TOUCHSTONE ADVISOR VARIABLE ANNUITY
SUPPLEMENTAL PROSPECTUS
MAY 1, 2000
Western-Southern Life Assurance Company
Separate Account 2
Western-Southern Life Assurance Company (WSLAC) is providing you with this
Supplemental Prospectus that supplements and should be read with the prospectus
for the Touchstone Advisor Variable Annuity dated May 1, 2000 (Advisor
Prospectus). The Advisor Prospectus contains details regarding your Contract.
Please read the Advisor Prospectus and this Supplemental Prospectus carefully
and keep them for future reference.
This Supplemental Prospectus describes the Touchstone Income Opportunity
Sub-Account, an additional investment option of the Contract available only to
Contract owners who were
o Actively participating in an automatic investment program or an
automatic asset allocation program on April 30, 2000 and
o Allocating payments to the Touchstone Income Opportunity Sub-Account
through that automatic investment program or automatic asset
allocation program.
This additional investment option will be available to you only through your
previously established automatic investment program or automatic asset
allocation program. This investment option will terminate when you no longer
have money in the Touchstone Income Opportunity Sub-Account.
The Touchstone Advisor Variable Annuity Contract is issued by WSLAC. The
Contract is an investment alternative for investors who want to accumulate money
on a tax-deferred basis for retirement or other long-term goals.
The Statement of Additional Information dated May 1, 2000 contains more
information about the Contract, WSLAC and its Separate Account 2. It has been
filed with the Securities and Exchange Commission (SEC) and is legally part of
this Prospectus. The table of contents for the Statement of Additional
Information is located on page 48 of the Advisor Prospectus. For a free copy,
call the Touchstone Variable Annuity Service Center at 800.669.2796 (press 2).
The Securities and Exchange Commission maintains a web site (http://www.sec.gov)
that contains the Statement of Additional Information, certain other material
that is legally part of the registration statement of Separate Account 2, and
other information about Separate Account 2. You can view these documents at the
Public Reference Room of the SEC or obtain copies, for a fee, by writing to the
Public Reference Room of the SEC, 450 Fifth Street N.W., Washington, D.C.
20549-6009. You can also call the SEC at 800.SEC.0330.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the Contracts or determined if this
Prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
The Contracts are not deposits or obligations of any bank. No bank has
guaranteed or endorsed the Contracts. The Contracts are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, the
National Credit Union Share Insurance Fund or any other agency. Investments in
variable annuities involve investment risk, including possible loss of principal
and earnings.
You should rely only on the information contained in the Contract, the Advisor
Prospectus, this Supplemental Prospectus, the Statement of Additional
Information or our approved sales literature. The description of the Contract in
the Advisor Prospectus is subject to the specific terms of your Contract as it
contains specific contractual provisions and conditions. If the terms of your
Contract differ from those in the Advisor Prospectus, you should rely on the
terms in your Contract.
No one is authorized to give any information or make any representation other
than those contained in the Contract, the Advisor Prospectus, this Supplemental
Prospectus, the Statement of Additional Information or our approved sales
literature.
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TABLE OF CONTENTS
PAGE
Cover Page. 1
Table Of Contents 2
Glossary 3
Fee And Expense Tables 4
Information About The Investment Option 6
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3
GLOSSARY
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ACCUMULATION UNIT
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A unit of measure used to calculate a Contract owner's share of a Sub-Account.
ACCUMULATION UNIT VALUE
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The dollar value of an Accumulation Unit in a Sub-Account.
CONTRACT
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The Touchstone Advisor Variable Annuity Contract, including the application
and any amendments, riders or endorsements.
CONTRACT DATE
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The effective date of a Contract. The Contract Date is shown on page 3 of your
Contract.
CONTRACT VALUE
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The total value of your Contract at any time before or on the Income Date. This
represents the sum of the value of your investments in the Sub-Accounts.
CONTRACT YEAR
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A year that starts on your Contract Date or the anniversary of your Contract
Date.
FUND
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Each Sub-Account invests in a Fund that has the same investment objective as
the Sub-Account.
SUB-ACCOUNT
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Each Sub-Account invests in a Fund, which has the same investment objective as
the Sub-Account.
WSLAC, WE, OUR AND US
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Western-Southern Life Assurance Company.
YOU AND YOUR
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The owner of the Contract.
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4
FEE AND EXPENSE TABLES
These tables describe the fees and expenses that you may pay directly or
indirectly if you purchase a contract. More complete information about these
fees and expenses is located in the "Charges" section of the Advisor Prospectus
on pages 17 through 18.
