<PAGE>
AMERICAN GENERAL LIFE INSURANCE COMPANY ("AGL")
SEPARATE ACCOUNT D
GENERATIONS(R)
FLEXIBLE PAYMENT VARIABLE AND FIXED INDIVIDUAL DEFERRED
ANNUITY CONTRACTS
SUPPLEMENT DATED SEPTEMBER 25, 2000
TO
PROSPECTUS DATED MAY 1, 2000
AS SUPPLEMENTED AUGUST 1, 2000
This supplement explains two issues that impact your Generations Variable
Annuity Contract. The first issue discusses the Asian Equity Portfolio
liquidation and the second issue discusses the Morgan Stanley Real Estate
Securities Portfolio merger.
ISSUE 1. Morgan Stanley Asset Management, adviser to the Asian Equity
Portfolio, a Series of The Universal Institutional Funds, Inc., and the
underlying investment option for the Asian Equity Division, has informed AGL
that it intends to liquidate the Asian Equity Portfolio in 2001. Accordingly,
AGL has decided to take the following steps:
. As of the date of this supplement, the Asian Equity Division, funded by
the Asian Equity Portfolio, is no longer available to new Contract Owners.
. We intend to file a substitution application with the Securities and
Exchange Commission that will allow us to move all of the assets that
remain in the Asian Equity Division, on May 1, 2001, into the Money Market
Division. If you had any of your Account Value in the Asian Equity
Division on that date, you will then be allowed to transfer your new
Account Value in the Money Market Division to any other available Division
in your Generations Contract, without having such transfer(s) incur a $25
Transfer Charge, or count against the 12 free transfers which you are
allowed each Contract Year.
ISSUE 2. Effective September 25, 2000, the Morgan Stanley Real Estate
Securities Portfolio, a Series of the Van Kampen Life Investment Trust, was
replaced by the U.S. Real Estate Portfolio, a Series of The Universal
Institutional Funds, Inc., as the underlying investment option for the Morgan
Stanley Real Estate Securities Division. On this date, all of the assets and
liabilities of the Morgan Stanley Real Estate Securities Portfolio were
automatically allocated to the U.S. Real Estate Portfolio. Additionally, the
Morgan Stanley Real Estate Securities Division was renamed the U.S. Real Estate
Division.
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Please note the following Generations Contract Prospectus changes:
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. Except on pages 8, 9 and 15, replace all references to the Morgan Stanley
Real Estate Securities Portfolio and the Morgan Stanley Real Estate
Securities Division, with the U.S. Real Estate Portfolio and the U.S. Real
Estate Division, respectively.
. Please add the following sentence under the list of Portfolios on Page 1:
Beginning on September 25, 2000, the Asian Equity Division, funded by the Asian
Equity Portfolio, is no longer available to new Contract Owners.
. Please delete all of the information on page 8 and replace with the
following:
THE SERIES' ANNUAL EXPENSES /1/, /5/ (as a percentage of average net assets)
<TABLE>
<CAPTION>
Management Other Annual
Fees After Expenses Expenses
Expense After Expense After Expense
Reimbursement Reimbursement Reimbursement
------------------- --------------------- --------------------
<S> <C> <C> <C>
Domestic Income /2/ 0.01% 0.60% 0.61%
Emerging Growth 0.67% 0.18% 0.85%
Enterprise 0.48% 0.12% 0.60%
Government 0.36% 0.24% 0.60%
Growth and Income 0.43% 0.32% 0.75%
Money Market /3/ 0.19% 0.43% 0.62%
Strategic Stock 0.24% 0.41% 0.65%
Asian Equity /4/ 0.00% 1.27% 1.27%
Emerging Markets Equity 0.42% 1.37% 1.79%
Equity Growth 0.29% 0.56% 0.85%
Global Equity 0.47% 0.68% 1.15%
International Magnum 0.29% 0.87% 1.16%
U.S. Real Estate 0.00% 1.10% 1.10%
Fixed Income 0.14% 0.56% 0.70%
High Yield 0.19% 0.61% 0.80%
Mid Cap Value 0.43% 0.62% 1.05%
Value 0.18% 0.67% 0.85%
</TABLE>
------------------
/1/ The Series' advisers have entered into administrative services agreements
with AGL. The advisers pay fees to AGL for these services. The fees do not
have a direct relationship to the Series' Annual Expenses. (See "Services
Agreements.")
/2/ The ratio of expenses to average net assets do not reflect credits earned on
overnight cash balances. If these credits were reflected as a reduction of
expenses, the ratios would decrease by .01% for the year ended December 31,
1999.
