality experience or by the actual expenses
incurred by us in excess of the expense deductions
provided for in this Contract. Settlement All
benefits under this Contract are payable from our
Home Office.

NONPARTICIPATING This Contract is nonparticipating and does not share
in our surplus or earnings.

CHANGE OF INVESTMENT Unless otherwise required by law or regulation, the
ADVISOR OR INVESTMENT investment advisor or any investment policy may not
POLICY be changed without our consent. If required, approval
of or change of any investment objective will be
filed with the Insurance Department of the state
where this Contract is delivered. You will be
notified of any material investment policy change
which has been approved. Notification of an
investment policy change will be given in advance to
those Owners who have the right to comment on or vote
on such change.

Any substitution of the underlying investments of any
Division will comply with all applicable requirements
of the Investment Company Act of 1940 and rules
thereunder.

RIGHTS RESERVED Upon notice to you, this Contract may be modified by
BY US us, but only if such modification is necessary to:

(1) Operate the Separate Account in any form
permitted under the Investment Company Act of
1940 or in any other form permit- ted by law;

(2) Transfer any assets in any Division to another
Division, or to one or more other separate
accounts, or to the Fixed Account;

(3) Add, combine or remo ve Divisions in the Separate
Account, or combine the Separate Account with
another separate account;

(4) Add, restrict or remove Guarantee Periods of the
Fixed Account;

(5) Make any new Division available to you on a basis
to be determined by us;

(6) Substitute for the shares held in any Division,
the shares of another Variable Fund or the shares
of another investment company or any other
investment permitted by law;

(7) Make any changes as required by the Internal
Revenue Code or by any other applicable law,
regulation or interpretation in order to continue
treatment of this Contract as an annuity; or

(8) Make any changes required to comply with rules of
any Variable Fund.

Page 6

<PAGE>

When required by law, we will obtain your approval of
changes and we will gain approval from any
appropriate regulatory authority.

CHANGING THE TERMS Any change in your Contract must be approved by one
OF YOUR CONTRACT of our officers. No agent has the authority to make
any changes or waive any of the terms of your
Contract.

TERMINATION This Contract will remain in force until surrendered
for its full value, or all annuity payments have been
made, or the death proceeds have been paid, except as
follows:

If the Owner's Account Value is less than $500, We
may cancel this Contract upon 60 days' notice to the
Owner. Such cancellation would be considered a full
surrender of this Contract.

If the value of any Separate Account Division (except
the Global Money Fund) falls below $500, we reserve
the right to transfer the remaining balance, without
charge, to the Global Money Fund.

PURCHASE PAYMENTS

MINIMUM PAYMENTS The minimum amounts acceptable as Purchase Payments
are shown on Page 3. We reserve the right to modify
these minimums or to refuse a Purchase Payment for
any reason.

ALLOCATION OF The initial allocation for Net Purchase Payments is
PURCHASE PAYMENTS shown on Page 3 of this Contract and will remain in
effect until changed by Written notice. The
percentage allocation for future Net Purchase
Payments may be changed at any time by Written
notice.

Changes in the allocation will be effective on the
date we receive the Owner's notice. The allocation
may be 100% to any available Division or Guarantee
Period, or may be divided among these options in
whole percentage points totaling 100%.

The initial Purchase Payment will be credited to the
Owner's Account not more than two Valuation Periods
after we receive it, together with all other required
documentation, in good order at the office designated
by the Company for the processing of initial Purchase
Payments. Subsequent Purchase Payments will be
credited as of the end of the Valuation Period in
which they are so received. We reserve the right to
limit the total number of Fixed Account Guarantee
Periods and Separate Account Divisions that may be
chosen during the life of the Contract.

PREMIUM TAXES When applicable, we will deduct an amount to cover
premium taxes. Such deduction will be made:

(1) From Purchase Payment(s) when received; or

(2) From the Account Value at the time annuity
payments are to commence; or

(3) From the amount of any partial withdrawal; or

(4) From proceeds payable upon termination of the
Contract for any other reason, including death of
the Annuitant or Owner, or surrender of the
Contract.

Page 7

<PAGE>

If premium tax is paid, the Company may reimburse itself for such tax when
deduction is being made under paragraphs 2, 3, or 4 above calculated by
multiplying the sum of Purchase Payments being withdrawn by the applicable
premium tax percentage.
OWNERSHIP PROVISIONS

EXERCISE OF CONTRACT This Contract belongs to the Owner, who is entitled
to exercise all Rights rights and privileges in
connection with this Contract. Where a Contract is
jointly owned, both Owners must join in any request
to exercise the rights or privileges of an Owner.

