<PAGE>
Supplement Dated October 1, 1997
to Prospectuses and Statements of Additional Information
Dated May 1, 1997
for
Pinnacle(version II) and Pinnacle(version III)
Flexible Premium Variable Annuities*
issued by National Integrity Life Insurance Company
and
Funded Through Its Separate Account II
THIS SUPPLEMENT MODIFIES THE
PROSPECTUSES AND STATEMENTS OF ADDITIONAL INFORMATION
AND SHOULD BE READ AND RETAINED
THE COVER PAGE OF THE PROSPECTUS IS AMENDED TO INCLUDE THE FOLLOWING:
* NOTE: CONTRACTS ISSUED IN THE STATE OF OREGON WILL BE SINGLE PREMIUM VARIABLE
ANNUITIES RATHER THAN FLEXIBLE PREMIUM VARIABLE ANNUITIES. ALL REFERENCES TO
FLEXIBLE CONTRIBUTIONS ARE SINGLE CONTRIBUTIONS FOR THIS STATE.
- --------------------------------------------------------------------------------
THE LAST SECTION IN PART 1 ENTITLED "FINANCIAL INFORMATION" IS AMENDED TO
INCLUDE THE FOLLOWING:
FINANCIAL INFORMATION
The Inception Date for each of the new Variable Account Options is October 1,
1997. The unit value for each Variable Account Option at inception is $10.00.
The number of units outstanding at December 31, 1997, since inception and the
unit value at the beginning and end of each period for each Variable Account
Options will be disclosed in the May 1, 1998 prospectus.
- --------------------------------------------------------------------------------
THE SEVENTH PARAGRAPH UNDER "GUARANTEED RATE OPTIONS" IN PART 3 - YOUR
INVESTMENT OPTIONS IS AMENDED TO INCLUDE THE FOLLOWING:
THE TEN YEAR GRO IS NOT AVAILABLE IN OREGON.
- --------------------------------------------------------------------------------
PART 8 - ADDITIONAL INFORMATION IS AMENDED TO INCLUDE THE FOLLOWING SECTION:
ASSET ALLOCATION AND REBALANCING PROGRAM
We also offer an Asset Allocation and Rebalancing Program developed in
consultation with Callan Associates (MODEL(s)). Callan Associates is an
independent research and consulting firm, specializing in the strategic asset
allocation decision.
You may select one of five proposed Models: Conservative, Moderately
Conservative, Moderate, Moderately Aggressive, or Aggressive. Your current
contribution allocations will be initially allocated among the Options currently
established for each Model. You and your financial representative also have the
option to design a program that is tailored to your specific retirement needs.
To ensure conformity with current Model instructions, the value in the Variable
Account Options will be automatically rebalanced at least annually by transfers
among such Variable Account Options. You will receive a confirmation notice
after each rebalancing.
<PAGE>
GRO Accounts attributable to the Model will not rebalance. Instead, GRO
Accounts shall continue for the same duration at the then-current Guaranteed
Interest Rate. See "Fixed Accounts - Renewals of GRO Accounts" in Part 3.
No transfer charge will apply to transfers under the Asset Allocation and
Rebalancing Program, nor will such transfers count toward the twelve transfers
you may make in a contract year before we may impose a transfer charge. See
"Transfer Charges" in Part 4.
To enroll under the Asset Allocation and Rebalancing Program, you must deliver
the appropriate administrative form to our Administrative Office. You should be
aware that other allocation programs, such as dollar cost averaging, as well as
additions, transfers and withdrawals that you make, may not work in concert with
the Individual Asset Rebalancing program. If, after selecting one of the five
Models, you initiate a transaction that results in a reallocation outside one of
the Models, your participation in the Model program is automatically terminated.
You should, therefore, monitor your use of such other programs, transfers, and
withdrawals while the Individual Asset Rebalancing program is in effect. This
program is not available in concert with the Individual Asset Rebalancing
program. We reserve the right to terminate or amend this program in whole or in
part, or to place restrictions on contributions to the program. This program
may not be available in all states.
You may terminate participation in this program upon one day's prior written
notice.
- --------------------------------------------------------------------------------
NOTICE TO CONTRACT OWNERS WHO HAVE ASSETS INVESTED IN THE MORGAN STANLEY ASIAN
GROWTH, MORGAN STANLEY WORLDWIDE HIGH INCOME, RENAISSANCE BALANCED,
NICHOLAS-APPLEGATE BALANCED, PINNACLE FIXED INCOME, AND ARM MONEY MARKET
PORTFOLIOS:
In regards to the proposed substitution which was addressed in the September 19,
1997, letter to affected contract owners, please note that if the substitution
is approved by the Securities and Exchange Commission, contract owners will have
the opportunity to reallocate contract values from the portfolios to be replaced
and the proposed substitute portfolios to other portfolios available under the
contract, without the imposition of any substitution charge or limitation. No
such transfers from the date of initial notice on September 19, 1997, through a
date thirty days following the substitution will count against the number of
free transfers permitted in a year.
2
