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AMERICAN GENERAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT D
SELECT RESERVE(SM)
COMBINATION FIXED AND VARIABLE DEFERRED ANNUITY
CONTRACTS
SUPPLEMENT DATED DECEMBER 28, 1998
TO
PROSPECTUS DATED MAY 1, 1998
AS SUPPLEMENTED AUGUST 28, 1998
Effective December 28, 1998, American General Life Insurance Company ("AGL") is
amending the charges to Separate Account D described on page 28 of the
prospectus, and the distribution of the Select Reserve Contracts described on
page 36 of the prospectus. The purpose for amending the prospectus is to
describe reduced charges to the Separate Account and to delete the arrangement
with Independent Advantage Financial and Insurance Services, Inc. ("IAF"), since
IAF is no longer an affiliate of AGL and this arrangement is no longer in place.
CHANGES WITH RESPECT TO
CHARGES TO SEPARATE ACCOUNT D
ON PAGE 28 OF THE PROSPECTUS, THE ENTIRE SECTION UNDER "CHARGE TO SEPARATE
ACCOUNT D" IS DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
CHARGE TO THE SEPARATE ACCOUNT
We assess Separate Account assets a daily charge at an annualized rate of 0.40%
(which we may change, but which will never exceed 0.66%) of the average daily
net asset value of the Separate Account attributable to the Contracts. This
charge (1) offsets administrative expenses and (2) compensates us for assuming
mortality and expense risks under the Contracts. The 0.40% charge divides into
.04% for administrative expenses and 0.36% for the assumption of mortality and
expense risks.
We do not expect to earn a profit on that portion of the charge that is for
administrative expenses. However, we do expect to derive a profit from the
portion that is for the assumption of mortality and expense risks. There is no
necessary relationship between the amount of administrative charges deducted for
a given Contract and the amount of expenses actually attributable to that
Contract.
In assuming the mortality risk, we incur the risks that
.our actuarial estimate of mortality rates may prove erroneous,
.Annuitants will live longer than expected, and
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.more Owners or Annuitants than expected will die at a time when the
death benefit we guarantee is higher than the net surrender value of
their interests in the Contracts.
In assuming the expense risk, we incur the risk that the revenues from the
expense charges under the Contracts (charges that we guarantee will not
increase) will not cover our expense of administering the Contracts.
CHANGES WITH RESPECT TO
DISTRIBUTION ARRANGEMENTS
ON PAGE 36 OF THE PROSPECTUS, THE ENTIRE SECTION UNDER "DISTRIBUTION
ARRANGEMENTS" IS DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
DISTRIBUTION ARRANGEMENTS
Individuals who sell the Contracts will be licensed by state insurance
authorities as agents of AGL. The individuals will also be registered
representatives of (1) American General Securities Incorporated ("AGSI"), the
principal underwriter of the Contracts or (2) other broker-dealer firms.
However, some individuals may be representatives of firms that are exempt from
broker-dealer regulation. AGSI and any non-exempt 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. AGSI's principal business address is
2727 Allen Parkway, Houston, Texas 77019-2191. AGL offers the Contracts on a
continuous basis.
AGL does not pay any compensation for distribution of the Contracts.
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