SUPPLEMENT DATED  December 9, 2002
                              TO THE PROSPECTUS OF


               VALUEMARK(R) INCOME PLUS IMMEDIATE VARIABLE ANNUITY

                                DATED MAY 1, 2002

                                    ISSUED BY
                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
                         ALLIANZ LIFE VARIABLE ACCOUNT B

The  Prospectus  has been revised to add the following  paragraphs to the end of
Section 9. "Performance and Illustrations" on page 26.

     Allianz  Life  may  also  provide   illustrations   to   customers.   These
     illustrations  provide  hypothetical  depictions  of the  "payout,"  or
     annuitization phase. Illustrations be based upon historical performance
     of the Investment Options, as adjusted for certain expenses.  (Any adjusted
     historical  performance  information will be accompanied by  "standardized"
     performance information.) In the alternative,  certain illustrations may be
     based  upon  an  assumed  rate  of  return  not  to  exceed  12%.  "Payout"
     illustrations may have various features, as follows:


o    Payout  illustrations  are  designed  to show the  hypothetical  effect  of
     annuitizing a Contact,  or receiving a stream of periodic  payments.  These
     illustrations  may  depict  either  a  variable  annuitization  or a  fixed
     annuitization.  A  variable  payout  illustration  would  be  based  upon a
     combination of adjusted historical performance and an assumed interest rate
     (AIR),  whereas  a fixed  payout  illustration  would  be  based  upon  the
     annuitant's  age, the payout option  selected,  and the payout factor rates
     currently  in  effect  on the  date of the  illustration.  Variable  payout
     illustrations  may also show the  portion of each payout that is subject to
     income tax and the portion that is non-taxable. In addition to variable and
     fixed payout  illustrations,  an illustration  may also be prepared showing
     the  effect  of  required  minimum  distribution  payments  from  qualified
     Contracts.

The values illustrated will be calculated reflecting the deduction of Investment
Option  expenses for the specific  Investment  Options  selected,  mortality and
expense  risk  charges,  and the  administrative  charge.  Contract  maintenance
charges may or may not be deducted from a particular illustration. Illustrations
will not reflect the  deduction of any state premium tax or any Federal or state
income tax or penalties.

The  illustrations  that are given to  customers by Allianz Life are designed to
assist  customers  in  understanding  how a contract  may  function in different
scenarios.  They are not guarantees or  representations as to future performance
or any specific rate of return.

A sample  format of a customer  illustration  is  attached  as Appendix A to the
Statement of Additional Information and is incorporated herein by reference.






                          THE VALUEMARK(R) INCOME PLUS
                       IMMEDIATE VARIABLE ANNUITY CONTRACT
                                    issued by
                         ALLIANZ LIFE VARIABLE ACCOUNT B
                                       and
                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
--------------------------------------------------------------------------------

This prospectus  describes the Valuemark Income Plus Immediate  Variable Annuity
Contract  with a Fixed  Payment  Option.  The Contract is issued by Allianz Life
Insurance  Company of North America (Allianz Life). All references to "we", "us"
and "our" refer to Allianz Life.

The annuity  offers the  Investment  Options  listed below,  and a Fixed Payment
Option of  Allianz  Life.  You can  select up to 10  investment  choices  (which
include any of the Investment  Options and the Fixed Payment Option).  The Fixed
Payment Option and one or more of the Investment Options may not be available in
your state.

AIM


USAZ AIM Basic Value Fund
USAZ AIM Blue Chip Fund
USAZ AIM Dent Demographic Trends Fund
USAZ AIM International Equity Fund

ALLIANCE CAPITAL

USAZ Alliance Capital Growth and Income Fund
USAZ Alliance Capital Large Cap Growth Fund
USAZ Alliance Capital Technology Fund

DAVIS

Davis VA Financial Portfolio
Davis VA Value Portfolio

DREYFUS

Dreyfus Small Cap Stock Index Fund
Dreyfus Stock Index Fund

FRANKLIN TEMPLETON

Franklin  Global  Communications  Securities  Fund  Franklin  Growth  and Income
Securities  Fund  Franklin  High Income Fund  Franklin  Income  Securities  Fund
Franklin  Large Cap Growth  Securities  Fund  Franklin Real Estate Fund Franklin
Rising  Dividends  Securities  Fund Franklin  Small Cap Fund Franklin  Small Cap
Value Securities  Fund* Franklin U.S.  Government Fund Franklin Zero Coupon Fund
2005  Franklin  Zero Coupon Fund 2010 Mutual  Discovery  Securities  Fund Mutual
Shares Securities Fund Templeton  Developing  Markets  Securities Fund Templeton
Foreign  Securities  Fund *  Templeton  Growth  Securities  Fund USAZ  Templeton
Developed Markets Fund

JENNISON

Jennison 20/20 Focus Portfolio
SP Jennison International Growth Portfolio
SP Strategic Partners Focused Growth Portfolio


OPPENHEIMER

Oppenheimer Global Securities Fund/VA
Oppenheimer High Income Fund/VA
Oppenheimer Main Street Growth & Income Fund/VA
USAZ Oppenheimer Emerging Growth Fund

PIMCO

PIMCO VIT High Yield Portfolio* PIMCO VIT StocksPLUS Growth and Income Portfolio
PIMCO VIT Total Return Portfolio* USAZ PIMCO Growth and Income Fund USAZ PIMCO
Renaissance Fund USAZ PIMCO Value Fund

SELIGMAN

Seligman Small-Cap Value Portfolio

USAZ

USAZ Money Market Fund*

VAN KAMPEN

USAZ Van Kampen Aggressive Growth Fund
USAZ Van Kampen Comstock Fund
USAZ Van Kampen Emerging Growth Fund*
USAZ Van Kampen Growth and Income Fund
USAZ Van Kampen Growth Fund

*The Investment Option name has changed as of the date of this prospectus as
follows:


Current Name                                     Previous Name
Franklin Small Cap Value Securities Fund Franklin Value Securities Fund
Templeton Foreign Securities Fund      Templeton  International Securities Fund
PIMCO  VIT High  Yield  Portfolio      PIMCO VIT High  Yield  Bond Portfolio
PIMCO VIT Total Return Portfolio       PIMCO VIT Total Return Bond Portfolio
USAZ Money  Market Fund                AZOA Money Market Fund
USAZ Van Kampen  Emerging Growth Fund  USAZ American Growth Fund


The  Securities and Exchange  Commission  has not approved or disapproved  these
securities  or  determined  if this  prospectus  is  truthful or  complete.  Any
representation to the contrary is a criminal offense.