In any case, such rights and privileges can be
exercised without the consent of the Beneficiary
(other than an irrevocably designated Beneficiary) or
any other person. Such rights and privileges may be
exercised only during the lifetime of the Annuitant
and prior to the Annuity Commencement Date, except as
otherwise provided in this Contract.

Unless the Owner specifies otherwise, the Annuitant
will become the Payee on the Annuity Commencement
Date. If the Owner or the Annuitant (without a
surviving Contingent Annuitant) dies prior to the
Annuity Commencement Date, the Beneficiary will
become the Payee. Such Payees may thereafter exercise
such rights and privileges of ownership which
continue.

BENEFICIARY The Owner named the Beneficiary and any Contingent
Beneficiary when applying for this Contract. By
Written notice to us, a non-irrevocable Beneficiary
or Contingent Beneficiary may be changed by the Owner
prior to the Annuity Commencement Date or by the
Annuitant or other properly-designated Payee after
the Annuity Commencement Date.

CHANGE OF OWNERSHIP Ownership of a Qualified Contract may not be
transferred except to: (1) the Annuitant; (2) a
trustee or successor trustee of a pension or profit
sharing trust which is qualified under Section 401 of
the Internal Revenue Code; (3) the employer of the
Annuitant, provided that the Qualified Contract after
transfer is maintained under the terms of a
retirement plan qualified under Section 403(a) of the
Internal Revenue Code for the benefit of the
Annuitant; (4) the trustee of an individual
retirement account plan qualified under Section 408
of the Internal Revenue Code; or (5) as otherwise
permitted from time to time by laws and regulations
governing the retirement or deferred compensation
plans for which a Qualified Contract may be issued.
In no other case may a Qualified Contract be sold,
assigned, transferred, discounted or pledged as
collateral.

During the lifetime of the Annuitant and prior to the
Annuity Commencement Date, the Owner may change the
ownership of a Non-Qualified Contract.

A change of ownership will not be binding upon us
until we receive Written notification at our Home
Office. When such notification is so received, the
change will be effective as of the date of the signed
request for change, but the change will be without
prejudice to us on account of any payment made, or
any action taken by us prior to receiving the change,
or on account of any tax consequence.

Page 8

<PAGE>

DISTRIBUTION OF If an Owner (including the first to die in the case
DEATH PROCEEDS of joint Contract owners) under a Non-Qualified
UNDER NON-QUALIFIED Contract dies prior to the Annuitant and before the
CONTRACTS Annuity Commencement Date, the death proceeds must be
distributed to the Beneficiary either (1) within five
years after the date of death of the Owner, or (2)
over the life of or a period not greater than the
life or expected life of the Beneficiary, with
annuity payments beginning within one year after the
date of death of the Owner. The Beneficiary shall be
considered the designated beneficiary for the
purposes of Section 72(s) of the Internal Revenue
Code. In all cases, any such designated beneficiary
will not be entitled to exercise any rights
prohibited by applicable federal income tax law.

These mandatory distribution requirements will not
apply when the designated Beneficiary is the spouse
of the deceased Owner, if the spouse elects to
continue this Contract in the spouse's own name, as
Owner. When the deceased Owner was also the
Annuitant, the surviving spouse (if the surviving
spouse is the designated Beneficiary) may elect to be
named as both Owner and Annuitant and continue this
Contract.

If the Payee under a Non-Qualified Contract dies
after the Annuity Commencement Date and before all of
the payments under the Annuity Option have been
distributed, the remaining amount payable, if any,
must be distributed at least as rapidly as under the
method of distribution then in effect.

If the Owner prior to the Annuity Commencement Date,
or the Payee thereafter, is not a natural person,
then the foregoing distribution requirements shall
apply upon the death of the primary Annuitant within
the meaning of the Internal Revenue Code.

PERIODIC REPORTS We will send to each Owner, at least once during each
Contract Year, a statement showing the Owner's
Account Value as of a date not more than two months
prior to the date of mailing. We will also send such
statements as may be required by applicable state and
federal laws, rules and regulations.

OWNER'S ACCOUNT We will establish an Owner's Account for the Owner
under this Contract and will maintain such account
during the Accumulation Period. The Owner's Account
Value for any Valuation Period will be equal to the
Owner's Separate Account Value, if any, plus the
Owner's Fixed Account Value, if any, for that
Valuation Period.

FIXED ACCOUNT

FIXED ACCOUNT VALUE That portion of a Net Purchase Payment which is
allocated to the Fixed Account will be credited to
the Owner's Account and allocated to the Guarantee
Period(s) selected. The Fixed Account Value of an
Owner's Account for any Valuation Period is equal to
the sum of the values in each of the Guarantee
Periods credited to the Owner's account for such
Valuation Period.

