AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT, N-4, 1999-12-08

AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
N-4, 1999-12-08

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No.

Post-Effective Amendment No. [ ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 1 (File No. 811-7195) [X]
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(Check appropriate box or boxes)

AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
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(Exact Name of Registrant)

American Enterprise Life Insurance Company
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(Name of Depositor)

80 South 8th Street, P.O. Box 534, Minneapolis, MN 55440-0534
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(Address of Depositor's Principal Executive Offices) (Zip Code)

Depositor's Telephone Number, including Area Code (612) 671-3678
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Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
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(Name and Address of Agent for Service)

It is proposed that this filing will become effective: as soon as possible.

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8 (a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to Section 8 (a) may
determine.

<PAGE>

Prospectus

[_____], 1999

American Express Variable Annuity

Individual or group flexible premium deferred combination fixed/variable
annuity.

American Enterprise Variable Annuity Account

Issued by: American Enterprise Life Insurance Company (American Enterprise Life)
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
Telephone: 800-333-3437

This prospectus contains information that you should know before investing. You
also will receive the prospectuses for:

o American Express(R)Variable Portfolio Funds
o AIM Variable Insurance Funds, Inc.
o Fidelity Variable Insurance Products - Service Class
o Franklin Templeton Variable Insurance Products Trust
o MFS(R) Variable Insurance Trust SM
o Putnam Variable Trust

Please read the prospectuses carefully and keep them for future reference. This
contract is available for qualified and nonqualified plans.

The Securities and Exchange Commission (SEC) has not approved or disapproved
these securities or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.

An investment in this contract is not a deposit of a bank or financial
institution and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. An investment in this contract
involves investment risk including the possible loss of principal.

A Statement of Additional Information (SAI), dated the same date as this
prospectus, is incorporated by reference into this prospectus. It is filed with
the SEC and is available without charge by contacting American Enterprise Life
at the telephone number above or by completing and sending the order form on the
last page of this prospectus. The table of contents of the SAI is on the last
page of this prospectus.

<PAGE>

Table of Contents

Key Terms
The Contract in Brief
Expense Summary
Condensed Financial Information (Unaudited)
Financial Statements
Performance Information
The Variable Account and the Funds
The Fixed Accounts
Buying Your Contract
Charges
Valuing Your Investment
Making the Most of Your Contract
Withdrawals
Changing Ownership
Benefits in Case of Death
The Annuity Payout Period
Taxes
Voting Rights
Substitution of Investments
About the Service Providers
Additional Information About American Enterprise Life
Directors and Executive Officers
Experts
American Enterprise Life Financial Information
Table of Contents of the Statement of Additional Information

<PAGE>

Key Terms

These terms can help you understand details about your contract.

Accumulation unit -- A measure of the value of each subaccount before annuity
payouts begin.

Annuitant -- The person on whose life or life expectancy the annuity payouts are
based.

Annuity payouts -- An amount paid at regular intervals under one of several
plans.

Beneficiary -- The person you designate to receive annuity benefits in case of
the owner's or annuitant's death while the contract is in force and before
annuity payouts begin.

Close of business -- When the New York Stock Exchange (NYSE) closes, normally 4
p.m. Eastern time.

Contract - An individual annuity contract or a certificate showing your interest
under a group annuity contract.

Contract value -- The total value of your contract before we deduct any
applicable charges.

Contract year -- A period of 12 months, starting on the effective date of your
contract and on each anniversary of the effective date.

Fixed accounts - The one-year fixed account is an account to which you may
allocate purchase payments. Amounts you allocate to this account earn interest
at rates that we declare periodically. Guarantee Period Accounts are fixed
accounts to which you may also allocate purchase payments. These accounts have
guaranteed interest rates declared for periods ranging from two to ten years.
Withdrawals from these accounts prior to the end of the term specified will
receive a Market Value Adjustment, which may result in a gain or loss of
principal.

Funds -- Mutual funds and/or portfolios that are investment options under your
contract, each with a different investment objective. You may allocate your
purchase payments into subaccounts investing in shares of any or all of these
funds.

Guarantee Period -- The number of years that a guaranteed interest rate is
credited.

Market Value Adjustment (MVA) -- A positive or negative adjustment assessed if
any portion of a Guarantee Period Account is withdrawn or transferred prior to
the end of its Guarantee Period.

Owner (you, your) -- The person who controls the contract (decides on investment
allocations, transfers, payout options, etc.). Usually, but not always, the
owner is also the annuitant. The owner is responsible for taxes, regardless of
whether he or she receives the contract's benefits.

Purchase payment credits -- An addition we make to your contract value based on
your net current payment.

Qualified annuity -- A contract that you purchase for one of the following
retirement plans that is subject to applicable federal law and any rules of the
plan itself:

o Individual Retirement Annuities (IRAs), including Roth IRAs

o Simplified Employee Pension (SEP) plans

All other contracts are considered nonqualified annuities.

<PAGE>

Retirement date -- The date when annuity payouts are scheduled to begin.

Valuation date -- Any normal business day, Monday through Friday, that the NYSE
is open. Each valuation date ends at the close of business. We calculate the
value of each subaccount at the close of business on each valuation date.

Variable account -- Consists of separate subaccounts to which you may allocate
purchase payments; each invests in shares of one fund. The value of your
investment in each subaccount changes with the performance of the particular
fund.

Withdrawal value -- The amount you are entitled to receive if you make a full
withdrawal from your contract. It is the contract value minus any applicable
charges.

<PAGE>

The Contract in Brief

Purpose: The purpose of the contract is to allow you to accumulate
money for retirement. You do this by making one or
more investments (purchase payments) that may earn returns
that increase the value of the contract. The contract provides
lifetime or other forms of payouts beginning at a specified
date (the retirement date).

Free look
period: You may return your contract to our office within 10
days after it is delivered to you and receive a full refund
of the contract value, less any purchase payment credits up
to the maximum withdrawal charges. (See "Buying Your
Contract - Purchase payment credits.") However, you bear the
investment risk from the time of purchase until you return
the contract; the refund amount may be more or less than the
payment you made. (Exception: If the law requires, we will
refund all of your purchase payments.)

Accounts: Currently, you may allocate your purchase payments among
any or all of:

o the subaccounts, each of which invests in a fund with a
particular investment objective. The value of each
subaccount varies with the performance of the
particular fund in which it invests. We cannot
guarantee that the value at the retirement date will
equal or exceed the total purchase payments you
allocate to the subaccounts. (p. __)

o the fixed accounts, which earn interest at rates that
we adjust periodically. (p. __)

Buying your
contract: Your sales representative will help you complete and
submit an application. Applications are subject to
acceptance at our office. You may buy a nonqualified annuity
or a qualified annuity. After your initial purchase payment,
you have the option of making additional purchase payments
in the future.

o Minimum initial purchase payment -- $2,000. The $2,000
minimum does not apply if you enroll in the Systematic
Investment Program (SIP). The Guarantee Period Accounts
require a minimum investment of $1,000.

o Minimum additional purchase payment -- $100 ($50 with
SIP payments).

o Maximum total purchase payments (without prior
approval) -- $1,000,000. (p.__ )

<PAGE>

Transfers: Subject to certain restrictions you currently may
redistribute your money among the subaccounts and the fixed
accounts without charge at any time until annuity payouts
begin, and once per contract year among the subaccounts
after annuity payouts begin. Transfers out of the Guarantee
Period Accounts before the end of the Guarantee Period will
be subject to a MVA. You may establish automated transfers
among the fixed accounts and subaccounts. Fixed account
transfers are subject to special restrictions. (p. __)

Withdrawals: You may withdraw all or part of your contract value
at any time before the retirement date. You also may
establish automated partial withdrawals. Withdrawals may be
subject to charges and tax penalties (including a 10% IRS
penalty if you make withdrawals prior to your reaching age
59 1/2) and may have other tax consequences; also, certain
restrictions apply. (p. __)

Changing ownership: You may change ownership of a nonqualified annuity by
written instruction, but this may have federal income tax
consequences. Restrictions apply to changing ownership of a
qualified annuity. (p. --)

Benefits in case of death:
If you or the annuitant die before annuity payouts
begin, we will pay the beneficiary an amount at least equal
to the contract value. (p. --)

Annuity payouts: You can apply your contract value to an annuity payout
plan that begins on the retirement date. You may choose from
a variety of plans to make sure that payouts continue as
long as you like. If you purchased a qualified annuity, the
payout schedule must meet the requirements of the qualified
plan. We can make payouts on a fixed or variable basis, or
both. Total monthly payouts may include amounts from each
subaccount and the one-year fixed account. During the
annuity payout period, your choices for subaccounts may be
limited. The Guarantee Period Accounts are not available
during the payout period. (p. __)

Taxes: Generally, your contract grows tax-deferred until you make
withdrawals from it or begin to receive payouts. (Under
certain circumstances, IRS penalty taxes may apply.) Even if
you direct payouts to someone else, you will be taxed on the
income if you are the owner. Roth IRAs, however, may grow
and be distributed tax free if you meet certain distribution
requirements. (p. __)

Charges:
o $40 annual contract administrative charge;
o a 0.15% variable account administrative charge;
o with qualified contracts, a 0.85% mortality and expense
risk fee applies;
o with non-qualified contracts, a 1.10% mortality and
expense risk fee applies;
o if either the Maximum Anniversary Value Death Benefit
rider or 5% Accumulation Death Benefit Rider is
selected, an additional 0.10% mortality and expense
risk fee.
o if the Enhanced Death Benefit Rider of the greater of
Maximum Anniversary Value or 5% Accumulation Death
Benefit is selected, an additional 0.30% mortality and
expense risk fee;
o if any one of the Guaranteed Minimum Income Benefit
Riders is selected, an annual fee based on the
Guaranteed Income Benefit Base (currently at 0.30%);

<PAGE>

o if the Performance Credit Rider is selected, an
additional 0.15% mortality and expense risk fee. (the
Performance Credit Rider cannot be selected with any of
the Guaranteed Minimum Income Benefit Riders);
o withdrawal charge;
o any premium taxes that may be imposed on us by state or
local governments (currently, we deduct any applicable
premium tax when you make a total withdrawal or when
annuity payouts begin, but we reserve the right to
deduct this tax at other times such as when you make
purchase payments); and
o the operating expenses of the funds.

Expense Summary

The purpose of the following information is to help you understand the various
costs and expenses associated with your contract.

You pay no sales charge when you purchase your contract. We show all costs that
you bear directly or indirectly for the subaccounts and funds below. Some
expenses may vary as we explain under "Charges." Please see the funds'
prospectuses for more information on the operating expenses of each fund.

Contract owner expenses:

Withdrawal charge: contingent deferred sales charge as a percentage of
purchase payment withdrawn.

Seven-year schedule
Years from purchase Withdrawal charge
payment receipt percentage
1 8%
2 8
3 7
4 7
5 6
6 5
7 3
Thereafter 0

Withdrawal charge under Annuity Payout Plan E: Payouts for a specified
period. The amount equal to the difference in the present value of
remaining payments using the assumed investment rate and such present
value using the assumed investment rate plus 1.36% under a qualified
contract and 1.61% under a non-qualified contract. This charge cannot be
greater than 9%.

Annual contract administrative charge $40**

**We will waive this charge when your contract value is $50,000 or more
on the current contract anniversary.

Guaranteed Minimum Income Benefit Rider fee:
as a percentage of the Guaranteed Income Benefit
Base charged annually. This is an optional expense. 0.30%

<PAGE>

Annual variable account expenses: as a percentage of average subaccount value.
You can choose the death benefit guarantee provided as well as the Performance
Credit Rider. The combination you choose determines the fees you pay. The table
below shows the combinations available to you and their cost.
<TABLE>
<CAPTION>
<S> <C> <C>

- - - --------------------------------------------------------------- ------------------------- ---------------------------
Qualified Contracts Non-Qualified Contracts
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Variable account administrative charge 0.15% 0.15%
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Mortality and expense risk fee 0.85% 1.10%
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Performance Credit Rider 0.15% 0.15%
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Maximum Anniversary Value Rider or the 5% Accumulation
Death Benefit Rider as part of the mortality and
expense risk fee (optional) 0.10% 0.10%
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Enhanced Death Benefit Rider fee as part of the
mortality and expense risk fee (optional) 0.30% 0.30%
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Total annual variable account expenses without any
optional rider fees 1.00% 1.25%
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Total annual variable account expenses with
Performance Credit Rider 1.15% 1.40%
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Total annual variable account expense with either the Maximum Anniversary
Value Rider or the 5% Accumulation Death Benefit Rider
(a) without the Performance Credit Rider 1.10% 1.35%
(b) with the Performance Credit Rider 1.25% 1.50%
- - - --------------------------------------------------------------- ------------------------- ---------------------------
- - - --------------------------------------------------------------- ------------------------- ---------------------------
Total annual variable account expense with the
Enhanced Death Benefit Rider
(a) without the Performance Credit Rider 1.30% 1.55%
(b) with the Performance Credit Rider 1.45% 1.70%
- - - --------------------------------------------------------------- ------------------------- ---------------------------

</TABLE>

<PAGE>

Annual operating expenses of the funds after fee waivers and/or expense
reimbursements, if applicable, as a percentage of average daily net assets

- - - ---------------------- ----------------- ------- -------------- -----------
Management 12b-1 Other
Fees Fees Expenses Total
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Fund #1
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Fund #2
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Fund #3
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Fund #4
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Fund #5
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Fund #6
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<PAGE>

Examples: *

You would pay the following expenses on a $1,000 investment if you have a
qualified contract without any optional riders and assuming a 5% annual return
and....

