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 14, 2000
to Prospectus dated May 1, 2000
The Midland Variable Annuity II now includes the following five new
investment options.
- Alger American Small Capitalization Portfolio
- Alger American MidCap Growth Portfolio
- Alger American Growth Portfolio
- Alger American Leveraged AllCap Portfolio
- Fidelity Variable Insurance Products Fund Mid Cap Portfolio
The Investment Objectives of the five newly available mutual fund portfolios
are as follows:
Portfolio Objective
Alger American Small Capitalization Portfolio Seeks long term capital
appreciation by focusing on
small, fast growing companies
that offer innovative
products, services or
technologies to a rapidly
expanding marketplace. Under
normal circumstances, the
portfolio invests primarily in
the equity securities of small
capitalization companies. A
small capitalization company is
one that has a market
capitalization within the range
of the Russell 2000 Growth
Index(r) or the S&P SmallCap 600
Index(r).
Alger American MidCap Growth Portfolio Seeks long term capital
Appreciation by focusing on
midsize companies with promising
growth potential. Under normal
circumstances, the portfolio
invests primarily in the equity
securities of companies in the
S&P MidCap 400 Index(r).
Alger American Growth Portfolio Seeks long term capital
appreciation by focusing on
growing companies that generally
have broad product lines,
markets, financial resources
and depth of management. Under
normal circumstances the
portfolio invests primarily in
the equity securities of large
companies. The portfolio
considers a large company to
have a market capitalization of
$1 billion or greater.
Alger American Leveraged AllCap Portfolio Seeks long term capital
Appreciation by investing, under
normal circumstances, in the
equity securities of companies
of any size which demonstrate
promising growth potential. The
portfolio can leverage, that it,
borrow money, up to one-third
of its total assets to buy
additional securities. By
borrowing money, the portfolio
has the potential to increases
its returns if the increase in
the value of the securities
purchased exceeds the cost of
borrowing, including interest
paid on the money borrowed.
Fidelity Variable Insurance Product Seeks long term growth of
capital.
Fund Mid Cap Portfolio
The five new Investment Divisions each invest in shares of the corresponding
portfolio of one of the following mutual funds:
Mutual Fund Investment Advisor
Alger American Fund Fred Alger Management, Inc.
Fidelity Variable Insurance Products Fund. Fidelity Management &
Research Company
The table on the following page summarizes the charges and deductions that
may be applicable to an investment in the five portfolios listed above.
These charges and deductions are explained in the prospectus for the
Variable Annuity II and the prospectus for the individual portfolios.
This Prospectus Supplement must be accompanied or preceded by the Prospectus
dated May 1, 2000 for the Variable Annuity II and by the Prospectus dated
May 1, 2000 for each Fund portfolio listed above.
As with all the Fund portfolios described in your May 1, 2000 prospectus,
the Fund Portfolios described above 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 the portfolios are very
similar to the investment objectives and policies of other (publicly
available) mutual fund portfolios that have very similar or nearly
idenbe managed by the same adviser or manager. Nevertheless, the
investment performance and results of the above two Fund Portfolios may be
lower, or higher than the investment results of any of the other (publicly
available) available portfolios. There can be no assurance and no
representation is made, that the investment results of any of the available
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 same investment objectives and policies and a very similar
or nearly identical name.
This Prospectus Supplement provides very limited information about the five
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 Annu investment same investment
objectives and policies and a very similar or nearly identical name.
This Prospectus Supplement provides very limited information about the five
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 five new portfolios.
In addition to the 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 portfolio's 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
Portfolio Fees Expenses Expenses
Alger American Small Capitalization Portfolio 0.85% 0.05% 0.90%
Alger American MidCap Growth Portfolio 0.80% 0.05% 0.85%
Alger American Growth Portfolio 0.75% 0.04% 0.79%
Alger American Leveraged AllCap Portfolio 0.85% 0.08% 0.93%
Fidelity VIP Mid Cap Portfolio (2) (3) 0.57% 0.40% 0.97%
(1) The fund data was provided by the fund managers and Midland has not
independently verified the accuracy of the Fund data. The annual expenses
shown are based on actual expenses for 1999. The expenses shown for
Fidelity's VIP Mid Cap Portfolio are those applicable to the Initial Class.
(2) The Mid Cap Portfolio's total annual expenses reflects Fidelity
Management & Research Company's (FMR) voluntary agreement to reimburse the
class to the extent total operating expenses (excluding interest, taxes,
certain securities lending costs, brokerage commissions and extraordinary
expenses) as a percentage of average net assets, exceed a certain rate.
FMR can discontinue this reimbursement arrangement at any time. Without
this reimbursement, the other expenses and total expenses would have been:
Other Total
Expenses Expenses
VIP Mid Cap 2.77% 3.34%
(3) A portion of the brokerage commissions that the fund pays is used to
reduce this fund's expenses. In addition, through arrangements with each
fund's custodian, credits realized as a result of uninvested cash balances
are used to reduce custodian expenses.
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
Alger American Small Capitalization Portfolio $104 $145 $189 $275
Alger American MidCap Growth Portfolio $104 $144 $186 $270
Alger American Growth Portfolio $104 $144 $186 $270
Alger American Leveraged AllCap Portfolio $105 $146 $190 $278
Fidelity VIP Mid Cap Portfolio $105 $148 $194 $285
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
Alger American Small Capitalization Portfolio $24 $75 $129 $275
Alger American MidCap Growth Portfolio $24 $74 $126 $270
Alger American Growth Portfolio $24 $74 $126 $270
Alger American leveraged AllCap Portfolio $25 $76 $130 $278
Fidelity VIP Mid Cap Portfolio $25 $78 $134 $285
The above examples are based on actual expenses for 1999. Actual expenses
are shown under the table titled 'Portfolio Annual Expenses' and are net of
any fee waivers or expense 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 0.11% of assets.
The 0.11% is based on an average cash value of $33,000.
STK00VA2.txt
