AGA SEPARATE ACCOUNT A, N-4, 1998-11-20

AGA SEPARATE ACCOUNT A
N-4, 1998-11-20

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 20, 1998
REGISTRATION NOS. 333- /811-8862
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4
---------------------

<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. [ ]
</TABLE>

---------------------
AGA SEPARATE ACCOUNT A
(EXACT NAME OF REGISTRANT)

AMERICAN GENERAL ANNUITY INSURANCE COMPANY
(NAME OF DEPOSITOR)

2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

(713) 526-5251
(DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE)

---------------------

NORI L. GABERT, ESQ.
AMERICAN GENERAL ANNUITY INSURANCE COMPANY
2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019
(NAME AND ADDRESS OF AGENT FOR SERVICE)

PLEASE SEND COPIES OF
ALL COMMUNICATIONS TO:

DIANE E. AMBLER, ESQ.
MAYER, BROWN & PLATT
2000 PENNSYLVANIA AVE., N.W.
WASHINGTON, D.C. 20006
---------------------
TITLE OF SECURITIES BEING REGISTERED: Individual
Variable Annuity Contracts

SEQUENTIAL NUMBER SYSTEM: PAGE OF PAGES
EXHIBIT INDEX ON SEQUENTIAL PAGE NUMBER

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 AT THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

AMERICAN GENERAL ANNUITY INSURANCE COMPANY
AGA SEPARATE ACCOUNT A
ELITEPLUS VALUE
FORM N-4
UNDER
THE SECURITIES ACT OF 1933 AND
THE INVESTMENT COMPANY ACT OF 1940

---------------------

CROSS REFERENCE SHEET

(PURSUANT TO RULE 481(A))

<TABLE>
<CAPTION>
ITEM NO. PROSPECTUS CAPTION
-------- ------------------
<C> <S> <C>
PART A
1. Cover Page........................................ Cover Page
2. Definitions....................................... About the Prospectus
3. Synopsis.......................................... General Information
4. Condensed Financial Information................... Selected Purchase Unit Data
5. General Description of Registrant, Depositor and
Portfolio Companies............................... General Information, Variable Account Options
6. Deductions and Expenses........................... Fees and Charges, Surrender of Account Value
7. General Description of Variable Annuity........... Transfers Between Investment Options Purchase
Contracts Period, Payout Period, Surrender of
Account Value, Other Contract Features
8. Annuity Period.................................... Payout Period
9. Death Benefit..................................... Death Benefit
10. Purchase and Contract Value....................... Fees and Charges, Purchase Period
11. Redemptions....................................... Surrender of Account Value
12. Taxes............................................. Federal Tax Matters
13. Legal Proceedings................................. Not Applicable
14. Table of Contents of the Statement of Additional
Information....................................... Contents of Statement Additional Information
</TABLE>

<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL
ITEM NO. INFORMATION CAPTION
-------- -----------------------
<C> <S> <C>
PART B
15. Cover Page........................................ Cover Page
16. Table of Contents................................. Table of Contents
17. General Information and History................... General Information
18. Services.......................................... Experts; Distribution of Variable Annuity
Contracts
19. Purchase of Securities Being Offered.............. Calculation of Surrender Charge; Purchase Unit
Value;
20. Underwriters...................................... Distribution of Variable Annuity Contracts
21. Calculation of Performance Data................... Performance Calculations
22. Annuity Payments.................................. Payout Payments
23. Financial Statements.............................. Financial Statements
</TABLE>

PART C

Information required to be set forth in Part C is set forth under the
appropriate item, so numbered, in Part C of the Registration Statement.
<PAGE> 3

AMERICAN GENERAL ANNUITY INSURANCE COMPANY
UNITS OF INTEREST UNDER FLEXIBLE PREMIUM INDIVIDUAL FIXED AND
VARIABLE DEFERRED ANNUITY CONTRACTS
ELITEPLUS VALUE
AGA SEPARATE ACCOUNT A
, 1999

PROSPECTUS

The Flexible Premium Fixed and Variable Deferred Annuity Contracts (the
"Contracts") described in this Prospectus provide for the accumulation of
Contract Value on a fixed or variable basis and payment of annuity payments on a
fixed and variable basis. The Contracts are designed for use by individuals in
retirement plans on a Qualified or Non-Qualified basis.

The Contract permits you to invest in and receive retirement benefits in up to 3
Fixed Account Options and/or an array of up to 25 Variable Account Options
described in this prospectus.

- --------------------------------------------------------------------------------

American General Annuity Insurance Company (the "Company") is a member of the
Insurance Marketplace Standards Association (IMSA). IMSA is a voluntary
membership organization created by the life insurance industry to promote
ethical market conduct for individual life insurance and annuity products. The
Company's membership in IMSA applies to the Company only and not to its products
or affiliates.

The Contracts are not deposits or obligations of, or guaranteed or endorsed by
any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. Investment in the
Contracts is subject to risk that may cause the value of the Owner's investment
to fluctuate, and when the Contracts are surrendered, the value may be higher or
lower than the Purchase Payments.

This prospectus provides you with information you should know before investing
in the Contract. This prospectus is accompanied by the current prospectuses for
the mutual fund options described in this prospectus. Please read and retain
each of these prospectuses for future reference.

A Statement of Additional Information, dated , 1999, has been
filed with the Securities and Exchange Commission ("SEC") and is available along
with other related materials at the SEC's internet web site
(http://www.sec.gov.). This Statement of Additional Information contains
additional information about the Contract and is part of this prospectus. For a
free copy, complete and return the form contained in the back of this prospectus
or call 1-800-424-4990.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFER CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO
WHOM SUCH OFFER WOULD BE UNLAWFUL THEREIN.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES. ALSO, IT HAS NOT PASSED ON WHETHER THIS PROSPECTUS IS ADEQUATE OR
ACCURATE. IT IS A CRIMINAL OFFENSE TO STATE OTHERWISE.

DO NOT COPY
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ABOUT THE PROSPECTUS............................... 1

PROFILE OF THE CONTRACT............................ 2
Fixed and Variable Options..................... 2
Guaranteed Death Benefit....................... 4
Transfers...................................... 4
Fees and Charges............................... 4
Payout Options................................. 4
Federal Tax Information........................ 4
Purchase Requirements.......................... 4

FEE TABLE.......................................... 5

SELECTED PURCHASE UNIT DATA........................ 9

GENERAL INFORMATION................................ 10
About the Contract............................. 10
About AGAIC.................................... 10
About AGA Separate Account A................... 10
Units of Interest.............................. 10

VARIABLE ACCOUNT OPTIONS........................... 11
Summary of Funds............................... 11

PURCHASE PERIOD.................................... 25
Purchase Payments.............................. 25
Purchase Units................................. 25
Calculation of Purchase Unit Value............. 25
Choosing Investment Options.................... 26
Fixed Account Options..................... 26
Variable Account Options.................. 26
Stopping Purchase Payments..................... 26

TRANSFERS BETWEEN INVESTMENT OPTIONS............... 27
During the Purchase Period..................... 27
During the Payout Period....................... 27
Communicating Transfer or Reallocation
Instructions................................. 27
Sweep Account Program.......................... 28
Effective Date of Transfer..................... 28
Reservation of Rights.......................... 28
Dollar Cost Averaging Program.................. 28
Portfolio Rebalancing Program.................. 29

FEES AND CHARGES................................... 30
Account Maintenance Fee........................ 30
Surrender Charge............................... 30
Amount of Surrender Charge................ 30
10% Free Withdrawal....................... 30
Exceptions to Surrender Charge............ 30
Premium Tax Charge............................. 30
Separate Account Charges....................... 30
Fund Annual Expense Charges.................... 31
Other Tax Charges.............................. 31

PAYOUT PERIOD...................................... 32
Fixed Payout................................... 32
Variable Payout................................ 32
Combination Fixed and Variable Payout.......... 32
Payout Date.................................... 32
Payout Options................................. 32
Payout Information............................. 33
</TABLE>

SURRENDER OF ACCOUNT VALUE......................... 34
When Surrenders are Allowed.................... 34
Amount That May Be Surrendered................. 34
Partial Surrender.............................. 34
Systematic Withdrawal Program.................. 34
Distributions Required By Federal Tax Law...... 34
Exchange Privilege............................. 35

DEATH BENEFITS..................................... 36
Beneficiary Information........................ 36
Special Information for Individual Non-Tax
Qualified Contracts.......................... 36
Joint Owner Spousal Election Information....... 36
Death Benefit.................................. 36
During the Payout Period....................... 36

HOW TO REVIEW INVESTMENT PERFORMANCE OF SEPARATE
ACCOUNT DIVISIONS................................ 37
Types of Investment Performance Information
Advertised................................... 37
Total Return Performance Information......... 37
Standard Average Annual Total Return......... 37
Nonstandard Average Annual Total Return...... 37
Cumulative Total Return...................... 37
Annual Change in Purchase Unit Value......... 37
Cumulative Change in Purchase Unit Value..... 38
Total Return Based on Different Investment
Amounts................................... 38
An Assumed Account Value of $10,000.......... 38
Yield Performance Information.................. 38

DIVISIONS OTHER THAN MONEY MARKET FUND DIVISIONS... 38

PERFORMANCE INFORMATION............................ 38
Average Annual Total Return, Cumulative Return
and Annual and Cumulative Change in Purchase
Unit Value Tables............................ 38

OTHER CONTRACT FEATURES............................ 42
Change of Beneficiary.......................... 42
Cancellation -- The 10 Day "Free Look"......... 42
We Reserve Certain Rights...................... 42

VOTING RIGHTS...................................... 43
Who May Give Voting Instructions............... 43
Determination of Fund Shares Attributable to
Your Account................................. 43
During Purchase Period......................... 43
During Payout Period or after a Death Benefit
Has Been Paid................................ 43
How Fund Shares Are Voted...................... 43

FEDERAL TAX MATTERS................................ 44
Type of Plans.................................. 44
Tax Consequences in General.................... 44
Effect of Tax-Deferred Accumulations........... 45
The Power of Tax-Deferred Growth............... 45

YEAR 2000.......................................... 47
Year 2000 Risks................................ 47
</TABLE>
<PAGE> 5

ABOUT THE PROSPECTUS
- --------------------------------------------------------------------------------

Unless otherwise specified in this prospectus, the words we, our, Company and
AGAIC mean American General Annuity Insurance Company. The words you and your,
unless otherwise specified in this prospectus, mean the contract owner,
annuitant or beneficiary.

We will use a number of other specific terms in this prospectus. We will, when
that term is used in the prospectus, provide you with a definition of that term.
The terms used in this prospectus for which we will provide you a definition
are:

<TABLE>
<CAPTION>
DEFINED TERMS PAGE NO.
- ------------- --------
<S> <C>
Account Value................... 27
AGA Separate Account A.......... 43
Annuitant....................... 36
Assumed Investment Rate......... 32
Beneficiary..................... 36
Contract Anniversary............ 27, 30
Contract Owner.................. 43
Contract Year................... 27, 30
Divisions....................... 37
Fixed Account Options........... 36
Annuity Service Center.......... 9, 27
Mutual Fund or Fund............. 10
Payout Period................... 27
Payout Unit..................... 32
Purchase Payments............... 4, 25, 37
Purchase Period................. 27
Purchase Unit................... 25
Variable Account Options........ 11, 36
</TABLE>

This prospectus is being given to you to help you make decisions for selecting
various investment options and benefits to plan and save for your retirement. It
is intended to provide you with information about the Company, the Contract, and
saving for your retirement.

The purpose of Variable Account Options and Variable Payout Options is to
provide you investment returns which are greater than the effects of inflation.
We cannot, however, guarantee that this purpose will be achieved.

This prospectus describes a contract in which units of interest in the AGA
Separate Account A are offered. The Contract will allow you to accumulate
retirement dollars in Fixed Account Options and/or Variable Account Options.
This prospectus describes only the variable aspects of the Contract except where
the Fixed Account Options are specifically mentioned.

For specific information about the Variable Account Options, you should refer to
the mutual fund prospectuses you have been given with this document. You should
keep these prospectuses to help answer any questions you may have in the future.

Following this introduction is a summary of the major features and options of
the Contract. This summary is called the "Profile of the Contract." It is
intended to provide you with a brief overview of those sections discussed in
more detail in this prospectus.

1
<PAGE> 6

PROFILE OF THE CONTRACT
- --------------------------------------------------------------------------------

The Contract is a combination fixed and variable annuity that offers you a wide
choice of investment options and flexibility. A summary of the Contract's major
features is presented below. For a more detailed discussion of the Contract,
please read the entire prospectus carefully.

FIXED AND VARIABLE OPTIONS

The Contract offers a choice from among 25 Variable Account Options. The
Contract also offers three Fixed Account Options, two of which, the DCA One Year
Guarantee Period Option and the DCA Six Month Guarantee Period Option, are
available only for dollar cost averaging. See the "Dollar Cost Averaging
Program" section of this prospectus.

- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
FIXED ACCOUNT
OPTIONS
- -------------------------------------------------------------------------------------------------------------------------
FIXED One Year Guarantee Guaranteed current interest income
OPTIONS Period
-----------------------------------------------------------------------------------------------------
DCA One Year Guarantee Guaranteed current interest income --
Period
-----------------------------------------------------------------------------------------------------
DCA Six Month Guaranteed current interest income --
Guarantee Period
- -------------------------------------------------------------------------------------------------------------------------
VARIABLE ACCOUNT INVESTMENT STRATEGY ADVISER
OPTIONS
- -------------------------------------------------------------------------------------------------------------------------
EQUITY AIM V.I. Capital Capital appreciation through investments in AIM Advisors, Inc.
FUNDS Appreciation Fund common stocks, with emphasis on medium-sized
and smaller emerging growth companies
-----------------------------------------------------------------------------------------------------
AIM V.I. International Growth through investments in international AIM Advisors, Inc.
Equity Fund equity securities
-----------------------------------------------------------------------------------------------------
AIM V.I. Value Fund Growth of capital by investing primarily in AIM Advisors, Inc.
equity securities
-----------------------------------------------------------------------------------------------------
Credit Suisse Growth Long-term capital growth, current income, and AGA Investment
and Income Portfolio growth of income, consistent with reasonable Advisory Services,
investment risk through investment in Inc.
domestic equity and debt securities
-----------------------------------------------------------------------------------------------------
Credit Suisse Long-term capital appreciation through AGA Investment
International Equity investment in equity and equity-related Advisory Services,
Portfolio securities of companies from at least five Inc.
different countries, excluding the U.S.
-----------------------------------------------------------------------------------------------------
EliteValue Portfolio Growth through investments in common stocks, AGA Investment
bonds and cash equivalents Advisory
Services, Inc.
-----------------------------------------------------------------------------------------------------
Federated American Long term growth of capital by investing Federated Advisers
Leaders Fund II primarily in "blue chip companies," with a
secondary objective to provide income
-----------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term growth of capital through Massachusetts
Series investments primarily in emerging growth Financial Service
companies Company
-----------------------------------------------------------------------------------------------------
MFS Research Series Growth through investments in equity Massachusetts
securities of companies believed to possess Financial Service
better than average prospects for long term Company
growth
-----------------------------------------------------------------------------------------------------
Oppenheimer Growth Capital appreciation through investment in Oppenheimer Funds,
Fund securities of well-known established Inc.
companies
-----------------------------------------------------------------------------------------------------
Oppenheimer Growth & Total return from equity and debt securities Oppenheimer Funds,
Income Fund Inc.
-----------------------------------------------------------------------------------------------------
Oppenheimer Small Cap Capital appreciation through investments in Oppenheimer Funds,
Growth Fund growth- type companies with market Inc.
capitalizations of less than $1 billion
-----------------------------------------------------------------------------------------------------
State Street Global Total return that exceeds, over time, the AGA Investment
Advisors Growth Equity Standard & Poor's 500 Composite Stock Price Advisory Services,
Portfolio Index through investment in equity securities Inc.
-----------------------------------------------------------------------------------------------------
Templeton Developing Long-term capital appreciation. It seeks to Templeton Asset
Market Fund -- Class 2 achieve this objective by investing primarily Management, Ltd.
in equity securities of issuers in countries
having developing markets
-----------------------------------------------------------------------------------------------------
Templeton Long-term capital growth through a flexible Templeton Asset
International policy of investing in stocks and debt Management, Ltd.
Fund -- Class 2 obligations of companies and governments
outside the United States
- -------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------
FIXED
OPTIONS
------------------------------------------------------------
--

---------------------------------------------------------------------------------------------------
--

- -------------------------------------------------------------------------------------------------------------------------
SUB-ADVISER

- -------------------------------------------------------------------------------------------------------------------------
EQUITY --
FUNDS

-----------------------------------------------------------------------------------------------------
--

-----------------------------------------------------------------------------------------------------
BEA Associates

-----------------------------------------------------------------------------------------------------
Credit Suisse Asset
Management Ltd.

-----------------------------------------------------------------------------------------------------
OpCap Advisors

-----------------------------------------------------------------------------------------------------
--

-----------------------------------------------------------------------------------------------------
State Street Global
Advisors

-----------------------------------------------------------------------------------------------------
--

- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

2
<PAGE> 7
<TABLE>
<S> <C> <C> <C>
VARIABLE ACCOUNT INVESTMENT STRATEGY ADVISER
OPTIONS
- -------------------------------------------------------------------------------------------------------------------------
Van Kampen Emerging Capital appreciation by investing in equity AGA Investment
Growth Portfolio securities of small and medium sized Advisory Services,
companies in the early stages of their life Inc.
cycles
-----------------------------------------------------------------------------------------------------
Van Kampen Enterprise Capital appreciation through investments in Van Kampen Asset
Portfolio common stocks believed to have above average Management, Inc.
potential for capital appreciation
-----------------------------------------------------------------------------------------------------
Van Kampen Strategic Total return through a combination of Van Kampen Asset
Stock Portfolio potential capital appreciation and dividend Management, Inc.
income, consistent with the preservation of
invested capital by investing primarily in a
portfolio of dividend paying equity
securities including the Dow Jones Industrial
Average and the Morgan Stanley Capital
International USA Index
- -------------------------------------------------------------------------------------------------------------------------
INCOME FUNDS AIM V.I. Diversified High current income through investment in AIM Advisors, Inc.
Income Fund domestic and foreign debt securities,
including lower-rated or unrated high yield
debt securities
-----------------------------------------------------------------------------------------------------
Federated Fund for Income by investing in U.S. government Federated Advisers
U.S. Government securities
Securities II
-----------------------------------------------------------------------------------------------------
Oppenheimer High Income from investments in high yield fixed Oppenheimer Funds,
Income Fund income securities Inc.
-----------------------------------------------------------------------------------------------------
Salomon Brothers U.S. High current income through investments in AGA Investment
Government Securities debt obligations and mortgage-backed Advisory Services,
Portfolio securities issued or guaranteed by the U.S. Inc.
government, its agencies or
instrumentalities, and collateralized
mortgage obligations backed by such
securities
- -------------------------------------------------------------------------------------------------------------------------
SPECIALTY FUNDS MFS Utilities Series Growth and income through investments Massachusetts
primarily in equity and debt securities of Financial Service
both domestic and foreign companies in the Company
utilities industry
-----------------------------------------------------------------------------------------------------
Oppenheimer Strategic Income through investments in debt securities Oppenheimer Funds,
Bond Fund Inc.
- -------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND State Street Global Income through investments in short-term AGA Investment
Advisors Money Market money market securities Advisory Services,
Portfolio Inc.
- -------------------------------------------------------------------------------------------------------------------------

<CAPTION>
SUB-ADVISER
- -------------------------------------------------------------------------------------------------------------------------
Van Kampen Asset
Management, Inc.
-----------------------------------------------------------------------------------------------------
--
-----------------------------------------------------------------------------------------------------
--
- -------------------------------------------------------------------------------------------------------------------------
INCOME FUNDS --
-----------------------------------------------------------------------------------------------------
--
-----------------------------------------------------------------------------------------------------
--
-----------------------------------------------------------------------------------------------------
Salomon Brothers
Asset Management
Inc.
- -------------------------------------------------------------------------------------------------------------------------
SPECIALTY FUNDS --
-----------------------------------------------------------------------------------------------------
--
- -------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND State Street Global
Advisors
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

3
<PAGE> 8

- --------------------------------------------------------------------------------

A detailed description of the investment objective of each Fund can be found in
the section of the prospectus entitled "Variable Account Options," and also in
the current prospectus for each Fund mentioned.

GUARANTEED DEATH BENEFIT

The Contract offers a death benefit equal to the greater of:

- - Net Purchase Payments (Purchase Payments less any partial surrenders), or

- - Account Value as of the end of the Valuation Period immediately following
receipt of proof of death and the election of the death benefit payment.

TRANSFERS

You may transfer money in your account among the Contract's investment options
during the Purchase Period free of charge. We reserve the right, however, to
impose a fee of $25 or 2% of the amount transferred for each transfer which will
be deducted from the amount transferred. You may transfer your Account Values
among the Variable Account Options and the non-DCA Fixed Account Option once
each day during the Purchase Period.

Once you begin receiving payments from your account (called the Payout Period),
you may still transfer funds among the Variable Account Options and from the
Variable Account Options to the non-DCA Fixed Account Option.

Transfers can be made by calling the Company's toll-free transfer service at
1-800-424-4990. For more information on account transfers, see the "Transfers
Between Investment Options" section in this prospectus.