- - - ---------------------------------------------------------------------------
a total withdrawal at no withdrawal or selection
the end of each time of an annuity payout plan
period at the end of each time
period
- - - ---------------------------------------------------------------------------
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1 year 3 years 1 year 3 years
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- - - ---------------------------------------------------------------------------
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Fund #1
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Fund #2
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Fund #3
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Fund #4
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Fund #5
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Fund #6
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<PAGE>

You would pay the following expenses on a $1,000 investment if you have a
qualified contract with the optional 0.30% Enhanced Death Benefit Rider and the
0.30% Guaranteed Minimum Income Benefit Rider and assuming a 5% annual return
and....

- - - ----------------------------------------------------------------------------
a total withdrawal at no withdrawal or selection
the end of each time of an annuity payout plan
period at the end of each time
period
- - - ----------------------------------------------------------------------------
- - - ----------------------------------------------------------------------------
1 year 3 years 1 year 3 years
- - - ----------------------------------------------------------------------------
- - - ----------------------------------------------------------------------------

- - - ----------------------------------------------------------------------------
- - - ----------------------------------------------------------------------------
Fund #1
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Fund #2
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Fund #3
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Fund #4
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Fund #5
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Fund #6
- - - ----------------------------------------------------------------------------

<PAGE>

You would pay the following expenses on a $1,000 investment if you have a
non-qualified contract without any optional riders and assuming a 5% annual
return and....

- - - --------------------------------------------------------------------------
a total withdrawal at no withdrawal or selection
the end of each time of an annuity payout plan
period at the end of each time
period
- - - --------------------------------------------------------------------------
- - - --------------------------------------------------------------------------
1 year 3 years 1 year 3 years
- - - --------------------------------------------------------------------------
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- - - --------------------------------------------------------------------------
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Fund #1
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Fund #2
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Fund #3
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Fund #4
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Fund #5
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Fund #6
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<PAGE>

You would pay the following expenses on a $1,000 investment if you have a
non-qualified contract with the optional 0.30% Enhanced Death Benefit Rider and
0.30% Guaranteed Minimum Income Benefit Rider and assuming a 5% annual return
and....

*In these examples, the $40 contract administrative charge is approximated as a
.067% charge based on our estimated average contract size. Premium taxes imposed
by some state and local governments are not reflected in these examples. We
entered into certain arrangements under which we are compensated by the funds'
advisors and/or distributors for the administrative services we provide to the
funds.

You should not consider these examples as representations of past or future
expenses. Actual expenses may be more or less than those shown.

<PAGE>

Condensed Financial Information (Unaudited)

We have not provided any condensed financial information for the subaccounts
because they are new and do not have any history.

Financial Statements

You can find our audited financial statements later in this prospectus. The SAI
does not include the audited financial statements of the subaccounts because
they are new and do not have any assets.

Performance Information

Performance information for the subaccounts may appear from time to time in
advertisements or sales literature. This information reflects the performance of
a hypothetical investment in a particular subaccount during a specified time
period. We show actual performance from the date the subaccounts began investing
in the funds. Currently, we do not provide any performance information because
they are new and have not had any activity to date. However, we show performance
from the commencement date of the funds as if the contract existed at that time,
which it did not. Although we base performance figures on historical earnings,
past performance does not guarantee future results.

We include non-recurring charges (such as withdrawal charges) in total return
figures, but not in yield quotations. Excluding non-recurring charges in yield
calculations increases the reported value.

Total return figures reflect deduction of all applicable charges, including:

o the contract administrative charge,
o the variable account administrative charge,
o any Death Benefit Rider fee,
o any Guaranteed Minimum Income Benefit Rider fee,
o the Performance Credit Rider fee,
o mortality and expense risk fee, and
o withdrawal charge (assuming a withdrawal at the end of the illustrated
period).

We also may make optional total return quotations that do not reflect deduction
of the withdrawal charge (assuming no withdrawal), the Enhanced Death Benefit
Rider fee and the Guaranteed Minimum Income Benefit Rider fee. Total return
quotations may be shown by means of schedules, charts or graphs.

Average annual total return is the average annual compounded rate of return of
the investment over a period of one, five and ten years (or up to the life of
the subaccount if it is less than ten years old).

Cumulative total return is the cumulative change in the value of an investment
over a specified time period. We assume that income earned by the investment is
reinvested. Cumulative total return generally will be higher than average annual
total return.

Annualized simple yield (for subaccounts investing in money market funds)
"annualizes" the income generated by the investment over a given seven-day
period. That is, we assume the amount of income generated by the investment
during the period will be generated each seven-day period for a year. We show
this as a percentage of the investment.

Annualized compound yield (for subaccounts investing in money market funds) is
calculated like simple yield except that we assume the income is reinvested when
we annualize it. Compound yield will be higher than simple yield because of the
compounding effect of the assumed reinvestment.

<PAGE>

Annualized yield (for subaccounts investing in income funds) divides the net
investment income (income less expenses) for each accumulation unit during a
given 30-day period by the value of the unit on the last day of the period. We
then convert the result to an annual percentage. You should consider performance
information in light of the investment objectives, policies, characteristics and
quality of the fund in which the subaccount invests and the market conditions
during the specified time period. Advertised yields and total return figures
include charges that reduce advertised performance. Therefore, you should not
compare subaccount performance to that of mutual funds that sell their shares
directly to the public. (See the SAI for a further description of methods used
to determine total return and yield.)

If you would like additional information about actual performance, please
contact us at the address or telephone number on the first page of this
prospectus.

<PAGE>

The Variable Account and the Funds

You may allocate payments to any or all the subaccounts of the variable account
that invest in shares of the following funds:

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Subaccount Investing In Investment Objectives Investment Advisor
and Policies or Manager
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Fund#1
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Fund #2
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Fund#3
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Fund #4
- - - -------------------------------------------------------------------------------
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Fund#5
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
Fund #6
- - - -------------------------------------------------------------------------------

The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other mutual funds that an investment
advisor or its affiliates manage. Although the objectives and policies may be
similar, each fund will have its own portfolio holdings and its own fees and
expenses. Accordingly, each fund will have its own investment results.

The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the funds' prospectuses for facts you
should know before investing. These prospectuses are also available by
contacting us at the address or telephone number on the first page of this
prospectus.

All funds are available to serve as the underlying investments for variable
annuities. Some funds also are available to serve as investment options for
variable life insurance policies and qualified plans. It is possible that in the
future, it may be disadvantageous for variable annuity accounts and variable
life insurance accounts and/or qualified plans to invest in the available funds
simultaneously.

Although the insurance company and the funds do not currently foresee any such
disadvantages, the boards of directors or trustees of the appropriate funds will
monitor events in order to identify any material conflicts between annuity
owners, policy owners and qualified plans and to determine what action, if any,
should be taken in response to a conflict. If a board were to conclude that it
should establish separate funds for the variable annuity, variable life
insurance and qualified plan accounts, you would not bear any expenses
associated with establishing separate funds. Please refer to the fund
prospectuses for risk disclosure regarding simultaneous investments by variable
annuity, variable life insurance and qualified plan accounts.

The IRS issued final regulations relating to the diversification requirements
under Section 817(h) of the Internal Revenue Code of 1986, as amended (the
Code). Each fund intends to comply with these requirements.

The variable account was established under Indiana law on July 15, 1987, and the
subaccounts are registered together as a single unit investment trust under the
Investment Company Act of 1940 (the 1940 Act). This registration does not
involve any supervision of our management or investment practices and policies
by the SEC. All obligations arising under the contracts are general obligations
of American Enterprise Life.

The variable account meets the definition of a separate account under federal
securities laws. We credit or charge income, capital gains and capital losses of
each subaccount only to that subaccount. State insurance law prohibits us from
charging a subaccount with liabilities of any other subaccount or of our general
business. The variable account includes other subaccounts that are available
under contracts that are not described in this prospectus.

The U.S. Treasury and the Internal Revenue Service (IRS) indicated that they may
provide additional guidance on investment control. This concerns how many
variable subaccounts an insurance company may offer and how many exchanges among
subaccounts it may allow before the contract owner would be currently taxed on
income earned within subaccount assets. At this time, we do not know what the
additional guidance will be or when action will be taken. We reserve the right
to modify the contract, as necessary, so that the owner will not be subject to
current taxation as the owner of the subaccount assets.

<PAGE>

We intend to comply with all federal tax laws so that the contract continues to
qualify as an annuity for federal income tax purposes. We reserve the right to
modify the contract as necessary to comply with any new tax laws.

The Fixed Accounts

Guarantee Period Accounts
You may also allocate purchase payments to one or more of the Guarantee Period
Accounts with Guarantee Periods ranging from two to ten years. The minimum
required investment in each Guarantee Period Account is $1,000. These accounts
are not available in all states and are not offered after annuity payouts begin.
Each Guarantee Period Account pays an interest rate that is declared when you
allocate money to that account. That interest rate is then fixed for the
Guarantee Period that you chose. We will periodically change the declared
interest rate for any future allocations to these accounts, but we will not
change the rate paid on money currently in a Guarantee Period Account.

We have no specific formula for determining the rate of interest that we declare
as future interest rates on the Guarantee Period Accounts. We will declare the
interest rates from time to time based on our analysis of current market
conditions. In addition, we also may consider various other factors in
determining the interest rates for a given Guarantee Period including regulatory
and tax requirements; sales commissions and administrative expenses we bear;
general economic trends; and competitive factors.

You may transfer money out of the Guarantee Period Accounts within 30 days
before the end of the Guarantee Period without receiving a MVA (see "Market
Value Adjustment (MVA)" below.) At that time you may choose to start a new
Guarantee Period of the same length, transfer the money to another Guarantee
Period Account, transfer the money to any of the subaccounts, or withdraw the
money from the contract (subject to applicable withdrawal provisions). If we do
not receive any instructions at the end of your Guarantee Period, we will
automatically transfer the money into the one-year fixed account.

We hold amounts you allocate to the Guarantee Period Accounts in a "nonunitized"
separate account we have established under the Indiana Insurance Code. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the Guarantee Period Accounts. State insurance
law prohibits us from charging this separate account with liabilities of any
other separate account or of our general business. We own the assets of this
separate account as well as any favorable investment performance of those
assets. You do not participate in the performance of the assets held in this
separate account. We guarantee all benefits relating to your value in the
Guarantee Period Accounts.

We intend to construct and manage the investment portfolio relating to the
separate account using a strategy known as "immunization." Immunization seeks to
lock in a defined return on the pool of assets versus the pool of liabilities
over a specified time horizon. Since the return on the assets versus the
liabilities is locked in, it is "immune" to any potential fluctuations in
interest rates during the given time. We achieve immunization by constructing a
portfolio of assets with a price sensitivity to interest rate changes (i.e.,
price duration) that is essentially equal to the price duration of the
corresponding portfolio of liabilities. Portfolio immunization provides us with
flexibility and efficiency in creating and managing the asset portfolio, while
still assuring safety and soundness for funding liability obligations.

We must invest this portfolio of assets in accordance with requirements
established by applicable state laws regarding the nature and quality of
investments that life insurance companies may make and the percentage of their
assets that they may commit to any particular type of investment. Our investment
strategy will incorporate the use of a variety of debt instruments having price
durations tending to match the applicable Guarantee Periods. These instruments
include, but are not necessarily limited to, the following:

o Securities issued by the U.S. government or its agencies or
instrumentalities, which issues may or may not be guaranteed by the U.S.
government;

o Debt securities that have an investment grade, at the time of purchase,
within the four highest grades assigned by any of three nationally
recognized rating agencies - Standard & Poor's, Moody's Investors Service
or Duff and Phelp's - or are rated in the two highest grades by the
National Association of Insurance Commissioners;

<PAGE>

o Other debt instruments which are unrated or rated below investment grade,
limited to 10% of assets at the time of purchase; and

o Real estate mortgages, limited to 45% of portfolio assets at the time of
acquisition.

In addition, options and futures contracts on fixed income securities will be
used from time to time to achieve and maintain appropriate investment and
liquidity characteristics on the overall asset portfolio.