The value in any one Guarantee Period on a Valuation
Date is the accumulated value of the Net Purchase
Payments, renewals or transfers allocated to the
Guarantee Period at the Guaranteed Interest Rate,
minus the accumulated value of surrenders and
transfers out of that Guarantee Period and Contract
Fee allocated to that Guarantee Period, at the
Guaranteed Interest Rate.

Page 9

<PAGE>

GUARANTEE PERIODS There will always be at least one Fixed Account
Guarantee Period. At any given time, additional
Guarantee Periods may be available for selection by
the Owner. Subject to availability, the Owner may
select one or more Guarantee Period(s). The Guarantee
Period(s) selected will determine the Guaranteed
Interest Rates(s). The Net Purchase Payment or the
portion thereof (or amount transferred in accordance
with the transfer privilege provision described
below) allocated to a particular Guarantee Period
will earn interest at the Guaranteed Interest Rate
during the Guarantee Period. Guarantee Periods begin
on the date as of which we credit the Owner's Account
Value to that Guarantee Period or, in the case of a
transfer, on the effective date of the transfer. The
Guarantee Period is the number of years we credit the
Guaranteed Interest Rate. The expiration date of any
Guarantee Period is the last day of the Guarantee
Period. Subsequent Guarantee Periods begin on the
first day following the expiration date. As a result
of Guarantee Period renewals, additional Purchase
Payments and transfers of portions of the Owner's
Account Value, Guarantee Periods of the same duration
may have different expiration dates and Guaranteed
Interest Rates.

We will notify the Owner in writing at least 30 and
no more than 60 days prior to the expiration date of
any Guarantee Period. A new Guarantee Period of the
same duration as the previous Guarantee Period will
begin automatically unless we receive Written notice
to the contrary from the Owner at least 3 Valuation
Dates prior to the end of such Guarantee Period. The
Owner may elect to change to another Guarantee Period
or Division which we offer at such time.

If the amount of an Owner's Account Value in a
Guarantee Period is less than $500 at the end of such
Guarantee Period, we reserve the right to transfer
such amount, without charge, to the Global Money Fund
of the Separate Account. However, we will transfer
such amount to another available Division at the
Owner's request.

GUARANTEED INTEREST We will periodically establish an applicable Rate
RATES Guaranteed Interest for each Guarantee Period we
offer. These rates will be guaranteed for the
duration of the respective Guarantee Periods. The
Guarantee Periods that we make available at any time
will be determined in our discretion. No Guaranteed
Interest Rate shall be less than an effective annual
rate of 3.0% per year.

SEPARATE ACCOUNT

DIVISIONS The Separate Account has several Divisions, each
investing in a corresponding Variable Fund. Net
Purchase Payments will be allocated to the Divisions
and the Fixed Account as shown on Page 3, unless the
Owner changes the allocation.

We will use the Net Purchase Payments and any
transferred amounts to purchase Variable Fund shares
applicable to the Divisions at their net asset value.
We will be the owner of all Variable Fund shares
purchased with the Net Purchase Payments or
transferred amounts. 97010

Page 10

<PAGE>

DIVISION Net Purchase Payments and transferred amounts
ACCUMULATION allocated to the Separate Account will be credited to
UNITS the Owner's Account in the form of Division
Accumulation Units. The number of Division
Accumulation Units will be determined by dividing the
amount allocated to a Division by the Division
Accumulation Unit value as of the end of the
Valuation Period as of which the transaction is
credited. The value of each Division Accumulation
Unit was arbitrarily set as of the date the Division
first purchased Variable Fund shares. Subsequent
values on any Valuation Date are equal to the
previous Division Accumulation Unit value times the
Net Investment Factor for the Valuation Period ending
on that Valuation Date.

NET INVESTMENT The Net Investment Factor is an index applied to
FACTOR measure the investment performance of a Division from
one Valuation Period to the next. The Net Investment
Factor may be greater or less than or equal to one;
therefore, the value of an Accumulation Unit may
increase, decrease or remain the same.

The Net Investment Factor for a Division is
determined by dividing (1) by (2), and then
subtracting (3) from the result, where:

(1) Is the sum of:

(a) The Net Asset Value Per Share of the
Variable Fund shares held in the Division,
determined at the end of the current
Valuation Period; plus

(b) The per share amount of any dividend or
capital gain distribu- tions made on the
Variable Fund shares held in the Division
during the current Valuation Period;

(2) Is the Net Asset Value Per Share of the Variable
Fund shares held in the Division, determined at
the beginning of the current Valuation Period;
and

(3) Is a factor representing the mortality risk,
expense risk, and admin- istrative expense
charge. We will determine the daily asset charge
factor annually, but in no event may it exceed
the Maximum Asset Charge Factor as specified on
Page 3.