FEES AND CHARGES

ACCOUNT MAINTENANCE FEE

On each Contract Anniversary, the Company deducts an Account Maintenance Fee of
$30 from your Account Value during the Purchase Period. The fee is deducted
proportionately from each investment option. If the Account Value on a Contract
Anniversary is at least $25,000, the Company will waive the fee for the
following Contract Year.

SURRENDER CHARGE

Under some circumstances a surrender charge is made to your account. These
situations are discussed in detail in the section of the prospectus entitled
"Fees and Charges -- Surrender Charge." When this happens the surrender charge
is computed as a percent of the total Purchase Payments withdrawn based on the
length of time from when each Purchase Payment was received up to a maximum of
7.0% of Purchase Payments.

Withdrawals are always subject to federal tax restrictions, which generally
include a tax penalty on withdrawals made prior to age 59 1/2.

PREMIUM TAX CHARGE

Premium taxes ranging from zero to 3 1/2% are currently imposed by certain
states and municipalities on Purchase Payments made under the Contract.

SEPARATE ACCOUNT CHARGES

If you choose a Variable Account Option you will incur a mortality and expense
risk fee and an administration fee computed at an aggregate annualized rate of
0.70% and 0.15%, respectively, on the average daily net asset value of the AGA
Separate Account A.

FUND ANNUAL EXPENSE CHARGE

A daily charge based on a percentage of each Fund's average daily net asset
value is payable by each Fund to its investment adviser. In addition to the
management fees, each Fund incurs other operating expenses which may vary.

PAYOUT OPTIONS

When you withdraw your money, you can select from several payout options: a
lifetime annuity (which guarantees payment for as long as you live), periodic
withdrawals and systematic withdrawals. More information on payout options can
be found in the "Payout Period" section of the prospectus.

FEDERAL TAX INFORMATION

Although deferred annuity contracts such as the Contract can be purchased with
after-tax dollars, they are also used in connection with retirement programs
which receive favorable tax treatment under federal law.

PURCHASE REQUIREMENTS

The minimum initial Purchase Payment for Non-Qualified Contracts is $5,000 and
for Qualified Contracts is $2,000. The minimum subsequent Purchase Payment is
$1,000 for Non-Qualified Contracts and $250 for Qualified Contracts. The minimum
amount per a preauthorized debit Purchase Payment under the Automatic Check
Option is $100. More information about the Automatic Check Option can be found
in the "Purchase Period" section of this prospectus.

More information on FEES
may be found in the
prospectus under the
headings "FEES AND
CHARGES" AND "FEE TABLE."

For a more detailed
discussion of these income
tax provisions, see the
"FEDERAL TAX MATTERS"
section of the prospectus and
of the Statement of Additional
Information.

For more information on
PURCHASE PAYMENTS, refer
to the "Purchase Period"
section of the prospectus.

4
<PAGE> 9

FEE TABLE
- --------------------------------------------------------------------------------
CONTRACT OWNER EXPENSES(1)

<TABLE>
<S> <C>
Account Maintenance Fee $ 30
Maximum Surrender Charge 7.00%
</TABLE>

(as a percentage of the Purchase Payment withdrawn and based on the length of
time from when each Purchase Payment was received)

SEPARATE ACCOUNT EXPENSES
(as a percentage of Separate Account net assets):

<TABLE>
<CAPTION>
MORTALITY
AND TOTAL
EXPENSE RISK ADMINISTRATION SEPARATE
FUND FEE FEE ACCOUNT FEE
---- ------------ -------------- -----------
<S> <C> <C> <C>
AIM V.I. Capital Appreciation Fund 0.70% 0.15% 0.85%
AIM V.I. Diversified Income Fund 0.70 0.15 0.85
AIM V.I. International Equity 0.70 0.15 0.85
AIM V.I. Value Fund 0.70 0.15 0.85
Credit Suisse Growth and Income Portfolio 0.70 0.15 0.85
Credit Suisse International Equity Portfolio 0.70 0.15 0.85
EliteValue Portfolio 0.70 0.15 0.85
Federated American Leaders Fund II 0.70 0.15 0.85
Federated Fund for U.S. Government Securities II 0.70 0.15 0.85
MFS Emerging Growth Series 0.70 0.15 0.85
MFS Research Series 0.70 0.15 0.85
MFS Utilities Series 0.70 0.15 0.85
Oppenheimer Growth Fund 0.70 0.15 0.85
Oppenheimer Growth & Income Fund 0.70 0.15 0.85
Oppenheimer High Income Fund 0.70 0.15 0.85
Oppenheimer Small Cap Growth Fund 0.70 0.15 0.85
Oppenheimer Strategic Bond Fund 0.70 0.15 0.85
Salomon Brothers U.S. Government Securities Portfolio 0.70 0.15 0.85
State Street Global Advisors Growth Equity Portfolio 0.70 0.15 0.85
State Street Global Advisors Money Market Portfolio 0.70 0.15 0.85
Templeton Developing Market Fund -- Class 2 0.70 0.15 0.85
Templeton International Fund -- Class 2 0.70 0.15 0.85
Van Kampen Emerging Growth Portfolio 0.70 0.15 0.85
Van Kampen Enterprise Portfolio 0.70 0.15 0.85
Van Kampen Strategic Stock Portfolio 0.70 0.15 0.85
</TABLE>

5
<PAGE> 10
- --------------------------------------------------------------------------------

FUND ANNUAL EXPENSES
(as a percentage of net assets):

<TABLE>
<CAPTION>
TOTAL
ANNUAL
MANAGEMENT OTHER PORTFOLIO
FEES (AFTER EXPENSES EXPENSES
EXPENSE (AFTER EXPENSE (AFTER EXPENSE
FUND REIMBURSEMENT(3)) REIMBURSEMENT(3)) REIMBURSEMENT(3))
---- ----------------- ----------------- -----------------
<S> <C> <C> <C>
AIM V.I. Capital Appreciation Fund(5)(7) .63% .05% .68%
AIM V.I. Diversified Income Fund(5)(7) .60 .20 .80
AIM V.I. International Equity(5)(7) .75 .18 .93
AIM V.I. Value Fund(5)(7) .62 .08 .70
Credit Suisse Growth and Income Portfolio .75 .12 .87
Credit Suisse International Equity Portfolio .90 .12 1.02
EliteValue Portfolio .65 .12 .77
Federated American Leaders Fund II(7) .75 .10 .85
Federated Fund for U.S. Government Securities
II(7) .60 .20 .80
MFS Emerging Growth Series(7) .75 .12 .87
MFS Research Series(7) .75 .13 .88
MFS Utilities Series(7) .75 .25 1.00
Oppenheimer Growth Fund(7) .73 .02 .75
Oppenheimer Growth & Income Fund(7) .75 .08 .83
Oppenheimer High Income Fund(7) .75 .07 .82
Oppenheimer Small Cap Growth Fund(4)(7) .75 .08 .83
Oppenheimer Strategic Bond Fund(7) .75 .08 .83
Salomon Brothers U.S. Government Securities
Portfolio .475 .12 .595
State Street Global Advisors Growth Equity
Portfolio .61 .12 .73
State Street Global Advisors Money Market
Portfolio .45 .12 .57
Templeton Developing Market Fund -- Class 2(6)(7) 1.25 .58 1.83
Templeton International Fund -- Class 2(6)(7) .69 .44 1.13
Van Kampen Emerging Growth Portfolio .75 .12 .87
Van Kampen Enterprise Portfolio(7) .44 .16 .60
Van Kampen Strategic Stock Portfolio(7) .00 .65 .65
</TABLE>

- ------------

(1) Premium taxes are not shown here, but may be charged by some states. See:
"Premium Tax Charge" in this prospectus.

(2) Other Expenses includes Rule 12b-1 distribution fees (if applicable),
custody, accounting, reports to shareholders, audit, legal, administrative
and other miscellaneous expenses. See each Fund's prospectus for a detailed
explanation of these fees.

(3) After expense reimbursement. In the absence of the expense reimbursement,
management fees, other expenses and total fund operating expenses,
respectively, would be: AIM V.I. Capital Appreciation Fund, %, % and
%; AIM V.I. Diversified Income Fund, %, % and %; AIM V.I.
International Equity, %, % and %; AIM V.I. Value Fund, %, %
and %; Credit Suisse Growth and Income Portfolio, %, % and %;
Credit Suisse International Equity Portfolio, %, % and %;
EliteValue Portfolio, %, % and %; Federated American Leaders Fund
II, %, % and %; Federated Fund for U.S. Government Securities II,
%, % and %; MFS Emerging Growth Series, %, % and %; MFS
Research Series; %, % and %; MFS Utilities Series, %, % and
%; Oppenheimer Growth Fund, %, % and %; Oppenheimer Growth &
Income Fund, %, % and %; Oppenheimer High Income Fund, %, %
and %; Oppenheimer Small Cap Growth Fund, %, % and %;
Oppenheimer Strategy Bond Fund, %, % and %; Salomon Brothers U.S.
Government Securities Portfolio, %, % and %; State Street Global
Advisors Growth Equity Portfolio, %, % and %; State Street Global
Advisors Money Market Portfolio, %, % and %; Templeton Developing
Market Fund -- Class 2, %, % and %; Templeton International
Fund -- Class 2, %, % and %; Van Kampen Emerging Growth Portfolio,
%, % and %; Van Kampen Enterprise Portfolio, %, % and %;
and Van Kampen Strategic Stock Portfolio, %, % and %.

(4) New Fund; Expense ratio estimated.

(5) A.I.M. Advisors, Inc. ("AIM") may from time to time voluntarily waive or
reduce its respective fees. Effective May 1, 1998, the Funds reimburse AIM
in an amount up to 0.25 of the average net asset value of each Fund, for
expenses incurred in providing, or assuring that participating insurance
companies provide, certain administrative services. Currently, the fee only
applies to the average net asset value of each Fund in excess of the net
asset value of each Fund as calculated on April 30, 1998.

(6) Class 2 of the Fund has a distribution plan or "Rule 12b-1 plan" of up to
0.25 per year which are included in "Other Expenses" above, and described
in the Fund's prospectus. Because Class 2 shares were not offered until May
1, 1997, figures (other than Rule 12b-1 fees) are estimates for 1998 based
on the historical expenses of the Fund's Class 1 shares for the fiscal year
ended December 31, 1997. In addition, Management Fees and Total Annual
Portfolio Expenses of the Templeton International Fund have been restated
to reflect the management fee schedule approved by shareholders and
effective May 1, 1997. Actual Management Fees and Total Annual Portfolio
Expenses of the Templeton International Fund before May 1, 1997 were lower.
See the Fund prospectus for details.

(7) The Company has entered into certain arrangements under which it is
compensated by the Fund's advisers or administrators for administrative
services the Company provides to the Funds.

6
<PAGE> 11

EXAMPLE #1 -- Assuming No Account Maintenance Fee and
No Surrender at the End of the Period Shown:
- --------------------------------------------------------------------------------

Total Expenses. You would pay the following expenses on a $1,000 investment
under the Contract without a surrender charge or Account Maintenance Fee
imposed, invested in a single Separate Account Division as listed below,
assuming a 5% annual return on assets:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM V.I. Capital Appreciation Fund $16 $50 $ 86 $188
AIM V.I. Diversified Income Fund 17 54 92 201
AIM V.I. International Equity 19 58 99 215
AIM V.I. Value Fund 16 51 87 191
Credit Suisse Growth and Income Portfolio 18 56 96 209
Credit Suisse International Equity Portfolio 20 60 104 225
EliteValue Portfolio 17 53 91 198
Federated American Leaders Fund II 18 55 95 207
Federated Fund for U.S. Government Securities II 17 54 92 201
MFS Emerging Growth Series 18 56 96 209
MFS Research Series 18 56 97 210
MFS Utilities Series 19 60 103 223
Oppenheimer Growth Fund 17 52 90 196
Oppenheimer Growth & Income Fund 18 55 94 205
Oppenheimer High Income Fund 17 54 93 204
Oppenheimer Small Cap Growth Fund 18 55 94 205
Oppenheimer Strategic Bond Fund 18 55 94 205
Salomon Brothers U.S. Government Securities Portfolio 15 47 82 179
State Street Global Advisors Growth Equity Portfolio 17 51 89 194
State Street Global Advisors Money Market Portfolio 15 47 80 176
Templeton Developing Market Fund 28 85 145 306
Templeton International Fund 21 64 109 236
Van Kampen Emerging Growth Portfolio 18 56 96 209
Van Kampen Enterprise Portfolio 15 47 82 180
Van Kampen Strategic Stock Portfolio 16 49 85 185
</TABLE>

EXAMPLE #2 -- Assuming No Surrender at the End of the Period Shown:
- --------------------------------------------------------------------------------

Total Expenses. You would pay the following expenses on a $1,000 investment
under the Contract without a surrender charge imposed, invested in a single
Separate Account Division as listed below, assuming a 5% annual return on
assets:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM V.I. Capital Appreciation Fund $16 $51 $ 87 $191
AIM V.I. Diversified Income Fund 18 54 94 204
AIM V.I. International Equity 19 58 100 218
AIM V.I. Value Fund 17 51 88 193
Credit Suisse Growth and Income Portfolio 18 56 97 211
Credit Suisse International Equity Portfolio 20 61 105 227
EliteValue Portfolio 17 53 92 201
Federated American Leaders Fund II 18 56 96 209
Federated Fund for U.S. Government Securities II 18 54 94 204
MFS Emerging Growth Series 18 56 97 211
MFS Research Series 18 57 98 212
MFS Utilities Series 20 60 104 225
Oppenheimer Growth Fund 17 53 91 198
Oppenheimer Growth & Income Fund 18 55 95 207
Oppenheimer High Income Fund 18 55 95 206
Oppenheimer Small Cap Growth Fund 18 55 95 207
Oppenheimer Strategic Bond Fund 18 55 95 207
Salomon Brothers U.S. Government Securities Portfolio 15 48 83 182
State Street Global Advisors Growth Equity Portfolio 17 52 90 196
State Street Global Advisors Money Market Portfolio 15 47 82 179
Templeton Developing Market Fund 28 85 146 309
Templeton International Fund 21 64 111 239
Van Kampen Emerging Growth Portfolio 11 33 58 128
Van Kampen Enterprise Portfolio 15 48 83 182
Van Kampen Strategic Stock Portfolio 16 50 86 188
</TABLE>

7
<PAGE> 12

EXAMPLE #3 -- Assuming Surrender at the End of the Period Shown:
- --------------------------------------------------------------------------------

Total Expenses. You would pay the following expenses on a $1,000 investment
under the Contract invested in a single Separate Account Division as listed
below, assuming a 5% annual return on assets:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM V.I. Capital Appreciation Fund $86 $ 95 $123 $191
AIM V.I. Diversification Income Fund 88 99 129 204
AIM V.I. International Equity 89 103 136 218
AIM V.I. Value Fund 87 96 124 193
Credit Suisse Growth and Income Portfolio 88 101 133 211
Credit Suisse International Equity Portfolio 90 106 140 227
EliteValue Portfolio 87 98 127 201
Federated American Leaders Fund II 88 101 132 209
Federated Fund for U.S. Government Securities II 88 99 129 204
MFS Emerging Growth Series 88 101 133 211
MFS Research Series 88 101 133 212
MFS Utilities Series 90 105 139 225
Oppenheimer Growth Fund 87 97 126 198
Oppenheimer Growth & Income Fund 88 100 131 207
Oppenheimer High Income Fund 88 100 130 206
Oppenheimer Small Cap Growth Fund 88 100 131 207
Oppenheimer Strategic Bond Fund 88 100 131 207
Salomon Brothers U.S. Government Securities Portfolio 85 93 118 182
State Street Global Advisors Growth Equity Portfolio 87 97 125 196
State Street Global Advisors Money Market Portfolio 85 92 117 179
Templeton Developing Market Fund 98 130 181 309
Templeton International Fund 91 109 146 239
Van Kampen Emerging Growth Portfolio 81 78 93 128
Van Kampen Enterprise Portfolio 85 93 119 182
Van Kampen Strategic Stock Portfolio 86 94 121 188
</TABLE>

Note: These examples should not be considered representations of past or future
expenses for AGA Separate Account A or for any Fund. Actual expenses may be
greater or less than those shown above. Similarly, the 5% annual rate of return
assumed in the examples is not an estimate or guarantee of future investment
performance. The purpose of the Fee Table above is to help Contract Owners
understand the various expenses of AGA Separate Account A and the Funds which
are, in effect, passed on to the Contract Owners.

This Fee Table shows all charges and expenses which may be deducted from the
assets of AGA Separate Account A and from the Funds in which AGA Separate
Account A invests. For a further description of these charges and expenses, see
"Fees and Charges" in this prospectus and the descriptions of fees and charges
in each of the Fund's prospectuses. Any and all limitations on total charges and
expenses are reflected in this Fee Table.

8
<PAGE> 13

Selected Purchase Unit Data
- --------------------------------------------------------------------------------

The Contract is a new variable annuity product; therefore, there is no Selected
Purchase Unit Data available at this time.

9
<PAGE> 14

General Information
- --------------------------------------------------------------------------------

ABOUT THE CONTRACT

The Contract was developed to help you save money for your retirement. It offers
you a combination of fixed and variable options that you can invest in to help
you reach your retirement savings goals. Your contributions to the Contract can
come from different sources, like payroll deductions or money transfers. Your
retirement savings process with the Contract will involve two stages: the
Purchase Period; and the Payout Period. The first is when you make contributions
into the Contract called "Purchase Payments." The second, is when you receive
your retirement payouts. For more information, see "Purchase Period" and the
"Payout Period" in this prospectus.

You may choose, depending upon your retirement savings goals and your personal
risk tolerances, to invest in the Fixed Account Options and/or the Variable
Account Options described in this prospectus. When you decide to retire, or
otherwise withdraw your money, you can select from a wide array of payout
options including both fixed and variable payments. In addition, this prospectus
will describe for you all fees and charges that may apply to your participation
in the Contract.

ABOUT AGAIC

We are a life insurance company organized in 1944 and located in the State of
Texas. Our main business is issuing and offering fixed and variable retirement
annuity contracts, like the Contract. Our principal offices are located at 2929
Allen Parkway, Houston, Texas 77019. Our Annuity Service Center is located at
205 E. 10th Avenue, Amarillo, Texas 79101. The Company primarily distributes its
annuity contracts through financial institutions, general agents, and specialty
brokers.

The Company is a wholly owned subsidiary of Western National Corporation.
Effective February 25, 1998, Western National Corporation became a wholly-owned
subsidiary of AGC Life Insurance Company, a subsidiary of American General
Corporation. On this date the Company changed its name from Western National
Life Insurance Company to American General Annuity Insurance Company. Members of
the American General Corporation group of companies operate in each of the 50
states, the District of Columbia, and Canada and collectively provide financial
services with activities heavily weighted toward insurance.

The Company is a member of the Insurance Marketplace Standards Association
(IMSA). IMSA is a voluntary membership organization created by the life
insurance industry to promote ethical market conduct for individual life
insurance and annuity products. The Company's membership in IMSA applies to the
Company only and not its products or affiliates.

ABOUT AGA SEPARATE ACCOUNT A

When you direct money to the Contract's Variable Account Options, you will be
sending that money through AGA Separate Account A. You do not invest directly in
the Mutual Funds made available in the Contract. AGA Separate Account A invests
in the Mutual Funds on behalf of your account. AGA Separate Account A is made up
of what we call "Divisions." Twenty-five Divisions are available and represent
the Variable Account Options in the Contract. Each of these Divisions invests in
a different Mutual Fund made available through the Contract. For example,
Division Twenty-One represents and invests in the Oppenheimer Strategic Bond
Fund. The earnings (or losses) of each Division are credited to (or charged
against) the assets of that Division, and do not affect the performance of the
other Divisions of AGA Separate Account A.

The Company established AGA Separate Account A in 1994 under Texas insurance
law. Prior to May 1, 1998, AGA Separate Account A was known as WNL Separate
Account A. AGA Separate Account A is registered with the Securities and Exchange
Commission (SEC) as a unit investment trust under the Investment Company Act of
1940. Units of interest in AGA Separate Account A are registered as securities
under the Securities Act of 1933.

AGA Separate Account A is administered and accounted for as part of the
Company's business operations. However, the income, capital gains or capital
losses, whether or not realized, of each Division of AGA Separate Account A are
credited to or charged against the assets held in that Division without regard
to the income, capital gains or capital losses of any other Division or arising
out of any other business the Company may conduct. In accordance with the terms
of the Contract, AGA Separate Account A may not be charged with the liabilities
of any other Company operation. The Texas Insurance Code requires that the
assets of AGA Separate Account A attributable to the Contract be held
exclusively for the benefit of the contract owner, annuitants, and beneficiaries
of the Contract. When we discuss performance information in this prospectus, we
mean the performance of an AGA Separate Account A Division.

UNITS OF INTERESTS

Your investment in a Division of AGA Separate Account A is represented by units
of interest issued by AGA Separate Account A. On a daily basis, the units of
interests issued by AGA Separate Account A are revalued to reflect that day's
performance of the underlying mutual fund minus any applicable fees and charges
to AGA Separate Account A.

All inquiries regarding
THE CONTRACT
may be directed to the
Annuity Service Center
at the address shown.

MUTUAL FUND OR FUND --
the investment portfolio(s)
of a registered open-end
management investment
company, which serves as
the underlying investment
vehicle for each Division
represented in AGA
Separate Account A.