Contract Owner Transaction Expenses
MAXIMUM Contingent Deferred Sales Charge (Surrender Charge) None
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Annual Contract Maintenance Charge * $35.00
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Sub-Account
Annual Expenses
(as a percentage of
average account value)
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MORTALITY AND EXPENSE RISK CHARGES 0.70%
CONTRACT ADMINISTRATION CHARGE 0.10%
TOTAL 0.80%
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Touchstone Income Opportunity Fund Expenses
(as a percentage of average daily net assets
and after expense reimbursement)
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ADVISOR FEE 0.65%
OTHER EXPENSES 0.20%
TOTAL EXPENSES 0.85%**
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* In certain states and for certain retirement plans, we can waive, reduce or
eliminate the annual contract maintenance charge.
** Touchstone Advisors, Inc. has agreed to waive certain fees or reimburse the
Fund so that the Fund's expenses do not exceed the percentage listed in
this table. The agreement will remain in place until at least December 31,
2000. If the waiver and reimbursement had not been in place, the total
expenses of the Fund would have been 1.29%.
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5
Examples
These examples should help you compare the cost of investing in the Touchstone
Income Opportunity Sub-Account with the cost of investing in other Sub-Accounts
available under the Contract.
The examples assume that you invest $1,000 in the Touchstone Income Opportunity
Sub-Account, your investment has a 5% return each year and the Touchstone Income
Opportunity Fund's total expenses are the same as shown on the table on the
previous page in the row entitled "Total Expenses". Your actual costs may be
higher or lower than the costs shown in the examples.
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Example 1 This example assumes that you surrender your Contract at the end of
the applicable time period.
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1 Year 3 Years 5 Years 10 Years
Touchstone Income Opportunity $20 $63 $108 $232
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Example 2 This example assumes that you annuitize your Contract at the end
of the applicable time period and choose at least a 5-year payout
period.
1 Year 3 Years 5 Years 10 Years
Touchstone Income Opportunity $20 $63 $108 $232
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Example 3 This example assumes that you do not surrender your Contract.
1 Year 3 Years 5 Years 10 Years
Touchstone Income Opportunity $20 $63 $108 $232
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6
INFORMATION ABOUT THE INVESTMENT OPTION
The Sub-Account and the Fund
The Touchstone Income Opportunity Sub-Account invests in the Touchstone Income
Opportunity Fund. This table contains information about the investment
objective, Advisor and Sub-Advisor of the Fund:
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Investment Objective Advisors/Sub-Advisors Alliance Capital Management L.P.*
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The Fund seeks to achieve a high level of
TOUCHSTONE current income as its main goal. The Fund
INCOME OPPORTUNITY may also seek to increase the value of
its Shares, if consistent with its main goal.
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*Sub-Advisor to Touchstone Advisors, Inc.
More complete information about the Fund, including information about its
expenses, is included in its prospectus, which is attached to this Supplemental
Prospectus. Please read the Fund's prospectus carefully.
Changes in the Sub-Accounts and the Funds
As described in the Advisor Prospectus, we may substitute a new Fund or similar
investment option for the Fund in which a Sub-Account invests. We would make a
substitution to ensure the underlying Fund continues to be a suitable
investment. A substitution may be triggered by unsatisfactory investment
performance, a change in laws or regulations, a change in a Fund's investment
objectives or restrictions, a change in the availability of the Fund for
investment, or any other reason. Before any substitution, we will obtain any
required approvals, including approval from the SEC or from Contract owners.
WE ARE CURRENTLY SEEKING APPROVAL FROM THE SEC TO SUBSTITUTE SHARES OF
THE TOUCHSTONE HIGH YIELD FUND DESCRIBED IN THE ADVISOR PROSPECTUS FOR
SHARES OF THE TOUCHSTONE INCOME OPPORTUNITY FUND. AFTER WE RECEIVE THE
APPROVAL FROM THE SEC, WE WILL AUTOMATICALLY REDEEM THE SHARES OF THE
TOUCHSTONE INCOME OPPORTUNITY FUND HELD BY THE TOUCHSTONE INCOME
OPPORTUNITY SUB-ACCOUNT AND USE THE REDEMPTION PROCEEDS TO BUY SHARES
OF THE TOUCHSTONE HIGH YIELD FUND.
Accumulation Unit Values
The Accumulation Unit Values shown in the table below are for an Accumulation
Unit outstanding throughout the periods. An explanation of how Accumulation Unit
Value is calculated is located on page 21 in the Advisor Prospectus.
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Years Ended Unit Value at Unit Value at Number of Units
Sub-Account December 31 Beginning of Year End of Year at End of Year
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1995* 10.000000 12.572866 2,048
1996 12.572866 15.886632 3,590
TOUCHSTONE 1997 15.886632 17.673231 58,064
INCOME OPPORTUNITY 1998 17.673231 15.367598 11,424
1999 15.367598 15.663341 7,560
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* Sub-Account operations began on February 23, 1995.