While this information generally describes our investment strategy, we are not
obligated to follow any particular strategy except as may be required by federal
law and Indiana and other state insurance laws.

Market Value Adjustment (MVA)
You may choose to transfer money out of the Guarantee Period Accounts at anytime
after 60 days of transfer or payment allocation into the Account. Any amount
transferred or withdrawn will receive a MVA which will increase or decrease the
actual amount transferred or withdrawn. We calculate the MVA using the formula
shown below and we base it on the current level of interest rates compared to
the rate of your Guarantee Period Account.

Amount transferred x ( l + i ) n/12
_____________________

( l + j + .001 )

Where:
i = rate earned in the account from which funds are being
transferred
j = current rate for a new Guarantee Period equal to the
remaining term in the current Guarantee Period
n = number of months remaining in the current Guarantee Period
(rounded up)

We will not make MVAs for amounts withdrawn for withdrawal charges, the annual
contract administrative charge or paid out as a death claim. We also will not
make MVAs on automatic transfers from the two year Guarantee Period Account. We
determine any applicable withdrawal charges based on the market value adjusted
withdrawals. In some states the MVA is limited.

The one-year fixed account
You may allocate purchase payments to the one-year fixed account. We back the
principal and interest guarantees relating to the one-year fixed account. The
value of the one-year fixed account increases as we credit interest to the
account. Purchase payments and transfers to the one-year fixed account become
part of our general account. We credit interest daily and compound it annually.
We will change the interest rates from time to time at our discretion.

Interest in the one-year fixed account is not required to be registered with the
SEC. However, the Market Value Adjustment interests under the contracts are
registered with the SEC. The SEC staff does not review the disclosures in this
prospectus on the one-year fixed account (but the SEC does review the
disclosures in this prospectus on the Market Value Adjustment interests).
Disclosures regarding the one-year fixed account, however, may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. (See
"Making the Most of Your Contract -- Transfer policies" for restrictions on
transfers involving the one-year fixed account.)

<PAGE>

Buying Your Contract

You or your sales representative will send an application along with your
initial purchase payment to our office. As the owner, you have all rights and
may receive all benefits under the contract. You can own a nonqualified annuity
in joint tenancy with rights of survivorship only in spousal situations. You
cannot own a qualified annuity in joint tenancy. You can buy a contract or
become an annuitant if you are 85 or younger. (The age limit may be younger for
qualified annuities in some states.)

When you apply, you may select (if available in your state):

o one of the following optional Death Benefit riders;
- Maximum Anniversary Value Death Benefit Rider
- 5% Accumulation Death Benefit Rider
- Enhanced Death Benefit Rider
o an optional Guaranteed Minimum Income Benefit Rider that corresponds to the
death benefit rider you selected;
o the optional Performance Credit Rider (cannot be selected with any of the
Guaranteed Minimum Income Benefit riders);
o the one-year fixed account, Guarantee Period Accounts and/or subaccounts in
which you want to invest;
o how you want to make purchase payments; and
o a beneficiary.

The contract provides for allocation of purchase payments to the subaccounts of
the variable account and/or to the fixed accounts in even 1% increments.

If your application is complete, we will process it and apply your purchase
payment to the fixed accounts and subaccounts you selected within two business
days after we receive it at our office. If we accept your application, we will
send you a contract. If we cannot accept your application within five business
days, we will decline it and return your payment. We will credit additional
purchase payments you make to your accounts on the valuation date we receive
them. We will value the additional payments at the next accumulation unit value
calculated after we receive your payments at our office.

You may make monthly payments to your contract under a SIP. To begin the SIP,
you will complete and send a form and your first SIP payment along with your
application. There is no charge for SIP. You can stop your SIP payments at any
time.

In most states, you may make additional purchase payments to nonqualified and
qualified annuities until the retirement date.

The retirement date
Annuity payouts are scheduled to begin on the retirement date. When we process
your application, we will establish the retirement date to the maximum age or
date described below. You can also select a date within the maximum limits. You
can align this date with your actual retirement from a job, or it can be a
different future date, depending on your needs and goals and on certain
restrictions. You also can change the date, provided you send us written
instructions at least 30 days before annuity payouts begin.

For nonqualified annuities and Roth IRAs, the retirement date must be:

o no earlier than the 60th day after the contract's effective date; and
o no later than the annuitant's 85th birthday or the tenth contract
anniversary, if purchased after age 75.

<PAGE>

For qualified annuities (except Roth IRAs), to avoid IRS penalty taxes, the
retirement date generally must be:

o on or after the date the annuitant reaches age 59 1/2; and
o for IRAs and SEPs, by April 1 of the year following the calendar year when
the annuitant reaches age 701/2.

If you take the minimum IRA distribution as required by the Code from another
tax-qualified investment, or in the form of partial withdrawals from this
contract, annuity payouts can start as late as the annuitant's 85th birthday or
the tenth contract anniversary, if later.

Beneficiary
We will pay your named beneficiary the death benefit if it becomes payable
before the retirement date (while the contract is in force and before annuity
payouts begin). If there is no named beneficiary, then you or your estate will
be the beneficiary. (See "Benefits in Case of Death" for more about
beneficiaries.)

Purchase payments

Minimum initial purchase payment: $2,000

Minimum additional purchase payments:

If paying by SIP*: If paying by any other method**:
$50 $100

*Payments made using SIP must total $2,000 before you can make partial
withdrawals. ** The Guarantee Period Accounts require a minimum $1,000
initial payment.

Maximum total allowable purchase payments*** (without prior approval):
$1,000,000

*** This limit applies in total to all American Enterprise Life annuities
you own. We reserve the right to increase the maximum limit. For
qualified annuities, the qualified plan's limits on annual contributions
also apply.

How to make purchase payments

1
By letter: Send your check along with your name and contract number to:

Regular mail:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534

Express mail:
American Enterprise Life Insurance Company
Attention: Unit 829
733 Marquette Avenue
Minneapolis, MN 55402

<PAGE>

2
By SIP: Contact your sales representative to complete the necessary SIP
paperwork.

Purchase payment credits
You will generally receive a purchase payment credit with any payment you make
to your contract that brings your total net payment (total payments less
withdrawals) to $100,000 or more. We apply this credit immediately. We allocate
the credit to the fixed accounts and subaccounts in the same proportions as your
purchase payment.

We fund the credit from our general account. We do not consider credits to be
"investments" for income tax purposes. (See "Taxes.")

We will reverse credits from the contract value for any purchase payment that is
not honored.

To the extent a death benefit or withdrawal payment includes purchase payment
credits applied within twelve months preceding: (1) the date of death that
results in a lump sum death benefit under this contract; or (2) a request for
withdrawal charge waiver due to "Contingent events" (see "Charges Contingent
events"), we will assess a charge, similar to a withdrawal charge, equal to the
amount of the purchase payment credits. The amount we pay to you under these
circumstances will always equal or exceed your withdrawal value. The amount
returned to you under the free look provision also will not include any credits
applied to your contract.

Charges

Contract administrative charge
We charge this fee for establishing and maintaining your records. We deduct $40
from the contract value on your contract anniversary at the end of each contract
year. We prorate this charge among the subaccounts and the fixed accounts in the
same proportion your interest in each account bears to your total contract
value.

We will waive this charge when your contract value is $50,000 or more on the
current contract anniversary.

If you take a full withdrawal from your contract, we will deduct the charge at
the time of withdrawal regardless of the contract value or purchase payments
made. We cannot increase the annual contract administrative charge and it does
not apply after annuity payouts begin or when we pay death benefits.

Variable account administrative charge
We apply this charge daily to the subaccounts. It is reflected in the unit
values of the subaccounts and it totals 0.15% of their average daily net assets
on an annual basis. It covers certain administrative and operating expenses of
the subaccounts such as accounting, legal and data processing fees and expenses
involved in the preparation and distribution of reports and prospectuses. We
cannot increase the variable account administrative charge.

Mortality and expense risk fee
We charge this fee daily to the subaccounts. The unit values of your subaccounts
reflect this fee. For qualified contracts, this fee totals 0.85% of their
average daily net assets on an annual basis. For non-qualified contracts, this
fee totals 1.10% of their average daily net assets on an annual basis. This fee
covers the mortality and expense risk that we assume. Approximately two-thirds
of this amount is for our assumption of mortality risk, and one-third is for our
assumption of expense risk. If you choose any optional Enhanced Death Benefit
Rider or the Performance Credit Rider, we will charge an additional fee (see
"Death Benefit Rider fee" and "Performance Credit Rider fee" below). These fees
do not apply to the fixed accounts. We cannot increase these fees.

Mortality risk arises because of our guarantee to pay a death benefit and our
guarantee to make annuity payouts according to the terms of the contract, no
matter how long a specific annuitant lives and no matter how long our entire
group of annuitants live. If, as a group, annuitants outlive the life expectancy
we assumed in our actuarial tables, then we must take money from our general
assets to meet our obligations. If, as a group, annuitants do not live as long
as expected, we could profit from the mortality risk fee.

<PAGE>

Expense risk arises because we cannot increase the contract administrative
charge or the variable account administrative charge and these charges may not
cover our expenses. We would have to make up any deficit from our general
assets.

The subaccounts pay us the mortality and expense risk fee they accrued as
follows:

o first, to the extent possible, the subaccounts pay this fee from any
dividends distributed from the funds in which they invest;
o then, if necessary, the funds redeem shares to cover any remaining fees
payable.

We may use any profits we realize from the subaccounts' payment to us of the
mortality and expense risk fee for any proper corporate purpose, including,
among others, payment of distribution (selling) expenses. We do not expect that
the withdrawal charge, discussed in the following paragraphs, will cover sales
and distribution expenses.

Death Benefit Rider fee
We charge a fee for this optional feature only if you choose this option. If
selected, we apply this fee daily to the subaccounts as part of the mortality
and expense risk fee. It is reflected in the unit values of the subaccounts. We
cannot increase the Death Benefit Rider fees.

o If either the Maximum Anniversary Value Death Benefit Rider or the 5%
Accumulation Death Benefit Rider is chosen, the fee is 0.10% of the
average daily net assets on an annual basis.

o If the Enhanced Death Benefit Rider is chosen, this fee is 0.20% of the
average daily net assets on an annual basis.

Guaranteed Minimum Income Benefit Rider fee
We charge a fee for this optional feature only if you choose any one of these
options. If selected, we deduct the fee (currently 0.30%) from the contract
value on your contract anniversary at the end of each contract year. We prorate
this fee among the subaccounts and fixed accounts in the same proportion your
interest in each account bears to your total contract value.

For the rider with the benefit base of the greater of the Maximum Anniversary
Value or the 5% Accumulation, we apply the fee on an adjusted benefit base
calculated as the result of (a) + (b) - (c), where:

(a) is the Guaranteed Income Benefit Base,
(b) is the adjusted transfers from the subaccounts to the fixedaccounts made in
the last six months, and
(c) is the total contract value in the fixed accounts.

The result of (b) minus (c) cannot be greater than zero. It allows us to base
the charge largely on the subaccounts, and not on the fixed accounts.

For the riders with a benefit base of either the Maximum Anniversary Value or
the 5% Accumulation, we apply the fee on an adjusted benefit base calculated as
the greater of the contract value in the subaccounts or the result of (a) + (b)
- - - - (c) as defined above.

We will deduct the fee, adjusted for the number of calendar days coverage was in
place, if the contract is terminated for any reason or when annuity payouts
begin. We cannot increase the Guaranteed Minimum Income Benefit Rider fee after
the rider effective date and it does not apply after annuity payouts begin. We
can increase the Guaranteed Minimum Income Benefit Rider fee on new contracts up
to a maximum of 0.75%.

Performance Credit Rider fee
We charge a fee for this optional feature if you choose this option. If
selected, we apply this fee daily to the subaccounts as part of the mortality
and expense risk fee. It is reflected in the unit value of the subaccounts and
it totals 0.15% of their average daily net assets on an annual basis. We cannot
increase this fee.

<PAGE>

Withdrawal charge
If you withdraw all or part of your contract, you may be subject to a withdrawal
charge. A withdrawal charge applies if all or part of the withdrawal amount is
from purchase payments we received within seven years before withdrawal. The
withdrawal charge percentages that apply to you are shown in your contract. In
addition, amounts withdrawn from a Guarantee Period Account prior to the end of
the applicable Guarantee Period will be subject to a MVA. (See "The Fixed
Accounts - Market Value Adjustments (MVA).")

For purposes of calculating any withdrawal charge, we treat amounts withdrawn
from your contract value in the following order:

1. First, in each contract year, we withdraw amounts totaling up to 10% of
your prior anniversary contract value. (Your initial purchase payment is
considered the prior anniversary contract value during the first contract
year.) We do not assess a withdrawal charge on this amount.

