FORM OF
SUPPLEMENT DATED AUGUST 1, 2000 TO
PROSPECTUS DATED MAY 1, 2000 FOR
INVESTORS SELECT FLEXIBLE PREMIUM INDIVIDUAL
DEFERRED VARIABLE ANNUITY CONTRACT
Issued by LINCOLN BENEFIT LIFE COMPANY
In connection with LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
This supplement updates certain information contained in the prospectus and
supersedes any inconsistent information. You should attach this supplement to
the prospectus and retain it with the prospectus for future reference. You may
obtain an additional copy of the prospectus, free of charge, by writing or
calling Lincoln Benefit Life Company ("Lincoln Benefit") at the address or
telephone number set forth below.
The purpose of this supplement is to notify you of a proposal to substitute
shares of the IAI Portfolios with shares of the Replacement Portfolios
identified below:
<TABLE>
<CAPTION>
<S> <C>
IAI Portfolios Replacement Portfolios
-------------- ----------------------
IAI Reserve Portfolio -> SVLIF Bond Portfolio (Class A)
IAI Balanced Portfolio -> Janus Aspen Series Balanced Portfolio
(Institutional Class)
IAI Regional Portfolio -> Janus Aspen Series Growth Portfolio
(Institutional Class)
</TABLE>
Subaccounts that invest in the Replacement Portfolios already are currently
available under your Contract. On July 25, 2000, Lincoln Benefit filed an
application with the Securities and Exchange Commission (the "Commission")
requesting an order approving the Substitutions. Upon obtaining the order from
the Commission approving the Substitutions, and subject to any prior approval by
applicable insurance authorities, Lincoln Benefit and Lincoln Benefit Life
Variable Annuity Account propose to effect the Substitutions as soon as is
practicable.
Lincoln Benefit has proposed the Substitutions because the subaccounts
corresponding to the IAI Portfolios have not generated sufficient Contract owner
interest. As a result, the IAI Portfolios have determined that it no longer is
economic to continue to offer shares of the IAI Portfolios, and they intend to
close those portfolios to new investment and ultimately to liquidate them.
Lincoln Benefit has selected the Replacement Portfolios to replace the IAI
Portfolios because each Replacement Portfolio, generally speaking, has
substantially similar or identical investment objectives to the objectives of
the corresponding IAI Portfolio, generally better performance, and lower
expenses. Although JAS Growth Portfolio lacks the regional focus of the IAI
Regional Portfolio, Lincoln Benefit is not aware of any other mutual fund
available for purchase by insurance company separate accounts that has that
regional focus. Since both Portfolios have capital appreciation as an investment
objective, Lincoln Benefit believes that the JAS Growth Portfolio is an
appropriate replacement.
We currently waive the transfer fee on all transfers and, while we reserve the
right at any time to impose that fee on any transfer after the first in each
month, we have no current intention of collecting that fee. Accordingly, prior
to the Substitutions you may make transfers from the Replaced Portfolios without
any transfer fee or limit on the number of transfers, as provided in our current
prospectus. In addition, Contract owners will receive a Notice within five (5)
days after the Substitutions that the Substitutions have taken place. For a
period of thirty-one (31) days from the mailing of the Notice, Contract owners
may transfer all assets, as substituted, to any other available subaccount
without limitation or charge. During the thirty-one (31) day period after the
Notice is mailed, we will not exercise our right to impose a transfer fee with
respect to transfers involving the assets affected by the Substitutions.
In preparation for the Substitutions, starting on September 15, 2000, we will
not permit you to allocate new purchase payments or make additional transfers to
the Subaccounts that invest in the Replacement Portfolios Even after that date,
if you are enrolled in one of our automatic transaction programs, such as dollar
cost averaging, portfolio rebalancing, and systematic withdrawals, we will
continue to effect automatic transactions involving the Replacement Portfolios.
When the SEC approves our application and we effect the Substitutions, however,
we will substitute the Replacement Portfolios for the IAI Portfolios for all
purposes under your Contract. Thus, for example, unless you instruct us
otherwise, we will allocate to the appropriate Replacement Portfolio any
percentage of your new purchase payments that previously would have been
allocated to an IAI Portfolio. Likewise, unless you instruct us otherwise, we
will substitute the Replacement Portfolios for the IAI Portfolios in effecting
transactions under our automatic transaction programs such as dollar cost
averaging, portfolio rebalancing, and systematic withdrawals.
On page 12 "Allocation of Purchase Payments", in the first paragraph, the second
and third sentences are deleted in their entirety and the following language is
substituted in its place:
"You must specify our allocation in your Contract application, either
as percentages or specific dollar amounts. If you make your allocation
in percentages, the total must equal 100%
You may obtain a prospectus by writing or calling Lincoln Benefit at the address
or telephone number set out below.
Lincoln Benefit Life Company
Street Address: 2940 South 84th St., Lincoln, NE 68506
Mailing Address: P. O. Box 82532, Lincoln, NE 68501-2532
Telephone Number: 1-800-525-9287