Please read this prospectus before investing and keep it for future reference.
It contains important information about the Valuemark Income Plus Immediate
Variable Annuity Contract with a Fixed Payment Option.



To learn more about the annuity  offered by this  prospectus,  you can receive a
copy of the  Statement of  Additional  Information  (SAI) dated May 1, 2002,  as
supplemented  December 9, 2002.  The SAI has been filed with the  Securities and
Exchange Commission (SEC) and is legally a part of this prospectus. The Table of
Contents of the SAI is on Page 24 of this  prospectus.  The SEC  maintains a Web
site  (http://www.sec.gov)  that  contains  the SAI,  material  incorporated  by
reference and other  information about companies that file  electronically  with
the SEC. For a free copy of the SAI, call us at:  1-800-542-5427 or write us at:
Allianz  Life  Insurance  Company of North  America  5701  Golden  Hills  Drive,
Minneapolis, Minnesota 55416-1297.




<PAGE>


The  Variable Annuity  Contract  involves certain risks, and you may lose money.
The Contracts:

o are not bank deposits
o are not federally insured
o are not endorsed by any bank or government agency o are not guaranteed and may
be subject to loss of principal.

The Valuemark Income Plus Immediate Variable
Annuity Contracts:



This prospectus is not an offering of the securities in any state,  country,  or
jurisdiction  in which we are not authorized to sell the  Contracts.  You should
rely  only  on the  information  contained  in this  prospectus  or that we have
referred you to. We have not authorized  anyone to provide you with  information
that is different. Dated: May 1, 2002, as supplemented December 9,2002.



TABLE OF CONTENTS____________________
-------------------------------------
Index of Terms                                       4


Summary                                              5

Fee Table                                            7

1.The Valuemark Income Plus Immediate
Variable Annuity Contract

2. Ownership 12


    Contract Owner/Annuitant                       12

    Joint Owner/Joint Annuitant                    12

    Beneficiary                                    12

    Assignment                                     12

3.  Annuity Payments 13 (The Payout Phase)

    Income Date                                    13

    Annuity Payments                               13

    Assumed Investment Return                      13

    Annuity Options                                13

4. Purchase 14

    Purchase Payment                               14

    Allocation of Purchase Payment                 14

    Tax - Free Section 1035 Exchanges              15

    Free Look                                      15

    VIP Units                                      15

5.Investment Options                               16

     Substitution and Limitation on

 Further Investments                               17

    Transfers                                      18
      Telephone Transfers                          18

    Excessive Trading                              18

    Voting Privileges                              18

    Substitution                                   18

6.Expenses                                         19

    Insurance Charges                              19
      Mortality and Expense Risk Charge            19
      Administrative Expense Charge                19

    Commutation Fee                                19

    Premium Taxes                                  19

    Income Taxes                                   19

    Investment Option Expenses                     19

7.Taxes                                            19

    Annuity Contracts in General                   19

    Qualified and Non-Qualified Contracts          20

    Liquidations - Non-Qualified Contracts         20

    Liquidations - Qualified Contracts             20

    Death Benefits                                 21

    Diversification                                21

8.Access to Your Money                             22

    Suspension of Payments or Transfers            22


9. Performance and Illustrations 23

10. Death Benefit 23

    Death of Beneficiary                           23

11. Other Information 23

    Allianz Life                                   23

    The Separate Account                           23

    Distribution                                   23

    Additional Credits For Certain Groups          23

    Administration                                 24

    Financial Statements                           25

Table of Contents of the Statement of
Additional Information                             25

    Privacy Notice                                 25

Appendix A - Condensed Financial
Information                                        26



Appendix B - Illustration of
Annuity Income                                     31




<PAGE>



INDEX OF TERMS
--------------------------------------------------------------------------------



This prospectus is written in plain English.  However,  there are some technical
terms used which are capitalized in the  prospectus.  The page that is indicated
below is where you will find the definition for the word or term.

                                      Page                                  Page

Annuitant                             12     Joint Annuitant                 12

Annuity Calculation Date              15     Joint Owner                     12

Annuity Options                       13     Non-Qualified                   18

Annuity Payments                      13     Payout Phase                    13

Annuity Unit                          15     Purchase Payment                14

Assumed Investment Return (AIR)       13     Qualified                       18

Beneficiary                           12     Tax Deferral                    18

Contract                              12     Total Liquidation Value         22

Contract Owner                        12     Investment Option               12

Fixed Payment Option                  12     VIP Unit                        15

Income Date                           13


<PAGE>



SUMMARY
--------------------------------------------------------------------------------


The  sections in the summary  correspond  to sections in this  prospectus  which
discuss the topics in more detail.

THE IMMEDIATE VARIABLE ANNUITY CONTRACT:

The annuity  contract  (Contract)  offered by Allianz Life  provides a means for
investing in an immediate  variable annuity Contract in both Investment  Options
and the Allianz Life Fixed  Payment  Option  (referred to in the Contract as the
"Fixed Account"). In return for your one time payment, the Contract provides for
income to you and another person (if elected) under a payment plan you select.


You can purchase the contract as a Non-Qualified Contract. You may also purchase
the Contract as a Qualified  Contract of a plan or type that is currently issued
by the company  with monies  deemed  qualified  as  determined  by the  Internal
Revenue Code.  This would include but may not be limited to Roth and Traditional
Individual  Retirement  Accounts  (IRA) and  Simplified  Employee  Pension (SEP)
contracts.


The Contract may be used as a funding vehicle for  asset-based fee  arrangements
offered by brokerage firms or their associated  investment advisory firms. There
may be fees and charges assessed by these firms for their asset-based  programs.
These fees and charges would be in addition to the charges and other  deductions
we describe elsewhere in this prospectus. Your registered representative will be
able to describe  the fees  assessed  in  connection  with any such  asset-based
programs.


We currently do not permit Contract Owners to borrow money from us using the
Contract as security for the loan


Contract features may not be available in all states.



ANNUITY PAYMENTS:

When you buy the Contract,  you select an Income Date.  You can start to receive
regular  income  from your  annuity by choosing  an Annuity  Option.  Under most
Annuity  Options,  you can choose whether to receive your Annuity  Payments as a
variable payout,  a fixed payout (not available in all states),  or both. If you
choose  to have any  part of your  Annuity  Payments  come  from the  Investment
Options,  the dollar amount of your Annuity  Payments may go up or down based on
the performance of the Investment Options.

PURCHASE:

You can buy the  Contract  with  $35,000 or more under most  circumstances.  You
cannot add to your  Contract  at a later  date  (i.e.,  it is a single  purchase
payment  contract).  Your  investment  representative  can help you complete the
appropriate forms.