2. Next, we withdraw contract earnings, if any, that are greater than the
annual 10% free withdrawal amount described in number one above. Contract
earnings equal contract value less purchase payments received and not
previously withdrawn. We do not assess a withdrawal charge on contract
earnings.

NOTE: We determine contract earnings by looking at the entire contract value,
not the earnings of any particular subaccount or the fixed accounts.

3. Next we withdraw purchase payments received prior to the withdrawal charge
period shown in your contract. We do not assess a withdrawal charge on
these purchase payments.

4. Finally, if necessary, we withdraw purchase payments received that are
still within the withdrawal charge period shown in your contract. We
withdraw these payments on a first-in, first-out (FIFO) basis. We do assess
a withdrawal charge on these payments.

We determine your withdrawal charge by multiplying each of your payments
withdrawn by the applicable withdrawal charge percentage, and then adding the
total withdrawal charges.

The withdrawal charge percentage depends on the number of years since you made
the payments that are withdrawn:

Years from purchase payment Withdrawal charge
receipt percentage
1 8%
2 8
3 7
4 7
5 6
6 5
7 3
Thereafter 0

<PAGE>

Withdrawal charge calculation example:
The following is an example of the calculation we would make to determine the
withdrawal charge on a contract with this history:

o The contract date is Jan. 1, 2000 with a contract year of Jan. 1 through
Dec. 31 and with an anniversary date of Jan. 1 each year; and

o We received these payments
- $10,000 Jan. 1, 2000;
- $8,000 Feb. 28, 2006; and
- $6,000 Feb. 20, 2008; and

o The owner withdraws the contract for its total withdrawal value of $38,101
on Aug. 5, 2010 and had not made any other withdrawals during that contract
year; and

o The prior anniversary Jan. 1, 2009 contract value was $38,488.
<TABLE>
<CAPTION>
<S> <C> <C>

Withdrawal Charge Explanation

$ 0 $3,848.80 is 10% of the prior anniversary contract value withdrawn
without withdrawal charge; and

$ 0 $10,252.20 is contract earnings in excess of the 10% free withdrawal
amount withdrawn without withdrawal charge; and

$ 0 $10,000 Jan. 1, 2000 payment was received seven or more years before
withdrawal and is withdrawn without withdrawal charge; and

$560 $8,000 Feb. 28, 2006 payment is in its fourth year from receipt,
withdrawn with a 7% withdrawal charge; and

$420 $6,000 Feb. 20, 2008 payment is in its third year from receipt
withdrawn with a 7% withdrawal charge.
$980
</TABLE>

For a partial withdrawal that is subject to a withdrawal charge, the amount we
actually withdraw from your contract will be the amount you request plus any
applicable withdrawal charge. We apply the withdrawal charge to this total
amount. We pay you the amount you requested. If you make a full withdrawal of
your contract, we also will deduct the $40 contract administrative charge.

Waiver of withdrawal charges We do not assess withdrawal charges for:

o withdrawals of any contract earnings;
o amounts totaling up to 10% of your prior contract anniversary contract
value to the extent it exceeds contract earnings;
o required minimum distributions from a qualified annuity (for those amounts
required to be distributed from the contract described in this prospectus);
o contracts settled using an annuity payout plan;

<PAGE>

o withdrawals made as a result of one of the "Contingent events"* described
below to the extent permitted by state law (see your contract for
additional conditions and restrictions);
o amounts we refund to you during the free look period; and
o death benefits.*

*However, we will reverse certain purchase payment credits up to the
maximum withdrawal charge. (See "Buying Your Contract - Purchase payment
credits.")

Contingent events
o Withdrawals you make if you or the annuitant are confined to a hospital or
nursing home and have been for the prior 60 days. Your contract will
include this provision when the owner and annuitant are under age 76 on the
date we issue the contract. You must provide proof satisfactory to us of
the confinement as of the date you request the withdrawal.
o Withdrawals you make if you or the annuitant are diagnosed in the second or
later contract years as disabled with a medical condition that with
reasonable medical certainty will result in death within 12 months or less
from the date of the licensed physician's statement. You must provide us
with a licensed physician's statement containing the terminal illness
diagnosis and the date the terminal illness was initially diagnosed.

Withdrawal charge under Annuity Payout Plan E: Payouts for a specified period.
Under this payout plan, you can choose to take a withdrawal. The amount that you
can withdraw is the present value of any remaining variable payouts. With a
qualified contract, the discount rate we use in the calculation will be 4.86% if
the assumed investment rate is 3.5% and 6.36% if the assumed investment rate is
5%. With a non-qualified contract, the discounted rate we use in the calculation
will be 5.11% if the assumed investment rate is 3.5% and 6.61% if the assumed
investment rate is 5%. The withdrawal charge is equal to the difference in
discount values using the above discount rates and the assumed investment rate.
The charge will not be greater than 9%.

Possible group reductions: In some cases we may incur lower sales and
administrative expenses due to the size of the group, the average contribution
and the use of group enrollment procedures. In such cases, we may be able to
reduce or eliminate the contract administrative and withdrawal charges. However,
we expect this to occur infrequently.

Premium taxes
Certain state and local governments impose premium taxes (up to 3.5%). These
taxes depend upon your state of residence or the state in which the contract was
sold. We deduct premium taxes when you make a full withdrawal from your contract
or when annuity payouts begin. We reserve the right to deduct this tax at other
times such as when you make purchase payments.

Valuing Your Investment

We value your fixed accounts and subaccounts as follows:

Fixed accounts: We value the amounts you allocated to the fixed accounts
directly in dollars. The value of a fixed account equals:

o the sum of your purchase payments and transfer amounts allocated to the
one-year fixed account and the Guarantee Period Accounts;
o plus any purchase payment credits allocated to the fixed accounts;
o plus interest credited;
o minus the sum of amounts withdrawn after the MVA (including any applicable
withdrawal charges) and amounts transferred out;
o minus any prorated contract administrative charge; and
o minus any prorated portion of the Guaranteed Minimum Income Benefit Rider
fee (if applicable).

<PAGE>

Subaccounts: We convert amounts you allocated to the subaccounts into
accumulation units. Each time you make a purchase payment or transfer amounts
into one of the subaccounts or we apply any purchase payment credits, we credit
a certain number of accumulation units to your contract for that subaccount.
Conversely, each time you take a partial withdrawal, transfer amounts out of a
subaccount, or we assess a contract administrative charge or the Guaranteed
Minimum Income Benefit Rider fee, we subtract a certain number of accumulation
units from your contract.

The accumulation units are the true measure of investment value in each
subaccount during the accumulation period. They are related to, but not the same
as, the net asset value of the fund in which the subaccount invests.

The dollar value of each accumulation unit can rise or fall daily depending on
the variable account expenses, performance of the fund and on certain fund
expenses. Here is how we calculate accumulation unit values:

Number of units
To calculate the number of accumulation units for a particular subaccount, we
divide your investment by the current accumulation unit value.

Accumulation unit value
The current accumulation unit value for each subaccount equals the last value
times the subaccount's current net investment factor.

Net investment factor
We determine the net investment factor by:

o adding the fund's current net asset value per share, plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee, the variable account administrative charge, any death benefit
rider fee (if selected) or the Performance Credit Rider fee (if selected)
from the result.

Because the net asset value of the fund may fluctuate, the accumulation unit
value may increase or decrease. You bear all the investment risk in a
subaccount.

Factors that affect subaccount accumulation units
Accumulation units may change in two ways: in number and in value. Here are
the factors that influence those changes:

The number of accumulation units you own may fluctuate due to:

o additional purchase payments you allocate to the subaccounts;
o any purchase payment credits allocated to the subaccounts;
o transfers into or out of the subaccounts;
o partial withdrawals;
o withdrawal charges;
o prorated portions of the contract administrative charge; and/or
o prorated portions of the Guaranteed Minimum Income Benefit Rider fee (if
selected).

<PAGE>

Accumulation unit values will fluctuate due to:

o changes in funds' net asset value;
o dividends distributed to the subaccounts;
o capital gains or losses of funds;
o fund operating expenses; and/or
o mortality and expense risk fee, the variable account administrative charge,
any Death Benefit Rider fees (if selected) and the Performance Credit Rider
(if selected).

Making the Most of Your Contract

Automated dollar-cost averaging
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might transfer a set amount monthly from a relatively conservative subaccount to
a more aggressive one, or to several others, or from the one-year fixed account
or the Guarantee Period Accounts (two year only) to one or more subaccounts. The
three to ten year Guarantee Period Accounts are not available for automated
transfers. You can also obtain the benefits of dollar-cost averaging by setting
up regular automatic SIP payments. There is no charge for dollar-cost averaging.

This systematic approach can help you benefit from fluctuations in accumulation
unit values caused by fluctuations in the market values of the funds. Since you
invest the same amount each period, you automatically acquire more units when
the market value falls and fewer units when it rises. The potential effect is to
lower your average cost per unit.
<TABLE>
<CAPTION>

How dollar-cost averaging works
<S> <C> <C> <C> <C>

By investing an Amount Accumulation unit Number of units
equal number of Month invested value purchased
dollars each month... Jan $100 $20 5.00
Feb 100 18 5.56
you automatically buy Mar 100 17 5.88
more units when the Apr 100 15 6.67
per unit market price May 100 16 6.25
is low... Jun 100 18 5.56
Jul 100 17 5.88
and fewer units when Aug 100 19 5.26
the per unit market Sept 100 21 4.76
price is high. Oct 100 20 5.00
</TABLE>

You paid an average price of only $17.91 per unit over the 10 months, while the
average market price actually was $18.10.

Dollar-cost averaging does not guarantee that any subaccount will gain in value
nor will it protect against a decline in value if market prices fall. Because
dollar-cost averaging involves continuous investing, your success with this
strategy will depend upon your willingness to continue to invest regularly
through periods of low price levels. Dollar-cost averaging can be an effective
way to help meet your long-term goals. For specific features contact us.

Asset Rebalancing
You can ask us in writing to automatically rebalance the subaccount portion of
your contract value either quarterly, semi-annually or annually. The period you
select will start to run on the date we record your request. On the first
valuation date of each of these periods, we automatically will rebalance your
contract value so that the value in each subaccount matches your current
subaccount percentage allocations. These percentage allocations must be in whole
numbers. Asset rebalancing does not apply to the fixed accounts. There is no
charge for asset rebalancing. The contract value must be at least $2,000.

<PAGE>

You can change your percentage allocations or your rebalancing period at any
time by contacting us in writing. We will restart the rebalancing period you
selected as of the date we record your change. You also can ask us in writing to
stop rebalancing your contract value. You must allow 30 days for us to change
any instructions that currently are in place. For more information on asset
rebalancing, contact your sales representative.

Transferring money between accounts
You may transfer money from any one subaccount, or the fixed accounts, to
another subaccount before annuity payouts begin. (Certain restrictions apply to
transfers involving the fixed accounts.) We will process your transfer on the
valuation date we receive your request. We will value your transfer at the next
accumulation unit value calculated after we receive your request. There is no
charge for transfers. Before making a transfer, you should consider the risks
involved in switching investments. Transfers out of the Guarantee Period
Accounts will be subject to a MVA if done more than 30 days before the end of
the Guarantee Period.

We may suspend or modify transfer privileges at any time. Excessive trading
activity can disrupt fund management strategy and increase expenses, which are
borne by all contract owners who allocated purchase payments to the fund
regardless of their transfer activity. We may apply modifications or
restrictions in any reasonable manner to prevent transfers we believe will
disadvantage other contract owners. (For information on transfers after annuity
payouts begin, see "Transfer policies" below.)

Transfer policies
o Before annuity payouts begin, you may transfer contract values between the
subaccounts, or from the subaccounts to the fixed accounts at any time.
However, if you made a transfer from the one-year fixed account to the
subaccounts, you may not make a transfer from any subaccount back to the
one-year fixed account for six months following that transfer.

o You may transfer contract values from the one-year fixed account to the
subaccounts or the Guarantee Period Accounts once a year on or within 30
days before or after the contract anniversary (except for automated
transfers, which can be set up at any time for certain transfer periods
subject to certain minimums). Transfers from the one-year fixed account are
not subject to a MVA.

o You may transfer contract values from a Guarantee Period Account anytime
after 60 days of transfer or payment allocation to the Account. Transfers
made before the end of the Guarantee Period will receive a MVA, which may
result in a gain or loss of contract value.

o If we receive your request on or within 30 days before or after the
contract anniversary date, the transfer from the one-year fixed account to
the subaccounts or the Guarantee Period Accounts will be effective on the
valuation date we receive it.

o We will not accept requests for transfers from the one-year fixed account
at any other time.

o Once annuity payouts begin, you may not make transfers to or from the
one-year fixed account, but you may make transfers once per contract year
among the subaccounts. During the annuity payout period, your choices of
subaccounts may be limited.

o Once annuity payouts begin, you may not make any transfers to the Guarantee
Period Accounts.