SEPARATE ACCOUNT The Separate Account for any Valuation Period is the
total of the Value values in each Division credited
to the Owner's Account for such Valuation Period. The
value for each Division will be equal to:

(1) The number of Division Accumulation Units;
multiplied by

(2) The Division Accumulation Unit value for the
Valuation Period.

The Separate Account value will vary from Valuation
Date to Valuation Date reflecting the total value in
the Divisions.

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<PAGE>

TRANSFERS

TRANSFERS Transfers may be made at any time during the
Accumulation Period after the first 30 days following
the Date of Issue. A transfer will be effective at
the end of the Valuation Period in which we receive
the Owner's Written request for a transfer. Transfers
will be subject to the following restrictions:

(1) Prior to the Annuity Commencement Date, the Owner
may make up to 12 transfers each Contract Year
without charge.

(2) There will be a charge of $25.00 for each
transfer in excess of 12 in a Contract Year.

(3) Transfers under some asset management
arrangements approved by the Company may be
subject to the $25.00 charge and may count
towards the 12 free transfers.

(4) Not more than 25% of the Owner's Account Value
allocated to a Guarantee Period at its inception
may be transferred to the Variable Account during
any Contract Year. Transfers from a Guarantee
Period are made on a first in, first out basis.
The 25% limit does not apply to:

(a) Transfers within 15 days before or after the
end of the applicable Guarantee Period; or

(b) A renewal at the end of a Guarantee Period
to the same Guarantee Period.

(5) If a transfer would cause the Account Value in
any Division or Guarantee Period to fall below
$500, we reserve the right to also transfer the
remaining balance in that Division or Guarantee
Period in the same proportions as the transfer
request.

(6) We reserve the right to defer any transfer from
the Fixed Account to the Variable Divisions for
up to 6 months.

We reserve the right to restrict or terminate
transfers.

After the Annuity Commencement Date, the Owner may
make one transfer during any 180 day period; such
transfer is without charge. The Owner may not make
transfers from the fixed annuity account.

Page 12

<PAGE>

SURRENDERS

GENERAL SURRENDER The amount surrendered will normally be paid to the
PROVISIONS Owner within 5 Valuation Dates following our receipt
of:

(1) The Owner's Written request on a form acceptable
to us; and

(2) This Contract, if required. We reserve the right
to defer payment of surrenders from the Fixed
Account for up to 6 months from the date we
receive the request.

FULL SURRENDER At any time prior to the Annuity Commencement Date
and during the lifetime of the Annuitant, the Owner
may surrender this Contract by sending us a Written
request. The amount payable on surrender is:

(1) The Owner's Account Value at the end of the
Valuation Period in which we receive the Owner's
request on a form acceptable to us;

(2) Minus any applicable Surrender Charge;

(3) Minus any applicable Contract Fee; and

(4) Minus any applicable premium tax.

The amount payable upon surrender will not be less
than the amount required by state law.

Upon payment of the surrender amount, this Contract
will be terminated and the Company will have no
further obligation to the Owner.

All collateral assignees must consent to any
surrender or partial withdrawal. We may require that
this Contract be returned to our Home Office prior to
making payment.

PARTIAL WITHDRAWALS A portion of the Owner's Account Value may be
withdrawn at any time prior to the Annuity
Commencement Date. The Owner must send us a Written
request specifying the Divisions or Guarantee Periods
from which the Partial Withdrawal is to be made.
However, in cases where the Owner does not so
specify, or the withdrawal cannot be made in
accordance with the Owner's specification, we reserve
the right to implement the withdrawal pro rata from
each Division and Guarantee Period based on the
Owner's Account Value in each. Partial Withdrawals
will be made effective at the end of the Valuation
Period in which we receive the Written request.
Partial Withdrawals will be subject to the following
guidelines:

(1) The Partial Withdrawal amount must be at least
$100 or, if less, the Owner's entire Account
Value;

Page 13

<PAGE>

(2) We will surrender Division Accumulation Units
from the Separate Account or interests in a
Guarantee Period so that the total amount
withdrawn will be the sum of:

(a) The amount payable to the Owner;

(b) Plus any Surrender Charge and any applicable
premium tax;

(3) If a Partial Withdrawal would cause the Owner's
Account Value in any Division or Guarantee Period
(except the Global Money Fund) to fall below
$500, we reserve the right to transfer the
remaining balance without charge to the Global
Money Fund.

(4) If the Owner's Account Value is less than $500,
We may cancel this Contract upon 60 days' notice
to the Owner. Such cancellAtion would be
considered a full surrender of this Contract.