INVESTMENT OPTIONS:

You can put your money in the Investment  Options and/or you can receive Annuity
Payments  from the  Allianz  Life Fixed  Payment  Option (not  available  in all
states).  Your income will fluctuate up or down based on the Investment Options'
performance.  No minimum  payment amount is  guaranteed.  You can make transfers
between the Investment Options. You cannot make transfers from the Fixed Payment
Option to the Investment Options.


EXPENSES:

The Contract has insurance features and investment features, and there are costs
related to each.


Allianz  Life is  responsible  for paying any  premium and other  similar  taxes
assessed  by states  and other  governmental  entities  (e.g.,  municipalities).
Premium taxes typically range from 0% to 3% of the Purchase  Payment or Contract
value,  depending on the state or  governmental  entity.  Allianz Life currently
assesses  premium tax charges when you die, when annuity payments begin, or when
you make a complete  withdrawal[,  whichever comes first.] Allianz Life reserves
the right to change this practice in the future.


Allianz Life deducts a mortality  and expense risk charge which is equal,  on an
annual basis, to 1.25% of the average daily value of the Contract invested in an
Investment  Option.  Allianz Life also deducts an administrative  expense charge
which is equal,  on an annual basis,  to 0.15% of the average daily value of the
Contract invested in an Investment Option.

Certain Annuity Options allow liquidations (withdrawals).  If you take money out
of the  Contract,  Allianz  Life  may  assess  a  commutation  fee,  which  is a
percentage  of the  amount  liquidated  (withdrawn),  or as set  forth  in  your
contract.  If you  choose  Annuity  Options  2 or 4,  you  may  make  a  partial
liquidation.  A  commutation  fee of 5% in Contract  year 2, reducing by 1% each
year until it is 1% for  Contract  year 6 and  thereafter,  will  apply.  If you
choose  Annuity  Option  6,  you  may  make a full  or  partial  liquidation.  A
commutation  fee of 5% in Contract years 1 and 2, reducing by 1% each year until
it is 1% for Contract year 6 and thereafter, will apply.

You currently can make as many transfers as you want each year. Allianz Life may
limit  this in the  future.  However,  you will  always  be  allowed  at least 6
transfers each year.


Each Investment Option deducts  portfolio  management fees and expenses from the
amounts you have invested in the Investment Options. Some Investment Option also
deduct 12b-1 fees from Investment  Option assets.  For 2001,  these expenses and
fees ranged,  on an annual basis, from 0.51% to 1.64% of the average daily value
of the Investment Option, after reimbursement.

We will pay sales  commissions to broker-dealers  who sell the Contracts.  For a
discussion of these arrangements, see "Distribution."


Allianz Life may assess a state premium tax charge, which ranges from 0% to 3.5%
of your Purchase Payment (depending upon the state).


TAXES:

Your earnings are generally not taxed until you take them out. If you take money
out  during the  Accumulation  Phase,  earnings  come out first and are taxed as
income.  If you are  younger  than 591/2  when you take  money  out,  you may be
charged a 10% federal tax penalty.  Other tax rules and limitations may apply to
Qualified Contracts.

ACCESS TO YOUR MONEY:

Generally,  you may not make  liquidations  (withdrawals)  from  your  Contract.
However, under certain circumstances, you may make one liquidation each Contract
year  after  the  Income  Date  if  you  selected  Annuity  Option  2,  4 or  6.
Liquidations made after the Income Date may be subject to a commutation fee. You
may also have to pay  income  tax and a tax  penalty  on any money you take out.
Limitation to withdrawals may apply to certain Qualified Contracts.

DEATH BENEFIT:

If you die before the Income Date and there is no Joint Annuitant,  the Contract
will be treated as if it had never been  issued.  We will return  your  Purchase
Payment  to your  estate.  If you have  chosen an  Annuity  Option  with a Joint
Annuitant and either you or the Joint Annuitant dies before the Income Date, the
Annuity Option will be changed to Option 2 (with 10 years of payments guaranteed
or 5 years of payments guaranteed if the survivor's life expectancy is less than
10 years).

PRIVACY  POLICY:  We  place  a high  priority  on  maintaining  your  trust  and
confidence.  A notice of the privacy  policy  followed  by Allianz  Life and its
affiliated companies is provided in the prospectus to enhance your understanding
of how we protect your privacy  when we collect and use  information  about you,
and the steps we take to safeguard that information. See "Privacy Notice."


INQUIRIES:

If you have questions about your Contract or need more information, please
contact us at:

USAllianz Service Center
300 Berwyn Park
P.O. Box 3031 Berwyn, Pennsylvania 19312-0031
(800) 792-7198



<PAGE>



FEE  TABLE
--------------------------------------------------------------------------------


The purpose of this Fee Table is to help you  understand  the costs of investing
in the  Contract.  It reflects  expenses of the Separate  Account as well as the
Investment  Options.  We have  provided  "Illustrations  of  Annuity  Income" in
Appendix  B to show you the  effects of the  charges,  expenses  and  investment
performance on annuity income.  Taxes,  including premium tax charges,  also may
apply, although they do not appear in the table.



contract Owner Transaction Fees

Commutation Fee*
(as a percentage of the amount taken out [liquidated])

                              Contract Year Charge

                                  1             5%

                                  2             5%

                                  3             4%

                                  4             3%

                                  5             2%

                               6 (& thereafter) 1%

* After the first Contract year, you may make one liquidation from your Contract
each  year if you have  selected  Annuity  Option  2 or 4. If you have  selected
Annuity  Option 6, you may make a  liquidation  once each year  beginning in the
first year.



