ELEMENTS(sm)
a Flexible Premium Deferred
Variable and Fixed Annuity Contract
issued by
Protective Life Insurance Company
2801 Highway 280 South
Birmingham, Alabama 35223
Telephone: 1-800-866-3555
Supplement dated December 4, 1998
to Prospectus dated November 5, 1998
The following language is added after the last paragraph on page 21 of the
prospectus:
PIC Money Market Fund Replacement
Protective Life proposes to replace PIC Money Market Fund with
Oppenheimer Money Fund as an investment option under the Contracts described in
this prospectus. On or about October 28, 1998, Protective Life and several other
applicants filed an application with the Securities and Exchange Commission
seeking an order approving the substitution of shares of Oppenheimer Variable
Account Funds' Money Fund for shares of Protective Investment Company's Money
Market Fund currently held by the PIC Money Market Sub-Account of Protective
Variable Annuity Separate Account. Protective Life will also obtain approvals of
state insurance regulators in any state where such approval is required by state
law. The substitution will not be made until all necessary approvals are
obtained.
Oppenheimer Money Fund seeks the maximum current income from
investments in "money market" securities consistent with low capital risk and
the maintenance of liquidity. Owners and prospective purchasers should carefully
read the prospectus for Oppenheimer Variable Account Funds, which accompanied
this prospectus.
Protective Life will not exercise any rights reserved under any
Contract to impose additional restrictions on transfers from the PIC Money
Market Sub-Account to another Sub- Account or a Fixed Account until at least
thirty (30) days after the proposed substitution. If the proposed substitution
is carried out, Protective Life will send each Owner affected by the
substitution a written notice that the substitution was carried out and that he
or she may, within thirty (30) days after the substitution, make one transfer of
all Contract Value invested in the Oppenheimer Money Fund Sub-Account on the
date of the notice to another Sub-Account or a Fixed Account without that
transfer counting as a "free" transfer permitted under a Contract.
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The following language replaces the second and third paragraphs under the
heading Death Benefit on page 31 of the prospectus:
The death benefit may be taken in one sum immediately, in which event
the Contract will terminate. If the death benefit is not taken in one sum
immediately, the death benefit will become the new Contract Value as of the end
of the Valuation Period during which we receive due proof of death and the
entire interest in the Contract must be distributed under one of the following
options:
(1) the entire interest must be distributed over the life of
the Beneficiary, or over a period not extending beyond the life
expectancy of the Beneficiary, with distribution beginning within one
year of the Owner's death; or,
(2) the entire interest must be distributed within 5 years of
the Owner's death.
If the Beneficiary is the deceased Owner's spouse, the surviving spouse
may elect, in lieu of receiving a death benefit, to continue the Contract and
become the new Owner, provided the deceased Owner's spouse's 80th birthday is
after the Effective Date and the 90th birthday is after the Annuity Commencement
Date then in effect. In certain states, more restrictive age conditions may
apply. The surviving spouse may select a new Beneficiary. Upon this spouse's
death, the death benefit may be taken in one sum immediately and the Contract
will terminate. If the death benefit is not taken in one sum immediately, the
death benefit will become the new Contract Value as of the end of the Valuation
Period during which we receive due proof of death and must be distributed to the
new Beneficiary according to paragraph (1) or (2), above.
