Rule 497(e)
File No. 33-90208
ACACIA NATIONAL LIFE INSURANCE COMPANY
ACACIA NATIONAL VARIABLE LIFE INSURANCE SEPARATE ACCOUNT I
ALLOCATOR 2000
September 14, 1998
The following information supplements the Allocator 2000 prospectus dated May 1,
1998, which offers individual flexible premium variable life insurance policies.
This supplement deletes "Allocation of Policy Loan," "Effect of Policy Loans,"
"Indebtedness," and "Repayment of Indebtedness" located within the section
titled "Loan Privileges" on pages 29-30 and replaces those subsections with the
following:
Allocation of Policy Loan. An Owner may allocate a Policy loan among the
General Account and the Sub-accounts of the Variable Account which have Policy
Account Value. If no such allocation is made, ANLIC will allocate the loan to
the General Account. If indebtedness exceeds the Policy's value in the General
Account, we will transfer the value equal to that excess indebtedness from the
Policy's value in each Sub-account of the Variable Account to the General
Account as security for the excess indebtedness. We will allocate the amount
transferred among the Sub-accounts in the same proportion that the Policy's
value in each Sub-account bears to the Variable Account Value.
The portion of the loan allocated to the Sub-accounts of the Variable
Account will normally be paid within seven days after receipt of a written
request. Postponement of loans may take place under certain circumstances. (See,
Postponement of Payments.) ANLIC will not defer a loan used to pay premium.
Effect of Policy Loans. Value equal to the portion of the Policy loan
allocated to each Sub-account will be transferred from the Sub-account to the
General Account, reducing the value in that Sub-account. On each Policy
anniversary, the amount of interest accrued during the prior year, minus
earnings on the total amount allocated to the General Account as security for
the loan, will be allocated among and transferred from the Sub-accounts in
accordance with the foregoing procedures.
Value in the General Account held as security for the loan will be credited
with interest at 4.50% per year. NO ADDITIONAL INTEREST WILL BE CREDITED TO THIS
VALUE. The interest earned will be credited no less frequently than once each
Policy Month. Upon partial repayment of indebtedness, value in the General
Account equal to the amount of repayment will be released as security for the
loan, and may be reallocated back by the Owner among the General Account and the
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Sub-accounts of the Variable Account. Upon a full repayment of indebtedness, all
collateral in the General Account may be reallocated back by the Owner.
Indebtedness. Indebtedness equals the total of all Policy loans and accrued
interest on Policy loans plus any due and unpaid monthly deductions. If
indebtedness exceeds the Policy Account Value less Surrender Charges, ANLIC will
notify the Owner and any assignee of record. If sufficient payment equal to the
excess indebtedness is not made to ANLIC within 62 days from the date notice is
sent, the Policy will lapse and terminate without value. The Policy, however,
may later be reinstated. (See, Policy Lapse and Reinstatement).
Repayment of Indebtedness. Indebtedness may be repaid any time before the
Maturity Date of the Policy. (See, Payment of Policy Benefits). If not repaid,
ANLIC may deduct indebtedness from any amount payable under the Policy. As
indebtedness is repaid, the Owner may allocate the value in the General Account
securing the indebtedness among the General Account and the Sub-accounts of the
Variable Account. If no allocation is made, ANLIC will allocate repayments among
the General Account and the Sub-accounts in the same proportion that net premium
is being allocated at the time of the repayment. ANLIC will allocate the
repayment of indebtedness at the end of the Valuation Period during which the
repayment is received.
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