Separate Account Annual Expenses
(as a percentage of average daily account value)

Mortality and Expense Risk Charge ..................  1.25%

Administrative Expense Charge ......................   .15%
                                                       ----

Total Separate Account Annual Expense ..............  1.40%



<PAGE>



INVESTMENT OPTION ANNUAL EXPENSES net of waivers/reimbursements

(as a percentage of an Investment Option's average daily net assets for the most
recent  fiscal  year.)  See  the  Investment   Option   prospectuses   for  more
information.*
<TABLE>
<CAPTION>


                                                  Management           12b-1               Other        Total Investment
Investment Option                                    Fees              Fees**            Expenses        Option Expenses
---------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>            <C>                  <C>               <C>
USAZ AIM Basic Value Fund1                             .75%            .25%                .10%               1.10%
USAZ AIM Blue Chip Fund1                               .80%            .25%                .10%               1.15%
USAZ AIM Dent Demographic Trends Fund1                 .85%            .25%                .10%               1.20%
USAZ AIM International Equity Fund1                    .90%            .25%                .10%               1.25%
USAZ Alliance Capital Growth and Income Fund1          .85%            .25%                 --                1.10%
USAZ Alliance Capital Large Cap Growth Fund1           .85%            .25%                 --                1.10%
USAZ Alliance Capital Technology Fund1                1.00%            .25%                 --                1.25%

Davis VA Financial Portfolio2                          .75%             --                 .25%               1.00%
Davis VA Value Portfolio                               .75%             --                 .12%                .87%

Dreyfus Small Cap Stock Index Fund  Service Shares1    .35%            .25%                 --                 .60%
Dreyfus Stock Index Fund  Service Shares               .25%            .25%                .07%                .57%

Franklin Global Communications Securities Fund - Class 23/4            .52%                .25%                .03%
..80%
Franklin Growth and Income Securities Fund - Class 23/4.48%            .25%                .03%                .76%
Franklin High Income Fund - Class 23/4                 .57%            .25%                .05%                .87%
Franklin Income Securities Fund - Class 23/4           .49%            .25%                .04%                .78%
Franklin Large Cap Growth Securities Fund - Class 23/4 .75%            .25%                .03%               1.03%
Franklin Real Estate Fund - Class 23/4                 .56%            .25%                .03%                .84%
Franklin Rising Dividends Securities Fund - Class 23/4/5.74%           .25%                .02%               1.01%
Franklin Small Cap Fund - Class 23/5                   .45%            .25%                .31%               1.01%
Franklin Small Cap Value Securities Fund - Class 23/5  .57%            .25%                .20%               1.02%
Franklin U.S. Government Fund - Class 23/4             .51%            .25%                .02%                .78%
Franklin Zero Coupon Fund 2005 - Class 14              .63%             --                 .05%                .68%
Franklin Zero Coupon Fund 2010 - Class 14              .63%             --                 .05%                .68%
Mutual Discovery Securities Fund - Class 23            .80%            .25%                .22%               1.27%
Mutual Shares Securities Fund - Class 23               .60%            .25%                .19%               1.04%
Templeton Developing Markets Securities Fund - Class 231.25%           .25%                .32%               1.82%
Templeton Foreign Securities Fund - Class 23/5         .68%            .25%                .22%               1.15%
Templeton Growth Securities Fund - Class 23/4          .80%            .25%                .05%               1.10%
USAZ Templeton Developed Markets Fund1                 .88%            .25%                .12%               1.25%

Jennison 20/20 Focus Portfolio - Class 21              .75%            .25%                .33%               1.33%
SP Jennison International Growth Portfolio - Class 26  .85%            .25%                .54%               1.64%
SP Strategic Partners Focused Growth Portfolio - Class 26 .90%         .25%                .26%               1.41%

Oppenheimer Global Securities Fund/VA                  .64%             --                 .06%                .70%
Oppenheimer High Income Fund/VA                        .74%             --                 .05%                .79%
Oppenheimer Main Street Growth & Income Fund/VA        .68%             --                 .05%                .73%
USAZ Oppenheimer Emerging Growth Fund1                 .85%            .25%                .15%               1.25%

PIMCO VIT High Yield Portfolio - Admin. Class7         .25%             --                 .50%                .75%
PIMCO VIT StocksPLUS Growth and  Income Portfolio - Admin. Class 7    .40%                   --                .27%
..67%
PIMCO VIT Total Return Portfolio- Admin. Class 7       .25%             --                 .40%                .65%
USAZ PIMCO Growth and Income Fund1                     .75%            .25%                .10%               1.10%
USAZ PIMCO Renaissance Fund1                           .75%            .25%                .10%               1.10%
USAZ PIMCO Value Fund1                                 .75%            .25%                .10%               1.10%

Seligman Small-Cap Value Portfolio - Class 18         1.00%             --                 .19%               1.19%

USAZ Money Market Fund1                                .35%            .25%                .30%                .90%

USAZ  Van Kampen Aggressive Growth Fund1               .80%            .25%                .20%               1.25%
USAZ Van Kampen Comstock Fund1                         .68%            .25%                .27%               1.20%
USAZ Van Kampen Emerging Growth Fund1                  .75%            .25%                .10%               1.10%
USAZ Van Kampen Growth and Income Fund1                .68%            .25%                .17%               1.10%
USAZ Van Kampen Growth Fund1                           .75%            .25%                .20%               1.20%
</TABLE>


*The fee and expense  information  regarding the Investment Options was provided
by the investment advisers, and Allianz Life has not independently verified such
information.  Some of the investment options may pay service fees, which vary by
Investment  Option.  Except  for the USAZ  Funds and the  PIMCO  VIT  Investment
Options,  neither the Investment  Options nor their Advisers are affiliated with
Allianz Life.


**The 12b-1 fees cover certain  distribution  and shareholder  support  services
provided  by  the  companies  selling  Contracts.   Our  principal  underwriter,
USAllianz Investor Services, LLC will receive 12b-1 fees.


1.   The USAZ AIM  Basic  Value  Fund,  USAZ AIM Blue Chip  Fund,  USAZ AIM Dent
     Demographic Trends Fund, USAZ AIM International  Equity Fund, Dreyfus Small
     Cap  Stock  Index  Fund,  Jennison  20/20  Focus  Portfolio  and  the  USAZ
     Oppenheimer  Emerging  Growth Fund commenced  operations as of May 1, 2002.
     The  expenses  shown  above  for these  Investment  Options  are  therefore
     estimated for the Investment  Option's  current  fiscal year.  Certain USAZ
     Fund  expenses  will be assumed by the Adviser and an annual  expense limit
     has been  designated  by the Adviser for each  Investment  Option  which is
     reflected in the total expense  amount  listed in the table above.  Without
     reimbursement,  total  Investment  Option  expenses  would be  estimated as
     follows: USAZ Alliance Capital Growth and Income Fund, 3.28%, USAZ Alliance
     Capital  Large Cap Growth Fund,  3.36%,  USAZ Alliance  Capital  Technology
     Fund,  3.19%,  USAZ Templeton  Developed  Markets Fund,  3.56%,  USAZ PIMCO
     Growth and Income Fund,  3.70%,  USAZ PIMCO  Renaissance  Fund, 2.96%, USAZ
     PIMCO Value Fund,  3.43%,  USAZ Money Market Fund,  1.21%,  USAZ Van Kampen
     Aggressive  Growth Fund,  7.59%, USAZ Van Kampen Comstock Fund, 3.01%, USAZ
     Van Kampen Emerging Growth Fund,  3.81%,  USAZ Van Kampen Growth and Income
     Fund, 2.71%, and the USAZ Van Kampen Growth Fund, 4.46%.