For more information about
THE COMPANY, see the Statement
of Additional Information.

10
<PAGE> 15

VARIABLE ACCOUNT OPTIONS
- --------------------------------------------------------------------------------

Each individual Division represents and invests, through AGA Separate Account A,
in specific Mutual Funds. These Mutual Funds serve as the investment vehicles
for the Contract and include:

- - AGA Series Trust -- offers 7 funds, for which AGA Investment Advisory
Services, Inc. serves as investment adviser and BEA Associates, Credit Suisse
Asset Management Ltd., OpCap Advisers, Salomon Brothers Asset Management,
Inc., State Street Global Advisers and Van Kampen Asset Management, Inc. serve
as sub-advisers.
- - AIM Variable Insurance Funds, Inc. -- offers 4 funds for which AIM Advisors,
Inc. serves as investment adviser.
- - Federated Insurance Series -- offers 2 funds for which Federated Advisers
serves as investment adviser.
- - MFS Variable Insurance Trust -- offers 3 funds, for which Massachusetts
Financial Service Company serves as investment adviser.
- - Oppenheimer Variable Account Funds -- offers 5 funds for which Oppenheimer
Funds, Inc. serves as investment adviser.
- - Templeton Variable Products Series Fund -- offers 2 funds for which Templeton
Investment Counsel, Inc. and Templeton Asset Management, Ltd. (Franklin
Resources, Inc.) respectively serve as investment adviser.
- - Van Kampen Life Investment Trust -- offers 2 funds for which Van Kampen Asset
Management, Inc. serves as investment adviser.

Each of these Funds is registered as a diversified open-end, management
investment company and is regulated under the Investment Company Act of 1940.
For complete information about each of these Funds, including charges and
expenses, you should refer to the prospectus for that Fund. Additional copies
are available from the Company's Annuity Service Center at the address shown in
the back of this prospectus.

SUMMARY OF FUNDS

A brief summary of the investment objectives of each Mutual Fund is shown below.
In addition to the investment objectives, the Account Value of an assumed
$10,000 investment in each of the Divisions is shown in both table and graph
form as well as the Standard Average Annual Total Return for each Division for a
1, 3, 5 and 10 year period if available. The performance information in the
tables and graphs will reflect a deduction for separate account fees (mortality
and expense risk fees plus administrative charge) and underlying fund charges.
They will not reflect any deduction for account maintenance fees, surrender
charges and premium taxes. These charges would further reduce your return. The
Account Values shown in the graphs reflect Separate Account performance based on
the performance of the underlying Fund for the last 10 fiscal years or, since
inception of the underlying Fund if for less than 10 years. The returns shown in
the tables for certain Funds (Divisions 1-7) reflect actual historical
performance of the related Separate Account Divisions since inception of each
Division. Investment return and principal value will fluctuate with market
conditions, and for foreign investments, currencies and the economic and
political climates of the countries where investments are made. Past performance
cannot predict or guarantee future results.

The Standard Average Annual Total Return figures show the average percentage
change in the value of an investment in a Division from the beginning to the end
of the historical periods shown below. The results shown are after all charges
and fees have been applied against the Division. This will include account
maintenance fees and surrender charges that would have been deducted if you
surrendered the Contract at the end of the specified period. Premium taxes are
not deducted. This information is calculated for each Division based on how an
initial investment of $1,000 performed at the end of the specified periods
shown.

For more information about how these returns were calculated including a
statement of the charges reflected and tables showing historical performance
information see "How to Review Investment Performance of Separate Account
Divisions" in this prospectus.

VARIABLE ACCOUNT
OPTIONS -- investment
options that correspond
to Separate Account
Divisions offered by
the Contract.
Investment returns on
Variable Account
Options may be positive
or negative depending on
the investment
performance of the
underlying Mutual Fund.

11
<PAGE> 16

CREDIT SUISSE GROWTH AND INCOME PORTFOLIO
(Division 1)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide long-term capital growth, current income, and growth of income,
consistent with reasonable investment risk through investment primarily in
domestic equity as well as domestic debt securities.

<TABLE>
<CAPTION>
Annual Value of a $10,000
Stipulated Payment made
October 20, 1995 $ Value
- ------------------------- -------
<S> <C>
10/20/95 $10,000
06/30/96 11,195
06/30/97 13,324
06/30/98 15,976
</TABLE>

VALUE AT MONTHLY INTERVALS OF A $10,000
STIPULATED PAYMENT MADE OCTOBER 20, 1995

CHART

PERIOD ENDED JUNE 30

CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
(Division 2)**

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide long-term capital appreciation through investment in equity and
equity-related securities of companies from at least five different countries,
excluding the United States. Under normal conditions, the Portfolio will invest
at least 65% of its total assets in equity securities of issuers whose principal
places of business (as determined by location of the issuer's principal
headquarters) are located in countries other than the United States. The balance
of the Portfolio, up to 35% of its total assets, may be invested in equity or
debt securities of U.S. issuers or foreign entities.

<TABLE>
<CAPTION>
Annual Value of a $10,000
Stipulated Payment made
October 20, 1995 $ Value
- ------------------------- -------
<S> <C>
10/20/95 $10,000
06/30/96 11,503
06/30/97 13,887
06/30/98 13,086
</TABLE>

VALUE AT MONTHLY INTERVALS OF A $10,000
STIPULATED PAYMENT MADE OCTOBER 20, 1995

CHART

PERIOD ENDED JUNE 30

* The Standard Average Annual Total Return for the Credit Suisse Growth and
Income Portfolio for the 1 year period and since inception was 19.97% and
18.99%, respectively.

** The Standard Average Annual Total Return for the Credit Suisse International
Equity Portfolio for the 1 year period and since inception was -5.77% and
10.48%, respectively.

12
<PAGE> 17

ELITEVALUE PORTFOLIO
(Division 3)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks growth of capital over time through investment in a portfolio consisting
of common stocks, bonds and cash equivalents.

<TABLE>
<CAPTION>
Annual Value of a $10,000
Stipulated Payment made
January 2, 1996 $ Value
- ------------------------- -------
<S> <C>
01/02/96 $10,000
06/30/96 10,886
06/30/97 14,062
06/30/98 16,727
</TABLE>

VALUE AT MONTHLY INTERVALS OF A $10,000
STIPULATED PAYMENT MADE JANUARY 2, 1996

CHART

PERIOD ENDED JUNE 30

SALOMON BROTHERS U.S.
GOVERNMENT SECURITIES PORTFOLIO
(Division 4)**

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks a high level of current income by investing a substantial portion of its
assets in debt obligations and mortgage-backed securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities, and collateralized
mortgage obligations backed by such securities.

<TABLE>
<CAPTION>
Annual Value of a $10,000
Stipulated Payment made
February 6, 1996 $ Value
- ------------------------- -------
<S> <C>
02/06/96 $10,000
06/30/96 9,837
06/30/97 10,552
06/30/98 11,405
</TABLE>

VALUE AT MONTHLY INTERVALS OF A $10,000
STIPULATED PAYMENT MADE FEBRUARY 6, 1996

CHART

PERIOD ENDED JUNE 30

* The Standard Average Annual Total Return for the EliteValue Portfolio for the
1 year period and since inception was 18.96% and 22.89%, respectively.

** The Standard Average Annual Total Return for the Salomon Brothers U.S.
Government Securities Portfolio for the 1 year period and since inception was
8.09% and 5.63%, respectively.

13
<PAGE> 18

STATE STREET GLOBAL
ADVISORS GROWTH EQUITY
PORTFOLIO
(Division 5)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide total returns that exceed, over time, the Standard & Poor's 500
Composite Stock Price Index through investment in equity securities. Equity
securities are selected on the basis of a proprietary analytical model of the
Portfolio's Sub-Adviser. Each security is ranked according to two separate and
uncorrelated measures: value and the momentum of Wall Street sentiment.

<TABLE>
<CAPTION>
Annual Value of a $10,000
Stipulated Payment made
October 20, 1995 $ Value
- ------------------------- -------
<S> <C>
10/20/96 $10,000
06/30/96 11,343
06/30/97 14,483
06/30/98 18,714
</TABLE>

VALUE AT MONTHLY INTERVALS OF A $10,000
STIPULATED PAYMENT MADE OCTOBER 20, 1995

CHART

PERIOD ENDED JUNE 30

STATE STREET GLOBAL
ADVISORS MONEY MARKET
PORTFOLIO
(Division 6)**

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks income through investments in short-term money market securities.

<TABLE>
<CAPTION>
Annual Value of a $10,000
Stipulated Payment made
October 6, 1995 $ Value
- ------------------------- -------
<S> <C>
10/06/95 $10,000
06/30/96 10,298
06/30/97 10,756
06/30/98 11,246
</TABLE>

VALUE AT MONTHLY INTERVALS OF A $10,000
STIPULATED PAYMENT MADE OCTOBER 20, 1995

CHART

PERIOD ENDED JUNE 30

* The Standard Average Annual Total Return for the State Street Global Advisers
Growth Equity Portfolio for the 1 year period and since inception was 29.21% and
26.14%, respectively.

** The Standard Average Annual Total Return for the State Street Global Advisors
Money Market Portfolio for the 1 year period and since inception was 4.55% and
4.39%, respectively.

14
<PAGE> 19

VAN KAMPEN EMERGING GROWTH PORTFOLIO
(Division 7)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide capital appreciation by investing in equity securities of small
and medium sized companies in the early stages of their life cycles; any
ordinary income received from portfolio securities is entirely incidental.

<TABLE>
<CAPTION>
Annual Value of a $10,000
Stipulated Payment made
January 2, 1996 $ Value
- ------------------------- -------
<S> <C>
01/02/96 $10,000
06/30/96 11,905
06/30/97 12,773
06/30/98 17,106
</TABLE>

VALUE AT MONTHLY INTERVALS OF A $10,000
STIPULATED PAYMENT MADE JANUARY 2, 1996

CHART

PERIOD ENDED JUNE 30

AIM V.I. CAPITAL
APPRECIATION FUND
(Division 8)**

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks capital appreciation through investments in common stocks, with emphasis
on medium-sized and smaller emerging growth companies.

* The Standard Average Annual Total Return for the Van Kampen Emerging Growth
Portfolio for the 1 year period and since inception was 33.96% and 24.02%,
respectively.

** The Division recently commenced operations. Accordingly, no performance for
the Division is available.

15
<PAGE> 20

AIM V.I. DIVERSIFIED
INCOME FUND
(Division 9)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to achieve a high level of current income through investment in: (i)
foreign government securities, (ii) foreign and domestic corporate debt
securities, (iii) U.S. Government securities, including U.S. Government Agency
Mortgage-Backed Securities, and (iv) lower-rated or unrated high yield debt
securities (commonly known as "junk bonds") of U.S. and foreign companies.

AIM V.I. INTERNATIONAL
EQUITY FUND
(Division 10)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide long-term growth of capital by investing in a diversified
portfolio of international equity securities the issuers of which are considered
by the adviser to have strong earnings momentum.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

16
<PAGE> 21

AIM V.I. VALUE FUND
(Division 11)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks long-term growth of capital by investing primarily in equity securities
judged by the adviser to be undervalued relative to the current or projected
earnings of the companies issuing the securities or relative to current market
values of assets owned by the Companies issuing the securities or relative to
the equity market generally.

FEDERATED AMERICAN
LEADERS FUND II
(Division 12)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks long-term growth of capital, with a secondary objective to provide income
by investing primarily in "blue chip" companies.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

17
<PAGE> 22

FEDERATED FUND FOR U.S.
GOVERNMENT SECURITIES II
(Division 13)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks current income by investing in a professionally managed, diversified
portfolio limited to U.S. Government securities.

MFS EMERGING
GROWTH SERIES
(Division 14)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide long-term growth of capital with dividend and interest income
incidental to growth of capital by investing primarily in common stocks of
emerging growth companies.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

18
<PAGE> 23

MFS RESEARCH SERIES
(Division 15)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide long-term growth of capital and future income by investing in
equity securities of companies believed to possess better than average prospects
for long term growth.

MFS UTILITIES SERIES
(Division 16)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide capital growth and current income through investment primarily
in equity and debt securities of both domestic and foreign companies in the
utilities industry.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

19
<PAGE> 24

OPPENHEIMER GROWTH FUND
(Division 17)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to achieve capital appreciation by investing in securities of well-known
established companies.

OPPENHEIMER GROWTH & INCOME FUND
(Division 18)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks high total return (which includes growth in the value of its shares as
well as current income) from equity and debt securities. From time to time, the
Fund may focus on small to medium capitalization common stocks, bonds and
convertible securities.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

20
<PAGE> 25

OPPENHEIMER HIGH INCOME FUND
(Division 19)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks to provide a high level of current income from investment in high yield
fixed-income securities.

OPPENHEIMER SMALL CAP GROWTH FUND
(Division 20)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks capital appreciation principally through investments in securities of
growth-type companies with market capitalizations of less than $1 billion.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

21
<PAGE> 26

OPPENHEIMER STRATEGIC BOND FUND
(Division 21)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks high current income principally through investment in debt securities and
to enhance current income by writing covered call options.

TEMPLETON DEVELOPING
MARKET FUND
(Division 22)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks long term capital appreciation. The Fund seeks to achieve this objective
by investing primarily in equity securities of issuers in countries having
developing markets.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

22
<PAGE> 27

TEMPLETON INTERNATIONAL
FUND
(Division 23)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks long term capital growth through a flexible policy of investing in stocks
and debt obligations of companies and governments outside the United States.

VAN KAMPEN ENTERPRISE
PORTFOLIO
(Division 24)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks capital appreciation through investments in common stocks believed to have
above average potential for capital appreciation.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

23
<PAGE> 28

VAN KAMPEN STRATEGIC
STOCK PORTFOLIO
(Division 25)*

- ---------------------------------------------------------------

INVESTMENT OBJECTIVE

Seeks total return through a combination of potential capital appreciation and
dividend income, consistent with the preservation of invested capital, by
investing primarily in a portfolio of dividend paying equity securities included
in the Dow Jones Industrial Average and the Morgan Stanley Capital International
USA Index.

* The Division recently commenced operations. Accordingly, no performance for
the Division is available.

24
<PAGE> 29

PURCHASE PERIOD
- --------------------------------------------------------------------------------

The Purchase Period begins when your first Purchase Payment is made and
continues until you begin your Payout Period. The Purchase Period can also end
when the Contract is surrendered before the Payout Period.

PURCHASE PAYMENTS
You may establish an account only through a Company representative. Initial
Purchase Payments must be received by the Company either with, or after, a
completed application.

Minimum initial and subsequent Purchase Payments are as follows:

<TABLE>
<CAPTION>
Initial Subsequent
Purchase Purchase
Contract Type Payment Payment
- --------------------------------- -------- ----------
<S> <C> <C>
Non-Qualified Contract $5,000 $1,000
Qualified Contract $2,000 $ 250
</TABLE>

Subject to the maximum and minimum Purchase Payment requirements, you may make
subsequent Purchase Payments and may increase or decrease or change the
frequency of such payments. The maximum total Purchase Payments we will accept
without our prior approval is $1,000,000.

You may select on your Contract application the Automatic Check Option. The
Automatic Check Option allows you to preauthorize debits against a bank account
that you indicate on the Preauthorized Debit Form to be sent in with your
Contract application. The minimum amount per a preauthorized debit Purchase
Payment under the Automatic Check Option is $100.

Purchase Payments are received at the Annuity Service Center. When an initial
Purchase Payment is accompanied by an application, within 2 business days we
will:

- - Accept the Application -- and issue a contract.

- - Reject the Application -- and return the Purchase Payment; or

- - Request Additional Information -- to correct or complete the application. We
will return the Purchase Payments within 5 business days if the requested
information is not provided, unless you otherwise so specify.

RIGHT TO RETURN

If for any reason you are not satisfied with your Contract, you may return it to
the Company and receive a refund of your Purchase Payments adjusted to reflect
investment experience. (In some states, we will return Purchase Payments as
required by state law.) To exercise your right to return your Contract, you must
mail it directly to the Annuity Service Center or return it to the AGAIC
representative through whom you purchased the Contract within 10 days after you
receive it. The address for the Annuity Service Center is located in the back of
this prospectus. In a few states, this period may be longer. In most states, we
invest your initial premium payment in the State Street Global Advisors Money
Market Portfolio Division Six from the date your investment performance begins
until the first business day that is at a maximum, 30 days later. Then we will
automatically allocate your investment among the investment options as you have
chosen. Any additional Purchase Payments we receive during the 30-day maximum
period will also be invested in the State Street Global Advisors Money Market
Portfolio Division Six and allocated to the investment options at the same time
as your initial Purchase Payment.

PURCHASE UNITS

A Purchase Unit is a unit of interest owned by you in your Variable Account
Option. Purchase Units apply only to the Variable Account Options selected for
your account. Purchase Unit values are calculated at the close of regular
trading of the New York Stock Exchange (the "Exchange"), currently 4:00 p.m. New
York time (see Calculation of Purchase Unit Value below for more information.)
Purchase Units will be credited the same business day if Purchase Payments are
received at our Annuity Service Center before the close of the Exchange. If not,
they will be calculated and credited the next business day. Purchase Unit values
will vary depending on the net investment results of each of the Variable
Account Options. This means the value of your Variable Account Option will
fluctuate.

CALCULATION OF PURCHASE UNIT VALUE
The Purchase Unit value for a Division is calculated as shown below:
Step 1: Calculate the gross investment rate:

Gross Investment Rate
= (EQUALS)
The Division's investment income and capital gains and losses (whether
realized or unrealized) on that day from the assets attributable to the
Division.
/ (DIVIDED BY)
The value of the Division for the immediately preceding day on which the
values are calculated.

PURCHASE PAYMENTS -- an
amount of money you pay to
the Company to receive the
benefits of an annuity
offered by the Contract.

PURCHASE UNIT -- a
measuring unit used to
calculate your Variable
Account Value during the
Purchase Period. The value
of a Purchase Unit will vary
with the investment experience
of the Separate Account
Division you have selected.

For more information as to
how PURCHASE UNIT VALUES
are calculated, see the
Statement of Additional
Information.

25
<PAGE> 30

- --------------------------------------------------------------------------------

We calculate the gross investment rate as of 4:00 p.m. New York time on each
business day when the Exchange is open.
Step 2: Calculate net investment rate for any day as follows:

Net Investment Rate
= (EQUALS)
Gross Investment Rate (calculated in Step 1)
- - (MINUS)
Separate Account charges and any income tax charges.

Step 3: Determine Purchase Unit Value for that day.

Purchase Unit Value for that day.
= (EQUALS)
Purchase Unit Value for immediate preceding day.
X (MULTIPLIED BY)
Net Investment Rate (as calculated in Step 2) plus 1.00.

CHOOSING INVESTMENT OPTIONS
There are 28 investment options offered under the Contract. This includes 3
Fixed Account Options and 25 Variable Account Options. The Funds that underlie
the Variable Account Options are registered as investment companies under and
are subject to regulation of the Investment Company Act of 1940. The Fixed
Account Options are not subject to regulation under the Act and are not required
to be registered under the Securities Act of 1933. As a result, the SEC has not
reviewed data in this prospectus that relates to the Fixed Account Options.
However, federal securities law does require such data to be accurate and
complete.

FIXED ACCOUNT OPTIONS

Each of the Fixed Account Options are part of the Company's general assets. You
may allocate all or a portion of your Purchase Payment to the Fixed Account
Options listed in "Profile of the Contract" appearing in this prospectus. The
One Year Guarantee and Six Month Guarantee Period DCA Fixed Account Options are
used exclusively in connection with the Dollar Cost Averaging Program. See the
"Dollar Cost Averaging Program" section of this prospectus. Purchase Payments
you allocate to these Fixed Account Options are guaranteed to earn at least a
minimum rate of interest. Interest is paid on each of the Fixed Account Options
at declared rates, which may be different for each option. We bear the entire
investment risk for the Fixed Account Option. All Purchase Payments and interest
earned on such amounts in your Fixed Account Option will be paid regardless of
the investment results experienced by the Company's general assets.
Here is how you may calculate the value of your Fixed Account Option during the
Purchase Period:

Value of Your Fixed Account Options
= (EQUALS)
All Purchase Payments made to the Fixed Account Options
+ (PLUS)
Amounts transferred from Variable Account Options to the Fixed
Account Options
+ (PLUS)
All interest earned
- - (MINUS)
Amounts transferred or withdrawn from Fixed Account Options
(including applicable fees and charges)

VARIABLE ACCOUNT OPTIONS
You may allocate all or a portion of your Purchase Payments to the Variable
Account Options listed in this prospectus. A complete discussion of each of the
Variable Account Options may be found in the "Variable Account Options" section
in this prospectus. Based upon a Variable Account Option's Purchase Unit Value
your account will be credited with the applicable number of Purchase Units. The
Purchase Unit Value of each Variable Account Option will change daily depending
upon the investment performance of the underlying fund (which may be positive or
negative) and the deduction of AGA Separate Account A charges. See the "Fees and
Charges" section in this prospectus. Because Purchase Unit Values change daily,
the number of Purchase Units your account will be credited with for subsequent
Purchase Payments will vary. Each Variable Account Option bears its own
investment risk. Therefore, the value of your account may be worth more or less
at retirement or withdrawal.
Here is how to calculate the value of each Variable Account Option in your
account during the Purchase Period:

Value of Your Variable Account Option
= (EQUALS)
Total Number of Purchase Units
X (MULTIPLIED BY)
Current Purchase Unit Value

STOPPING PURCHASE PAYMENTS

Purchase Payments may be stopped at any time. Purchase Payments may be resumed
at any time before your Contract has been surrendered. While no Purchase
Payments are being made, the number of Purchase Units outstanding will remain
the same. (This is assuming no transfers or withdrawals are made.) The value of
the Purchase Units will continue to vary. Your Account Value will continue to be
subject to charges.