SURRENDER Except as noted under "Surrender Charge Exceptions,"
CHARGE a Surrender Charge will be applied to the amount of
FOR PARTIAL any Purchase Payment with- drawn during the first 7
WITHDRAWALS AND years after it was first credited, as follows:
FULL SURRENDERS
<TABLE>
<CAPTION>
SURRENDER CHARGE
YEAR OF AS A PERCENTAGE
PURCHASE PAYMENT OF PURCHASE
WITHDRAWAL PAYMENT WITHDRAWN
<S> <C> <C>
1st 7%
2nd 6%
3rd 5%
4th 5%
5th 4%
6th 3%
7th 2%
Thereafter 0%
</TABLE>

For purposes of computing the Surrender Charge, the
oldest Purchase Payments are deemed to be withdrawn
first, and before any amounts in excess of Purchase
Payments are withdrawn from an Owner's Account. The
following transactions will be considered as
withdrawals for purposes of computing the Surrender
Charge: total surrender, partial withdrawal,
commencement of an annuity payment option and
termination due to insufficient Owner Account Value.

SURRENDER CHARGE The Surrender Charge will not apply:
EXCEPTIONS
(1) To any amounts in excess of Purchase Payments
that are withdrawn from an Owner's Account; or

(2) To any amounts in excess of the amount permitted
by the 10% Free Withdrawal Privilege if such
amounts are required to be withdrawn to obtain or
retain favorable federal tax treatment; (The
granting of this exception is subject to our
approval);

(3) Upon the death of the Annuitant at any age during
the Payout Period;

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<PAGE>

(4) Upon the death of the Annuitant at any age during
the Accumulation Period if no Contingent
Annuitant survives;

(5) Upon the death of the Owner of a Non-Qualified
Contract, unless the Contract is being continued
under the special rule for a surviv- ing spouse
as defined under Internal Revenue Code Section
(72)(s);

(6) Upon selection of an annuity payment option over
a period of at least 10 years;

(7) Upon selection of an annuity payment option based
on life contingencies if life expectancy is at
least 10 years.

10% FREE WITHDRAWAL The Surrender Charge does not apply to that portion
of each with- Privilege drawal or a total surrender
in any Contract Year that does not exceed:

(1) Ten Percent (10%) of the amount of Purchase
Payments not previously withdrawn that have been
credited to this Contract for at least one year,
but not more than 7 years; less

(2) The amount of any previous withdrawals made
during such Contract Year.

For withdrawals under a systematic withdrawal plan,
Purchase Payments credited for 30 days or more are
eligible for the 10% Free Withdrawal Privilege.

If multiple withdrawals are made during a Contract
Year, the amount eligible for the free withdrawal
will be recalculated at the time of each Partial
Withdrawal. After the first Contract Year,
non-automatic and automatic withdrawals may be made
in the same Contract Year subject to the 10%
limitation.

A free withdrawal pursuant to any of the foregoing
Surrender Charge Exceptions is not deemed a
withdrawal of Purchase Payments except for purposes
of computing the 10% free withdrawal privilege.
However the Surrender Charge will never be applied to
an amount greater than the Owner's Account Value.

CONTRACT FEE

MANNER OF An annual Contract Fee not to exceed $35.00 will be
DEDUCTING deducted at the end of each Contract Year prior to
the Annuity Commencement Date. Unless paid directly,
the fee will be allocated among the Guarantee Periods
and Divisions in proportion to the Owner's Account
Value in each. The entire fee for the year will be
deducted from the proceeds of any full surrender of
this Contract.

TAX CHARGE

RIGHT TO We reserve the right to impose additional charges or
IMPOSE establish reserves for any federal or local taxes
incurred or that may be incurred by us, and that may
be deemed attributable to the Contracts.

ONE-TIME REINSTATEMENT PRIVILEGE

REINSTATEMENT OF If the Owner has made a full surrender of the Owner's
ACCOUNT VALUE Account Value, the Owner may reinstate the Contract,
if we receive the Written reinstatement request,
together with a return of the net surrender

Page 15

<PAGE>

proceeds, not more than 30 days after the date as of
which the surrender was made. In such a case, the
Owner's Account Value will be restored to what it was
at the time of the surrender (less any annual
Contract maintenance charge that has since become
payable), and any subsequent Surrender Charge will be
computed as if the Contract had been issued at the
date of reinstatement in consideration of a Purchase
Payment in the amount of such net surrender proceeds.
This one-time reinstatement privilege is available
only if the Owner's Account Value following the
reinstatement would be at least $500. Unless the
Owner requests otherwise in Writing, the Account
Value following the reinstatement will be allocated
among the Divisions and Guarantee Periods in the same
proportions as those prior to surrender.