<PAGE>

How to request a transfer or withdrawal
1 Send your name, contract number, Social Security Number
By letter: or Taxpayer Identification Number and signed request
for a transfer or withdrawal to:

Regular mail:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534

Express mail:
American Enterprise Life Insurance Company
Attention: Unit 829
733 Marquette Avenue
Minneapolis, MN 55402

Minimum amount

Transfers or
withdrawals: $500 or entire account balance

Maximum amount

Transfers or
withdrawals: Contract value

2 Your sles representative can help you set up automated
By automated transfers or partial withdrawals among your subaccounts or
transfers and fixed accounts.
automated partial
withdrawals: You can start or stop this service by written request or
other method acceptable to us. You must allow 30 days for us
to change any instructionsthat are currently in place.

o Automated transfers from the one-year fixed account to
any one of the subaccounts may not exceed an amount
that, if continued, would deplete the one-year fixed
account within 12 months.
o Automated withdrawals may be restricted by applicable
law under some contracts.
o You may not make additional purchase payments if
automated partial withdrawals are in effect.
o Automated partial withdrawals may result in IRS taxes
and penalties on all or part of the amount withdrawn.

Minimum amount

Transfers or
withdrawals: $100 monthly
$250 quarterly, semi-annually
or annually

<PAGE>

3 Call between 7 a.m. and 6 p.m. Central time:
By phone:
800-333-3437 or
(612) 671-7700 (Minneapolis/St. Paul area)

Minimum amount

Transfers or
withdrawals: $500 or entire account
balance

Maximum amount

Transfers: Contract value
Withdrawals: $25,000

We answer telephone requests promptly, but you may experience delays when the
call volume is unusually high. If you are unable to get through, use the mail
procedure as an alternative.

We will honor any telephone transfer or withdrawal requests that we believe are
authentic and we will use reasonable procedures to confirm that they are. This
includes asking identifying questions and tape recording calls. We will not
allow a telephone withdrawal within 30 days of a phoned-in address change. As
long as we follow the procedures, we (and our affiliates) will not be liable for
any loss resulting from fraudulent requests.

Telephone transfers and withdrawals are automatically available. You may request
that telephone transfers and withdrawals not be authorized from your account by
writing to us.

Withdrawals

You may withdraw all or part of your contract at any time before annuity payouts
begin by sending us a written request or calling us. We will process your
withdrawal request on the valuation date we receive it. For total withdrawals,
we will compute the value of your contract at the next accumulation unit value
calculated after we receive your request. We may ask you to return the contract.
You may have to pay charges (see "Charges") and IRS taxes and penalties (see
"Taxes"). You cannot make withdrawals after annuity payouts begin except under
Plan E (see "The Annuity Payout Period - Annuity payout plans").

Withdrawal policies
If you have a balance in more than one account and you request a partial
withdrawal, we will withdraw money from all your subaccounts and/or the fixed
accounts in the same proportion as your value in each account correlates to your
total contract value, unless you request otherwise.

Receiving payment By regular or express mail:

o payable to owner;
o mailed to address of record.

NOTE: We will charge you a fee if you request express mail delivery.

<PAGE>

Normally, we will send the payment within seven days after receiving your
request. However, we may postpone the payment if:

- - - -- the withdrawal amount includes a purchase payment check that has not cleared;
- - - -- the NYSE is closed, except for normal holiday and weekend closings;
- - - -- trading on the NYSE is restricted, according to SEC rules;
- - - -- an emergency, as defined by SEC rules, makes it impractical to sell
securities or value the net assets of the accounts; or
- - - -- the SEC permits us to delay payment for the protection of security holders.

Changing Ownership

You may change ownership of your nonqualified annuity at any time by completing
a change of ownership form we approve and sending it to our office. The change
will become binding upon us when we receive and record it. We will honor any
change of ownership request that we believe is authentic and we will use
reasonable procedures to confirm authenticity. If we follow these procedures, we
will not take any responsibility for the validity of the change.

If you have a nonqualified annuity, you may incur income tax liability by
transferring, assigning or pledging any part of it. (See "Taxes.")

If you have a qualified annuity, you may not sell, assign, transfer, discount or
pledge your contract as collateral for a loan, or as security for the
performance of an obligation or for any other purpose except as required or
permitted by the Code. However, if the owner is a trust or custodian, or an
employer acting in a similar capacity, ownership of a contract may be
transferred to the annuitant.

Benefits in Case of Death

We will pay the death benefit to your beneficiary upon the earlier of your death
or the annuitant's death. The benefit paid will be based on the death benefit
coverage you select when you purchased the contract. If a contract has more than
one person as the owner, we will pay benefits upon the first to die of any owner
or the annuitant.

If you own the contract in joint tenancy with rights of survivorship, we will
pay benefits upon the first to die of either you or the annuitant.

Return of Premium Death Benefit
This option is required if either you or the annuitant are age 80 or above.

Under this option, if you or the annuitant die before annuity payouts begin
while this contract is in force, we will pay the beneficiary the greater of the
following less any purchase credits added to the contract in the last 12 months:

1. the contract value; or

2. the total purchase payments paid plus purchase payments credits and less
any "adjusted partial withdrawals."

<PAGE>

Adjusted partial withdrawals: We calculate an "adjusted partial withdrawal" for
each partial withdrawal as the product of (a) times (b) where:

(a) is the ratio of the amount of the partial withdrawal (including any
applicable withdrawal charge) to the contract value on the date of (but
prior to) the partial withdrawal; and

(b) is the death benefit on the date of (but prior to) the partial
withdrawal.

Example:

o The contract is purchased with a payment of $25,000 on Jan. 1, 2000.
o On Jan. 1, 2001 an additional premium payment of $5,000 is made.
o On March 1, 2001 the contract value has grown to $32,000 ($30,000 in
premium payments and $2,000 in earnings). The owner takes a $1,500 partial
withdrawal leaving a contract value of $30,500.
o On March 1, 2002 the contract value has fallen to $28,000.

The death benefit on March 1, 2002 is calculated as follows:

Total premiums paid: $30,000.00
minus any "adjusted partial withdrawals"
calculated as: 1,500 x 30,000 = - 1,406.25
32,000
for a death benefit of: $28,593.75

Maximum Anniversary Value Death Benefit Rider

If this rider is available in your state and both you and the annuitant are age
79 or younger on the contract date, you may choose to add this benefit to your
contract. This rider provides that if you or the annuitant die before annuity
payouts begin while this contract is in force, we will pay the beneficiary the
greatest of the following amounts less any purchase payment credits added in the
last 12 months:

1. the contract value; or

2. the total purchase payments paid plus purchase payment credits and less any
"adjusted partial withdrawals"; or

3. the "maximum anniversary value" immediately preceding the date of death
plus the dollar amount of any payments since that anniversary plus purchase
payment credits and minus any "adjusted partial withdrawals" since that
anniversary.

Maximum anniversary value: Each contract anniversary prior to the earlier of
your or the annuitant's 81st birthday, we calculate the anniversary value which
is the greater of:

(a) the contract value on that anniversary; or

(b) total purchase payments made to the contract plus purchase payment
credits and minus any "adjusted partial withdrawals".

The "maximum anniversary value" is equal to the greatest of these anniversary
values.

After the earlier of your or the annuitant's 81st birthday, the death benefit
continues to be the death benefit value as of that date, plus any subsequent
payments and purchase payment credits and minus any "adjusted partial
withdrawals."

<PAGE>

Example:

o The contract is purchased with a payment of $20,000 on Jan. 1, 2000.
o On Jan. 1, 2001 (the first contract anniversary) the contract value has
grown to $24,000.
o On March 1, 2001 the contract value has fallen to $22,000, at which point
the owner takes a $1,500 partial withdrawal, leaving a contract value of
$20,500.

The death benefit on March 1, 2001 is calculated as follows:

The "maximum anniversary value" : $24,000.00
(the greatest of the anniversary values which
was the contract value on Jan. 1, 2001)

plus any purchase payments paid since that anniversary: +0.00

minus any "adjusted partial withdrawal" taken since that
anniversary, calculated as: 1,500 x 24,000 = - 1,636.36
22,000

for a death benefit of: $22,363.64

5% Accumulation Death Benefit Rider
If this rider is available in your state and both you and the annuitant are age
79 or younger on the contract date, you may choose to add this benefit to you
contract. This rider provides that if you or the annuitant die before annuity
payouts begin while this contract is in force, we will pay the beneficiary the
greatest of the following amounts less any purchase payment credits added in the
last 12 months:

2. the contract value; or

2. the total purchase payments paid plus purchase payment credits and less any
"adjusted partial withdrawals"; or

3. the Variable Account 5% Floor

The Variable Account 5% Floor

On or before the contract anniversary after the earlier of your or the
annuitant's 81st birthday, the Variable Account 5% Floor is the sum of the value
in the fixed accounts plus the variable account floor. After the contract
anniversary immediately following either your or the annuitant's 81st birthday,
the Variable Account 5% Floor is the floor on that anniversary increased by
additional purchase payments made since that anniversary plus purchase payment
credits and reduced by any "adjusted partial withdrawals" since that
anniversary.

On each contract anniversary prior to the earlier of your or the annuitant's
81st birthday, we increase the variable account floor by accumulating the prior
anniversary's floor at 5%. On the first contract anniversary, the floor is
increased by 5% of the accumulated initial purchase payments plus purchase
payment credits allocated to the subaccounts. On any day that you allocate
additional amounts to, or withdraw or transfer from the subaccounts, we adjust
the floor by adding the additional amounts and subtracting the "adjusted partial
withdrawals" or "adjusted transfers."

<PAGE>

For the Variable Account 5% Floor, we calculate the "adjusted partial
withdrawals" or adjusted transfers" as the result of (a) times (b) where:

(a) is the ratio of the amount of withdrawal (including any withdrawal charges)
or transfer from the subaccounts to the total value in the subaccounts on
the date of (but prior to) the withdrawal or transfer.

(b) is the variable account floor on the date of (but prior to) the withdrawal
or transfer.

Example:

o The contract is purchased with a payment of $25,000 on Jan. 1, 2000 with
$5,000 allocated to the one-year fixed account and $20,000 allocated to the
subaccounts.

o On Jan. 1, 2001 (the first contract anniversary) the one-year fixed account
value is $5,200 and the subaccout value is $17,000. Total contract value is
$23,200.

o On March 1, 2001, the one-year fixed account value is $5,300 and the
subaccount value is $19,000. Total contract value is $24,300. The owner
takes a $1,500 partial withdrawal all from the subaccounts, leaving the
contract value of $22,800.

The death benefit on March 1, 2001 is calculated as follows:

The variable account floor on Jan. 1, 2001,
calculated as: 1.05 x 20,000 = $21,000.00

plus any purchase payments paid since that anniversary: +0.00

minus any "adjusted partial withdrawals" from the subaccounts,
calculated as: 1,500 x 21,000 = -$ 1,657.89
19,000

Variable Account Floor Benefit $19,342.10
plus the one-year fixed account value + 5,300.00

for a death benefit of: $24,642.10

Enhanced Death Benefit Rider
If this rider is available in your state and both you and the annuitant are age
79 or younger on the contract date, you may choose to add this benefit to you
contract. This rider provides that if you or the annuitant die before annuity
payouts begin while this contract is in force, we will pay the beneficiary the
greatest of the following amounts less any purchase payment credits added in the
last 12 months:

1. the contract value; or

2. the total purchase payments paid plus purchase payment credits and less any
"adjusted partial withdrawals"; or

4. the Variable Account 5% Floor

<PAGE>

Example:

o The contract is purchased with a payment of $20,000 on Jan. 1, 2000, with
$5,000 allocated to the one-year fixed account and $15,000 allocated to the
subaccounts.

o On Jan. 1, 2001 (the first contract anniversary), the one-year fixed
account value is $5,200 and the subaccount value is $12,000. Total contract
value is $17, 200.

o On March 1, 2001, the one-year fixed account value is $5,300 and the
subaccount value is $14,000. Total contract value is $19,300. The owner
takes a $1,500 partial withdrawal all from the subaccounts, leaving the
contract value at $17,800.
<TABLE>
<CAPTION>
<S> <C>

The death benefit on March 1, 2001 is calculated as follows:

The "maximum anniversary value" (the purchase payment): $ 20,000.00

plus any purchase payment paid since that anniversary: + 0.00

minus any "adjusted partial withdrawal" taken since that anniversary,
calculated as: 1,500 x 20,000 =
19,300 - 1,554.40

Maximum Anniversary Value Benefit $ 18,445.60

The variable account floor on Jan. 1, 2001,
calculated as: 1.05 x 15,000 = $ 15,750.00

plus any purchase payments paid since that anniversary: + 0.00

minus any "adjusted partial withdrawals" from the subaccounts,
calculated as: 1,500 x 15,750 =
14,000 -$ 1,687.50

Variable Account Floor Benefit $ 14,062.50
plus the one year fixed account value + 5,300.00

Variable Account 5% Floor, calculated as the one-year fixed account
plus the Variable Account Floor Benefit $ 19,362.50

Enhanced Death Benefit, calculated as the greater of the Maximum Anniversary
Value Benefit and the Variable Account 5% Floor, minus any purchase payment $ 19,362.50
credits made in the last 12 months ($0)
</TABLE>

If your spouse is sole beneficiary under a nonqualified annuity and you die
before the retirement date, your spouse may keep the contract as owner with the
contract value equal to the death benefit that would have otherwise been paid.
To do this your spouse must, within 60 days after we receive proof of death,
give us written instructions to keep the contract in force. There will be no
withdrawal charges on the contract from that point forward unless additional
purchase payments are made. The Guaranteed Minimum Income Benefit Rider, if
selected, is then terminated.