If your Account Value falls below $500, and you do not make any Purchase
Payments for 180 days we may forward to you, at our discretion, written notice
that we will close your Account and pay the Account Value 90 days from the date
of notice if additional Purchase Payments are not made in amounts sufficient to
increase your Account Value to $500 or more.

26
<PAGE> 31

TRANSFERS BETWEEN INVESTMENT OPTIONS
- --------------------------------------------------------------------------------

You may transfer all or part of your Account Value between the various Fixed
Account and Variable Account Options in the Contract subject to the limitations
on transfers discussed below. Transfer instructions may be made either in
writing or by telephone as discussed below. Transfers may be made during the
Purchase Period or during the Payout Period.

DURING THE PURCHASE PERIOD

During the Purchase Period, transfers may be made between the Contract's non-DCA
Fixed Account Option and the Variable Account Options free of charge. We reserve
the right to impose a fee of the lesser of $25 or 2% of the amount transferred
for each transfer (which will be deducted from the amount transferred).

We currently permit transfers among the Variable Account Options once per day
and from the Variable Account Options to the non-DCA Fixed Account Option once
per a six-month period. We may, however, limit the number of transfers you can
make. The minimum amount to be transferred in any one transfer is $250 or the
entire amount in the Variable Account Option or non-DCA Fixed Account Option
from which the transfer is made. If a transfer request would reduce your Account
Value in a Division or the non-DCA Fixed Account Option below $500, we will
transfer your entire Account Value in that Division or Fixed Account Option.

Transfers from the non-DCA Fixed Account Option to a Variable Account Option are
limited to 20% of the non-DCA Fixed Account Option from which the transfer is
made from, determined as of the immediately preceding Contract Anniversary.

We currently do not permit transfers from the Variable Account Options to the
DCA One Year Guarantee Period and DCA Six Month Guarantee Period Fixed Account
Options. Transfers from the DCA One Year Guarantee Period and DCA Six Month
Guarantee Period Fixed Account Options may only be made under the Dollar Cost
Averaging Program. See the "Dollar Cost Averaging Program -- section of this
prospectus.

DURING THE PAYOUT PERIOD

During the Payout Period, transfers may be made between the Variable Account
Options and from the Variable Account Options to the non-DCA Fixed Account
Option. We will not permit transfers from any Fixed Account Option during the
Payout Period. We reserve the right to impose a fee of the lesser of $25 or 2%
of the amount transferred for each transfer (which will be deducted from the
amount transferred). The minimum amount to be transferred during the Payout
Period is $250.

Transfers during the Payout Period are permitted subject to the following
limitations:

<TABLE>
<CAPTION>
% OF ACCOUNT OTHER
ACCOUNT OPTION VALUE FREQUENCY(1) RESTRICTIONS(2)
- -------------- ----------------- ------------ ------------------------
<S> <C> <C> <C>
Variable: Up to 100% Unlimited The minimum amount to be
transferred is $250 or
the entire amount in the
Variable Account Option
if less. The minimum
amount which must remain
in the Variable Account
Option after a transfer
is $500 or $0 if the
entire amount of the
Variable Account Option
is transferred.
Combination Up to 100% of Unlimited The minimum amount to be
Fixed and money in variable transferred is $250 or
Variable option payout the entire amount in the
Payout: Fixed Account Option if
less. The minimum amount
which must remain in the
Fixed Account Option
after a transfer is $500
or $0 if the entire
amount of the Fixed
Account Option is
transferred.
Fixed: Not permitted -- --
</TABLE>

- ---------------

(1) AGAIC may change the number of transfers permitted to no more than six (6)
transfers per year during the Payout Period.
(2) AGAIC may impose a transfer fee of $25 or 2% of the amount transferred for
each transfer above six (6) transfers per year.

COMMUNICATING TRANSFER OR
REALLOCATION INSTRUCTIONS

A written instruction to transfer or reallocate all or part of your Account
Value between the various investment options in the Contract should be sent to
our Annuity Service Center.

Instructions for transfers or reallocations may be made by calling
1-800-424-4990. Telephone transfers will be allowed unless we have been notified
not to accept such telephone instructions. In this event, we must receive
written instructions, in order to permit future telephone transfers to be made.
Before a transfer will be made by telephone, you must give us the requested
identifying information concerning your account(s).

Unless we have been instructed not to accept requests for telephone transfers,
anyone may effect a telephone transfer if they furnish the requested
information. You will bear any loss resulting from such instructions, whether
the caller was specifically authorized by you or not.

No one that we employ or that represents AGAIC may give telephone instructions
on your behalf without AGAIC's prior written permission. (This does not apply to
a contract with the immediate

ACCOUNT VALUE -- the total
sum of your Fixed Account
and/or Variable Account
Options that have not yet
been applied to your Payout
Payments.

PURCHASE PERIOD -- the time
between your first Purchase
Payment and your Payout
Period (or surrender).

ANNUITY SERVICE CENTER -- our
Annuity Service Center is
located at 205 E. 10th
Avenue, Amarillo, Texas 79101

CONTRACT ANNIVERSARY -- the date
that the contract is issued
and each yearly anniversary
of that date thereafter.

PAYOUT PERIOD -- the time
that starts when you begin to
withdraw your money in a
steady stream of payments.

27
<PAGE> 32
- --------------------------------------------------------------------------------

family of an employee or representative of AGAIC).

We will send you a confirmation of the completed transfer within 5 days from the
date of your instruction. When you receive your confirmation, it is your duty to
verify the information shown, and advise us of any errors within one business
day.

You will bear the risk of loss arising from instructions received by telephone.
We are not responsible for the authenticity of such instructions. Any telephone
instructions which we reasonably believe to be genuine will be your
responsibility. This includes losses from errors in communication. Telephone
transfer instruction may not be made during the Payout Period. We reserve the
right to stop telephone transfers at any time.

SWEEP ACCOUNT PROGRAM

During the Purchase Period you may elect to participate in the Sweep Account
Program if your Account Value is at least $25,000 on the date that the request
for the Sweep Account Program is received by us at the Annuity Service Center.
The Sweep Account Program allows you to transfer the earnings from the non-DCA
Fixed Account Option to the Variable Account Options. The transfers can be made
on a quarterly basis only. All amounts transferred must be in whole percentages,
with a 10% minimum to be transferred to each selected Variable Account
Option(s). There is no charge for the Sweep Account Program. We do not take into
account transfers made pursuant to the Sweep Account Program in assessing any
transfer fee.

EFFECTIVE DATE OF TRANSFER

The effective date of a transfer will be:

- - The date of receipt, if received at our Annuity Service Center before the
close of regular trading of the Exchange on a day values are calculated;
(Normally, this will be 4:00 P.M. New York time); otherwise

- - The next date values are calculated.

RESERVATION OF RIGHTS

If a transfer causes your Account Value in a Fixed Account Option or Variable
Account Option to fall below $500, we may transfer the remaining Account Value
in the same proportions as your transfer request.

We may defer any transfer from the Fixed Account Options to the Variable Account
Options for up to six months. We also may terminate or restrict transfers at any
time.

DOLLAR COST AVERAGING PROGRAM

You may elect the Dollar Cost Averaging Program which permits the systematic
transfer of your Account Value from a Fixed Account Option or the State Street
Global Advisors Money Market Portfolio Division Six to one or more Variable
Account Options not including the State Street Global Advisors Money Market
Portfolio Division Six. By allocating amounts on a regularly scheduled basis, as
opposed to allocating the total amount at one particular time, you may be less
susceptible to the effect of market fluctuations. We currently provide three
Fixed Account Options, two of which, the DCA One Year Guarantee Period Option
and the DCA Six Month Guarantee Period Option, are available only for dollar
cost averaging.

We determine the amount of transfers from a DCA Fixed Account Option or the
State Street Global Advisors Money Market Portfolio Division Six by dividing the
Purchase Payments allocated to that DCA Fixed Account Option or the State Street
Global Advisors Money Market Portfolio Division Six by the number of months
remaining in the term. Transfers from a DCA Fixed Account Option or the State
Street Global Advisors Money Market Portfolio Division Six are available on a
monthly basis. We require that you specify each allocation to a Variable Account
Option, not including the State Street Global Advisors Money Market Portfolio
Division Six, in whole percentages using a maximum of 10 Variable Account
options. The minimum amount to be transferred into a Variable Account Option is
10% of the entire amount transferred.

We will transfer your entire Account Value in a DCA Fixed Account Option by the
expiration of its term. The minimum amount to be transferred under the Dollar
Cost Averaging Program is $250 per a transfer. We currently do not permit
transfers to the DCA One Year Guarantee Period Option or the DCA Six Month
Guarantee Period Option from the Variable Account Options or the non-DCA Fixed
Account Option.

You may enroll in dollar cost averaging for the DCA Fixed Account Options only
when you make your initial Purchase Payment and the State Street Global Advisors
Money Market Portfolio Division Six at any time. There is no charge for dollar
cost averaging. We do not take into account transfers made pursuant to the
Dollar Cost Averaging Program in assessing any transfer fee.

28
<PAGE> 33
- --------------------------------------------------------------------------------

PORTFOLIO REBALANCING PROGRAM

From time to time, we will make available a portfolio rebalancing program which
provides for periodic pre-authorized automatic transfers among the Variable
Account Options pursuant to your written allocation instructions. We will make
such transfers to maintain a specified percentage allocation of Account Value
among the Variable Account Options as selected by you. We require each
allocation to a Variable Account Option equal at least 1% of Account Value.

You may elect the portfolio rebalancing program if your Account Value is at
least $25,000 on the date that the request for portfolio rebalancing is received
by us at the Annuity Service Center. The Company may from time to time reduce or
waive the $25,000 Account Value requirement to participate in the portfolio
rebalancing program. You may select rebalancing to occur on a monthly,
quarterly, semi-annual, or annual basis, and currently, all Variable Account
Options are available for portfolio rebalancing. The Fixed Account Options do
not participate in portfolio rebalancing.

There is no charge for portfolio rebalancing. We do not take into account
transfers made pursuant to the Portfolio Rebalancing Program in assessing any
transfer fee.

29
<PAGE> 34

FEES AND CHARGES
- --------------------------------------------------------------------------------

By investing in the Contract, you may be subject to six basic types of fees and
charges:

- - Account Maintenance Fee
- - Surrender Charge
- - Premium Tax Charge
- - Separate Account Charges
- - Fund Annual Expense Charge
- - Other Tax Charges

These fees and charges are explained below. For additional information about
these fees and charges, see the Fee Table in this prospectus.

ACCOUNT MAINTENANCE FEE

An account maintenance fee of $30 will be deducted on each Contract Anniversary
from your Account Value during the Purchase Period. If all your money in the
Contract is withdrawn, the fee will be deducted at that time. The fee will be
assessed equally among the Variable Account and Fixed Account Options that make
up your Account Value.

The account maintenance fee is to reimburse the Company for our administrative
expenses for providing Variable Account and Fixed Account Options. This includes
the expense for establishing and maintaining the recordkeeping for your
Contract.

If your Account Value on a Contract Anniversary is at least $25,000, we will
waive the account maintenance fee for the next Contract Year.

SURRENDER CHARGE

When you withdraw money from your account, you may be subject to a surrender
charge that will be deducted from the amount withdrawn. For information about
your right to surrender, see "Surrender of Account Value" in this prospectus.

It is assumed that the Purchase Payments are withdrawn first under the concept
of first-in, first-out. No surrender charge will be applied unless an amount is
actually withdrawn.

We calculate the surrender charge by multiplying the applicable percentages
specified in the table below by the Purchase Payments withdrawn.

Amount of Surrender Charge

A surrender charge may not be greater than:

<TABLE>
<CAPTION>
NUMBER OF YEARS
SINCE
DATE OF PURCHASE CHARGE AS PERCENTAGE OF
PAYMENT PURCHASE PAYMENT WITHDRAWN
---------------- --------------------------
<S> <C>
1 7%
2 7%
3 5%
4 5%
5 4%
6 2%
7+ 0%
</TABLE>

10% Free Withdrawal

For each Contract Year after the first Contract Year, up to 10% of the Account
Value, determined as of the immediately preceding Contract Anniversary, may be
withdrawn once each Contract Year without a surrender charge. The surrender
charge will apply to any amount withdrawn that exceeds this 10% limit. The
percentage withdrawn will be determined by dividing the amount withdrawn by the
Account Value, determined as of the immediately preceding Contract Anniversary,
just prior to the withdrawal.

If a surrender charge is applied to all or part of a Purchase Payment, no
surrender charge will be applied to such Purchase Payment (or portion thereof)
again.

The 10% free withdrawal requires a minimum withdrawal of $100, or if less, the
entire Account Value. The minimum amount which must remain in the Account after
a withdrawal is $500.

EXCEPTIONS TO SURRENDER CHARGE

No surrender charge will be applied:

- - To death benefits;

- - To Payout Payments; and

- - To partial surrenders through the Systematic Withdrawal Program, in lieu of
the 10% free withdrawal, during the first Contract Year, see the "Surrender of
Account Value" section of this prospectus.

PREMIUM TAX CHARGE

Taxes on Purchase Payments are imposed by some states, cities, and towns. The
rate will range from zero to 3.5%.

The timing of tax levies varies from one taxing authority to another. If premium
taxes are applicable to a Contract, we will deduct such tax against Account
Value in a manner determined by us in compliance with applicable state law. We
may deduct an amount for premium taxes either upon:

- - receipt of the Purchase Payments;

- - the commencement of Payout Payments;

- - surrender (full or partial); or

- - the payment of death benefit proceeds.

SEPARATE ACCOUNT CHARGES

There will be a mortality and expense risk fee and an administration fee applied
to AGA Separate Account A. These are daily charges at annualized rates of 0.70%
and 0.15%, respectively, on the average daily net asset value of AGA Separate
Account A. Each charge is guaranteed and cannot be increased by the Company. The
mortality and

CONTRACT ANNIVERSARY --the
date that the contract
is issued and each
yearly anniversary
of that date thereafter.

CONTRACT YEAR -- the first
twelve month period and
then each yearly anniversary
of that period following the
issue date of the contract.

30
<PAGE> 35
- --------------------------------------------------------------------------------

expense risk fee is to compensate the Company for assuming mortality and expense
risks under the Contract. The mortality risk that the Company assumes is the
obligation to provide payments during the Payout Period for your life no matter
how long that might be. In addition, the Company assumes the obligation to pay
during the Purchase Period death benefit. For more information about the death
benefit see the "Death Benefit" section of this prospectus. The expense risk is
our obligation to cover the cost of issuing and administering the Contract, no
matter how large the cost may be.

The Company may make a profit on the mortality and expense risk fee and on the
administration fee.

The administration fee is to reimburse the Company for our administrative
expenses under the Contract. This includes the expense of administration and
marketing (including but not limited to enrollment and Contract Owner
education).

For more information about the mortality and expense risk fee and administration
fee, see the Fee Table in this prospectus.

FUND ANNUAL EXPENSE CHARGES

Investment management charges based on a percentage of each Fund's average daily
net assets are payable by each Fund. Depending on the Variable Account Option
selected, the charges will be paid by each Fund to its investment adviser. These
charges and other Fund charges and expenses are fully described in the
prospectuses for the Funds. These charges indirectly cost you because they lower
your return.

OTHER TAX CHARGES

We reserve the right to charge for certain taxes (other than premium taxes) that
we may have to pay. This could include federal income taxes. Currently, no such
charges are being made.

31
<PAGE> 36

PAYOUT PERIOD
- --------------------------------------------------------------------------------

The Payout Period begins when you decide to withdraw your money in a steady
stream of payments. You select the date to begin the Payout Period, the Payout
Date. If you do not select a date to begin the Payout Period, then the Payout
Period will begin when you reach age 65. You may change the date selected to
begin the Payout Period at any time before the Payout Date. You may apply any
portion of your Account Value to one of the types of Payout Options listed
below. You may choose to have your Payout Option on either a fixed, a variable,
or a combination payout basis. When you choose to have your Payout Option on a
variable basis, you may keep the same Variable Account Options in which your
Purchase Payments were made, or transfer to different ones.

FIXED PAYOUT

Under Fixed Payout, you will receive payments from the Company. These payments
are fixed and guaranteed by the Company. The amount of these payments will
depend on:

- Type and duration of Payout Option chosen;

- Your age or whether joint and survivor payouts are chosen, and the age of
your survivor, if applicable;

- Your sex or whether joint and survivor payouts are chosen, and the sex of
your survivor, if applicable (1);

- The portion of your Account Value being applied; and

- The payout rate being applied and the frequency of the payments.

(1) Not applicable for certain Contracts.

VARIABLE PAYOUT

With a Variable Payout, you may select from your existing Variable Account
Options. Your payments will vary accordingly. This is due to the varying
investment results that will be experienced by each of the Variable Account
Options you selected. The Payout Unit Value is calculated just like the Purchase
Unit Value for each Variable Account Option except that the Payout Unit Value
includes a factor for the Assumed Investment Rate. For additional information on
how Payout Payments and Payout Unit Values are calculated, see the Statement of
Additional Information.

In determining your first Payout Payment, an Assumed Investment Rate of 3% is
used. If the net investment experience of the Variable Account Option exceeds
the Assumed Investment Rate, your next payment will be greater than your first
payment. If the investment experience of the Variable Account Option is lower
than your Assumed Investment Rate, your next payment will be less than your
first payment.

COMBINATION FIXED AND VARIABLE
PAYOUT

With a Combination Fixed and Variable Payout, you may choose:

- From your existing Variable Account Options (payments will vary); with

- The non-DCA Fixed Account Option (payment is fixed and guaranteed).

PAYOUT DATE

The Payout Date is the date elected by you on which your payout payments will
start and is subject to our approval. You may change the Payout Date subject to
our approval. We will notify you of the approaching Payout Date 60 to 90 days
prior to such date. Unless you select a Payout Date, we will automatically
extend the Payout Date to begin at the later of when you attain age 65 or ten
years after we issue the Contract. Generally, for qualified contracts, the
Payout Date may begin when you attain age 59 1/2 or separate from service, but
must begin no later than April 1 following the calendar year you reach age
70 1/2 or the calendar year in which you retire. [HOWEVER, THE DATE MAY BE LATER
FOR PARTICIPANTS IN 403(B) PLANS. NON-QUALIFIED ANNUITIES DO NOT HAVE A SPECIFIC
DATE.] For additional information on the minimum distribution rules that apply
to payments under IRA or 403(b) plans, see "Federal Tax Matters" in this
prospectus and in the Statement of Additional Information.

PAYOUT OPTIONS

You may specify the manner in which your Payout Payments are made. You may
select one of the following options:

- LIFE ONLY -- payments are made only to you during your lifetime. Under this
option there is no provision for a death benefit for the beneficiary. For
example, it would be possible under this option for the Annuitant to receive
only one payout payment if he died prior to the date of the second payment,
two if he died before the third payment.

- LIFE WITH PERIOD CERTAIN -- payments are made to you during your lifetime;
but if you die before the guaranteed period has expired, your beneficiary
will receive November 18, 1998payments for the rest of your guaranteed
period.

PAYOUT UNIT -- a measuring
unit used to calculate Payout
Payments from your Variable
Account Option. Payout Unit
values will vary with the
investment experience of the
AGA Separate Account A
Division you have selected.

ASSUMED INVESTMENT
RATE -- the rate used to
determine your first monthly
Payout Payment per
thousand dollars of Account
Value in your Variable
Account Option(s).

32
<PAGE> 37

- --------------------------------------------------------------------------------

- JOINT AND SURVIVOR LIFE -- payments are made to you during the joint
lifetime of you and your joint annuitant. Upon the death of one, payments
continue during the lifetime of the survivor. This option is designed
primarily for couples who require payouts during their joint lives and are
not concerned with providing for beneficiaries at death of the last
survivor. For example, it would be possible under this option for the Joint
Annuitants to receive only one payment if both Annuitants died prior to the
date of the second payment. Additionally, it would be possible for the
Joint Annuitants to receive only one payment and the surviving Annuitant to
receive only one payment if one Annuitant died prior to the date of the
second payment and the surviving Annuitant dies prior to the date of the
third payment.

PAYOUT INFORMATION

Once your Payout Payments have begun, the option you have chosen may not be
changed. Any one of the Variable Account Options may result in your receiving
unequal payments during your life expectancy. If payments begin before age
59 1/2, you may suffer unfavorable tax consequences if you do not meet an
exception to federal tax law. See "Federal Tax Matters" in this prospectus.

Your Payment Option should be selected at least 15 days before your Payout
Date. If such selection is not made and state or federal law does not require
the selection of the Joint and Survivor Life Option:

- Payments will be made under the Life with Period Certain Option,

- The payments will be guaranteed for a 10 year period,

- The payments will be based on the allocation used for your Account Value,

- The non-DCA Fixed Account Option will be used to distribute payments to you
on a Fixed Payout basis, and

- Variable Account Options will be used to distribute payments to you on a
Variable Payout basis.