2.   Without  reimbursement,  other expenses and total operating  expenses would
     have  been  0.29%  and  1.04%,  respectively  for the  Davis  VA  Financial
     Portfolio.

3.   For  the  Investment  Options  of  Franklin  Templeton  Variable  Insurance
     Products Trust,  Class 2 shares have a distribution  plan which is referred
     to as a rule  12b-1  plan.  See "Fund  Account  Policies"  in the  Franklin
     Templeton Variable Insurance Products Trust prospectus for more information
     about the rule 12b-1 plan.


4.   The Investment  Option  administration  fee is paid indirectly  through the
     management fee.


5.   For the Franklin Rising  Dividends,  Franklin Small Cap, Franklin Small Cap
     Value Securities and Templeton Foreign  Securities Funds, the managers have
     agreed in advance to make estimated  reductions of 0.01%,  0.08%, 0.03% and
     0.01%,  respectively,  in their fees to reflect reduced services  resulting
     from the Investment Options' investment in a Franklin Templeton money fund.
     The managers are required by the Investment  Options' Board of Trustees and
     an order of the Securities and Exchange  Commission to reduce their fees if
     the Investment  Options invest in a Franklin  Templeton money fund. Without
     these reductions,  the total annual Investment  Options' operating expenses
     are estimated to be 1.02%, 1.09%, 1.05% and 1.16%, respectively.

6.   Without  reimbursement,  total operating expenses would have been 2.26% and
     3.01%,  respectively  for  the  SP  Jennison  International  Growth  and SP
     Strategic  Partners Focused Growth  Portfolios.  These  reimbursements  are
     voluntary and may be terminated at any time.

7.   "Other Expenses" without deduction  reflect a 0.35%  administrative  fee, a
     0.15% service fee and 0.01%  representing  pro rata  Trustees' Fees for the
     PIMCO VIT High Yield Portfolio; a 0.10% administrative fee, a 0.15% service
     fee and 0.02%  interest  expense  for the PIMCO VIT  StocksPLUS  Growth and
     Income Portfolio;  and a 0.25%  administrative fee, a 0.15% service fee and
     0.01%  representing  pro rata Trustees' fees for the PIMCO VIT Total Return
     Portfolio. PIMCO has contractually agreed to reduce total annual Investment
     Option  operating  expenses  to the extent  they would  exceed,  due to the
     payment of  organizational  expenses and Trustees' fees,  0.75%,  0.65% and
     0.65%,  respectively,  of  average  daily net assets for the PIMCO VIT High
     Yield,  StocksPLUS Growth and Income and Total Return  Portfolios.  Without
     such  reductions,  Total Annual Expenses for the fiscal year ended December
     31, 2001 would have been 0.76%,  0.67% and 0.66%,  respectively.  Under the
     Expense   Limitation   Agreement,   PIMCO  may  recoup  these  waivers  and
     reimbursements in future periods, not exceeding three years, provided total
     expenses,  including  such  recoupment,  do not exceed  the annual  expense
     limit.  Ratio of net  expense to  average  net  assets  excluding  interest
     expense is 0.65% for the StocksPlus Growth and Income Portfolio.


8.   Effective  March 1, 2001, J & W. Seligman & Co.  Incorporated  ("Seligman")
     voluntarily  agreed to  reimburse  expenses  of  Seligman  Small-Cap  Value
     Portfolio,  other than management and 12b-1 fees, that exceed 0.20%.  Prior
     to that date, Seligman  reimbursed all expenses,  other than management and
     12b-1 fees.  Without  reimbursement,  other  expenses and total  Investment
     Option expenses would have been 0.22% and 1.22%, respectively.  There is no
     assurance that Seligman will continue this policy in the future.



<PAGE>


EXAMPLES

The examples below should not be considered a  representation  of past or future
expenses.  Actual  expenses  may be  greater  or less than  those  shown.  These
examples  assume that the  applicable  fee  waivers  and expense  reimbursements
provided by some of the Investment  Options will continue for the periods shown.
The examples  assume you invested $1,000 with annual payments based on a 15 year
period  certain  payout  under  Annuity  Option 6 with a 5%  Assumed  Investment
Return.  Premium taxes are not reflected in the tables. Premium taxes may apply.
For  additional  information,  see  Section  5 -  "Expenses".  You would pay the
following expenses on a $1,000  investment,  assuming a 5% annual return on your
money (compounded  annually) if you surrender your Contract under Annuity Option
6 at the end of each time period:
<TABLE>
<CAPTION>



                                                     1 Year             3 Years           5 Years         10 Years
--------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                <C>              <C>               <C>
USAZ AIM Basic Value Fund                              $70                $96              $111              $158
USAZ AIM Blue Chip Fund                                $70                $97              $113              $161
USAZ AIM Dent Demographic Trends Fund                  $70                $98              $115              $164
USAZ AIM International Equity Fund                     $71                $99              $117              $166
USAZ Alliance Capital Growth and Income Fund           $70                $96              $111              $158
USAZ Alliance Capital Large Cap Growth Fund            $70                $96              $111              $158
USAZ Alliance Capital Technology Fund                  $70               $107              $149              $308
Davis VA Financial Portfolio                           $69                $93              $108              $153
Davis VA Value Portfolio                               $68                $90              $103              $145
Dreyfus Small Cap Stock Index fund                     $65                $84               $93              $130
Dreyfus Stock Index Fund                               $65                $83               $92              $128
Franklin Global Communications Securities Fund         $65                $82               $90              $125
Franklin Growth and Income Securities Fund             $64                $81               $89              $124
Franklin High Income Fund                              $65                $83               $92              $128
Franklin Income Securities Fund                        $64                $81               $89              $124
Franklin Large Cap Growth Securities Fund              $67                $88              $100              $140
Franklin Real Estate Fund                              $65                $84               $93              $130
Franklin Rising Dividends Securities Fund              $67                $88              $100              $140
Franklin Small Cap Fund                                $67                $88              $99               $140
Franklin Small Cap Value Securities Fund               $67                $89              $102              $144
Franklin U.S. Government Fund                          $65                $82               $90              $125
Franklin Zero Coupon Fund - 2005                       $66                $85               $95              $133
Franklin Zero Coupon Fund - 2010                       $66                $85               $95              $133
Mutual Discovery Securities Fund                       $69                $94              $108              $154
Mutual Shares Securities Fund                          $67                $89              $100              $141
Templeton Developing Markets Securities Fund           $73               $107              $128              $183
Templeton Foreign Securities Fund                      $68                $90              $103              $145
Templeton Growth Securities Fund                       $68                $90              $103              $146
USAZ Templeton Developed Markets Fund                  $70               $107              $149              $308
SP Jennison International Growth Portfolio             $74               $108              $131              $187
SP Strategic Partners Focused Growth Portfolio         $72               $103              $123              $175
Oppenhimer Global Securities Fund/VA                   $66                $86               $97              $136
Oppenhimer High Income Fund/VA                         $67                $88              $100              $141
Oppenhimer Main Street Growth & Income Fund/VA         $66                $87               $98              $137
USAZ Oppenheimer Emerging Growth Fund                  $71                $99              $117              $166
PIMCO VIT High Yield Portfolio                         $67                $87               $98              $139
PIMCO VIT StocksPLUS Growth and Income Portfolio       $66                $85               $95              $133
PIMCO VIT Total Return Portfolio                       $66                $85               $95              $133
USAZ PIMCO Growth and Income Fund                      $70                $96              $111              $158
USAZ PIMCO Renaissance Fund                            $70                $96              $111              $158
USAZ PIMCO Value Fund                                  $70                $96              $111              $158
Seligman Small-Cap Value Portfolio                     $70                $98              $115              $163
USAZ Money Market Fund                                 $68                $91              $104              $147
USAZ Van Kampen Aggressive Growth Fund                 $71                $99              $117               $166
USAZ Van Kampen Comstock Fund                          $70                $98              $115              $164
USAZ Van Kampen Emerging Growth Fund                   $70                $96              $111              $158
USAZ Van Kampen Growth and Income Fund                 $70                $96              $111              $158
USAZ Van Kampen Growth Fund                            $70                $98              $115              $164
---------------------------------------------------------------------------------------------------------------------------