DEATH PROCEEDS

DEATH PROCEEDS If the Annuitant dies before the Annuity Commencement
COMMENCEMENT DATE Date, and is survived by a Contingent Annuitant, the
BEFORE THE ANNUITY Contract will be continued with the Contingent
Annuitant being named the Annuitant. If this is a
Non-Qualified Contract, this Contract may qualify for
continuation under the "Distribution of Death
Proceeds under Non-Qualified Contracts" provision.
Otherwise, we will pay the death proceeds to the
Beneficiary if one of the following dies prior to the
Annuity Commencement Date:

(1) The Annuitant (provided that no Contingent
Annuitant survives); or

(2) The Owner of a Non-Qualified Contract (including
the first to die in the case of Joint Owners). If
the Annuitant or such Owner dies, the amount of
the death proceeds will be the greatest of the
following amounts, less any applicable Premium
Tax: (1) The sum of all Net Purchase Payments
less any prior Partial Withdrawals; (2) The
Owner's Account Value as of the end of the
Valuation Period in which we receive proof of the
Annuitant's or such Owner's death and a Written
request from the Beneficiary as to the form of
payment; or

(3) The Highest Anniversary Value prior to the date
of death, deter- mined as follows:

(a) We will calculate the Account Values at the
end of each of the past Contract
Anniversaries that occurred prior to the de-
ceased's 81st birthday;

(b) Each of the Account Values will be increased
by the amount of Net Purchase Payments made
since the end of such Contract Years;

Page 16

<PAGE>

The Highest Anniversary Value will be an
amount equal to the highest of such values.
The death proceeds will not be less than the
amount payable on a full surrender at the
date used to value the death benefit.

The death proceeds will become payable when we
receive:

(1) Proof of the Owner's or Annuitant's Death; and

(2) A Written request from the Beneficiary for either
a single sum or payment under an Annuity Option.

If the Annuitant dies, and a Contingent Annuitant was
named but predeceased the Annuitant, we will require
proof of the Contingent Annuitant's death in addition
to proof of the death of the Annuitant.

We will pay a single sum to the Beneficiary unless an
Annuity Option is chosen within 60 days after the
death of the Owner or Annuitant.

DEATH PROCEEDS ON If the Annuitant dies on or after the Annuity
OR AFTER THE Commencement Date, the Beneficiary will receive the
ANNUITY death proceeds, if any, as provided by the annuity
COMMENCEMENT DATE form in effect.

PROOF OF DEATH We accept any of the following as proof of the
Annuitant's or Owner's death:

(1) A copy of a certified death certificate;

(2) A copy of a certified decree of a court of
competent jurisdiction as to the finding of
death;

(3) A written statement by a medical doctor who
attended the deceased at the time of death; or

(4) Any other proof satisfactory to us.

PAYMENT OF BENEFITS

APPLICATION OF Unless directed otherwise, we will apply the Fixed
ACCOUNT VALUE Account Value to provide a Fixed Annuity, and the
Separate Account Value to provide a Variable Annuity.
The Owner must tell us in writing at least 30 days
prior to the Annuity Commencement Date if Fixed and
Separate Account values are to be applied in
different proportions. Transfers and partial
withdrawals will be permitted within the 30-day
period.

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<PAGE>

Annuity The Annuity Commencement Date (Annuity Date) is shown
COMMENCEMENT DATE on page 3. The Owner of a qualified Contract may be
required to receive distri- butions after the
Annuitant's 70th birthday to comply with certain
federal tax requirements. The Annuity Date may be
changed by Written notice from the Owner, subject to
our approval.

OPTIONS AVAILABLE The Owner may elect to have annuity payments made
TO A CONTRACT beginning on the Annuity Commencement Date under any
OWNER one of the Annuity Options described in this
Contract. We will notify the Owner 60 to 90 days
prior to the scheduled Annuity Date that the Contract
is scheduled to mature, and request that an Annuity
Option be selected. If the Owner has not selected an
Annuity Option ten days prior to the Annuity
Commencement Date, we will proceed as follows:

If the scheduled Annuity Commencement Date is any
date prior to the Annuitant's 100th birthday, we will
extend the Annuity Commencement Date to the
Annuitant's 100th birthday.

If the scheduled Annuity Commencement Date is the
Annuitant's 100th birthday, the Account Value less
any applicable charges and premium taxes will be paid
in one sum to the Owner.

OPTIONS AVAILABLE The Owner may elect, in lieu of payment in one sum,
TO BENEFICIARY that any amount or part thereof due under this
Contract be applied under any of the options
described below. Within 60 days after the death of
the Annuitant or Owner, the Beneficiary may make such
election if the Owner has not done so. In such case,
the Beneficiary thereafter shall have all the rights
and options of the Owner.

The first annuity payment under any option shall be
made on the first day of the second month after
approval of the claim for settlement. Subsequent
payments shall be made periodically in accordance
with the manner of payment elected.

PAYMENT CONTRACT At such time as one of these options becomes
effective, this Contract shall be surrendered to the
Company in exchange for a payment contract providing
for the option elected.