Most Payout Payments are made monthly; however, Payout Payments may also be made
as quarterly, semiannual or annual installments. If you have chosen either a
Fixed or Variable Payout Option and if the amount of your payment is less than
$200, we reserve the right to reduce the number of payments made each year so
each of your payments is at least $200. If you have chosen a combination of
Fixed and Variable Payout Options and the amount of your payment is less than
$100, we reserve the right to reduce the number of payments made each year so
each of your payments is at least $100.

For more information about
PAYOUT OPTIONS
available under the Contract,
see the "Statement of
Additional Information".

33
<PAGE> 38

SURRENDER OF ACCOUNT VALUE
- --------------------------------------------------------------------------------

WHEN SURRENDERS ARE ALLOWED
You may withdraw all or part of your Account Value at any time before the Payout
Period begins if:

- allowed under federal and state law; and

- allowed under your retirement plan.

For an explanation of charges that may apply if you surrender your Account
Value, see "Fees and Charges" in this prospectus.

You may be subject to a 10% federal tax penalty for partial or total surrenders
made before age 59 1/2, see "Federal Tax Matters" in this prospectus.

AMOUNT THAT MAY BE SURRENDERED
The amount that may be surrendered at any time can be determined as follows:

<TABLE>
<S> <C> <C>
Your
Account
Allowed Value(1)
Surrender - (MINUS)
Value Any Applicable
= (EQUALS) Surrender
Charge, any
applicable taxes
and Account
Maintenance Fee
</TABLE>

(1) Equals the Account Value next computed after your properly completed
request for surrender is received at the Annuity Service Center.

There is no guarantee that the Surrender Value in a Variable Account Option will
ever equal or exceed the total amount of your Purchase Payments received by us.

We will mail to you the Surrender Value within 7 calendar days after we receive
your properly completed surrender request at the Annuity Service Center.
However, we may be required to suspend or postpone payments if redemption of an
underlying Fund's shares have been suspended or postponed. See your current
Fund(s)' prospectuses for a discussion of the reasons why the redemption of
shares may be suspended or postponed.

We may receive a surrender for a Purchase Payment which has not cleared the
banking system. We may delay payment of that portion of your Surrender Value
until the check clears. The rest of the Surrender Value will be processed as
usual.

PARTIAL SURRENDER

You may request a partial surrender of your Account Value at any time during the
Purchase Period. A partial surrender plus any surrender charge will reduce your
Account Value.

To process your partial surrender, you may specify the Account Value that should
be deducted from each investment option. If you fail to provide us with this
information, we may deduct the partial surrender from each investment option in
which your Account Value is held on a pro rata basis.

The minimum partial surrender we will allow is $100 or your entire Account
Value, if less.

We reserve the right to defer the payment of a partial surrender from the
non-DCA Fixed Account Option for up to six months. We currently do not permit
partial surrenders from the DCA Fixed Account Options.

SYSTEMATIC WITHDRAWAL PROGRAM

The Systematic Withdrawal Program allows you to make withdrawals in a Contract
Year of up to 10% of your Account Value without the imposition of a surrender
charge. If you withdraw more than 10% of your Account Value, you will be subject
to a surrender charge. Account Value, for purposes of the Systematic Withdrawal
Program, is determined as of the immediately preceding Contract Anniversary or,
if during the first Contract Year, the date we issue you the Contract. See the
"Fees and Charges" section in this prospectus.

You may elect to withdraw all or part of your Account Value under a systematic
withdrawal method described in your Contract. Withdrawals using this method are
eligible for the 10% free withdrawal privilege each Contract Year. The
Systematic Withdrawal Program provides for:

- Payments to be made to you;

- Payment over a stated period of time;

- Payment of a stated yearly dollar amount or percentage.

We may require a minimum withdrawal of $100 per a withdrawal under this method.
The portion of your account that has not been withdrawn will continue to receive
the investment return of the Variable Account Option or the Fixed Account Option
which you selected. A systematic withdrawal election may be changed or revoked
at no charge. No more than one systematic withdrawal election may be in effect
at any one time. We reserve the right to discontinue any or all systematic
withdrawals or to change its terms, at any time.

DISTRIBUTIONS REQUIRED BY FEDERAL TAX LAW.

See "Federal Tax Matters" in this prospectus and in the Statement of Additional
Information for more information about required distributions imposed by tax
law.

For an explanation of possible adverse tax consequences of a surrender, see
"Federal Tax Matters" in this prospectus and in the Statement of Additional
Information.

34
<PAGE> 39

EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------

We issue other fixed and/or variable annuity contracts (other contracts) in
addition to ElitePlus Value. We will allow you, under certain conditions, to
exchange from one of these other contracts to ElitePlus Value. If you elect to
exercise an exchange, you should contact our Annuity Service Center at the
address shown in the back of this prospectus. An exchange may require the
issuance of a contract or may be subject to any other requirements that the
Company may impose.

RESTRICTIONS ON EXCHANGE PRIVILEGE

We will impose certain general restrictions and rules on the exchange
privileges.

- Partial exchanges are not permitted.

- Exchanges from ElitePlus Value to other contract forms are not permitted.

Additionally, if you have your money in a fixed account of ElitePlus Bonus or in
a fixed annuity contract, you must exchange directly into the Fixed Account
Options of ElitePlus Value. You will be subject to all of the rules that apply
to the Fixed Account Options in ElitePlus Value. For example, you will be
subject to the rules concerning transfers among investment options as stated in
the Transfers Between Investment Options section in this prospectus. We may, at
our option, waive any transfer restrictions for a stated period of time. If we
waive these transfer restrictions, you will be allowed to exchange to any
investment option available in ElitePlus Value.

WE RESERVE THE RIGHT TO TERMINATE, MODIFY OR SUSPEND THESE EXCHANGE PRIVILEGES
AT ANY TIME.

TAXES AND CONVERSION COSTS

We will impose no fee or charge for these exchanges. Please read the "Federal
Tax Matters" section in this prospectus for information about the federal income
tax treatment of ElitePlus Value.

SURRENDER CHARGES

We will generally not impose nor waive existing surrender charges as a result of
your electing to exchange from one of the other contracts.

For any other contract, the contract date for determining surrender charges
under ElitePlus Value will be the same date as the other contract.

If there is no surrender charge on assets within another contract, we will not
impose charges on those assets as a result of an exchange. If surrender charges
are to be based on Purchase Payments within a contract, we will consider
Purchase Payments to have been made under ElitePlus Value as of the date such
payments were made under the other contract for purposes of calculating the
surrender charge. The effective dates of these Purchase Payments will also be
retained for surrender charge purposes.

The ElitePlus Value surrender charge is calculated assuming the Purchase
Payments are withdrawn first under the concept of first-in, first-out. This
policy may cause exchanged funds to be accessible only after charges are
imposed.

ElitePlus Value will have the same Account Value (called Contract Value in the
other contracts) as the other contracts.

COMPARISON OF ELITEPLUS BONUS TO ELITEPLUS VALUE CONTRACTS

ElitePlus Bonus contains generally the same provisions except as to the level of
fees and as to available Variable Account Options.

COMPARISON OF OTHER CONTRACTS

You should carefully compare the features, charges and restrictions of the other
contracts to those of ElitePlus Value. A more detailed comparison of the
features, charges, and restrictions between each above listed other contract and
ElitePlus Value is provided in the Statement of Additional Information.

FEATURES OF ELITEPLUS VALUE

In deciding whether you want to exercise these exchange privileges, you should
consider the following factors of ElitePlus Value.

- ElitePlus Value has 25 investment options to select from.

- The ElitePlus Value surrender charge is a higher percentage of Purchase
Payments in years 1, 2, 4 and 5, and a lower percentage of Purchase Payments
in year 7, then ElitePlus Bonus.

- ElitePlus Value has no Bonus provision.

- ElitePlus Value Fund fees and charges are different than the other contracts
and in some cases may be higher.

- ElitePlus Value charges a Mortality and Expense Risk fee which is lower than
ElitePlus Bonus.

35
<PAGE> 40

DEATH BENEFITS
- --------------------------------------------------------------------------------

The Contract will pay a death benefit during either the Purchase Period or the
Payout Period. How the death benefit will be paid is discussed below. The death
benefit provisions in the Contract may vary from state to state.

BENEFICIARY INFORMATION

The Beneficiary may receive death benefits:

- - In a lump sum; or

- - Payment of the entire death benefit within 5 years of the date of death; or

- - In the form of an annuity under any of the Payout Options stated in the Payout
Period section of this prospectus subject to the restrictions of that Payout
Option.

Payment of any death benefits must be within the time limits set by federal tax
law.

SPECIAL INFORMATION FOR NON-TAX QUALIFIED CONTRACTS

It is possible that the Contract Owner and the Annuitant under a Non-Qualified
Contract are not the same person. If this is the case, and the Contract Owner
dies, death benefits must be paid:

- - commencing within 5 years of the date of death; or

- - by payments beginning within 1 year of the date of death under:

- a life annuity with or without a period certain, or

- an annuity for a designated period not extending beyond the life expectancy
of the Beneficiary.

JOINT OWNER SPOUSAL ELECTION INFORMATION

The Beneficiary will receive the Death Benefit payout if:

- the Contract Owner dies before the Payout Date, or

- the Annuitant dies during the Annuity Period.

If the Annuitant dies before the Annuity date, the Owner may designate a new
Annuitant or become the Annuitant.

With regard to Joint Owners of a Non-Qualified Contract, the Death Benefit is
payable upon the death of either Owner during the Purchase Period. However, in
the event of your death where the sole Beneficiary of the Non-Qualified
Contract is your spouse, your spouse may continue the Contract as Owner, in
lieu of receiving the Death Benefit.

DEATH BENEFIT

If death occurs at the age of 80 or younger, then the Death Benefit during the
Purchase Period will be the greater of:

<TABLE>
<S> <C> <C>
Your Account Value on the date both proof of
death and election of the payment method are
received by the Company at its Annuity Service
Center
OR
100% of Purchase Payments (to Fixed and/or
Variable Account Options)
- - (MINUS)
Amount of all prior withdrawals, charges and any
portion of Account Value applied under a Payout
Option
</TABLE>

If death occurs at the age of 81 or older, than the Death Benefit during the
Purchase Period will be:

<TABLE>
<S> <C> <C>
Your Account Value on the date both proof of
death and election of the payment method are
received by the Company at its Annuity Service
Center.
</TABLE>

DURING THE PAYOUT PERIOD

If the Annuitant dies during the Payout Period, your Beneficiary may receive any
continuing payments under the Payout Option that you selected. The Payout
Options available in the Contract are described in the "Payout Period" section
of this prospectus.

BENEFICIARY -- the person
designated to receive Payout
Payments or the Account Value
upon the death of
an Annuitant or the Owner.

ANNUITANT -- the individual,
(in most cases this person is
you) to whom Payout
Payments will be paid. The
Annuitant is also the
measuring life for the Contract.

FIXED ACCOUNT OPTIONS -- a
particular subaccount into
which your Purchase
Payments and Account Value
may be allocated to fixed
investment options. Currently,
there are three Fixed
Account Options: the non-DCA
Fixed Account Option; the DCA
Six Month Guarantee Period
Option; and the DCA One Year
Guarantee Period Option. The
non-DCA Fixed Account Option
is guaranteed to earn at least a
minimum rate of interest.

VARIABLE ACCOUNT
OPTIONS -- Investment
Options that correspond to
AGA Separate Account A
Divisions offered by the
Contract. Investment returns
on Variable Account Options
will be positive or negative
depending on the investment
performance of the
underlying mutual fund.

36
<PAGE> 41

HOW TO REVIEW INVESTMENT PERFORMANCE
OF SEPARATE ACCOUNT DIVISIONS
- --------------------------------------------------------------------------------

We will advertise information about the investment performance of AGA Separate
Account A Divisions. Our advertising of past investment performance results does
not mean that future performance will be the same. The performance information
will not predict what your actual investment experience will be in that Division
or show past performance under an actual contract. We may also show how the
Divisions rank on the basis of data compiled by independent ranking services.

Some of the Divisions (and underlying Funds) offered in this prospectus were
previously available through other annuity contracts. We may therefore,
advertise investment performance since the inception of the underlying Funds. In
each case, we will use the charges and fees imposed by the Contract in
calculating the Division's investment performance.

TYPES OF INVESTMENT PERFORMANCE
INFORMATION ADVERTISED

We may advertise the Division's Total Return Performance information and Yield
Performance information.

TOTAL RETURN PERFORMANCE INFORMATION

Total Return Performance Information is based on the overall dollar or
percentage change in value of an assumed investment in a Division over a given
period of time.

There are seven ways Total Return Performance Information may be advertised:

- Standard Average Annual Total Return
- Nonstandard Average Annual Total Return
- Cumulative Total Return
- Annual Change in Purchase Unit Value
- Cumulative Change in Purchase Unit Value
- Total Return Based on Different Investment Amounts
- An Assumed Account Value of $10,000

Each of these is described below.

STANDARD AVERAGE ANNUAL TOTAL RETURN

Standard Average Annual Total Return shows the average percentage change in the
value of an investment in the Division from the beginning to the end of a given
historical period. The results shown are after all charges and fees have been
applied against the Division. This will include account maintenance fees and
surrender charges that would have been deducted if you surrendered the Contract
at the end of each period shown. Premium taxes are not deducted. This
information is calculated for each Division based on how an initial assumed
payment of $1,000 performed at the end of 1, 3, 5 and 10 year periods.

The return for periods of more than one year are annualized to obtain the
average annual percentage increase (or decrease) during the period.
Annualization assumes that the application of a single rate of return each year
during the period will produce the ending value, taking into account the effect
of compounding.

NONSTANDARD AVERAGE ANNUAL TOTAL RETURN

Nonstandard Average Annual Total Return is calculated in the same manner as the
Standard Average Annual Total Return. However, Nonstandard Average Annual Total
Return shows only the historic investment results of the Division. Account
maintenance fees, surrender charges and premium taxes are not deducted. The
Securities and Exchange Commission staff takes the position that performance
information of an underlying Fund reduced by Account fees for a period prior to
the inception of the corresponding Division is nonstandard performance
information regardless of whether all Account fees and charges are deducted.

CUMULATIVE TOTAL RETURN

Cumulative Total Return assumes the investment in the Contract will stay in the
Division beyond the time that a surrender charge would apply. It may be
calculated for 1, 3, 5 and 10 year periods. It is based on an assumed initial
investment of $10,000. The Cumulative Return will be calculated without
deduction of account maintenance fees, surrender charges or premium taxes.

ANNUAL CHANGE IN PURCHASE UNIT VALUE

Annual Change in Purchase Unit Value is a percentage change during a one year
period. This is calculated as follows:

- The Purchase Unit Value at the start of the year is subtracted from the
Purchase Unit Value at the end of the year;

- The difference is divided by the Purchase Unit Value at the start of the
year.

Account maintenance fees, surrender charges and premium taxes are not deducted.
The effect of these charges, if deducted, would reduce the Division's Annual
Change in Purchase Unit Value.

DIVISIONS -- subaccounts of
AGA Separate Account A
which represent the Variable
Account Options in the
Contract. Each Division
invests in a different mutual
fund, each having its own
investment objective and
strategy.

PURCHASE PAYMENTS -- an
amount of money you pay to
the Company to receive the benefits
of an annuity Contract offered
by the Contract.

For more information on how
TOTAL RETURN PERFORMANCE
INFORMATION is calculated,
see the Statement of
Additional Information.

37
<PAGE> 42

- --------------------------------------------------------------------------------

CUMULATIVE CHANGE IN PURCHASE UNIT VALUE

Cumulative Change in Purchase Unit Value is a percentage change from the
beginning to the ending of a period usually greater than one year. Otherwise, it
is calculated in the same way as the Annual Change in Purchase Unit Value.

TOTAL RETURN BASED ON DIFFERENT
INVESTMENT AMOUNTS

We may show total return information based on different investment amounts. For
example, we may show $200 a month for 10 years, or $100 a month to age 65. Fees
may or may not be included. Each performance illustration will explain the
Contract charges and fees imposed on the Division.

AN ASSUMED ACCOUNT VALUE OF $10,000

We may show annual values based on an initial investment of $10,000. This will
not reflect any deduction for account maintenance fees, surrender charges and
premium taxes.

YIELD PERFORMANCE INFORMATION

We may advertise Yield Performance, at a given point in time. A Division's yield
is one way of showing the rate of income the Division is earning as a percentage
of the Division's Purchase Unit Value.

DIVISIONS OTHER THAN MONEY MARKET FUND DIVISIONS

We may advertise the standardized yield performance for each Division. The yield
for each Division will be determined as follows:

- We will subtract the account maintenance fee from the average daily net
investment income per Purchase Unit;

- We will divide the remainder by the Purchase Unit Value on the last day of
the period; and

- We will annualize the result.

PERFORMANCE INFORMATION:

AVERAGE ANNUAL TOTAL RETURN, CUMULATIVE RETURN AND ANNUAL AND CUMULATIVE CHANGE
IN PURCHASE UNIT VALUE TABLES.

In the sections above we have described a number of ways we may advertise
information about the investment performance of AGA Separate Account A
Divisions. Certain performance information for each AGA Separate Account A
Division is printed in the six tables below.

The information presented does not reflect the advantage under the Contract of
deferring federal income tax on increases in Account Value due to earnings
attributable to Purchase Payments (see "Federal Tax Matters" in this prospectus
and in the Statement of Additional Information.) The information presented also
does not reflect the advantage under Qualified Contracts of deferring federal
income tax on Purchase Payments.

The performance results shown in the following tables are not an estimate or
guarantee of future investment performance, and do not represent the actual
experience of amounts invested by a particular Contract Owner.

38
<PAGE> 43

TABLE I

AVERAGE ANNUAL TOTAL RETURN
WITH SURRENDER CHARGE AND ACCOUNT MAINTENANCE FEE IMPOSED*
(FROM SEPARATE ACCOUNT DIVISION INCEPTION TO JUNE 30, 1998)

<TABLE>
<CAPTION>
DIVISION
INCEPTION SINCE
FUND AND DIVISION DATE INCEPTION 1 YEAR
----------------- --------- --------- ------
<S> <C> <C> <C>
Credit Suisse Growth and Income Portfolio (Division 1)...... 10/20/95 17.75% 14.69%
Credit Suisse International Equity Portfolio (Division 2)... 10/20/95 9.09% -10.83%
EliteValue Portfolio (Division 1)........................... 1/2/96 21.59% 13.95%
Salomon Brothers U.S. Government Securities Portfolio
(Division 4).............................................. 2/6/96 3.89% 1.42%
State Street Global Advisors Growth Equity Portfolio
(Division 5).............................................. 10/20/95 25.06% 23.34%
State Street Global Advisors Money Market Portfolio
(Division 2).............................................. 10/6/95 2.83% -2.47%
Van Kampen Emerging Growth Portfolio (Division 3)........... 1/2/96 22.72% 28.45%
</TABLE>

- ---------------

* The Standard Average Annual Total Return figures are based on the average
percentage change in the value of an investment in a corresponding Division
for a different variable annuity contract issued through AGA Separate
Account A from the beginning to the end of the historical periods shown and
have been restated to take into account the fees and charges under this
Contract.

39
<PAGE> 44

TABLE II
AVERAGE ANNUAL TOTAL RETURN
WITH NO SURRENDER CHARGE OR ACCOUNT MAINTENANCE FEE IMPOSED*
(FROM SEPARATE ACCOUNT DIVISION INCEPTION TO JUNE 30, 1998)

<TABLE>
<CAPTION>
INCEPTION SINCE
FUND AND DIVISION DATE INCEPTION 1 YEAR
----------------- --------- --------- ------
<S> <C> <C> <C>
Credit Suisse Growth and Income Portfolio (Division 1)...... 10/20/95 18.99% 19.97%
Credit Suisse International Equity Portfolio (Division 2)... 10/20/95 10.48% -5.77%
EliteValue Portfolio (Division 1)........................... 1/2/96 22.89% 18.96%
Salomon Brothers U.S. Government Securities Portfolio
(Division 4).............................................. 2/6/96 5.63% 8.09%
State Street Global Advisors Growth Equity Portfolio
(Division 5).............................................. 10/20/95 26.14% 29.21%
State Street Global Advisors Money Market Portfolio
(Division 2).............................................. 10/6/95 4.39% 4.55%
Van Kampen Emerging Growth Portfolio (Division 3)........... 1/2/96 24.02% 33.96%
</TABLE>

- ---------------

* The Average Annual Total Return figures are based on the average percentage
change in the value of an investment in a corresponding Division for a
different variable annuity contract issued through AGA Separate Account A
from the beginning to the end of the historical periods shown and have been
restated to take into account the fees and charges under the Contract other
than the surrender charge and account maintenance fee.