<PAGE>


You would pay the  following  expenses  on a $1,000  investment,  assuming  a 5%
annual  return on your  money  (compounded  annually)  if your  Contract  is not
surrendered:


                                                     1 Year             3 Years           5 Years         10 Years
---------------------------------------------------------------------------------------------------------------------------
USAZ AIM Basic Value Fund                              $23                $64               $98              $155
USAZ AIM Blue Chip Fund                                $23                $65              $100              $158
USAZ AIM Dent Demographic Trends Fund                  $24                $66              $102              $160
USAZ AIM International Equity Fund                     $24                $68              $104              $163
USAZ Alliance  Capital Growth and Income Fund          $23                $64               $98              $155
USAZ Alliance Capital Large Cap Growth Fund            $23                $64               $98              $155
USAZ Alliance Capital Technology Fund                  $24                $66              $102              $160
Davis VA Financial Portfolio                           $22                $61               $94              $149
Davis VA Value Portfolio                               $21                $58               $90              $142
Dreyfus Small Cap Stock Index Fund                     $18                $51               $79              $126
Dreyfus Stock Index Fund                               $18                $51               $78              $125
Franklin Global Communications Securities Fund         $18                $49               $76              $122
Franklin Growth and Income Securities Fund             $18                $49               $76              $121
Franklin High Income Fund                              $18                $51               $78              $125
Franklin Income Securities Fund                        $18                $49               $76              $121
Franklin Large Cap Growth Securities Fund              $20                $56               $86              $137
Franklin Real Estate Fund                              $18                $51               $79              $126
Franklin Rising Dividends Securities Fund              $20                $56               $86              $137
Franklin Small Cap Fund                                $20                $56               $86              $136
Franklin Small Cap Value Securities Fund               $21                $57               $88              $140
Franklin U.S. Government Fund                          $18                $49               $76              $122
Franklin Zero Coupon Fund - 2005                       $19                $53               $82              $130
Franklin Zero Coupon Fund - 2010                       $19                $53               $81              $129
Mutual Discovery Securities Fund                       $22                $62               $95              $150
Mutual Shares Securities Fund                          $20                $56               $87              $138
Templeton Developing Markets Securities Fund           $27                $75              $115              $180
Templeton Foreign Securities Fund                      $21                $58               $90              $142
Templeton Growth Securities Fund                       $21                $58               $90              $143
USAZ Templeton Developed Markets Fund                  $24                $66              $102              $160
SP Jennison International Growth Portfolio             $28                $77              $118              $184
SP Strategic Partners Focused Growth Portfolio         $26                $72              $110              $172
Oppenhimer Global Securities Fund/VA                   $19                $54               $83              $132
Oppenhimer High Income Fund/VA                         $20                $56               $87              $137
Oppenhimer Main Street Growth & Income Fund/VA         $20                $55               $84              $134
USAZ Oppenheimer Emerging Growth Fund                  $24                $68              $104              $163
PIMCO VIT High Yield Portfolio                         $20                $55               $87              $138
PIMCO VIT StocksPLUS Growth and Income Fund            $19                $53               $81              $129
PIMCO VIT Total Return Portfolio                       $19                $53               $81              $129
USAZ PIMCO Growth and Income Fund                      $23                $64               $98              $155
USAZ PIMCO Renaissance Fund                            $23                $64               $98              $155
USAZ PIMCO Value Fund                                  $23                $64               $98              $155
Seligman Small-Cap Value Portfolio                     $24                $66              $101              $160
USAZ Money Market Fund                                 $21                $59               $91              $144
USAZ Van Kampen Aggressive Growth Fund                 $24                $68              $104              $163
USAZ Van Kampen Comstock Fund                          $24                $66              $102              $160
USAZ Van Kampen Emerging Growth Fund                   $23                $64               $98              $155
USAZ Van Kampen Growth and Income Fund                 $23                $64               $98              $155
USAZ Van Kampen Growth Fund                            $24                $66              $102              $160

See Appendix A - Condensed Financial Information for unit values.
</TABLE>



<PAGE>


THE VALUEMARK INCOME
--------------------------------------------------------------------------------
PLUS IMMEDIATE VARIABLE
--------------------------------------------------------------------------------
1.ANNUITY CONTRACT
--------------------------------------------------------------------------------

This prospectus describes an immediate variable annuity contract (Contract) with
a Fixed Payment Option offered by Allianz Life.

An annuity is a contract  between you, the owner,  and an insurance  company (in
this case Allianz  Life),  where the insurance  company  promises to pay you (or
someone else you choose) an income, in the form of Annuity Payments. The Annuity
Payments must begin on a designated  date that is no later than 60 days after we
allocate your  Purchase  Payment.  This is called the Income Date.  The Contract
benefits  from Tax  Deferral.  Tax Deferral  means that you are not taxed on any
earnings or appreciation on the assets in your Contract until you take money out
of your Contract.