FIXED ANNUITY Fixed Annuity Payments start on the Annuity
PAYMENTS Commencement Date. The amount of the first monthly
payment for the annuity selected will be at least as
favorable as that produced by the applicable annuity
tables of this Contract for each $1,000 applied as of
the end of the Valuation Period that contains the
tenth day prior to the Annuity Commencement Date.

The dollar amount of any payments after the first
payment is specified during the entire period of
annuity payments, according to the provisions of the
Annuity Option selected.

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<PAGE>

VARIABLE ANNUITY PAYMENTS

ANNUITY UNITS We convert the Division Accumulation Units into
Division Annuity Units at the values determined at
the end of the Valuation Period which contains the
tenth day prior to the Annuity Commencement Date. The
number of Division Annuity Units is obtained by
dividing the first monthly payment by the Division
Annuity Unit Value determined at the end of the above
Valuation Period (see following paragraph). The first
monthly payment is determined by applying the dollar
value of the Division Accumulation Units to the
applicable Annuity Table. The number of Division
Annuity Units remains constant as long as an annuity
remains in force and allocation among the Divisions
has not changed.

Each Division Annuity Unit Value was arbitrarily set
when the Division first converted Division
Accumulation Units into Division Annuity Units.
Subsequent values on any Valuation Date are equal to
the previous Division Annuity Unit Value times the
Net Investment Factor for that Division for the
Valuation Period ending on that Valuation Date, with
an offset for the 3 1/2% assumed interest rate used
in the annuity tables of this Contract.

Variable Annuity Payments start on the Annuity
Commencement Date. Payments will vary in amount and
are determined at the end of the Valuation Period
that contains the tenth day prior to each payment.

If the monthly payment under the annuity form
selected is based on a single Division, the monthly
payment is found by multiplying the Division Annuity
Unit Value on said date by the number of Division
Annuity Units. If the monthly payment under the
annuity form selected is based upon more than one
Division, the above procedure is repeated for each
applicable Division. The sum of these payments is the
Variable Annuity Payment.

We guarantee that the amount of each payment will not
be affected by variations in expense or mortality
experience.

ANNUITY OPTIONS FIRST OPTION - LIFE ANNUITY - An annuity payable
monthly during the lifetime of the Annuitant.

SECOND OPTION - LIFE ANNUITY WITH 120, 180 OR 240
MONTHLY PAYMENTS GUARANTEED - An annuity payable
monthly during the lifetime of the Annuitant,
including the guarantee that if, at the death of the
Annuitant, payments have been made for less than 120
months, 180 months or 240 months (as selected),
payments shall be continued during the remainder of
the selected period.

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<PAGE>

THIRD OPTION - JOINT AND LAST SURVIVOR LIFE ANNUITY -
An annuity payable monthly during the joint lifetime
of the Annuitant, and a secondary Annuitant, and
thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the
death of the survivor.

FOURTH OPTION - PAYMENTS FOR A DESIGNATED PERIOD - An
amount payable monthly for the number of years
selected which may be from 5 to 40 years. If this
option is selected on a variable basis, the number of
years may not exceed the life expectancy of the
Annuitant or other properly-designated Payee.

FIFTH OPTION - PAYMENTS OF A SPECIFIC DOLLAR AMOUNT -
The amount due may be paid in equal monthly
installments of a designated dollar amount (not less
than $125 nor more than $200 per annum per $1,000 of
the original amount due) until the remaining balance
is less than the amount of one installment. Payments
under this option are available on a fixed basis
only. To determine the remaining balance at the end
of any month, such balance at the end of the previous
month is decreased by the amount of any installment
paid during the month and the result will be
accumulated at an interest rate not less than 3.5%
compounded annually. If the remaining balance at any
time is less than the amount of one installment, such
balance will be paid and will be the final payment
under the option.

In lieu of monthly payments, payments may be elected
on a quarterly, semi-annual or annual basis, in which
cases the amount of each annuity payment will be
determined on a basis consistent with that described
in this Contract for monthly payments.

No election of any Annuity Option may be made in the
case where a Fixed or Variable Annuity is elected,
unless a minimum initial annuity payment of $100 will
be provided. No election of any Annuity Option may be
made in the case where a combination of a Fixed and a
Variable Annuity is elected, unless a minimum initial
annuity payment of $50 on each basis will be
provided. If the initial annuity payment does not
meet the minimum amount required for the Annuity
Option elected, the Company will provide a less
frequent payment schedule. If the minimum is still
not met, the Company will make a lump-sum payment of
the Account Value (less any Surrender Charge,
uncollected annual Maintenance Charge and applicable
premium tax) as of the date of this determination to
the Annuitant or other properly-designated Payee.

If the age of the Annuitant has been misstated to us,
any amount payable will be that which would have been
payable had the misstatement not occurred. We will
deduct any overpayment from the next payment or
payments due and add any underpayments to the next
payment due. Interest at an effective annual rate of
3.5% will be added to any such adjustment.

