Flexible Premium Deferred Variable Annuity Contract
(Variable Annuity II)
Issued by
Midland National Life Insurance Company
(through Midland National Life Separate Account C)
Supplement dated September 1, 1998
to Prospectus dated May 1, 1998
The Midland Variable Annuity II now includes the following new
investment options:
MFS VIT Emerging Growth
MFS VIT Research
MFS VIT Growth With Income
MFS VIT New Discovery
Lord, Abbett VCC Growth and Income
American Century VP Income & Growth
The investment objectives of the six newly available mutual fund portfolios
are as follows:
Portfolio Objective
MFS VIT Emerging Growth Series Seeks to provide long-term growth of
capital. Dividend and interest
income from portfolio securities, if any,
is incidental to the Series investment
objective of long-term growth of capital.
MFS VIT Research Series Seeks to provide long-term growth of
capital and future income.
MFS VIT Growth With Income Series Seeks to provide reasonable
current income and long-term
growth of capital and income.
MFS VIT New Discovery Series Seeks capital appreciation.
Lord, Abbett VCC Growth and Income Seeks long-term growth of
Portfolio capital and income without excessive
fluctuation in market value.
American Century VP Income & Growth
Portfolio Seeks dividend growth,current income
and capital appreciation. The Portfolio
will seek to achieve its investment
objective by investing in a diversified
portfolio of U.S. stocks.
The six new Investment Divisions each invest in shares of a corresponding
portfolio of one of the following mutual funds:
Mutual Fund Investment Adviser
MFS Variable Insurance Trust Massachusetts Financial
(MFS VIT) Services Company
Lord, Abbett Series Fund, Inc.
(variable contract class) Lord, Abbett & Co.
(Lord, Abbett VCC)
American Century Variable Portfolios,
Inc. American Century Investment
(American Century VP) Management, Inc.
The table on the following page summarizes the charges and deductions that
may be applicable to an investment in the six portfolios listed above. These
charges and deductions are explained in the prospectus for the Variable
Annuity II and the prospectuses for the individual portfolios.
This Prospectus Supplement must be accompanied or preceded
by the Prospectus dated May 1, 1998 for the Variable Annuity II
and by the Prospectus dated May 1, 1998 for each Fund portfolio
listed above.
The Fund portfolios described above and the other Fund portfolios described
in the Prospectus dated May 1, 1998 for the Variable Annuity II are not
available for purchase directly by the general public, and are not the same as
the mutual funds with very similar or nearly identical names that are sold
directly to the public. However, the investment objectives and policies of
certain of the Funds portfolios are very similar to the investment objectives
and policies of other (publicly available) mutual fund portfolios that have
very similar or nearly identical names and that are or may be managed by
the same investment adviser or manager. Nevertheless, the investment
performance and results of the Funds portfolios available under the
Contracts may be lower, or higher, than the investment results of such other
(publicly available) portfolios. There can be no assurance, and no
representation is made, that the investment results of any of the Funds
portfolios will be comparable to the investment results of any other portfolio
or mutual fund, even if the other portfolio or mutual fund has the same
investment adviser or manager and the same investment objectives and
policies, and a very similar name.
This Prospectus Supplement provides very limited information about the
newly available Fund portfolios. The prospectuses for these portfolios,
which accompany this Prospectus Supplement, describe the investment
objectives, policies and risks of the portfolio. The information in this
Prospectus Supplement is qualified in its entirety by the information
included in the Prospectus for the Variable Annuity II and the prospectus for
the portfolios.
In addition to fees and charges deducted under the Contracts (described in
the Prospectus for the Variable Annuity II), certain fees and charges are
deducted by each Fund for managing each portfolios investments and
providing services to the portfolio. The table below summarizes these
portfolio expenses:
Portfolio Annual Expenses (1)
(as a percentage of Portfolio average net assets)
Management Other Total Annual
Portfolio Fees Expenses Expenses (2)
MFS VIT Emerging Growth Series 0.75% 0.12% 0.87%
MFS VIT Research Series 0.75% 0.13% 0.88%
MFS VIT Growth With Income Series (3) 0.75% 0.25% 1.00%
MFS VIT New Discovery Series (3) 0.90% 0.25% 1.15%
Lord, Abbett VCC Growth and Income Portfolio 0.50% 0.02% 0.52%
American Century VP Income & Growth Portfolio 0.70% 0.00% 0.70%
(1) The Fund data was provided by Massachusetts Financial Services
Company, Lord, Abbett Distributor LLP and American Century Investment
Management, Inc. Midland has not independently verified the accuracy of
the Fund data.
(2) The annual expenses shown are based on actual expenses for 1997,
except for the MFS VIT New Discovery Series and American Century VP
Income & Growth Portfolio where they are based on estimated expenses for
1998.
(3) MFS has agreed to bear expenses for these Series, subject to
reimbursement by these Series such that each such Series Other Expenses
shall not exceed 0.25%. Without this limitation on the Other Expenses, the
Other Expenses and Total Annual Expenses would be:
Other Total Annual
Series Expenses Expenses
MFS VIT Growth With Income Series 0.35% 1.10%
MFS VIT New Discovery Series 0.47% 1.37%
Expense Examples:
If You surrender or annuitize Your Contract at the end of the applicable time
period, You would pay the following expenses on a $1,000 investment,
assuming 5% annual return on assets:
One Three Five Ten
Year Year Year Year
MFS VIT Emerging Growth Series $104 $145 $188 $274
MFS VIT Research Series 104 145 189 275
MFS VIT Growth With Income Series 106 149 195 287
MFS VIT New Discovery Series 107 153 202 301
Lord, Abbett VCC Growth and Income 101 134 170 238
American Century VP Income & Growth 103 140 179 256
If you do not surrender Your Contract, You would pay the following
expenses on a $1,000 investment, assuming 5% annual return on assets:
One Three Five Ten
Year Year Year Year
MFS VIT Emerging Growth Series $24 $75 $128 $274
MFS VIT Research Series 24 75 129 275
MFS VIT Growth With Income Series 26 79 135 287
MFS VIT New Discovery Series 27 83 142 301
Lord, Abbett VCC Growth and Income 21 64 110 238
American Century VP Income & Growth 23 70 119 256
The above examples are based on actual expenses for 1997, or estimated
expenses for 1998, as indicated above. Actual expenses are shown under the
table titled Portfolio Annual Expenses and are net of any fee waivers or
expenses reimbursements.
The examples should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. The
assumed 5% annual return is hypothetical. Past or future annual returns may
be greater or less than the assumed amount. The above examples reflect the
$35 Contract Maintenance Charge as an annual charge of 0.13% of assets.
The 0.13% is based on an average contract value of $27,000.