Under a qualified annuity, if the annuitant dies before the Code requires
distributions to begin, and the spouse is the only beneficiary, the spouse may
keep the contract as owner until the date on which the annuitant would have
reached age 70 1/2 or any other date permitted by the Code. To do this, the
spouse must give us written instructions within 60 days after we receive proof
of death. The contract value is equal to the death benefit that would otherwise
have been paid. There will be no withdrawal charges on the contract from that
point forward unless additional purchase payments are made. The Guaranteed
Minimum Income Benefit Rider, if selected, is then terminated.

<PAGE>

Payments: Under a nonqualified annuity, we will pay the beneficiary in a single
sum unless you give us other written instructions. We must fully distribute the
death benefit within five years of your death. However, the beneficiary may
receive payouts under any annuity payout plan available under this contract if:

o the beneficiary asks us in writing within 60 days after we receive proof of
death; and

o payouts begin no later than one year after your death, or other date as
permitted by the Code; and

o the payout period does not extend beyond the beneficiary's life or life
expectancy.

When paying the beneficiary, we will process the death claim on the valuation
date our death claim requirements are fulfilled. We will determine the
contract's value at the next accumulation unit value calculated after our death
claim requirements are fulfilled. We pay interest, if any, from the date of
death at a rate no less than required by law. We will mail payment to the
beneficiary within seven days after our death claim requirements are fulfilled.

Other rules may apply to qualified annuities. (See "Taxes").

Guaranteed Minimum Income Benefit Riders
One of three Guaranteed Minimum Income Benefit Riders may be available in many
jurisdictions for a separate annual charge, (see "Charges - Guaranteed Minimum
Income Rider fee"). Each rider provides a different benefit base from which the
guaranteed income payout is derived:

(a) Maximum Anniversary Value
(b) 5% Accumulation
(c) Greater of (a) or (b)

The rider guarantees a minimum amount of fixed annuity lifetime income during
the annuity payout period if your contract has been in force for at least ten
years, subject to the conditions described below. The rider also provides you
the option of variable annuity payouts, with a guaranteed minimum initial
payment.

In some instances, we may allow you to add this rider if it was not available
when you initially purchased your contract. In these instances, we would add
this rider at the next contract anniversary and all conditions of the rider
would use this date as the effective date.

This rider does not create contract value or guarantee the performance of any
investment option. Fixed annuity payouts under the terms of this rider will
occur at the guaranteed annuity purchase rates stated in the contract. We base
first year payments from the variable annuity payout option offered under this
rider on the same factors as the fixed annuity payout option. We base subsequent
payments on the initial payment and an assumed annual return of 5%. Because this
rider is based on guaranteed actuarial factors for the fixed option, the level
of fixed lifetime income it guarantees may be less than the level that would be
provided by applying the then current annuity factors. Likewise, for the
variable annuity payout option, we base the rider on more conservative factors
resulting in a lower initial payment and lower lifetime payments than those
provided otherwise if the same benefit base were used. However, the Guaranteed
Income Benefit Base described below establishes a floor, which when higher than
the contract value, can result in a higher annuity payout level. Thus, the rider
is a guarantee of a minimum amount of annuity income.

Each of the three riders provide a Guaranteed Income Benefit Base equal to the
benefit provided by the corresponding death benefit rider. (see "Maximum
Anniversary Value Death Benefit Rider", "5% Accumulation Death Benefit Rider",
or the "Enhanced Death Benefit Rider") if:

o the Guaranteed Minimum Income Rider became effective on the contract date, and
o all payments are recognized in the benefit base.

The Guaranteed Income Benefit Base, less any applicable premium tax, is the
value that will be used to determine minimum annuity payouts if the rider is
exercised.

<PAGE>

We reserve the right to exclude subsequent payments and purchase payment credits
paid in the last five years before exercise of the benefit, in the calculation
of the Guaranteed Income Benefit Base. We would do so only if such payments and
credits total $50,000 or more or if they are 25% or more of total payments and
credits paid into the contract.

If we exclude such payments and credits, the Guaranteed Minimum Income Benefit
Base would be calculated as the greatest of:

(a) contract value less "market value adjusted prior 5 years of payments and
purchase payment credits";

(b) total payments and purchase payment credits less prior 5 years of
payments and purchase payment credits, less adjusted partial
withdrawals; or

If the benefit base is the Maximum Anniversary Value,

(c) Maximum Anniversary Value immediately preceding the date of settlement,
plus payments and credits and minus adjusted partial withdrawals since
that anniversary, less the "market value adjusted prior 5 years of
payments and purchase payment credits";

If the benefit base is the 5% Accumulation,

(d) the Variable Account 5% Floor, less the "5% adjusted prior 5 years of
payments and purchase payment credits";

If the benefit base is the greater of the Maximum Anniversary Value or the 5%
Accumulation,

(e) the greater of (c) or (d) above.

"Market value adjusted prior 5 years of payments and purchase payment credits"
are calculated as the sum of each such payment or credit, multiplied by the
ratio of the current contract value over the estimated contract value on the
anniversary prior to such payment or credit. The estimated contract value at
such anniversary is calculated by assuming that payments, credits and partial
withdrawals occurring in a contract year take place at the beginning of the year
for that anniversary and every year after that to the current contract year.

"5% Adjusted prior 5 years of payments and purchase payment credits" are
calculated as the sum of each payment or payment credit accumulated at 5% for
the number of full contract years they have been in the contract.

Conditions on election of the rider: The following conditions apply to the
election of the rider:

o you must elect the rider at the time you purchase your contract along
with the corresponding death benefit rider option, and

o the annuitant must be age 75 or younger on the contract date.

Fund selection to continue the rider: You may allocate your purchase payments to
any of the subaccounts or the fixed accounts. However, we reserve the right to
limit the amount in the Money Market Fund to 10% of the total amount in the
subaccounts. If we are required to activate this restriction, and you have more
than 10% of your subaccount value in this fund, we will send you notice and ask
that you reallocate your contract value so that the limitation is satisfied
within 60 days. If after 60 days the limitation is not satisfied, the rider will
be terminated.

<PAGE>

Exercising the rider: The following conditions apply to the exercise of the
rider:

o you may only exercise the rider within 30 days after any contract
anniversary following the expiration of the waiting period shown below from
the effective date of the rider,

Benefit Base waiting period
(a) Maximum Anniversary value 7 years
(b) 5% Accumulaiton 7 years
(c) Greater of (a) or (b) 10 years

o the annuitant on the retirement date must be between 50 and 86 years old,
and

o you can only take an annuity payout in one of the following annuity payout
plans: - Plan A -- Life Annuity - no refund - Plan B -- Life Annuity with
ten years certain - Plan D -- Joint and last survivor life annuity - no
refund

Contingent event benefits: If you selected the Guaranteed Minimum Income Benefit
rider with the Enhanced Death Benefit rider, you will have this additional
benefit. If the annuitant satisfies the conditions for the waiver of withdrawal
charges in the event of terminal illness or a confinement in a nursing home or
hospital (see "Charges- Waiver of withdrawal charges") you can exercise the
rider at any time. In this event, you can take up to 50% of the Guaranteed
Income Benefit Base in cash. You can use the balance of the Guaranteed Income
Benefit Base for annuity payouts under the terms above with regard to annuitant
age at retirement date, the annuity payout plans and the more conservative
annuity factors.
You can also change the annuitant for the payouts.

Terminating the rider: The following conditions apply to the termination of any
of the three riders:

o you may terminate the rider within 30 days after the first anniversary of
the effective date of the rider.

o if the waiting period under the rider is 10 years, you may terminate the
rider within 30 days of the fifth anniversary of the effective date of the
rider.

o you may terminate the rider any time after the end of the waiting period of
the rider.

o the rider will terminate on the date you make a full withdrawal from the
contract, or annuity payouts begin, or on the date that a death benefit is
payable. o the rider will terminate on the contract anniversary after the
annuitant's 86th birthday.

Example:
o The contract is purchased with a payment of $100,000 on Jan. 1, 2000, and a
$1,000 purchase payment credit is added to the contract.

o There are no additional purchase payments and no partial withdrawals.

o The money is fully allocated to the subaccounts.

o The annuitant is male and age 55 on the contract date. For the joint and
last survivor option (annuity payout Plan D), the joint annuitant is female
and age 55 on the contract date.

o The Guaranteed Income Benefit Base is based on the Variable Account 5%
Floor. o The contract is within 30 days after contract anniversary.

If the Guaranteed Minimum Income Benefit Rider is exercised, the minimum fixed
annuity monthly payout or the first year variable annuity monthly payout would
be:

Fixed Annuity Payout Options
Minimum Guaranteed Annual Income
<S> <C> <C> <C> <C>

Contract Anniversary At Minimum Guaranteed Benefit Plan A -- Plan B -- Plan D --
Exercise Base
10 $164,518 $ 857.14 $ 834.11 $682.75
15 $209,972 $1,251.43 $1,192.64 $967.97
</TABLE>

After the first year payments, lifetime income payments on a variable annuity
payout option will depend on the investment performance of the subaccounts you
select. The payments will be higher if investment performance is greater than a
5% annual return and lower if investment performance is less than a 5% annual
return.

Performance Credit Rider
If this rider is available in your state, you may choose to add this benefit to
your contract. This feature provides certain benefits if your contract value has
not reached or exceeded a target value on its tenth anniversary. If, on the 10th
contract anniversary , your contract value has not reached the target value (as
defined below) you can choose either of the following benefits:

(a) You may choose to accept a credit to your contract equal to 5% of your
purchase payments less adjusted partial withdrawals and less purchase
payments and credits made in the prior five years. Such credit is made at
the 10th anniversary and allocated according to your current purchase
payment allocations.

(b) you may choose to begin receiving annuity payouts (only with lifetime
income plans; Plan E cannot be chosen) within 60 days of the 10th contract
anniversary and receive an additional 5% credit (for a total of 10% credit)
as calculated in (a).

Following your 10th contract anniversary, we will inform you if your contract
value did not meet or exceed the Target Value. We will assume that you have
elected (a) unless we receive your request to begin a lifetime annuity payout
plan within 60 days after the 10th contract anniversary.

On the 10th contract anniversary and every 10 years thereafter while you have
the contract, the 10 year calculation period restarts if (a) is elected. The
contract value (after any credits made) on that anniversary is used as the
initial purchase payment for the calculation of the target value and any credit.
Additional credits may then be made at the end of each 10 year period as
described above.

Target Value
The Target Value accumulates purchase payments at an annual interest rate of
7.2% until the tenth anniversary less adjusted partial withdrawals also
accumulated at 7.2% until the tenth contract anniversary.

Adjusted partial withdrawals
We calculated the adjusted partial withdrawals for each partial withdrawal as
the product of (a) times (b) where:

(a) is the ratio of the amount of partial withdrawal (including any applicable
withdrawal charge) to the contract value on the date of (but prior to) the
partial withdrawal, and

(b) is the target value on the date of (but prior to) the partial withdrawal.

Reset Option
You can elect to lock in the growth in your contract by restarting the 10-year
period on any contract anniversary. If you elect to restart the calculation
period, the contract value on the restart date is used as the initial purchase
payment for the calculation of the target value and any credit. The next 10 year
calculation period will then restart at the end of the new 10 year period from
the most recent restart date. We must receive your request to restart the
calculation period within 30 days after an anniversary.

<PAGE>

Fund Selection Effect on Target Value
You may allocate your purchase payments to any of the subaccounts or the fixed
accounts. However, we reserve the right to limit the amount in the fixed
accounts and the Money Market Fund to 10% of the contract value. If we are
required to activate this restriction and you have more than 10% of your
contract value in these accounts, we will send you notice and ask you that you
reallocate your contract value so that the limitation is satisfied in 60 days.
If after 60 days, the limitation is not satisfied, the target value calculation
for that year will use a 3% accumulation rate.