/3/ The ratio of expenses to average net assets do not reflect credits earned on
overnight cash balances. If these credits were reflected as a reduction of
expenses, the ratios would decrease by .02% for the year ended December 31,
1999.
/4/ Beginning on September 25, 2000, the Asian Equity Division, funded by the
Asian Equity Portfolio, is no longer available to new Contract Owners.
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/5/ Management fees and other expenses would have been the percentages shown in
the following table without certain voluntary expense reimbursements from
the investment adviser.
<TABLE>
<CAPTION>
Management Other Total Annual
Fees Expenses Expenses
------------------- --------------------- ---------------------
<S> <C> <C> <C>
Domestic Income 0.50% 0.60% 1.10%
Emerging Growth 0.70% 0.18% 0.88%
Enterprise 0.50% 0.12% 0.62%
Government 0.50% 0.24% 0.74%
Growth and Income 0.60% 0.32% 0.92%
Money Market 0.50% 0.43% 0.93%
Strategic Stock 0.50% 0.41% 0.91%
Asian Equity 0.80% 2.23% 3.03%
Emerging Markets Equity 1.25% 1.37% 2.62%
Equity Growth 0.55% 0.56% 1.11%
Global Equity 0.80% 0.68% 1.48%
International Magnum 0.80% 0.87% 1.67%
U.S. Real Estate 0.80% 1,10% 1.90%
Fixed Income 0.40% 0.56% 0.96%
High Yield 0.50% 0.61% 1.11%
Mid Cap Value 0.75% 0.62% 1.37%
Value 0.55% 0.67% 1.22%
</TABLE>
. Please delete all of the information on page 9 and replace with the
following:
Example The following expenses would apply to a $1,000 investment at the end of
the applicable time period, if you surrender your Contract (or if you annuitize
under circumstances where you owe a surrender charge) /1/, and if you assume a
5% annual return on assets:
<TABLE>
<CAPTION>
If all amounts are invested
in one of the following Series 1 year 3 years 5 years 10 years
------------------------------ -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Domestic Income $72 $108 $146 $240
Emerging Growth $75 $115 $158 $265
Enterprise $72 $107 $145 $239
Government $72 $107 $145 $239
Growth and Income $74 $112 $153 $255
Money Market $72 $108 $146 $241
Strategic Stock $73 $109 $148 $245
Asian Equity $79 $128 $179 $307
Emerging Markets Equity $84 $143 $204 $356
Equity Growth $75 $115 $158 $265
Global Equity $78 $124 $173 $295
International Magnum $78 $124 $174 $296
U.S. Real Estate $77 $123 $171 $290
Fixed Income $73 $110 $150 $250
High Yield $74 $113 $156 $260
Mid Cap Value $77 $121 $168 $285
Value $75 $115 $158 $265
</TABLE>
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Example The following expenses would apply to a $1,000 investment at the end of
the applicable time period, if you do not surrender your Contract (or if you
annuitize under circumstances where a surrender charge is not payable) /1/, and
if you assume a 5% annual return on assets:
<TABLE>
<CAPTION>
If all amounts are invested
in one of the following Series 1 year 3 years 5 years 10 years
------------------------------ -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Domestic Income $21 $ 65 $112 $240
Emerging Growth $24 $ 73 $124 $265
Enterprise $21 $ 65 $111 $239
Government $21 $ 65 $111 $239
Growth and Income $23 $ 69 $119 $255
Money Market $21 $ 66 $112 $241
Strategic Stock $22 $ 66 $114 $245
Asian Equity $28 $ 85 $145 $307
Emerging Markets Equity $33 $100 $170 $356
Equity Growth $24 $ 73 $124 $265
Global Equity $27 $ 82 $139 $295
International Magnum $27 $ 82 $140 $296
U.S. Real Estate $26 $ 80 $137 $290
Fixed Income $22 $ 68 $116 $250
High Yield $23 $ 71 $122 $260
Mid Cap Value $26 $ 79 $134 $285
Value $24 $ 73 $124 $265
</TABLE>
/1/ See "Surrender Charge" for a description of the circumstances when you may
be required to pay the Surrender Charge upon annuitization.