40
<PAGE> 45

TABLE III
CUMULATIVE RETURN
WITH NO SURRENDER CHARGE OR ACCOUNT MAINTENANCE FEE IMPOSED*
(FROM SEPARATE ACCOUNT DIVISION INCEPTION TO JUNE 30, 1998)

<TABLE>
<CAPTION>
DIVISION
INCEPTION SINCE
FUND AND DIVISION DATE INCEPTION 1 YEAR
----------------- --------- --------- ------
<S> <C> <C> <C>
Credit Suisse Growth and Income Portfolio (Division 1)...... 10/20/95 59.86% 19.97%
Credit Suisse International Equity Portfolio (Division 2)... 10/20/93 30.86% -5.77%
EliteValue Portfolio (Division 1)........................... 1/2/96 67.27% 18.96%
Salomon Brothers U.S. Government Securities Portfolio
(Division 4).............................................. 2/6/96 14.05% 8.09%
State Street Global Advisors Growth Equity Portfolio
(Division 5).............................................. 10/20/95 87.14% 29.4%
State Street Global Advisors Money Market Portfolio
(Division 2).............................................. 10/6/95 12.46% 4.55%
Van Kampen Emerging Growth Portfolio (Division 3)........... 1/2/96 71.14% 33.96%
</TABLE>

- ---------------

* The Cumulative Return figures are based on the percentage changes in the value
of an investment in a corresponding Division for a different variable annuity
contract issued through AGA Separate Account A from the beginning to the end
of the historical periods shown and have been restated to take into account
the fees and charges under the Contract other than the surrender charge and
account maintenance fee.

41
<PAGE> 46

OTHER CONTRACT FEATURES
- --------------------------------------------------------------------------------

CHANGE OF BENEFICIARY

The Beneficiary (if not irrevocable) may usually be changed at any time.

The right to name or change a Beneficiary may be subject to approval by the
spouse. Also, the right to name a Beneficiary other than the spouse may be
subject to certain tax laws and regulations.

If the Owner dies, and there is no Beneficiary, any death benefit will be
payable to the Owner's estate.

If a Beneficiary dies while receiving payments, and there is no co-Beneficiary
to continue to receive payments, any amount still due will be paid to the
Beneficiary's estate.

CANCELLATION -- THE 10 DAY "FREE LOOK"

You may cancel the Contract by returning it to the Company within 10 days after
delivery. A longer period will be allowed if required under state law. A refund
will be made to you within 7 days after receipt of the Contract within the
required period. The amount of the refund will be equal to the Account Value
except in those states which require the Company to refund Purchase Payments,
less withdrawals.

WE RESERVE CERTAIN RIGHTS

We reserve the right to:
- Amend the Contract to conform with substitutions of investments;

- Amend the Contract to comply with tax or other laws;

- Operate AGA Separate Account A as a management investment company under the
1940 Act, in consideration of an investment management fee or in any other
form permitted by law; and

- Deregister AGA Separate Account A under the 1940 Act, if registration is no
longer required.

42
<PAGE> 47

VOTING RIGHTS
- --------------------------------------------------------------------------------

As discussed in the "About AGA Separate Account A" section of this prospectus,
AGA Separate Account A holds on your behalf shares of the Funds which comprise
the Variable Account Options. From time to time the Funds are required to hold a
shareholder meeting to obtain approval from their shareholders for certain
matters. As a Contract Owner, you may be entitled to give voting instructions to
us as to how AGA Separate Account A should vote its Fund shares on these
matters. Those persons entitled to give voting instructions will be determined
before the shareholders meeting is held. For more information about these
shareholder meetings and when they may be held, see the Funds' prospectuses.

WHO MAY GIVE VOTING INSTRUCTIONS

In most cases during the Purchase Period, you will have the right to give voting
instructions for the shareholder meetings. Contract Owners will instruct AGA
Separate Account A in accordance with these instructions. You will receive proxy
material and a form on which voting instructions may be given before the
shareholder meeting is held.

You will not have the right to give voting instructions if the Contract was
issued in connection with a nonqualified and unfunded deferred compensation
plan.

DETERMINATION OF FUND SHARES
ATTRIBUTABLE TO YOUR ACCOUNT

During Purchase Period

The number of Fund shares attributable to your account will be determined on the
basis of the Purchase Units credited to your account on the record date set for
the Fund shareholder meeting.

During Payout Period or after a Death
Benefit Has Been Paid

The number of Fund shares attributable to your account will be based on the
liability for future variable annuity payments to your payees on the record date
set for the Fund shareholder meeting.

HOW FUND SHARES ARE VOTED

The Funds which comprise the Variable Account Options in the Contract may have a
number of shareholders including AGA Separate Account A, the Company, other
affiliated insurance company separate accounts and retirement plans within the
American General group of companies and public shareholders.

AGA Separate Account A will vote all of the shares of the Funds it holds based
on, and in the same proportion as, the instructions given by all the Contract
Owners invested in that Fund entitled to give instructions at that shareholder
meeting. AGA Separate Account A will vote the shares of the Funds it holds for
which it receives no voting instruction in the same proportion as the shares for
which voting instructions have been received.

The Company will vote the shares of the Funds it holds based on, and in the same
proportion as, the voting instructions received from Contract Owners.

In the future, we may decide how to vote the shares of the Company or AGA
Separate Account A in a different manner if permitted at that time under federal
securities law.

CONTRACT OWNER -- the person
entitled to the ownership rights
as stated in this prospectus.

AGA SEPARATE
ACCOUNT A -- a segregated
asset account established by
the Company under the Texas
Insurance Code. The purpose
of AGA Separate Account A
is to receive and invest your
Purchase Payments and
Account Value in the Variable
Account Options you have
selected.

43
<PAGE> 48

FEDERAL TAX MATTERS
- --------------------------------------------------------------------------------

The Contract provides tax-deferred accumulation over time, but is subject to
federal income and excise taxes, mentioned briefly below. You should refer to
the Statement of Additional Information for further details. Section references
are to the Internal Revenue Code ("Code"). We do not attempt to describe any
potential estate or gift tax, or any applicable state, local or foreign tax law
other than possible premium taxes mentioned under "Premium Tax Charge." Remember
that future legislation could modify the rules discussed below, and always
consult your personal tax adviser regarding how the current rules apply to your
specific situation.

TYPE OF PLANS

Tax rules vary, depending on whether the Contract is offered under your
employer's tax-qualified retirement program or 408(b) IRA, or is instead a
nonqualified Contract. The Contract is used under the following types of
retirement arrangements:

- Section 403(b) annuities for employees
of public schools and
Section 501(c)(3) tax-exempt
organizations;

- Section 408(b) individual retirement annuities.

The foregoing Contracts are "Qualified Contracts." Certain series of the
Contract may also be available through a nondeductible Section 408A "Roth"
individual retirement annuity.

Note that the specific terms of the governing employer plan may limit rights and
options otherwise available under a Contract.

In addition, the Contract is also available through "Non-Qualified Contracts."
Such Non-Qualified Contracts generally include unfunded, nonqualified deferred
compensation plans of corporate employers, as well as individual annuity
contracts issued to individuals outside of the context of any formal employer or
employee retirement plan or arrangement. Non-Qualified Contracts generally may
invest only in mutual funds which are not available to the general public
outside of annuity contracts or life insurance contracts.

TAX CONSEQUENCES IN GENERAL

Purchase Payments, distributions, withdrawals, transfers and surrender of a
Contract can each have a tax effect, which varies with the governing retirement
arrangement. Please refer to the detailed explanation in the Statement of
Additional Information, the documents (if any) controlling the retirement
arrangement through which the contract is offered, and your personal tax
adviser.

Purchase Payments under the Contract can be made as contributions by employers,
or as pre-tax or after-tax contributions by employees, depending on the type of
retirement program. After-tax employee contributions constitute "investment in
the Contract." All Qualified Contracts receive deferral of tax on the inside
build-up of earnings on invested Purchase Payments, until a distribution occurs.
See the Statement of Additional Information for special rules, including those
applicable to taxable, non-natural owners of Non-Qualified Contracts.

Transfers among investment options within a variable annuity contract generally
are not taxed at the time of such a transfer. However, in 1986 the Internal
Revenue Service (IRS) indicated that limitations might be imposed with respect
to either the number of investment options available within a contract, or the
frequency of transfers between investment options, or both, in order for the
contract to be treated as an annuity contract for federal income tax purposes.
If imposed, such limitations could be applied to qualified contracts as well as
nonqualified contracts, and the Company can provide no assurance that such
limitations would not be imposed on a retroactive basis to contracts issued
under this prospectus. However, the Company has no present indication that the
IRS intends to impose such limitation, or what the terms or scope of those
limitations might be.

Distributions are taxed differently depending on the program through which the
Contract is offered and the previous tax characterization of the contributions
to which the distribution relates. Generally, the portion of a distribution
which is not considered a return of investment in the Contract is subject to
income tax. For annuity payments, investment in the contract is recovered
ratably over the expected payout period. Special recovery rules might apply in
certain situations.

Amounts subject to income tax may also incur excise tax under the circumstances
described in the Statement of Additional Information. Generally, distributions
would also be subject to some form of federal income tax withholding unless
rolled into another tax-deferred vehicle.

44
<PAGE> 49

- --------------------------------------------------------------------------------

Required withholding will vary according to type of program, type of payment and
your tax status. In addition, amounts received under all Contracts may be
subject to state income tax withholding requirements.

Investment earnings on contributions to Non-Qualified Contracts which are not
owned by natural persons will be taxed currently to the owner, and such
contracts will not be treated as annuities for federal income tax purposes.

EFFECT OF TAX-DEFERRED ACCUMULATIONS

The chart below compares the results from
Premium Payments made to:

- The Contract issued to a tax favored retirement program purchased with
pre-tax premium payments;

- A non-qualified Contract purchased with after-tax Premium Payments and;

- Conventional savings vehicles such as savings accounts.

THE POWER OF TAX-DEFERRED GROWTH

[BAR GRAPH]
This hypothetical chart compares the results of (1) contributing $100 per month
to a conventional, non-tax deferred plan, (2) contributing $100 to a
nonqualified, tax-deferred annuity, and (3) contributing $100 per month ($138.89
since contributions are made before tax) to a qualified tax-deferred plan such
as a 403(b) annuity. The chart assumes a 28% tax rate and an 8% fixed rate of
return. The deduction of fees and charges for both tax-deferred plans is
reflected in the chart. Variable options incur mortality and expense risk fee
and administration and distribution fee charges (0.75% -- 1.25%) and may also
incur account maintenance fees ($3.75 per quarter) and surrender charges (5% of
the lesser of all contributions received during the last 60 months or the amount
withdrawn). The dotted lines represent the amounts remaining after withdrawal
and payment of taxes and any surrender charge. An additional 10% tax penalty may
apply to withdrawals before age 59 1/2. This information is for illustrative
purposes only and is not a guarantee of future return.

Unlike savings accounts, Premium Payments made to tax-favored retirement
programs and Non-Qualified Contracts generally provide tax deferred treatment on
earnings. In addition, Premium Payments made to tax-favored retirement programs
ordinarily are not subject to income tax until withdrawn. As shown above,
investing in a tax-favored program increases the accumulation power of savings
over time. The more taxes saved and reinvested in the program, the more the
accumulation power effectively grows over the years.

To further illustrate the advantages of tax deferred savings using a 28% Federal
tax bracket, an annual fixed yield (BEFORE THE DEDUCTION OF ANY FEES OR CHARGES)
of 8% under a tax-favored retirement program in which tax savings were
reinvested has an equivalent after-tax annual fixed yield of 5.76% under a
conventional savings program. THE 8% YIELD ON THE TAX-FAVORED PROGRAM WILL BE
REDUCED BY THE IMPACT OF INCOME TAXES UPON WITHDRAWAL. The yield will vary
depending upon the timing of withdrawals. The previous chart represents (without
factoring in fees and charges) after-tax amounts that would be received.

By taking into account the current deferral of taxes, contributions to
tax-favored retirement programs increase the amount available for savings by
decreasing the relative current out-of-pocket cost (referring to the effect on
annual net take-home pay) of the investment. The chart below illustrates this
principle by comparing a pre-tax contribution to a tax-favored retirement plan
with an after-tax contribution to a conventional savings account:

PAYCHECK COMPARISON

<TABLE>
<CAPTION>
TAX-FAVORED CONVENTIONAL
RETIREMENT SAVINGS
PROGRAM ACCOUNT
----------- ------------
<S> <C> <C>
Annual amount available
for savings before
federal taxes......... $2,000 $2,000
Current federal income
tax due on Purchase
Payments.............. 0 (560)
Net retirement plan
Purchase Payments..... $2,000 $1,440
</TABLE>

This chart assumes a 28% federal income tax rate. The $560 which is paid toward
current federal income taxes reduces the actual amount saved in the conventional
savings account to $1,440 while the full $2,000 is contributed to the
tax-qualified program, subject to being taxed upon withdrawal. Stated otherwise,
to reach an annual retirement

45
<PAGE> 50

- --------------------------------------------------------------------------------

savings goal of $2,000, the contribution to a tax-qualified retirement program
results in a current out-of-pocket expense of $1,440 while the contribution to a
conventional savings account requires the full $2,000 out-of-pocket expense. The
tax-qualified retirement program represented in this chart is a plan type, such
as one under Section 403(b) of the Code, which allows participants to exclude
contributions within limits, from gross income.

46
<PAGE> 51

YEAR 2000
- --------------------------------------------------------------------------------

YEAR 2000 RISKS

The Company is in the process of modifying its systems to achieve Year 2000
readiness. This endeavor is directed and managed by the Company and monitored by
the parent company, American General Corporation. The Company has developed
clearly defined and documented plans that have been implemented to minimize the
risk of significant negative impact on its operations.

These plans include the following activities: (1) perform an inventory of the
Company's information technology and non-information technology systems; (2)
assess which items in the inventory may expose the Company to business
interruptions due to Year 2000 issues; (3) test systems for Year 2000 readiness;
(4) reprogram or replace systems that are not Year 2000 ready; and (5) return
the systems to operation. The Company expects to complete the forgoing
activities for all critical business systems relevant to AGA Separate Account A
by December 1998.

In addition, the Company has business relationships with various third parties,
each of which must also be Year 2000 ready. Therefore, the Company's plans also
include assessing and attempting to mitigate the risks associated with the
potential failure of third parties to achieve Year 2000 readiness. Due to the
various stages of the third parties' Year 2000 readiness, the Company's efforts
in this regard will extend through 1999.

Through June 30, 1998 the Company has incurred and expensed $81,722 (pretax)
related to Year 2000 readiness, including $40,369 incurred during the first six
months of 1998. The Company currently anticipates that it will incur future
costs of $1.2 million (pretax) for additional internal staff, third party
vendors, and other expenses to achieve Year 2000 readiness.

Due to the magnitude and complexity of this project, risks and uncertainties
exist. If conversion of the Company's systems is not completed on a timely basis
(due to non-performance by significant third-party vendors or other unforeseen
circumstances), or if significant third parties fail to achieve Year 2000
readiness on a timely basis, the Year 2000 issue could have a material adverse
impact on the operations of the Company and the AGA Separate Account A.

47
<PAGE> 52

Please tear off, complete and return the form below to the Annuity Service
Center at the address shown on the inside back cover of this Prospectus. A
Statement of Additional Information may also be ordered by calling
1-800-424-4990.

................................................................................

THE CONTRACTS

Please send me a free copy of the Statement of Additional Information for AGA
Separate Account A (ElitePlus Value).

(Please Print or Type)

- --------------------------------------------------------------------------------

Name: Policy #
Address:
Social Security Number:
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 53

(This page intentionally left blank)
<PAGE> 54

CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information.............................. 3
Marketing Information........................
Endorsements and Published Ratings...........
Types of Variable Annuity Contracts.............. 4
Variable Annuity Contract General Provisions..... 4
Federal Tax Matters.............................. 5
Tax Consequences of Purchase Payments........ 5
Tax Consequences of Distributions............ 6
Special Tax Consequences -- Early
Distribution.............................. 7
Special Tax Consequences -- Required
Distributions............................. 7
Tax Free Rollovers, Transfers and
Exchanges................................. 8
Calculation of Surrender Charge.................. 10
Illustration of Surrender Charge on Total
Surrender................................. 10
Illustration of Surrender Charge on a 10%
Partial Surrender Followed by a Full
Surrender................................. 10
Purchase Unit Value.............................. 11
Illustration of Calculation of Purchase Unit
Value..................................... 11
Illustration of Purchase of Purchase Units... 11
Performance Calculations......................... 11
Standardized Yield for Bond Fund Divisions....... 11
Calculation of Standardized Yield for Bond
Fund Divisions............................ 12
Illustration of Calculation of Standardized
Yield for Bond Fund Divisions............. 12
Calculation of Average Annual Total Return... 13
Performance Information.......................... 14
Hypothetical $10,000 Account Value and
Cumulative Return as Compared to
Benchmark................................. 14
Tables
Performance Compared to Market Indices....... 14
Credit Suisse Growth and Income Portfolio........ 16
Credit Suisse International Equity Portfolio..... 16
</TABLE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
EliteValue Portfolio............................. 17
Salomon Brothers U.S. Government Securities
Portfolio...................................... 17
State Street Global Advisors Growth Equity
Portfolio...................................... 18
State Street Global Advisors Money Market
Portfolio...................................... 18
Van Kampen Emerging Growth Portfolio............. 19
AIM V.I. Capital Appreciation Fund............... 20
AIM V.I. Diversified Income Fund................. 20
AIM V.I. International Equity.................... 20
AIM V.I. Value Fund.............................. 20
Federated American Leaders Fund II............... 20
Federated Fund for U.S. Government Securities
II............................................. 20
MFS Emerging Growth Series....................... 20
MFS Research Series.............................. 20
MFS Utilities Series............................. 20
Oppenheimer Growth Fund.......................... 20
Oppenheimer Growth & Income Fund................. 20
Oppenheimer High Income Fund..................... 20
Oppenheimer Small Cap Growth Fund................ 20
Oppenheimer Strategic Bond Fund.................. 20
Templeton Developing Market Fund -- Class 2...... 20
Templeton International Fund -- Class 2.......... 20
Van Kampen Enterprise Fund....................... 20
Van Kampen Strategic Stock....................... 20
Payout Payments.................................. 21
Assumed Investment Rate...................... 21
Amount of Payout Payments.................... 21
Payout Unit Value............................ 21
Illustration of Calculation of Payout Unit
Value..................................... 22
Illustration of Payout Payments.............. 22
Distribution of Variable Annuity Contracts....... 23
Experts.......................................... 23
Comments on Financial Statements................. 23
</TABLE>
<PAGE> 55

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FOR ADDITIONAL INFORMATION ABOUT THE CONTRACTS
CONTACT THE ANNUITY SERVICE CENTER:
205 E. 10TH AVENUE
AMARILLO, TEXAS 79101
1-800-424-4990

AMERICAN GENERAL ANNUITY INSURANCE COMPANY
2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019
1-800-424-4990
FOR UNIT VALUE INFORMATION CALL: 1-800-424-4990
FOR ASSET TRANSFERS BY TELEPHONE CALL: 1-800-424-4990
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 56

THE AMERICAN GENERAL ANNUITY INSURANCE COMPANY

AGA SEPARATE ACCOUNT A
UNITS OF INTEREST UNDER FLEXIBLE PREMIUM
INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS
ELITEPLUS VALUE

--------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------------------------------

FORM N-4 PART B
, 1999

This Statement of Additional Information is not a prospectus but contains
information in addition to that set forth in the prospectus for the Flexible
Premium Fixed and Variable Deferred Annuity Contracts dated , 1999
("Contracts") and should be read in conjunction with the prospectus. The terms
used in this Statement of Additional Information have the same meaning as those
set forth in the prospectus. A prospectus may be obtained by calling or writing
the Company, at 205 E. 10th Avenue, Amarillo, Texas 79101; 1-800-424-4990.
Prospectuses are also available from registered sales representatives.

DO NOT COPY
<PAGE> 57

CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information.............................. 3
The Company...................................... 3
Endorsements and Published Ratings............... 3
Types of Variable Annuity Contracts.............. 4
Variable Annuity Contract General Provisions..... 4
Federal Tax Matters.............................. 5
Tax Consequences of Purchase Payments........ 5
Tax Consequences of Distributions............ 6
Special Tax Consequences -- Early
Distribution.............................. 7
Special Tax Consequences -- Required
Distributions............................. 7
Tax Free Rollovers, Transfers and
Exchanges................................. 8
Calculation of Surrender Charge.................. 9
Illustration of Surrender Charge on Total
Surrender................................. 9
Illustration of Surrender Charge on a 10%
Partial Surrender Followed by a Full
Surrender................................. 9
Purchase Unit Value.............................. 10
Illustration of Calculation of Purchase Unit
Value..................................... 10
Illustration of Purchase of Purchase Units... 10
Performance Calculations......................... 10
Standardized Yield for Bond Fund Divisions....... 11
Calculation of Standardized Yield for Bond
Fund Divisions............................ 11
Illustration of Calculation of Standardized
Yield for Bond Fund Divisions............. 11
Calculation of Average Annual Total Return... 12
Performance Information.......................... 13
Hypothetical $10,000 Account Value and
Cumulative Return as Compared to Benchmark
Tables.................................... 13
Performance Compared to Market Indices....... 14
Credit Suisse Growth and Income Portfolio........ 15
</TABLE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Credit Suisse International Equity Portfolio..... 15
EliteValue Portfolio............................. 16
Salomon Brothers U.S. Government Securities
Portfolio...................................... 16
State Street Global Advisors Growth Equity
Portfolio...................................... 17
State Street Global Advisors Money Market
Portfolio...................................... 17
AGA Van Kampen Emerging Growth Portfolio......... 18
AIM V.I. Capital Appreciation Fund............... 19
AIM V.I. Diversified Income Fund................. 19
AIM V.I. International Equity.................... 19
AIM V.I. Value Fund.............................. 19
Federated American Leaders Fund II............... 19
Federated Fund for U.S. Government Securities
II............................................. 19
MFS Emerging Growth Series....................... 19
MFS Research Series.............................. 19
MFS Utilities Series............................. 19
Oppenheimer Growth Fund.......................... 19
Oppenheimer Growth & Income Fund................. 19
Oppenheimer High Income Fund..................... 19
Oppenheimer Small Cap Growth Fund................ 19
Oppenheimer Strategic Bond Fund.................. 19
Templeton Developing Market Fund -- Class 2...... 19
Templeton International Fund -- Class 2.......... 19
Van Kampen Enterprise Fund....................... 19
Van Kampen Strategic Stock....................... 19
Payout Payments.................................. 20
Assumed Investment Rate...................... 20
Amount of Payout Payments.................... 20
Payout Unit Value............................ 20
Illustration of Calculation of Payout Unit
Value..................................... 21
Illustration of Payout Payments.............. 21
Distribution of Variable Annuity Contracts....... 22
Experts.......................................... 22
Comments on Financial Statements................. 22
</TABLE>

2
<PAGE> 58

GENERAL INFORMATION

THE COMPANY

American General Annuity Insurance Company develops, markets, and issues
annuity products through niche distribution channels. We market single-premium
deferred annuities to the savings and retirement markets, flexible-premium
deferred annuities to the tax-qualified retirement market, and single-premium
immediate annuities to the structured settlement and retirement markets. The
Company distributes its annuity products primarily through financial
institutions, general agents, and specialty brokers. As of December 31, 1997,
the Company had over $11.7 billion in assets.

