<PAGE>
AMERICAN GENERAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT D
GENERATIONS(TM)
FLEXIBLE PAYMENT VARIABLE AND FIXED INDIVIDUAL DEFERRED ANNUITY CONTRACTS
SUPPLEMENT DATED OCTOBER 2, 1998
TO
PROSPECTUS DATED MAY 1, 1998
AS SUPPLEMENTED AUGUST 26, 1998
Effective October 2, 1998, all American General Life Insurance Company Separate
Account D, Generations(TM) Flexible Payment Variable and Fixed Individual
Deferred Annuity Contracts will be changed to reflect a 15% instead of 10% free
withdrawal privilege. This change of the 10% free withdrawal privilege to a 15%
free withdrawal privilege is subject to applicable state insurance department
approvals.
ON PAGE 31, PLEASE DELETE THE THREE FULL PARAGRAPHS IMMEDIATELY PRECEDING
THE SECTION ENTITLED "TRANSFER CHARGES," AND INSERT IN THEIR PLACE THE
FOLLOWING:
The following applies to Contracts issued prior to October 2, 1998:
. 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previously been withdrawn and (b) have been credited to the Contract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. If multiple withdrawals are made during a
Contract Year, the amount eligible for the free withdrawal will be
recalculated at the time of each withdrawal. After the first Contract
Year, non-automatic and automatic withdrawals may be made in the same
Contract Year subject to the 10% limitation. For withdrawals under a
systematic withdrawal plan, Purchase Payments credited for 30 days or
more are eligible for the 10% free withdrawal.
. The Surrender Charge will not apply to any amounts withdrawn which are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withdrawn to obtain or retain favorable tax treatment. For example,
under certain circumstances the income and estate tax benefits of a
charitable remainder trust may be available only if assets are
withdrawn from a Contract funding such trust more rapidly than the 10%
free withdrawal privilege would permit. 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 described in
the preceding paragraph. A penalty tax may be imposed on
distributions if the recipient is under age 59 1/2. (See "Penalty Tax
on Premature Distributions.")
<PAGE>
The following applies to Contracts issued on or after October 2, 1998:
. The Surrender Charge does NOT apply to the portion of your first
withdrawal or total surrender in any Contract Year that does not
exceed 15% 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. If multiple withdrawals are made during a
Contract Year, the amount eligible for the free withdrawal will be
recalculated at the time of each withdrawal. After the first Contract
Year, non-automatic and automatic withdrawals may be made in the same
Contract Year subject to the 15% limitation. For withdrawals under a
systematic withdrawal plan, Purchase Payments credited for 30 days or
more are eligible for the 15% free withdrawal.
. The Surrender Charge will not apply to any amounts withdrawn which are
in excess of the amount permitted by the 15% free withdrawal
privilege, described above, if such amounts are required to be
withdrawn to obtain or retain favorable tax treatment. For example,
under certain circumstances the income and estate tax benefits of a
charitable remainder trust may be available only if assets are
withdrawn from a Contract funding such trust more rapidly than the 15%
free withdrawal privilege would permit. 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 15% free withdrawal described in
the preceding paragraph. A penalty tax may be imposed on
distributions if the recipient is under age 59 1/2. (See "Penalty Tax
on Premature Distributions.")
On all Contracts purchased on or after October 2, 1998, and upon receipt of
applicable state insurance department approvals, we will, as required (i) offer
Owners a new Contract which reflects the 15% free withdrawal privilege, or (ii)
issue an amendment to the Owner's existing Contract which reflects the 15% free
withdrawal privilege.
All capitalized terms not defined in this Supplement have the same meaning as
stated in the Prospectus.