. Please delete all of the information on page 15 and replace with the
following:
<TABLE>
Accumulation Accumulation Accumulation Accumulation
Unit Values Unit Values Unit Values Unit Values
(Beginning of at at at
Division Period) /1/ 12/31/97 12/31/98 12/31/99
-------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Domestic Income $ 8.951759 $ 9.781081 $10.315892 $ 9.958590
Emerging Growth $ 7.012841 $ 7.942509 $10.774584 $21.717019
Enterprise $14.101272 $17.240471 $21.251692 $26.375512
Government $ 8.702150 $ 9.402347 $10.069069 $ 9.596172
Growth and Income $ 4.940321 $ 5.889714 $ 6.947234 $ 7.741113
Money Market $ 7.771505 $ 8.010579 $ 8.297154 $ 8.562230
Strategic Stock $ 5.000000 $ 5.113696 $ 5.874906 $ 5.766543
Asian Equity $ 5.227120 $ 2.866335 $ 2.644425 $ 4.689485
Emerging Markets Equity $ 5.055192 $ 4.592849 $ 3.434261 $ 6.627577
Equity Growth $ 4.960272 $ 6.241285 $ 7.341937 $10.096795
Global Equity $ 4.982000 $ 5.905700 $ 6.607712 $ 6.783431
International Magnum $ 5.061205 $ 5.318456 $ 5.715332 $ 7.056344
U.S. Real Estate /2/ $ 7.469787 $ 8.930383 $ 7.783444 $ 7.416938
Fixed Income $ 5.003078 $ 5.408434 $ 5.754670 $ 5.582715
High Yield $ 5.051645 $ 5.574231 $ 5.760334 $ 6.084287
Mid Cap Value $ 5.001685 $ 6.585704 $ 7.527388 $ 8.916204
Value $ 4.944849 $ 5.801721 $ 5.599234 $ 5.421651
</TABLE>
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<TABLE>
<CAPTION>
Accumulation Accumulation Accumulation
Units Units Units
Outstanding Outstanding Outstanding
Division at 12/31/97 at 12/31/98 at 12/31/99
-------- ----------------------- -------------------- -----------------
<S> <C> <C> <C>
Domestic Income 140,179.030 349,478.346 444,681.126
Emerging Growth 627,503.779 1,387,157.729 2,666,685.028
Enterprise 436,617.612 981,102.075 1,410,215.575
Government 93,147.080 645,398.780 767,290.730
Growth and Income 1,883,485.263 4,147,031.927 5,433,558.335
Money Market 195,357.851 396,621.092 959,626.899
Strategic Stock 453,980.311 2,531,896.466 2,749,248.760
Asian Equity 70,260.047 231,259.462 308,047.085
Emerging Markets Equity 320,283.628 582,059.420 675,252.263
Equity Growth 848,910.769 2,137,697.309 2,585,231.406
Global Equity 430,927.305 1,230,933.378 1,365,900.174
International Magnum 968,270.623 1,565,948.526 1,447,995.815
U.S. Real Estate /2/ 226,773.370 637,896.039 497,669.105
Fixed Income 218,999.860 492,032.803 634,362.949
High Yield 533,823.765 1,359,950.410 1,596,774.639
Mid Cap Value 1,004,597.420 2,433,905.631 2,439,321.278
Value 1,484,693.134 2,522,464.631 2,446,769.893
</TABLE>
________________________________
/1/ The dates when the Divisions commenced operations are as follows: the Growth
and Income, Emerging Markets Equity, Equity Growth, and Value Divisions, January
29, 1997; the Emerging Growth and Fixed Income Divisions, January 30, 1997; the
Enterprise, U.S. Real Estate, Global Equity, High Yield, and Mid Cap Value
Divisions, February 5, 1997; the International Magnum Division, February 10,
1997; the Money Market Division, February 25, 1997; the Government Division,
March 3, 1997; the Domestic Income Division, March 5, 1997; the Asian Equity
Division, June 13, 1997; the Strategic Stock Division, November 3, 1997.
/2/ Effective September 25, 2000, the Morgan Stanley Real Estate Securities
Portfolio (previously offered under the Contract) merged into the U.S. Real
Estate Portfolio. Accordingly, the Morgan Stanley Real Estate Securities
Division was renamed the U.S. Real Estate Division. The Selected Accumulation
Unit Data (Unaudited) for the Division through December 31, 1999, reflects units
of the Morgan Stanley Real Estate Securities Division.
FINANCIAL INFORMATION
The financial statements of AGL appear in the Statement. Please see the first
page of this Prospectus for information on how to obtain a copy of the
Statement. You should consider the financial statements of AGL only as bearing
on the ability of AGL to meet its contractual obligations under the Contracts.
The financial statements do not bear on the investment performance of the
Separate Account. (See "Contents of Statement of Additional Information.")
. Please add the following sentence under the list of Portfolios on Page 17:
Beginning on September 25, 2000, the Asian Equity Division, funded by the Asian
Equity Portfolio, is no longer available to new Contract Owners.
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