The Company is licensed to do business in 47 states, Puerto Rico and the
District of Columbia and is incorporated in the state of Texas. We are a
wholly-owned subsidiary of Western National Corporation. Western National
Corporation is a wholly-owned subsidiary of AGC Life Insurance Company, a
subsidiary of American General Corporation. Effective February 25, 1998, we
changed our name from Western National Life Insurance Company to American
General Annuity Insurance Company. Our executive offices are located at 2929
Allen Parkway, Houston, TX 77019.

ENDORSEMENTS AND
PUBLISHED RATINGS

Also from time to time, the rating of the Company as an insurance company
by A. M. Best may be referred to in advertisements or in reports to Contract
Owners. Each year the A. M. Best Company reviews the financial status of
thousands of insurers, culminating in the assignment of Best's Ratings. These
ratings reflect their current opinion of the relative financial strength and
operating performance of an insurance company in comparison to the norms of the
life/health insurance industry. Best's Ratings range from A++ to F.

In addition, the claims-paying ability of the Company as measured by the
Standard and Poor's Ratings Group may be referred to in advertisements or in
reports to Contract Owners. A Standard and Poor's insurance claims-paying
ability rating is an assessment of an operating insurance company's financial
capacity to meet the obligations of its insurance policies in accordance with
their terms. Standard and Poor's ratings range from AAA to D.

Further, from time to time the Company may refer to Moody's Investor's
Service's rating of the Company. Moody's Investor's Service's financial strength
ratings indicate an insurance company's ability to discharge senior policyholder
obligations and claims and are based on an analysis of the insurance company and
its relationship to its parent, subsidiaries and affiliates. Moody's Investor's
Service's ratings range from Aaa to C.

The Company may additionally refer to its Duff & Phelp's rating. A Duff &
Phelp's rating is an assessment of a company's insurance claims paying ability.
Duff & Phelp's ratings range from AAA to CCC.

Ratings relate to the claims paying ability of the Company's General
Account and not the investment characteristics of the Separate Account.

The Company may from time to time, refer to Lipper Analytical Services
Incorporated ("Lipper"), Morningstar, Inc. ("Morningstar") and CDA/Wiesenberger
Investment Companies (CDA/Wiesenberger) when discussing the performance of its
Divisions. Lipper, Morningstar and CDA/Wiesenberger are leading publishers of
statistical data about the investment company industry in the United States.

Additionally, the Company may compare the performance of the Divisions to
categories published by Lipper and Morningstar. The published categories which
may be utilized in comparison with the performance of the Divisions include the
Morningstar Growth and Income Mutual Fund Category, Morningstar Aggressive
Growth Mutual Fund Category, Morningstar Growth Mutual Fund Category,
Morningstar International Stock Mutual Fund Category, Lipper Growth and Income
Mutual Fund Category, Lipper Small Company Growth Mutual Fund Category, Lipper
Growth Mutual Fund Category and Lipper International Mutual Fund Category.
Additional Lipper or Morningstar categories may be utilized if they are deemed
by the Company relevant to the performance of the Company's Divisions.

The Company may, from time to time, refer to The Variable Annuity Research
& Data Services (VARDS) Report. The VARDS Report offers monthly analysis of the
variable annuity industry, including marketing and performance information.

Finally, the Company will utilize as a comparative measure for the
performance of its Funds the Consumer Price Index ("CPI"). The CPI is a measure
of change in consumer prices, as deter-

3
<PAGE> 59

mined in a monthly survey of the U.S. Bureau of Labor Statistics. Housing costs,
transportation, food, electricity, changes in taxes and labor costs are among
the CPI components. The CPI provides a tool for determining the impact of
inflation on an individual's purchasing power.

TYPES OF VARIABLE ANNUITY
CONTRACTS

The Contracts offered in connection with the prospectus to which this
Statement of Additional Information relates, are flexible payment deferred
annuity Contracts.

Under flexible payment Contracts, Purchase Payments generally are made
until retirement age is reached. However, no Purchase Payments are required to
be made after the first payment. Purchase Payments are subject to any minimum
payment requirements under the Contract. Purchase Payments are invested and
accumulate on a fixed or variable basis until the date the Contract Owner
selects to commence annuity payments.

The majority of these Contract will be sold to individuals through
financial institutions in the Non-Qualified market. A smaller number of these
contracts will be sold in the Qualified market through 403(b) plans and certain
IRA situations.

The Contracts are non-participating and will not share in any of the
profits of the Company.

VARIABLE ANNUITY CONTRACT GENERAL PROVISIONS

THE CONTRACT: The entire Contract consists of the Contract, the
Application, if any, and any riders or endorsements attached to the Contract.
The Contract may be changed or altered only by an authorized officer of the
Company. A change or alteration must be made in writing.

MINIMUM CONTRACT VALUE: If the minimum Contract Value falls below the
minimum Contract Value shown in the Contract, then the Company reserves the
right to surrender the Contract and pay the Contract Value to the Owner.

MISSTATEMENT OF AGE OR SEX: If the Age or sex of any Annuitant has been
misstated, any Annuity benefits payable will be the Annuity benefits provided by
the correct Age or sex. After Annuity Payments have begun, any underpayments
will be made up in one sum with the next Annuity Payment. Any overpayments will
be deducted from future Annuity Payments until the total is repaid.

INCONTESTABILITY: The Contract is incontestable.

MODIFICATION: The Contract may be modified in order to maintain compliance
with applicable state and federal law. When required, the Company will obtain
the Owner's approval of changes and gain approval from appropriate regulatory
authorities.

NON-PARTICIPATING: The Contract will not share in any distribution of
dividends.

EVIDENCE OF SURVIVAL: The Company may require satisfactory evidence of
continued survival of any person(s) on whose life Annuity Payments are based.

PROOF OF AGE: The Company may require evidence of Age of any Annuitant or
Owner.

PROTECTION OF PROCEEDS: To the extent permitted by law, death benefits and
Annuity Payments shall be free from legal process and the claim of any creditor
if the person is entitled to them under the Contract. No payment and no amount
under the Contract can be taken or assigned in advance of its payment date
unless the Company receives the Owner's written consent.

REPORTS: At least once each calendar year, the Company will furnish the
Owner with a report showing the Contract Value as of a date not more than four
months prior to the date of mailing, and will provide any other information as
may be required by law. The Company will also furnish an annual report of the
Separate Account. Reports will be sent to the last known address of the Owner.

TAXES: Any taxes paid to any governmental entity relating to the Contract
will be deducted from the Purchase Payment or Contract Value when incurred. The
Company will, in its sole discretion, determine when taxes have resulted from:
the investment experience of the Separate Account; receipt by the Company of the
Purchase Payments; or commencement of Annuity Payments. The Company may, in its
sole discretion, pay taxes when due and deduct that amount from the Contract
Value at a later date. Payment at an earlier date does not waive any right the
Company may have to deduct amounts at a later date. While the Company is not
currently maintaining a provision for federal income taxes with respect to the
Separate Account, the Company has reserved the right to establish a provision
for income taxes if it determines, in its sole discretion, that it will incur a
tax as a result of the operation of the Separate Account. The Company will
deduct for any income taxes incurred by it as a result of the operation of the
Separate Account whether or not there was a provision for taxes and whether or
not it was sufficient. The Company will
4
<PAGE> 60

deduct any withholding taxes required by applicable law.

REGULATORY REQUIREMENTS: All values payable under the Contract, including
any paid-up annuity, cash withdrawal or death benefits that may be available,
will not be less than the minimum benefits required by the laws and regulations
of the state in which the Contract is delivered.

FEDERAL TAX MATTERS

This Section summarizes the major tax consequences of contributions,
payments, and withdrawals under the Contracts, during life and at death.

TAX CONSEQUENCES OF PURCHASE PAYMENTS

403(b) Annuities. Purchase Payments made by Section 501(c)(3) tax-exempt
organizations and public educational institutions toward Contracts for their
employees are excludable from the gross income of employees, to the extent
aggregate Purchase Payments do not exceed several tax limitations. This gross
income exclusion applies both to employer contributions and to your voluntary
and nonelective salary reduction contributions.

Your voluntary salary reduction contributions are generally limited to
$10,000 ($9,500 before 1998), although additional, "catch-up" contributions are
permitted under certain circumstances. Combined employer and salary reduction
contributions are generally limited to the smallest of $30,000, approximately
25% of salary, or an exclusion allowance which takes into account a number of
factors. In addition, employer contributions for highly compensated employees
may be further limited by applicable nondiscrimination rules.

408(b) Individual Retirement Annuities ("408(b) IRAs"). Annual
tax-deductible contributions for 408(b) IRA Contracts are limited to the lesser
of $2,000 or 100% of compensation, and generally may be made only by individuals
who:

(i) are not active participants in another
retirement plan, and are not married;

(ii) are not active participants in another
retirement plan, are married, but either (a) the spouse is not an active
participant in another retirement plan, or (b) the spouse is an active
participant, but the couple's adjusted gross income does not exceed
$150,000.

(iii) are active participants in another retirement
plan, are unmarried, and have adjusted gross income of $30,000 or less
($25,000 or less prior to 1998; adjusted upward for inflation after 1998);
or

(iv) are active participants in another retirement
plan, are married, and have adjusted gross income of $50,000 or less
($40,000 or less prior to in 1998; adjusted upward for inflation after
1998).

Active participants in other retirement plans whose adjusted gross income
exceeds the limits in (ii), (iii) or (iv) by less than $10,000 are entitled to
make deductible 408(b) IRA contributions in proportionately reduced amounts. If
a 408(b) IRA is established for a nonworking spouse who has no compensation, the
annual tax-deductible Purchase Payments for both spouses' Contracts cannot
exceed the lesser of $4,000 or 100% of the working spouse's earned income, and
no more than $2,000 may be contributed to either spouse's IRA for any year.

You may be eligible to make nondeductible IRA contributions of an amount
equal to the excess of:

(i) the lesser of $2,000 ($4,000 for you and your
spouse's IRA) or 100% of compensation, over

(ii) your applicable IRA deduction limit.

You may also make rollover contributions to an IRA of eligible rollover
amounts from other qualified plans and contracts. See Tax-Free Rollovers,
Transfers and Exchanges.

408A "Roth" Individual Retirement Annuities ("408A "Roth" IRAs"). After
1997, annual nondeductible contributions for 408A "Roth" IRA Contracts are
limited to the lesser of $2,000 or 100% of compensation, and may be made only by
individuals who:

(i) are unmarried and have adjusted gross
income of $95,000 or less; or

(ii) are married and filing jointly and have
adjusted gross income of $150,000 or less.

The available nondeductible 408A "Roth" IRA contribution is reduced
proportionately to zero where adjusted gross income exceeds the limit in (i) by
$15,000 or less, or the limit in (ii) by $10,000 or less. Similarly, individuals
who are married and filing separately and whose adjusted gross income is less
than $10,000 may make a contribution to a Roth IRA of a portion of the otherwise
applicable $2,000 or 100% of compensation limit.

All contributions to 408(b) IRAs, traditional nondeductible IRAs and 408A
"Roth" IRAs must

5
<PAGE> 61

be aggregated for purposes of the $2,000 annual contribution limit.

SEP. Employer contributions under a SEP are made to a separate individual
retirement account or annuity established for each participating employee, and
generally must be made at a rate representing a uniform percent of participating
employees' compensation. Employer contributions are excludable from employees'
taxable income and, after 1993, cannot exceed the lesser of $30,000 or 15% of
your compensation.

Through 1996, employees of certain small employers (other than tax-exempt
organizations) were permitted to establish plans allowing employees to
contribute pretax, on a salary reduction basis, to the SEP. These salary
reduction contributions may not exceed $7,000, indexed for inflation in later
years. Such plans, if established by December 31, 1996, may still allow
employees to make these contributions.

SIMPLE IRA. Employer and employees contributions under a SIMPLE Retirement
Account Plan are made to a separate individual retirement account or annuity for
each employee. Employee salary reduction contributions cannot exceed $6,000 in
any year. Employer contributions can be a matching or a nonelective contribution
of a percentage as specified in the Code. Only employers with 100 or fewer
employees can maintain a SIMPLE IRA plan, which must also be the only plan the
employer maintains.

Non-Qualified Contracts. Purchase Payments made under Non-Qualified
Contracts are neither excludible from the gross income of the Contract Owner nor
deductible for tax purposes. However, any increase in the Purchase Unit Value of
a Non-Qualified Contract resulting from the investment performance of AGA
Separate Account A is not taxable to the Contract Owner until received by him.
Contract Owners that are not natural persons, however, are currently taxable on
any annual increase in the Purchase Unit Value attributable to Purchase Payments
made after February 28, 1986 to such Contracts.

TAX CONSEQUENCES OF DISTRIBUTIONS

403(b) Annuities. Voluntary salary reduction amounts accumulated after
December 31, 1988, and earnings on voluntary contributions before and after that
date, may not be distributed before one of the following:

(1) attainment of age 59 1/2;

(2) separation from service;

(3) death;

(4) disability, or

(5) hardship (hardship distributions are limited to salary reduction
contributions only, exclusive of earnings thereon).

Similar restrictions will apply to all amounts transferred from a Section
403(b)(7) custodial account (other than rollover contributions). Contributions
which are not subject to these restrictions, such as employee contributions to a
Section 403(b) annuity, may be subject to restrictions under the sponsoring
employer's plan, if any. Distributions are taxed as ordinary income to the
recipient in accordance with Section 72.

408(b) IRA, SEPs and SIMPLE IRAs. Distributions are generally taxed as
ordinary income to the recipient. Rollovers from an IRA to a Roth IRA, and
conversions of an IRA to a Roth IRA, where permitted, are generally taxable in
the year of the rollover or conversion. Such rollovers of conversions completed
in 1998 are generally eligible for pro-rata federal income taxation over four
years. Individuals with adjusted gross income over $100,000 are generally
ineligible for such conversions, regardless of marital status, as are married
individuals who file separately.

408A "Roth" IRAs. "Qualified" distributions upon attainment of age 59 1/2,
death, disability or for first-time homebuyer expenses are tax-free as long as
five or more years have passed since the first contribution to taxpayer's first
408A "Roth" IRA. The five-year holding period may be different for determining
whether a distribution allowable to a conversion contribution is subject to the
10% penalty tax. Qualified distributions may be subject to state income tax in
some states. Other distributions are generally taxable to the extent that the
distribution exceeds purchase payments.

Non-Qualified Contracts. Partial redemptions from a Non-Qualified Contract
purchased after August 13, 1982 (or allocated to post-August 13, 1982 Purchase
Payments under a pre-existing Contract), generally are taxed as ordinary income
to the extent of the accumulated income or gain under the Contract if they are
not received as an annuity. Partial redemptions from a Non-Qualified Contract
purchased before August 14, 1982 are taxed only after

6
<PAGE> 62

the Contract Owner has received all of his pre-August 14, 1982 investment in the
Contract. The amount received in a complete redemption of a Non-Qualified
Contract (regardless of the date of purchase) will be taxed as ordinary income
to the extent that it exceeds the Contract Owner's investment in the Contract.
Two or more Contracts purchased from the Company (or an affiliated company) by a
Contract Owner within the same calendar year, after October 21, 1988, are
treated as a single Contract for purposes of measuring the income on a partial
redemption or complete surrender.

When payments are received as an annuity, the Contract Owner's investment
in the Contract is treated as received ratably and excluded ratably from gross
income as a tax-free return of capital, over the expected payment period of the
annuity. Individuals who begin receiving annuity payments on or after January 1,
1987 can exclude from income only their unrecovered investment in the Contract.
Upon death prior to recovering tax-free their entire investment in the Contract,
such individuals generally are entitled to deduct the unrecovered amount on
their final tax return.

SPECIAL TAX CONSEQUENCES -- EARLY DISTRIBUTION

403(b) Annuities, 408(b) IRAs, SEPs and SIMPLE IRAs. Taxable distributions
received before the recipient attains age 59 1/2 generally are subject to a 10%
penalty tax in addition to regular income tax. Distributions on account of the
following generally are excepted from this penalty tax:

(1) death;

(2) disability;

(3) separation from service after a participant reaches age 55 (only applies to
qualified plans and 403(b) annuities);

(4) separation from service at any age if the distribution is in the form of
substantially equal periodic payments over the life (or life expectancy) of
the Participant (or the Participant and Beneficiary); and

(5) distributions which do not exceed the employee's tax-deductible medical
expenses for the taxable year of receipt.

Separation from service is not required for distributions from an IRA, SEP
or SIMPLE IRA under #4 above. Certain distributions from a SIMPLE IRA within two
years after first participating in the plan may be subject to a 25% penalty,
rather than a 10% penalty.

After 1997, distributions from 408(b) IRAs on account of the following
additional reasons are also excepted from this penalty tax:

(6) distributions up to $10,000 (in the aggregate) to cover costs of acquiring,
constructing or reconstructing the residence of a first-time homebuyer;

(7) distributions to cover certain costs of higher education tuition, fees,
books, supplies and equipment for the IRA owner, a spouse, child or
grandchild; and

(8) distributions to cover certain medical care or long-term care insurance
premiums, for individuals who have received federal or state unemployment
compensation for 12 consecutive months.

408A "Roth" IRAs. Distributions, other than "qualified" distributions where
the five-year holding rule is met, are generally subject to the same 10% penalty
tax as other IRAs.

SPECIAL TAX CONSEQUENCES -- REQUIRED
DISTRIBUTIONS

403(b) Annuities. Generally, minimum required distributions must commence
no later than April 1 of the calendar year following the later of the calendar
year in which the Participant attains age 70 1/2 or the calendar year in which
the Participant retires. Required distributions must be made over a period that
does not exceed the life or life expectancies of the Participant (or lives or
joint life expectancies of the Participant and Beneficiary). The minimum amount
payable can be determined several different ways. A penalty tax of 50% is
imposed on the amount by which the minimum required distribution in any year
exceeds the amount actually distributed in that year.

Amounts accumulated under a Contract on December 31, 1986 may be paid in a
manner that meets the above rule or, alternatively:

(i) should begin to be paid when the Participant attains age 75; and

(ii) the present value of payments expected to be made over the life of the
Participant, (under the option chosen) must exceed 50% of the present value
of all payments expected to be made (the "50% rule").

The 50% rule will not apply if a Participant's spouse is the joint annuitant.
Notwithstanding these pre-January 1, 1987 rules, the entire contract balance

7
<PAGE> 63

must meet the minimum distribution incidental benefit requirement of Section
403(b)(10).

At the Participant's death before payout has begun, Contract amounts
generally either must be paid to the Beneficiary within 5 years, or must begin
within 1 year of death and be paid over the life or life expectancy of the
Beneficiary. If death occurs after commencement of (but before full) payout,
distributions generally must continue at least as rapidly as under the method
elected by the Participant and in effect at the time of death.

A participant generally may aggregate his or her 403(b) contracts and
accounts for purposes of satisfying these requirements, and withdraw the
required distribution in any combination from such contracts or accounts, unless
the plan, contract, or account otherwise provides.

408(b) IRAs, SEPs and SIMPLE IRAs. Minimum distribution requirements are
generally the same as described above for 403(b) Annuities, except that:

(1) there is no exception for pre-1987 amounts; and

(2) there is no available postponement, past April 1 of the calendar year
following the calendar year in which age 70 1/2 is attained.

A participant generally may aggregate his or her IRAs for purposes of
satisfying these requirements, and withdraw the required distribution in any
combination from such contracts or accounts, unless the contract or account
otherwise provides.

408A "Roth" IRAs. Minimum distribution requirements generally applicable to
403(b) Annuities, 401(a) and 403(a) Qualified Plans, 408(b) IRAs, SEPs and 457
Plans do not apply to 408A "Roth" IRAs during the owner's lifetime, but
generally do apply after the owner's death.