Example:

o The contract is purchased with a payment of $100,000 on January 1, 2000 and
a $1,000 purchase payment credit is added to the contract

o There are no additional purchase payments and no partial withdrawals

o On January 1, 2010, the contract value is $200,000

o The credit on January 1, 2010 is determined as:

Target Value on January 1, 2010 = 101,000 x (1.072)^10 = 101,000 x 2.00423 =
202,427

As the target value of $202,427 is greater than the contract value of
$200,000, a credit is made to the contract equal to $5,050 (or 5% of the
purchase payment and credits of $101,000). Your total contract value on
January 1, 2010 would be $205,050.

o On February 1, 2010, the contract value is $210,000 and you choose to begin
receiving annuity payouts under a lifetime income plan. We would use the
value of $215,050 ($210,000 + another credit of $5,050) to determine your
monthly income.

o If the contract continues and annuity payouts are not started, the benefit
restarts on January 1, 2010 with the "initial purchase payment" equal to
$205,050 and the credit determination made on January 1, 2020.

The Annuity Payout Period

As owner of the contract, you have the right to decide how and to whom annuity
payouts will be made starting at the retirement date. You may select one of the
annuity payout plans outlined below, or we may mutually agree on other payout
arrangements.

The amount available for payouts under the plan you select is the contract value
on your retirement date (less any applicable premium tax). We do not deduct any
withdrawal charges under the payout plans listed below.

You also decide whether we will make annuity payouts on a fixed or variable
basis, or a combination of fixed and variable. The amounts available to purchase
payouts under the plan you select is the contract value on your retirement date
(less any applicable premium tax). You may reallocate this contract value to the
one-year fixed account to provide fixed dollar payouts and/or among the
subaccounts to provide variable annuity payouts. During the annuity payout
period, we reserve the right to limit the number of subaccounts in which you may
invest. The Guarantee Period Accounts are not available during this payout
period.

Amounts of fixed and variable payouts depend on:

o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract; and
o the amounts you allocated to the accounts at the settlement.

<PAGE>

In addition, for variable payouts only, amounts depend on the investment
performance of the subaccounts you select. These payouts will vary from month to
month because the performance of the funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.)

For information with respect to transfers between accounts after annuity payouts
begin, see "Making the Most of Your Contract -- Transfer policies."

Annuity table
The annuity table in your contract shows the amount of the first monthly payment
for each $1,000 of contract value according to the age and, when applicable, the
sex of the annuitant. (Where required by law, we will use a unisex table of
settlement rates.) The table assumes that the contract value is invested at the
beginning of the annuity payout period and earns a 5% rate of return, which is
reinvested and helps to support future payouts.

Substitution of 3.5% table
If you ask us at least 30 days before the retirement date, we will substitute an
annuity table based on an assumed 3.5% investment rate for the 5% table in the
contract. The assumed investment rate affects both the amount of the first
payout and the extent to which subsequent payouts increase or decrease. Using
the 5% table results in a higher initial payment, but later payouts will
increase more slowly when annuity unit values rise and decrease more rapidly
when they decline.

Annuity payout plans
You may choose any one of these annuity payout plans by giving us written
instructions at least 30 days before contract values are used to purchase the
payout plan:

o Plan A -- Life annuity - no refund: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death. We will not make any further payouts. This means that if the
annuitant dies after we have made only one monthly payout, we will not make
any more payouts.

o Plan B -- Life annuity with five, ten or 15 years certain: We make monthly
payouts for a guaranteed payout period of five, ten or 15 years that you
elect. This election will determine the length of the payout period to the
beneficiary if the annuitant should die before the elected period expires.
We calculate the guaranteed payout period from the retirement date. If the
annuitant outlives the elected guaranteed payout period, we will continue
to make payouts until the annuitant's death.

o Plan C -- Life annuity - installment refund: We make monthly payouts until
the annuitant's death, with our guarantee that payouts will continue for
some period of time. We will make payouts for at least the number of months
determined by dividing the amount applied under this option by the first
monthly payout, whether or not the annuitant is living.

o Plan D -- Joint and last survivor life annuity - no refund: We make monthly
payouts while both the annuitant and a joint annuitant are living. If
either annuitant dies, we will continue to make monthly payouts at the full
amount until the death of the surviving annuitant. Payouts end with the
death of the second annuitant.

o Plan E -- Payouts for a specified period: We make monthly payouts for a
specific payout period of ten to 30 years that you elect. We will make
payouts only for the number of years specified whether the annuitant is
living or not. Depending on the selected time period, it is foreseeable
that an annuitant can outlive the payout period selected. During the payout
period, you can elect to have us determine the present value of any
remaining variable payouts and pay it to you in a lump sum. We determine
the present value of the remaining annuity payouts which are assumed to
remain level. The discount rate we use in the calculation will vary between
4.86% and 6.61% depending on the mortality and expense risk charge and the
applicable assumed investment rate. (See "Charges-Withdrawal charge under
Annuity Payout Plan E.") You can also take a portion of the discounted
value once a year. If you do so, your monthly payouts will be reduced by
the proportion of your withdrawal to the full discounted value. A 10% IRS
penalty tax could apply if you take a withdrawal or if the period you chose
is less than your life expectancy as specified by tax law.

<PAGE>

Restrictions for some qualified plans: If you purchased a qualified annuity, you
may be required to select a payout plan that provides for payouts:

o over the life of the annuitant;
o over the joint lives of the annuitant and a designated beneficiary;
o for a period not exceeding the life expectancy of the annuitant; or
o for a period not exceeding the joint life expectancies of the annuitant
and a designated beneficiary.

You have the responsibility for electing a payout plan that complies with your
contract and with applicable law.

If we do not receive instructions: You must give us written instructions for the
annuity payouts at least 30 days before the annuitant's retirement date. If you
do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed.
Contract values that you allocated to the one-year fixed account will provide
fixed dollar payouts and contract values that you allocated among the
subaccounts will provide variable annuity payouts.

If monthly payouts would be less than $20: We will calculate the amount of
monthly payouts at the time the contract value is used to purchase a payout
plan. If the calculations show that monthly payouts would be less than $20, we
have the right to pay the contract value to you in a lump sum or to change the
frequency of the payouts.

Death after annuity payouts begin
If you or the annuitant die after annuity payouts begin, we will pay any amount
payable to the beneficiary as provided in the annuity payout plan in effect.

Taxes

Generally, under current law, any increase in your contract value is taxable to
you only when you receive a payout or withdrawal (see detailed discussion
below). Any portion of the annuity payouts and any withdrawals you request that
represent ordinary income are normally taxable. We will send you a tax
information reporting form for any year in which we made a taxable distribution
according to our records. Roth IRAs may grow and be distributed tax free if you
meet certain distribution requirements.

Qualified annuities: We designed this contract for use with qualified retirement
plans. Special rules apply to these retirement plans. Your rights to benefits
may be subject to the terms and conditions of these retirement plans regardless
of the terms of the contract.

Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions under the contract comply with the law.
Qualified annuities have minimum distribution rules that govern the timing and
amount of distributions during your life (except for Roth IRAs) and after your
death. You should refer to your retirement plan or adoption agreement or consult
a tax advisor for more information about your distribution rules.

Annuity payouts under nonqualified annuities: A portion of each payout will be
ordinary income and subject to tax, and a portion of each payout will be
considered a return of part of your investment and will not be taxed. All
amounts you receive after your investment in the contract is fully recovered
will be subject to tax.

Tax law requires that all nonqualified deferred annuities issued by the same
company (and possibly its affiliates) to the same owner during a calendar year
be taxed as a single, unified contract when you take distributions from any one
of those contracts.

Annuity payouts under qualified annuities (except Roth IRAs): Under a qualified
annuity, the entire payout generally is includable as ordinary income and is
subject to tax except to the extent that contributions were made with after-tax
dollars. If you or your employer invested in your contract with deductible or
pre-tax dollars as part of a qualified retirement plan, such amounts are not
considered to be part of your investment in the contract and will be taxed when
paid to you.

Purchase payment credits and credits under the Performance Credit Rider: These
are considered earnings and are taxed accordingly.

<PAGE>

Withdrawals: If you withdraw part or all of your contract before your annuity
payouts begin, your withdrawal payment will be taxed to the extent that the
value of your contract immediately before the withdrawal exceeds your
investment. You also may have to pay a 10% IRS penalty for withdrawals you make
before reaching age 59 1/2 unless certain exceptions apply. For qualified
annuities, other penalties may apply if you withdraw your contract before your
plan specifies that you can receive payouts.

Death benefits to beneficiaries: The death benefit under a contract (except a
Roth IRA) is not tax-exempt. Any amount your beneficiary receives that
represents previously deferred earnings within the contract is taxable as
ordinary income to the beneficiary in the years he or she receives the payments.
The death benefit under a Roth IRA generally is not taxable as ordinary income
to the beneficiary if certain distribution requirements are met.

Annuities owned by corporations, partnerships or trusts: For nonqualified
annuities any annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that year. This
provision is effective for purchase payments made after Feb. 28, 1986. However,
if the trust was set up for the benefit of a natural person only, the income
will remain tax-deferred.

Penalties: If you receive amounts from your contract before reaching age 59 1/2,
you may have to pay a 10% IRS penalty on the amount includable in your ordinary
income. However, this penalty will not apply to any amount received by you or
your beneficiary:

o because of your death;

o because you become disabled (as defined in the Code);

o if the distribution is part of a series of substantially equal periodic
payments, made at least annually, over your life or life expectancy (or
joint lives or life expectancies of you and your beneficiary); or

o if it is allocable to an investment before Aug. 14, 1982 (except for
qualified annuities).

For a qualified annuity, other penalties or exceptions may apply if you make
withdrawals from your contract before your plan specifies that payouts can be
made.

Withholding, generally: If you receive all or part of the contract value, we may
deduct withholding against the taxable income portion of the payment. Any
withholding represents a prepayment of your tax due for the year. You take
credit for these amounts on your annual tax return.

If the payment is part of an annuity payout plan, we generally compute the
amount of withholding using payroll tables. You may provide us with a statement
of how many exemptions to use in calculating the withholding. As long as you've
provided us with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have any withholding occur.

If the distribution is any other type of payment (such as a partial or full
withdrawal), we compute withholding using 10% of the taxable portion. Similar to
above, as long as you have provided us with a valid Social Security Number or
Taxpayer Identification Number, you can elect not to have this withholding
occur.

Some states also impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment outside the United States.

Transfer of ownership of a nonqualified annuity: If you transfer a nonqualified
annuity without receiving adequate consideration, the transfer is a gift and
also may be a withdrawal for federal income tax purposes. If the gift is a
currently taxable event for income tax purposes, the original owner will be
taxed on the amount of deferred earnings at the time of the transfer and also
may be subject to the 10% IRS penalty discussed earlier. In this case, the new
owner's investment in the contract will be the value of the contract at the time
of the transfer.

Collateral assignment of a nonqualified annuity: If you collaterally assign or
pledge your contract, earnings on purchase payments you made after Aug. 13, 1982
will be taxed to you like a withdrawal.

<PAGE>

Important: Our discussion of federal tax laws is based upon our understanding of
current interpretations of these laws. Federal tax laws or current
interpretations of them may change. For this reason and because tax consequences
are complex and highly individual and cannot always be anticipated, you should
consult a tax advisor if you have any questions about taxation of your contract.

Tax qualification: We intend that the contract qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract are to be
interpreted to ensure or maintain such tax qualification, in spite of any other
provisions of the contract. We reserve the right to amend the contract to
reflect any clarifications that may be needed or are appropriate to maintain
such qualification or to conform the contract to any applicable changes in the
tax qualification requirements. We will send you a copy of any amendments.

Voting Rights

As a contract owner with investments in the subaccounts, you may vote on
important fund policies until annuity payouts begin. Once they begin, the person
receiving them has voting rights. We will vote fund shares according to the
instructions of the person with voting rights.

Before annuity payouts begin, the number of votes you have is determined by
applying your percentage interest in each subaccount to the total number of
votes allowed to the subaccount.

After annuity payouts begin, the number of votes you have is equal to:

o the reserve held in each subaccount for your contract;

o divided by the net asset value of one share of the applicable fund.

As we make annuity payouts, the reserve for the contract decreases; therefore,
the number of votes also will decrease.

We calculate votes separately for each subaccount. We will send notice of
shareholders' meetings, proxy materials and a statement of the number of votes
to which the voter is entitled. We will vote shares for which we have not
received instructions in the same proportion as the votes for which we received
instructions. We also will vote the shares for which we have voting rights in
the same proportion as the votes for which we received instructions.

Substitution of Investments

We may substitute the funds in which the subaccounts invest if:

o laws or regulations change,
o existing funds become unavailable, or
o in our judgment, the funds no longer are suitable for the subaccounts.