ANNUITY TABLES The tables that follow show the dollar amount of the
first monthly payment for each $1,000 applied under
the options. The tables are based on the 1983a Male
or Female Tables, adjusted by projection scale G for
9 years, with unisex rates based on 60% female and
40%

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<PAGE>

male, and interest at the rate of 3 1/2% per year.
Under the First or Second Options, the amount of each
payment will depend upon the Annuitant's adjusted age
at the time the first payment is due. Under the Third
Option, the amount of each payment will depend upon
both Annuitant's adjusted ages at the time the first
payment is due.

In using the table of annuity payment rates, the ages
of the Annuitants must be reduced by one year for
Annuity Commencement Dates occurring during the
decade 2000-2009, reduced two years for Annuity
Commencement Dates occurring during the decade 2010-
2019, and reduced an additional year for each decade
that follows. The age 70 rate is also used for ages
above 70.

ALTERNATE AMOUNT If a fixed life income option is elected, the Owner
OF INSTALLMENTS (or, if the Owner has not elected a payment option,
UNDER FIXED LIFE the Beneficiary) may elect life income payments equal
INCOME OPTIONS to those provided by those fixed single premium
immediate annuity option rates in use by the Company
when annuity payments begin.

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<PAGE>

ANNUITY TABLES
AMOUNT OF MONTHLY PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE

Options 1 and 2 - Life Annuities

-----Monthly Payments Guaranteed-----
<TABLE>
<CAPTION>
Adjusted Unisex
Age Option 1 Option 2 Option 2 Option 2
None 120 180 240
<S> <C> <C> <C> <C>
50 4.18 4.15 4.12 4.07
51 4.24 4.21 4.18 4.12
52 4.31 4.28 4.24 4.17
53 4.38 4.34 4.30 4.23
54 4.45 4.41 4.36 4.28
55 4.53 4.48 4.43 4.34
56 4.61 4.56 4.50 4.40
57 4.70 4.64 4.57 4.46
58 4.79 4.73 4.65 4.52
59 4.89 4.82 4.72 4.59
60 5.00 4.91 4.81 4.65
61 5.11 5.02 4.89 4.71
62 5.23 5.12 4.98 4.78
63 5.36 5.23 5.07 4.85
64 5.49 5.35 5.17 4.91
65 5.64 5.48 5.26 4.98
66 5.80 5.61 5.36 5.04
67 5.96 5.74 5.46 5.10
68 6.14 5.88 5.57 5.16
69 6.34 6.03 5.67 5.21
70 and above 6.54 6.19 5.77 5.27
</TABLE>
Option 3 - Joint and Last Survivor Life Annuity
<TABLE>
Adjusted Age Adjusted Age of Secondary Annuitant
of Annuitant
<CAPTION>
Unisex 50 55 60 65 70
<S> <C> <C> <C> <C> <C>
50 3.75 3.85 3.94 4.01 4.07
55 3.85 4.00 4.13 4.24 4.33
60 3.94 4.13 4.32 4.49 4.65
65 4.01 4.24 4.49 4.75 5.00
70 4.07 4.33 4.65 5.00 5.36
</TABLE>
Option 4 - Payments for a Designated Period
<TABLE>
<CAPTION>
Years of Amount of Monthly Years Amount of Monthly
Payment Payment Payment Payment
<S> <C> <C> <C>

5 $18.12 23 $5.24
6 15.35 24 5.09
7 13.38 25 4.96
8 11.90 26 4.84
9 10.75 27 4.73
10 9.83 28 4.63
11 9.09 29 4.53
12 8.46 30 4.45
13 7.94 31 4.37
14 7.49 32 4.29
15 7.10 33 4.22
16 6.76 34 4.15
17 6.47 35 4.09
18 6.20 36 4.03
19 5.97 37 3.98
20 5.75 38 3.92
21 5.56 39 3.88
22 5.39 40 3.83
</TABLE>

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<PAGE>

AMERICAN GENERAL LIFE
INSURANCE COMPANY

This is a FLEXIBLE PAYMENT VARIABLE and FIXED INDIVIDUAL DEFERRED ANNUITY
CONTRACT. NONPARTICIPATING -- NOT ELIGIBLE FOR DIVIDENDS.

For Information, Service or to make a Complaint
Contact your Registered Representative,
or the Annuity Administration Department

American General Life
Insurance Company
2727-A Allen Parkway
P.O. Box 1401
Houston, Texas 77251-1401
(713) 831-3505

[American General Logo]
A STOCK COMPANY
---------------------------------------------
A Subsidiary of American General Corporation
---------------------------------------------

EXHIBIT 4(f)(2)