A participant generally may aggregate his or her Roth IRAs for purposes of
satisfying these requirements, and withdraw the required distribution in any
combination from such contracts or accounts, unless the contract or account
otherwise provides.

Non-Qualified Contracts. Tax laws do not require commencement of
distributions from Non-Qualified Contracts at any particular time during the
Owner's lifetime, provided that the Owner is a natural person, and generally do
not limit the duration of annuity payments.

TAX-FREE ROLLOVERS, TRANSFERS AND EXCHANGES

403(b) Annuities. Tax-free transfers between 403(b) annuity contracts
and/or 403(b)(7) custodial accounts, and tax-free rollovers from 403(b) programs
to 408(b) IRAs or other 403(b) programs, are permitted under certain
circumstances.

408(b) IRAs. Funds may be transferred tax-free to a 408(b) IRA Contract,
from a 403(b) Annuity, under certain conditions. These amounts may subsequently
be rolled over on a tax-free basis to another 403(b) Annuity Contract from this
"conduit" IRA if no additional contributions have been made to that IRA. In
addition, tax-free rollovers may be made from one 408(b) IRA (other than a Roth
IRA) to another provided that no more than one such rollover is made during any
twelve-month period.

408A "Roth" IRAs. Funds may be transferred tax-free from one 408A "Roth"
IRA to another. Funds in a 408(b) IRA may be rolled in a taxable transaction to
a 408A "Roth" IRA by individuals who:

(i) have adjusted gross income of $100,000 or less, whether single or married
filing jointly; and

(ii) are not married filing separately.

Special, complicated rules governing holding periods, escape from the 10%
penalty tax and ratable recognition of 1998 income also apply to rollovers from
408(b) IRAs to 408A "Roth" IRAs, and may be subject to further modification by
Congress. You should consult your tax advisor regarding the application of these
rules.

SEPs. Funds may be rolled over tax free from one SEP only to another SEP or
a 408(b) IRA.

Non-Qualified Contracts. Certain of the Non-Qualified single payment
deferred annuity Contracts permit the Contract Owner to exchange the Contract
for a new deferred annuity contract prior to the commencement of annuity
payments. The exchange of one annuity contract for another is a tax-free
transaction under Section 1035, but is reportable to the IRS.

8
<PAGE> 64

CALCULATION OF SURRENDER CHARGE

The surrender charge is discussed in the Prospectus under "Fees and
Charges -- Surrender Charge." Examples of calculation of the Surrender
Charge upon total and partial surrender are set forth below:

ILLUSTRATION OF SURRENDER CHARGE ON TOTAL SURRENDER
Example 1.
TRANSACTION HISTORY

<TABLE>
<CAPTION>
DATE TRANSACTION AMOUNT
---- ----------- ------
<S> <C> <C>
2/1/92.......................... Purchase Payment $10,000
2/1/93.......................... Purchase Payment 5,000
2/1/94.......................... Purchase Payment 15,000
2/1/95.......................... Purchase Payment 2,000
2/1/96.......................... Purchase Payment 3,000
2/1/97.......................... Purchase Payment 4,000
7/1/97.......................... Total Purchase Payments (Assumes
Account Value is $50,000) 39,000
</TABLE>

Surrender Charge calculated on the excess over 10% of the Account Value at
the time of surrender:

<TABLE>
<S> <C> <C> <C>
Account Value at time of surrender $ 50,000
Less 10% not subject to Surrender Charge -5,000
--------
Subject to Surrender Charge 45,000
X 2%
--------
Surrender Charge based on Account Value $ ............... $900
--------
</TABLE>

ILLUSTRATION OF SURRENDER CHARGE ON A 10% PARTIAL SURRENDER FOLLOWED BY A FULL
SURRENDER

Example 2.
TRANSACTION HISTORY (ASSUMES NO INTEREST EARNED)

<TABLE>
<CAPTION>
DATE TRANSACTION AMOUNT
---- ----------- ------
<S> <C> <C>
2/1/92.......................... Purchase Payment $10,000
2/1/93.......................... Purchase Payment 5,000
2/1/94.......................... Purchase Payment 15,000
2/1/95.......................... Purchase Payment 2,000
2/1/96.......................... Purchase Payment 3,000
2/1/97.......................... Purchase Payment 4,000
7/1/97.......................... 10% Partial Surrender 3,900
(Assumes Account Value is $39,000)
8/1/97.......................... Full Surrender
-------
</TABLE>

a. Since this is the first partial surrender in this participant year, calculate
the excess over 10% of the value of the Purchase Units

10% of $39,000 = $3,900 [no charge on this 10% withdrawal]

b. The Account Value upon which Surrender Charge on the Full Surrender may be
calculated (levied) is $39,000 -- $3,900 = $35,100

c. The Surrender Charge calculated on the Account Value withdrawn $35,100 X 2% =
$702

d. Since only $4,000 has been paid in Purchase Payments in the 12 months prior
to the Full Surrender, the charge can only be calculated on $35,100. The
$3,900 partial withdrawal does not reduce this amount. Thus, the charge is
$35,100 X (2%) = $702.

9
<PAGE> 65

PURCHASE UNIT VALUE

The calculation of Purchase Unit value is discussed in the Prospectus under
"Purchase Period." The following illustrations show a calculation of a new Unit
value and the purchase of Purchase Units (using hypothetical examples):

ILLUSTRATION OF CALCULATION OF PURCHASE UNIT VALUE

Example 3.

<TABLE>
<S> <C>
1. Purchase Unit value, beginning of
period................................ $ 1.800000
2. Value of Fund share, beginning of
period................................ $ 21.200000
3. Change in value of Fund share........ $ .500000
4. Gross investment return (3)/(2)...... .023585
5. Daily separate account fee*.......... .000025
-----------
*Mortality and expense risk fee and
administration and distribution
fee of 0.90% per annum used for
illustrative purposes.
6. Net investment return (4)-(5)........ .023560
-----------
7. Net investment factor 1.000000+(6)... 1.023560
-----------
8. Purchase Unit value, end of period
(1)X(7)............................... 1.842408
-----------
</TABLE>

ILLUSTRATION OF PURCHASE OF PURCHASE UNITS (ASSUMING NO STATE PREMIUM TAX)

Example 4.

<TABLE>
<S> <C>
1. First Periodic Purchase Payment.......................... $ 100.00
2. Purchase Unit value on effective date of purchase (see
Example 3)............................................... $1.800000
3. Number of Purchase Units purchased (1)/(2)............... 55.556
4. Purchase Unit value for valuation date following purchase
(see Example 3).......................................... $1.842408
---------
5. Value of Purchase Units in account for valuation date
following purchase (3)X(4)............................... $ 102.36
---------
</TABLE>

PERFORMANCE CALCULATIONS*

MONEY MARKET DIVISION YIELD

ILLUSTRATION OF CALCULATION OF CURRENT YIELD FOR MONEY MARKET DIVISION

The current yield quotation based on a seven day period is computed by
determining the net change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one Purchase Unit at the
beginning of the period, subtracting a hypothetical charge reflecting deductions
from Contract Owner accounts, and dividing the difference by the value of the
account at the beginning of the base period to obtain the base period return and
then multiplying the base period return by 365/7.

10
<PAGE> 66

ILLUSTRATION OF CALCULATION OF EFFECTIVE YIELD FOR MONEY MARKET DIVISION

An effective yield quotation above is computed by determining the net
change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one Purchase Unit at the beginning of
the period, subtracting a hypothetical charge reflecting deductions from
Contract Owner accounts, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period return and then
compounding the base period return by adding 1, raising the sum to a power equal
to 365 divided by 7, and subtracting 1 from the result, according to the
following formula:

EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) 365/7] -1

STANDARDIZED YIELD FOR BOND FUND DIVISIONS

ILLUSTRATION OF CALCULATION OF STANDARDIZED YIELD FOR BOND FUND DIVISIONS

The standardized yield quotation based on a 30-day period is computed by
dividing the net investment income per Purchase Unit earned during the period by
the maximum offering price per Unit on the last day of the period, according to
the following formula:

YIELD = 2 [( a - b + 1)6 - 1]
cd

Where:

<TABLE>
<S> <C> <C>
a = net investment income earned during the period by the Fund
attributable to shares owned by the Division

b = expenses accrued for the period (net of reimbursements)

c = the average daily number of Purchase Units outstanding
during the period

d = the maximum offering price per Purchase Unit on the last day
of the period
</TABLE>

Yield on each Division is earned from dividends declared and paid by the
Fund, which are automatically reinvested in Fund shares.

11
<PAGE> 67

CALCULATION OF AVERAGE ANNUAL TOTAL RETURN

Average Annual Total Return quotations for the 1, 3, 5, and 10 year periods
ended December 31, 1997, the date of the most recent balance sheet included in
this registration statement, are computed by finding the average annual
compounded rates of over the 1, 3, 5, and 10 year periods that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:

P (1+T)n = ERV

Where:

<TABLE>
<S> <C> <C>
P = a hypothetical initial Purchase Payment of $1,000
T = average annual total return
n = number of years
ERV = redeemable value at the end of the 1, 3, 5 or 10 year
periods of a hypothetical $1,000 Purchase Payment made at
the beginning of the 1, 3, 5, or 10 year periods (or
fractional portion thereof)
</TABLE>

The Company may advertise standardized average annual total return which,
includes the surrender charge of up to 7% of Gross Purchase Payments as well as
non-standardized average annual total returns which does not include a surrender
charge or maintenance fee.

There is no sales charge for reinvested dividends. All recurring fees have
been deducted. For fees which vary with the account size, an account size equal
to that of the median account size has been assumed. Ending redeemable value has
been determined assuming a complete redemption at the end of the 1, 3, 5 or 10
year period and deduction of all nonrecurring charges at the end of each such
period.

12
<PAGE> 68

PERFORMANCE INFORMATION

HYPOTHETICAL $10,000 ACCOUNT VALUE AND
CUMULATIVE RETURN AS COMPARED TO BENCHMARKS TABLES.

The following tables show the Hypothetical $10,000 Account Value and
Cumulative Return for certain Divisions as compared to the benchmarks shown.

These performance calculations for the Divisions, and the methods used for
calculating them, are explained in the prospectus. (See "How To Review
Investment Performance of Separate Account Divisions" and "Variable Account
Options" in the prospectus.)

These tables compare hypothetical investment performance and percentage
changes in Purchase Unit values with the results of several benchmarks,
representing unmanaged market indices. The performance information has been
added to reflect mortality and expense risk fees and administration fee, net of
any expense reimbursements from the Underlying Fund. Surrender charges,
maintenance fees and premium taxes are not deducted. The effect of these charges
is to reduce total return to a Contract Owner. The comparisons should be
considered in light of the investment policies and objectives of the Funds.
Rates of return for the Divisions include reinvestment of investment income,
including capital gains, interest and dividends. The rates of return on the
market indices also have been adjusted to reflect reinvestment of interest and
dividends.

Price returns for the market indices are calculated by subtracting the
price level at the beginning of the year from the price level at the end of the
year and dividing the difference by the price level at the beginning of the
year. To calculate dollar values for the indices' Hypothetical $10,000 Account
Value presentation, price index values were substituted for Unit values in the
calculation described in the prospectus, and where applicable, dividend yields
were then added to determine the total returns applied in the dollar value
calculations. Similarly, to calculate Cumulative Return for the indices, the
Cumulative Return calculation described in the prospectus for Unit values of the
Divisions is used, substituting the Hypothetical $10,000 Account Value at the
end of each year for the Purchase Unit Value. No sales load, administrative
charges, or any other expenses have been deducted from the index calculations.

Additionally, the performance of a Division may from time to time be
compared with other Indexes which have been deemed by the Company relevant to
the Division.

These benchmarks do not reflect any charges for investment advisory fees,
brokerage commissions or other fees and expenses of the type charged at either
the Separate Account or Fund level. Therefore, the comparisons with these
benchmarks are of limited use.

THE PERFORMANCE RESULTS SHOWN IN THIS SECTION ARE NOT AN ESTIMATE OR
GUARANTEE OF FUTURE INVESTMENT PERFORMANCE, AND DO NOT REPRESENT THE ACTUAL
EXPERIENCE OF AMOUNTS INVESTED BY A PARTICULAR CONTRACT OWNER.

PERFORMANCE COMPARED TO MARKET INDICES

The performance of the Credit Suisse Growth and Income Portfolio Division 1
may be compared to the S&P 500 & Lehman Brothers Aggregate Index.

The performance of the Credit Suisse International Equity Portfolio
Division 2 may be compared to EAFE Index.

The performance of the EliteValue Division 3 may be compared to Lipper
Variable Annuity Flex Portfolio IX.

The performance of the Salomon Brothers U.S. Government Securities
Portfolio Division 4 may be compared to Salomon Brothers 1-10 Yr. Treasury
Index.

The performance of the State Street Global Advisors Growth Equity Portfolio
Division 5 may be compared to S&P 500 Index.

The performance of the Van Kampen Emerging Growth Portfolio Division 7 may
be compared to Lipper Variable Annuity Mid-Cap Index.

The performance of the AIM V.I. Capital Appreciation Fund Division 8 may be
compared to .

The performance of the AIM V.I. Diversified Income Fund Division 9 may be
compared to .

13
<PAGE> 69

The performance of the AIM V.I. International Equity Fund Division 10 may
be compared to .

The performance of the AIM V.I. Value Division 11 may be compared to
.

The performance of the Federated American Leaders Fund II Division 12 may
be compared to .

The performance of the Federated Fund for U.S. Government Securities II
Division 13 may be compared to .

The performance of the MFS Emerging Growth Division 14 may be compared to
.

The performance of the MFS Research Division 15 may be compared to
.

The performance of the MFS Utilities Division 16 may be compared to
.

The performance of the Oppenheimer Growth Fund Division 17 may be compared
to .

The performance of the Oppenheimer Growth & Income Fund Division 18 may be
compared to .

The performance of the Oppenheimer High Income Fund Division 19 may be
compared to .

The performance of the Oppenheimer Small Cap Growth Fund Division 20 may be
compared to .

The performance of the Oppenheimer Strategic Bond Fund Division 21 may be
compared to .

The performance of the Templeton Developing Market Fund Division 22 may be
compared to .

The performance of the Templeton International Fund Division 23 may be
compared to .

The performance of the Van Kampen Enterprise Portfolio Division 24 may be
compared to .

The performance of the Van Kampen Strategic Stock Portfolio Division 25 may
be compared to .

The Account Value of an assumed $10,000 investment in each of the Divisions
is shown in table form below. This will reflect a deduction for separate account
fees (mortality and expense risk fees plus administration and distribution fees
minus any applicable reimbursements) and underlying fund charges. This will not
reflect any deduction for account maintenance fees, surrender charges and
premium taxes. These charges would further reduce your return. See "How to
Review Investment Performance of Separate Account Divisions" in the prospectus
for information about how these returns were calculated as well as Standard
Average Annual Total Return information that reflects the deduction of all
separate account fees and charges.

14
<PAGE> 70

CREDIT SUISSE GROWTH AND INCOME PORTFOLIO DIVISION ONE PERFORMANCE COMPARED TO
S&P 500 & LEHMAN BROTHERS AGGREGATE INDEX

HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE OCTOBER 20, 1995

<TABLE>
<CAPTION>
CREDIT SUISSE GROWTH AND INCOME PORTFOLIO
DIVISION ONE INDEX
- ----------------------------------------------------------------- ----------
<S> <C> <C>
10/20/95................................................ $10,000 $ 10,000
06/30/96................................................ 11,195 10,932
------- ----------
06/30/97................................................ 13,325 13,375.64
------- ----------
06/30/98................................................ 15,986 16,331
------- ----------
</TABLE>

CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED JUNE 30, 1998)

<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------ ---------
<S> <C> <C>
Investment Division
Credit Suisse Growth and Income Portfolio Division One.... 19.97% 59.86%
----- -----
Benchmark Comparison
S&P 500 & Lehman Brothers Aggregate Index.... 25.85% 63.31%
----- -----
</TABLE>

CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO DIVISION TWO PERFORMANCE COMPARED
TO EAFE INDEX

HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE OCTOBER 20, 1995

<TABLE>
<CAPTION>
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
DIVISION TWO INDEX
- -------------------------------------------------------------------- -------
<S> <C> <C>
10/20/95................................................... $10,000 $10,000
06/30/96................................................... 11,503 11,047
------- -------
06/30/97................................................... 13,874 12,465
------- -------
06/30/98................................................... 13,086 13,225
------- -------
</TABLE>

CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED JUNE 30, 1998)

<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------ ---------
<S> <C> <C>
Investment Division
Credit Suisse International Equity Portfolio Division
Two.................................................... -5.77% 30.86%
----- -----
Benchmark Comparison
EAFE Index................................... 6.10% 32.25%
----- -----
</TABLE>

15
<PAGE> 71

ELITEVALUE DIVISION THREE PERFORMANCE COMPARED TO LIPPER VARIABLE ANNUITY FLEX
PORTFOLIO IX

HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE JANUARY 2, 1996

<TABLE>
<CAPTION>
ELITEVALUE
DIVISION THREE INDEX
- -------------------------------------------------------------------- -------
<S> <C> <C>
01/02/96................................................... $10,000 $10,000
06/30/96................................................... 10,886 10,489
------- -------
06/30/97................................................... 14,062 12,397
------- -------
06/30/98................................................... 16,727 14,359
------- -------
</TABLE>

CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED JUNE 30, 1998)

<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------ ---------
<S> <C> <C>
Investment Division
EliteValue Division Three................................. 18.96% 67.27%
----- -----
Benchmark Comparison
Lipper Variable Annuity Flex Portfolio IX................. 17.83% 43.59%
----- -----
</TABLE>

SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO DIVISION FOUR PERFORMANCE
COMPARED TO SALOMON BROTHERS 1-10 YR TREASURY INDEX

HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE FEBRUARY 6, 1996

<TABLE>
<CAPTION>
SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO
DIVISION FOUR INDEX
- -------------------------------------------------------------------- -------
<S> <C> <C>
02/06/96................................................... $10,000 $10,000
06/30/96................................................... 9,837 9,974
------- -------
06/30/97................................................... 10,552 10,684
------- -------
06/30/98................................................... 11,405 11,587
------- -------
</TABLE>

CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED JUNE 30, 1998)

<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------ ---------
<S> <C> <C>
Investment Division
Salomon Brothers U.S. Government Securities Portfolio
Division Four.......................................... 8.09% 14.05%
----- -----
Benchmark Comparison
Salomon Brothers 1-10 Yr Treasury Index...... 8.45% 85.74%
----- -----
</TABLE>

16
<PAGE> 72

STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO DIVISION FIVE PERFORMANCE
COMPARED TO S&P 500 INDEX

HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE OCTOBER 20, 1995

<TABLE>
<CAPTION>
STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO
DIVISION FIVE INDEX
- -------------------------------------------------------------------- -------
<S> <C> <C>
10/20/95................................................... $10,000 $10,000
06/30/96................................................... 11,343 11,676
------- -------
06/30/97................................................... 14,483 15,756
------- -------
06/30/98................................................... 18,714 20,506
------- -------
</TABLE>

CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED JUNE 30, 1998)

<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------ ---------
<S> <C> <C>
Investment Division
State Street Global Advisors Growth Equity Portfolio
Division Five.......................................... 29.21% 87.14%
----- ------
Benchmark Comparison
S&P 500 Index................................ 30.15% 105.06%
----- ------
</TABLE>

STATE STREET GLOBAL ADVISERS MONEY MARKET PORTFOLIO DIVISION SIX

HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE OCTOBER 6, 1995

<TABLE>
<CAPTION>
STATE STREET GLOBAL ADVISERS MONEY MARKET PORTFOLIO
DIVISION SIX
- ---------------------------------------------------------------------
<S> <C>
10/06/95.................................................... $10,000
06/30/96.................................................... 10,298
-------
06/30/97.................................................... 10,756
-------
06/30/98.................................................... 11,246
-------
</TABLE>

CUMULATIVE RETURN
(PERIOD ENDED JUNE 30, 1998)

<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------- ---------
<S> <C> <C>
Investment Division
State Street Global Advisers Money Market Portfolio
Division Six........................................... 4.55% 12.46%
------- -------
</TABLE>

17
<PAGE> 73

VAN KAMPEN EMERGING GROWTH PORTFOLIO DIVISION SEVEN PERFORMANCE COMPARED TO
LIPPER VARIABLE ANNUITY MID-CAP INDEX

HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE JANUARY 2, 1996

<TABLE>
<CAPTION>
VAN KAMPEN EMERGING GROWTH
DIVISION SEVEN INDEX
- --------------------------------------------------------------------- -------
<S> <C> <C>
01/02/96.................................................... $10,000 $10,000
06/30/96.................................................... 11,905 11,111
------- -------
06/30/97.................................................... 12,773 12,494
------- -------
06/30/98.................................................... 17,106 14,905
------- -------
</TABLE>

CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED JUNE 30, 1998)

<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION
------ ---------
<S> <C> <C>
Investment Division
Van Kampen Emerging....................................... 33.96% 71.14%
------ ------
Growth Portfolio Division Seven
Benchmark Comparison
Lipper Variable Annuity Mid-Cap Index...... 22.09% 49.05%
------ ------
</TABLE>

18
<PAGE> 74

AIM V.I. CAPITAL APPRECIATION FUND DIVISION EIGHT