If any of these situations occur and if we believe it is in the best interest of
persons having voting rights under the contract, we have the right to substitute
funds other than those currently listed in this prospectus for other funds.

We may also:

o add new subaccounts;
o combine any two or more subaccounts;
o add subaccounts investing in additional funds;
o transfer assets to and from the subaccounts or the variable account;
and
o eliminate or close any subaccounts.

<PAGE>

In the event of substitution or any of these changes, we may amend the contract
and take whatever action is necessary and appropriate without your consent or
approval. However, we will not make any substitution or change without the
necessary approval of the SEC and state insurance departments. We will notify
you of any substitution or change.

About the Service Providers

Principal Underwriter
American Express Financial Advisors Inc. (AEFA) serves as the principal
underwriter for the contract. Its office are located at IDS Tower 10,
Minneapolis, MN 55440. AEFA is a wholly-owned subsidiary of American Express
Financial Corporation (AEFC) which is a wholly-owned subsidiary of American
Express Company.

The contracts will be distributed by broker-dealers which have entered into
distribution agreements with AEFA and American Enterprise Life.

We will pay commissions for sales of the contracts of up to 7% of purchase
payments to insurance agencies or broker-dealers that are also insurance
agencies. Sometimes we pay the commissions as a combination of a certain amount
of the commission at the time of sale and a trail commission (which, when
totaled, could exceed 7% of purchase payments). In addition, we may pay certain
sellers additional compensation for selling and distribution activities under
certain circumstances. From time to time, we will pay or permit other
promotional incentives, in cash or credit or other compensation.

Issuer
American Enterprise Life issues the annuities. American Enterprise Life is a
wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of AEFC.
AEFC is a wholly-owned subsidiary of American Express Company. American Express
Company is a financial services company principally engaged through subsidiaries
(in addition to AEFC) in travel related services, investment services and
international banking services.

American Enterprise Life is a stock life insurance company organized in 1981
under the laws of the state of Indiana. Its administrative offices are located
at 80 South Eighth Street, Minneapolis, MN 55402. Its statutory address is 100
Capitol Center South, 201 North Illinois Street, Indianapolis, IN 46204.
American Enterprise Life conducts a conventional life insurance business.

Legal proceedings
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which American Enterprise Life and AEFC do business involving
insurers' sales practices, alleged agent misconduct, failure to properly
supervise agents and other matters. American Enterprise Life and AEFC, like
other life and health insurers, from time to time are involved in such
litigation. On October 13, 1998, an action entitled Richard W. and Elizabeth J.
Thoresen vs. American Express Financial Corporation, American Centurion Life
Assurance Company, American Enterprise Life Insurance Company, American Partners
Life Insurance Company, IDS Life Insurance Company and IDS Life Insurance
Company of New York was commenced in Minnesota State Court. The action was
brought by individuals who purchased an annuity in a qualified plan. They allege
that the sale of annuities in tax-deferred contributory retirement investment
plans (e.g., IRAs) is never appropriate. The plaintiffs purport to represent a
class consisting of all persons who made similar purchases. The plaintiffs seek
damages in an unspecified amount. American Enterprise Life also is a defendant
in various other lawsuits. In American Enterprise Life's opinion, none of these
lawsuits will have a material adverse effect on our financial condition.

Additional Information About American Enterprise Life

Selected financial data
The following selected financial data for American Enterprise Life should be
read in conjunction with the financial statements and notes.

[To be filed by amendment]

Management's discussion and analysis of financial condition and results of
operations

1998 Compared to 1997:
[To be filed by amendment]

1997 Compared to 1996:
[To be filed by amendment]

Risk Management
[To be filed by amendment]

Liquidity and Capital Resources
[To be filed by amendment]

Risk Management
[To be filed by amendment]

Year 2000 Issue

The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of American Enterprise Life
and the variable account. All of the major systems used by American Enterprise
Life and by the variable account are maintained by AEFC and are utilized by
multiple subsidiaries and affiliates of AEFC. American Enterprise Life's and the
variable account's businesses are heavily dependent upon AEFC's computer systems
and have significant interactions with systems of third parities.

A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps have been taken to resolve any potential problems including
modification to existing software and the purchase of new software. AEFC's
target date for substantially completing its program of corrective measures on
internal business critical systems was December 31, 1998. As of June 30, 1999,
AEFC completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. The Year 2000 readiness of
unaffiliated investment managers and other third parties whose system failures
could have an impact on American Enterprise Life's and the Variable Account's
operations continues to be evaluated. The failure of external parties to resolve
their own year 2000 issues in a timely manner could result in a material
financial risk to AEFC, American Enterprise Life or the variable account.

AEFC's Year 2000 project includes establishing Year 2000 contingency plans for
all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. These plans are being amended to include specific Year 2000
considerations and will continue to be refined throughout 1999 as additional
information related to potential Year 2000 exposure is gathered.

Reserves
In accordance with the insurance laws and regulations under which we operate, we
are obligated to carry on our books, as liabilities, actuarially determined
reserves to meet our obligations on our outstanding annuity contracts. We base
our reserves for deferred annuity contracts on accumulation value and for fixed
annuity contracts in a benefit status on established industry mortality tables.
These reserves are computed amounts that will be sufficient to meet our policy
obligations at their maturities.

Investments
Of our total investments of $4,503,960,000 at Dec. 31, 1998, 28% was invested in
mortgage-backed securities, 53% in corporate and other bonds, 18% in primary
mortgage loans on real estate and the remaining 1% in other investments.

Competition
We are engaged in a business that is highly competitive due to the large number
of stock and mutual life insurance companies and other entities marketing
insurance products. There are over 1,600 stock, mutual and other types of
insurers in the life insurance business. Best's Insurance Reports, Life-Health
edition 1998, assigned us one of its highest classifications, A+ (Superior).

Employees
As of Dec. 31, 1998, we had no employees.

Properties
We occupy office space in Minneapolis, MN, which is rented by AEFC. We reimburse
AEFC for rent based on direct and indirect allocation methods. Facilities
occupied by us are believed to be adequate for the purposes for which they are
used and well maintained.

<PAGE>

State Regulation
American Enterprise Life is subject to the laws of the State of Indiana
governing insurance companies and to the regulations of the Indiana Department
of Insurance. An annual statement in the prescribed form is filed with the
Indiana Department of Insurance each year covering our operation for the
preceding year and its financial condition at the end of such year. Regulation
by the Indiana Department of Insurance includes periodic examination to
determine American Enterprise's contract liabilities and reserves so that the
Indiana Department of Insurance may certify that these items are correct. The
Company's books and accounts are subject to review by the Indiana Department of
Insurance at all times. Such regulation does not, however, involve any
supervision of the account's management or the company's investment practices or
policies. In addition, American Enterprise Life is subject to regulation under
the insurance laws of other jurisdictions in which it operates. A full
examination of American Enterprise Life's operations is conducted periodically
by the National Association of Insurance Commissioners.

Under insurance guaranty fund laws, in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses incurred
by insolvent companies. Most of these laws do provide however, that an
assessment may be excused or deferred if it would threaten an insurer's own
financial strength.

Directors and Executive Officers*

The directors and principal executive officers of American Enterprise Life and
the principal occupation of each during the last five years is as follows:

Directors

James E. Choat
Born in 1947

Director, president and chief executive officer since 1996; Senior vice
president - Institutional Products Group, AEFA, 1994 to 1997.

Richard W. Kling
Born 1940

Director and chairman of the board since March 1989.

Paul S. Mannweiler**
Born in 1949

Director since 1986; Partner at Locke Reynolds Boyd & Weisell since 1980.

Paula R. Meyer
Born in 1954

Director and executive vice president since 1998; vice president, AEFC since
1998; Piper Capital Management (PCM) President from Oct. 1997 to May 1998; PCM
Director of Marketing from June 1995 to Oct. 1997; PCM Director of Retail
Marketing from Dec. 1993 to June 1995.

William A. Stoltzmann
Born in 1948

Director since Sept. 1989; vice president, general counsel and secretary since
1985.

<PAGE>

Officers other than directors

Jeffrey S. Horton
Born 1961

Vice president and treasurer since Dec. 1997; vice president and corporate
treasurer, AEFC, since Dec. 1997; controller, American Express Technologies -
Financial Services, AEFC, from July 1997 to Dec. 1997; controller, Risk
Management Products, AEFC, from May 1994 to July 1997; director of finance and
analysis, Corporate Treasury, AEFC, from June 1990 to May 1994.

Philip C. Wentzel
Born in 1961

Vice president and controller since 1998; vice president - Finance, Risk
Management Products, AEFC since 1997; and director of financial reporting and
analysis from 1992 to 1997.

*The address for all of the directors and principal officers is: IDS Tower 10,
Minneapolis, MN 55440-0010 except for Mr. Mannweiler who is an independent
director.

**Mr. Mannweiler's address is: 201 No. Illinois Street, Indianapolis, IN 46204

Executive compensation
Our executive officers also may serve one or more affiliated companies. The
following table reflects cash compensation paid to the five most highly
compensated executive officers as a group for services rendered in the most
recent year to us and our affiliates. The table also shows the total cash
compensation paid to all our executive officers, as a group, who were executive
officers at any time during the most recent year.
<TABLE>
<CAPTION>
<S> <C> <C>
Name of individual or
number in group Position held Cash compensation

Five most highly compensated $4,476,367
executive officers as a group:

Richard W. Kling Chairman of the Board
James E. Choat President and CEO
Stuart A. Sedlacek Executive Vice President
Lorraine R. Hart Vice President, Investments
Deborah L. Pederson Assistant Vice President, Investments

All executive officers as a group $7,925,328
(12)

</TABLE>

Security ownership of management
Our directors and officers do not beneficially own any outstanding shares of
stock of the company. All of our outstanding shares of stock are beneficially
owned by IDS Life. The percentage of shares of IDS Life owned by any director,
and by all our directors and officers as a group, does not exceed 1% of the
class outstanding.

<PAGE>

Experts

Ernst & Young LLP, independent auditors, have audited the financial statements
of American Enterprise Life Insurance Company at Dec. 31, 1998 and 1997, and for
each of the three years in the period ended Dec. 31, 1998, as set forth in their
report. We've included our financial statements in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.

American Enterprise Life Financial Information
[To be filed on amendment]

Table of Contents of the Statement of Additional Information

Performance Information p.
Calculating Annuity Payouts p.
Rating Agencies p.
Principal Underwriter p.
Independent Auditors p.
Financial Statements

<PAGE>

Please check the box to receive a copy of the Statement of Additional
Information for:

- - - -- American ExpressR Variable Portfolio Funds

- - - -- AIM Variable Insurance Funds, Inc.
- - - -- Fidelity Variable Insurance Products - Service Class
- - - -- Franklin Templeton Variable Insurance Products Trust
- - - -- MFS(R) Variable Insurance TrustSM
- - - -- Putnam Variable Trust

Mail your request to:

American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-534

We will mail your request to:

Your name _____________________________________________
Address _______________________________________________
City _____________________ State _________ Zip ________

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

for

American Enterprise Variable Annuity Account

_____, 1999

American Enterprise Variable Annuity Account is a separate account established
and maintained by American Enterprise Life Insurance Company (American
Enterprise Life).

This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI, which may be
obtained by writing or calling us at the address and telephone number below. The
prospectus is incorporated in this SAI by reference.

American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
800-333-3437

<PAGE>

TABLE OF CONTENTS

Performance Information..................................................p.

Calculating Annuity Payouts..............................................p.

Rating Agencies..........................................................p.

Principal Underwriter....................................................p.

Independent Auditors.....................................................p.

Financial Statements

<PAGE>

PERFORMANCE INFORMATION
- - - -------------------------------------------------------------------------------

The subaccounts may quote various performance figures to illustrate past
performance. We base total return and current yield quotations (if applicable)
on standardized methods of computing performance as required by the Securities
and Exchange Commission (SEC). An explanation of the methods used to compute
performance follows below.

Average Annual Total Return

We will express quotations of average annual total return for the subaccounts in
terms of the average annual compounded rate of return of a hypothetical
investment in the contract over a period of one, five and ten years (or, if
less, up to the life of the subaccounts), calculated according to the following
formula:

P(1+T)n = ERV

where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the
period (or fractional portion thereof)

We calculated the following performance figures on the basis of historical
performance of each fund. We show actual performance from the date the
subaccounts began investing in the funds. For some subaccounts, we do not
provide any performance information because they are new and have not had any
activity to date. We also show performance from the commencement date of the
funds as if the contract existed at that time, which it did not.
Past performance does not guarantee future results.

<PAGE>

Average Annual Total Return (without purchase payment credits) For Qualified
Annuities Without Withdrawal For Periods Ending Dec. 31, 1998