The Contract is called a variable annuity because you can choose among different
Investment Options, and, depending upon market conditions,  your payments can go
up or  down  based  on  the  Investment  Options'  investment  performance.  The
Investment  Options are designed to offer a better return than the Fixed Payment
Option.  However, this is not guaranteed.  Your payments may go up or down based
on the investment performance of the Investment Option(s) you select.

The Contract also contains a Fixed Payment  Option  (referred to in the Contract
as the "Fixed Account").  The Fixed Payment Option (not available in all states)
offers an interest  rate that is  guaranteed  by Allianz Life. If you select the
Fixed Payment Option, your money will be placed with the other general assets of
Allianz  Life.  Any  portion of your  Purchase  Payment  allocated  to the Fixed
Payment  Option will be  temporarily  allocated to the USAZ Money Market Fund on
the day we allocate  your  Purchase  Payment.  It will then be  allocated to the
Fixed  Payment  Option  when you  begin  receiving  Annuity  Payments  from your
Contract.  We will not make any changes to your Contract without your permission
except as may be required  by law. We may,  however,  add  endorsements  to your
Contract from time to time.

2 OWNERSHIP
--------------------------------------------------------------------------------


CONTRACT OWNER/ANNUITANT

You are the Contract Owner and the Annuitant.  You, as the Contract Owner,  have
all the rights under the  Contract.  The Contract  Owner is as designated at the
time the Contract is issued.

An Annuitant is the natural person on whose life we base Annuity Payments.


JOINT OWNER/JOINT ANNUITANT

If there is more than one Contract  Owner,  each Contract Owner is a Joint Owner
of the Contract.  Any Join Owner must be the spouse of the other  Contract Owner
(exceptions:  Colorado  and  Pennsylvania.  Joint  Owners  have equal  ownership
rights.  You both must authorize those ownership rights unless otherwise allowed
by Allianz Life. You can name a Joint Annuitant. Each Joint Owner must be either
an Annuitant or Joint Annuitant.

If you die before the Income Date and there is no Joint Annuitant, we will treat
the Contract as if we never  issued it and will return the  Purchase  Payment to
your estate.  If you die while the Contract is in force, the Joint Annuitant (if
not  already a Joint  Owner)  will become the  Contract  Owner.  On or after the
Income Date, if there is no Joint  Annuitant or when the Joint  Annuitant  dies,
the Beneficiary(ies) will be the Owner(s) of their respective shares.


BENEFICIARY

The  Beneficiary  is the  person(s)  or  entity  you name to  receive  any death
benefit. You can also name a contingent Beneficiary.  The contingent Beneficiary
will receive any death benefit if the  Beneficiary is not alive when you and any
Joint Annuitant die. The Beneficiary is named at the time the Contract is issued
unless  changed at a later  date.  Unless an  irrevocable  Beneficiary  has been
named, you can change the Beneficiary or contingent Beneficiary.


ASSIGNMENT

You can  transfer  ownership  of (assign)  the  Contract at any time during your
lifetime.  We will not be liable  for any  payment we make,  or other  action we
take, in accordance  with the Contract  before we receive  written notice of the
assignment.  An  assignment  may be a taxable  event.  If the Contract is issued
under a Qualified plan, you may be unable to assign the Contract.

3. ANNUITY PAYMENTS (THE PAYOUT PHASE)
--------------------------------------------------------------------------------


INCOME DATE

You can receive  regular income  payments under your Contract as long as you and
any Joint  Annuitant  are alive on the Income  Date.  We call the date that your
Annuity  Payments  begin the Income Date.  We ask you to choose your Income Date
when you purchase the Contract.  Your Income Date must be the first or fifteenth
day of a  calendar  month  and must not be  later  than 60 days  from the day we
allocate your Purchase Payment.

ANNUITY PAYMENTS


Under Annuity  Options 1-5, you may elect to receive your Annuity  Payments as a
variable payout, a fixed payout (not available in all states),  or a combination
of both.  Under Annuity Option 6, Annuity Payments will come from the Investment
Options only (variable payout). If you choose a Fixed Payment Option, all of the
Annuity  Payments will be the same dollar amount  (equal  installments).  If you
choose a variable payout, you can select from the available  Investment Options.
Guaranteed  fixed  annuity rates are based on 2.5% interest per year and , where
applicable,  the 1983 (a)  Individual  Annuity  Mortality  Table with  mortality
improvement projected 30 years using Mortality Projection Scale G.


If you choose to receive  variable  payments,  we  determine  the amount of your
first variable payment based on:

1) your  Contract  value on the Annuity  Calculation  Date (no more than 10 days
before the first payment), 2) your age and the age of any Joint Annuitant on the
Annuity  Calculation Date (except in Option 6), 3) the Assumed Investment Return
(AIR), a benchmark you select, and 4) the Annuity Option you select.

We credit your Contract with a fixed number of Annuity Units for each Investment
Option you select.  We do this by allocating  the first payment amount among the
Investment  Options  according  to your  instructions,  and  dividing the amount
allocated  to each  Investment  Option by the Annuity  Unit value on the Annuity
Calculation  Date. The number of Annuity Units in your Contract remains the same
unless  you make a  liquidation  or  transfer.  After  the first  payment,  your
payments will change based on the change in value of the Annuity Units  credited
to your Contract. The amount of each change will depend on how the Annuity Units
in your Contract  perform as compared to your AIR benchmark.  You can choose the
frequency of Annuity Payments (for example, monthly, quarterly, semi-annually or
annually).  The SAI  contains a  discussion  of how we  calculate  Annuity  Unit
values.

ASSUMED INVESTMENT RETURN

We base your Annuity Payments on the Assumed  Investment  Return. You can choose
either a 7%, 5% or 3% per year AIR.  The 7% AIR is not  available  in all states
(check with your  registered  representative  for  availability).  If you do not
choose  one,  the 5% AIR will  automatically  apply.  If the actual  performance
exceeds the AIR you choose, your Annuity Payments will increase.  Similarly,  if
the actual  rate is less than the AIR you choose,  your  Annuity  Payments  will
decrease.  If you choose a higher  AIR,  the  initial  amount of income  will be
higher,  but income will increase more slowly during periods of good  investment
performance and decrease faster during periods of poor investment performance.

ANNUITY OPTIONS

You can choose among income  plans.  We call those Annuity  Options.  Except for
Annuity Option 6, once you select an Annuity Option you may not change it.

You can choose one of the  following  Annuity  Options.  You can also choose any
other Annuity Option you want as long as Allianz Life agrees to provide it.

OPTION 1. Life  Annuity.  Under  this  option,  we will  make  periodic  Annuity
Payments so long as the Annuitant is alive.  After the  Annuitant  dies, we will
stop making Annuity Payments.

OPTION 2. Life Annuity with 5, 10, 15 or 20 Year Payments Guaranteed. Under this
option,  we will make  periodic  Annuity  Payments so long as the  Annuitant  is
alive.  If the Beneficiary  does not want to receive Annuity  Payments after the
Annuitant's  death,  he or she can ask for a lump sum equal to the present value
of the guaranteed  monthly Annuity  Payments  remaining,  as of the date Allianz
Life receives  proof of the death of the Annuitant and a payment  election form,
commuted as set for in the Contract.

OPTION 3.  Joint and Last  Survivor  Annuity.  Under this  option,  we will make
periodic  Annuity  Payments  during  the  joint  lifetime  of you and the  Joint
Annuitant. When you die, if the Joint Annuitant is still alive, we will continue
to make Annuity  Payments during the Joint  Annuitant's  life. The amount of the
Annuity  Payments we will make to the Joint  Annuitant can be equal to 100%, 75%
or 50% of the amount  that was being paid when both you and the Joint  Annuitant
were alive.  You choose this  percentage  when you apply for the  Contract.  The
Annuity Payments will end when the last surviving Annuitant dies.


OPTION 4. Joint and Last  Survivor  Annuity  with 5, 10, 15 or 20 Year  Payments
Guaranteed. Under this option, we will make periodic Annuity Payments during the
joint  lifetime  of you and the  Joint  Annuitant.  When you die,  if the  Joint
Annuitant is still alive,  we will continue to make Annuity  Payments during the
life of the  surviving  Annuitant.  The payments will be 100% of the amount that
was being paid when you were both alive. If, when the last death occurs, we have
made  Annuity  Payments for less than the selected  guaranteed  period,  we will
continue  to make  Annuity  Payments  to the  Beneficiary  for  the  rest of the
guaranteed period. If the Beneficiary does not want to receive Annuity Payments,
he or she can ask for a  single  lump  sum.  Equal to the  present  value of the
guaranteed  monthly  Annuity  Payments  remaining,  as of the date  Allianz Life
receives  proof of the  death of the  Annuitant  and a  payment  election  form,
commuted as set forth in the Contract.

OPTION 5. Refund Life Annuity.  Under this option, we will make periodic Annuity
Payments during your lifetime.  The last Annuity Payment will be made before you
die. If the value of the Annuity Payments made is less than the value applied to
the Annuity Option,  then the Beneficiary  will receive a refund as set forth in
the Contract.

OPTION 6. Specified  Period  Certain  Annuity.  Under this option,  we will make
periodic Annuity Payments for a specified period that you choose. The period can
be from 5 to 30 years (you must use whole numbers of years). If at the time both
you and any Joint Annuitant die, we have made Annuity Payments for less than the
selected  guaranteed  period,  we will continue to make Annuity  Payments to the
Beneficiary  for the  rest of the  guaranteed  period.  This  option  may not be
available in all states. This option can only be elected as a variable payout.

After the first  Contract  anniversary,  you can  exchange  an Annuity  Option 6
payout for a payout  under  Annuity  Options  1-5.  You can do this if the Total
Liquidation Value of your Contract is at least $25,000.  Furthermore, if you own
a  Non-Qualified  Contract  you must be 59 1/2 or older.  If you own a Qualified
Contract you may make the exchange  after the later of your  reaching age 59 1/2
or 5 years from the date of the first  Annuity  Payment and prior to the year in
which  you  reach  age 70 1/2.  A new  Contract  will be  issued to you for your
existing  Contract.  You must return your existing  Contract to us. The Contract
Owner/Annuitant  and  Joint  Annuitant  (if  any)  must be the same  under  both
Contracts.


<PAGE>


4PURCHASE
--------------------------------------------------------------------------------

PURCHASE PAYMENT

The Purchase Payment is the money you put into the Contract. The minimum payment
Allianz Life will accept is $35,000.  The Contract is a single payment Contract.
This means that you cannot add money to your  Contract  after you buy it. If you
buy more than one Contract, the Purchase Payment for each Contract does not need
to be $35,000 if the average  payment for each Contract is $35,000 or more. When
you make your  Purchase  Payment,  we will deduct any premium taxes that you owe
before we allocate it to the  Investment  Options.  This product is not designed
for professional market timing  organizations,  other entities, or persons using
programmed, large or frequent transfers.

The Contract may be used in  connection  with certain tax  qualified  retirement
plans.  The Contract  includes  attributes  such as tax deferral on  accumulated
earnings. Qualified retirement plans provide their own tax deferral benefit; the
purchase of this  Contract  does not provide  additional  tax deferral  benefits
beyond those provided in the qualified plan. Accordingly,  if you are purchasing
the Contract  through a qualified  plan,  you should  consider  purchasing  this
Contract for its Death Benefit,  annuity  benefits,  and other  non-tax-deferral
related benefits.  Please consult a tax advisor for information specific to your
circumstances to determine whether the Contract is an appropriate investment for
you.


ALLOCATION  OF PURCHASE  PAYMENT When you purchase a Contract,  we will allocate
your  Purchase  Payment  to one or  more  of the  Investment  Options  you  have
selected. If you want any portion of the Purchase Payment to be allocated to the
Fixed Payment Option,  we will temporarily  allocate it to the USAZ Money Market
Fund. It will be moved to the Fixed Payment  Option on the day we calculate your
first Annuity Payment (Annuity  Calculation Date). The Annuity  Calculation Date
will be no more than 10 business  days before the Income  Date.  We ask that you
allocate your money in whole percentages. Each allocation must be at least 10%.


Currently,  you may  invest  in 10  investment  choices  at any one time  (which
includes the Investment  Options and the Fixed Payment  Option).  We may, in the
future,  limit the number of  Investment  Options  that you may invest in at one
time (except in Texas).

Once we receive your  Purchase  Payment and the necessary  information,  we will
issue your Contract and allocate your Purchase  Payment  within 2 business days.
If you do not give us all of the  information  we need,  we will  contact you or
your  registered  representative  to get it. If for some reason we are unable to
complete  this  process  within 5 business  days,  we will either send back your
money  or get  your  permission  to keep it  until  we get all of the  necessary
information.  Our business day closes when the New York Stock  Exchange  closes,
which is usually at 4:00 p.m. Eastern Time.

TAX-FREE SECTION 1035 EXCHANGES

You generally can exchange one annuity  Contract or a life insurance  policy for
another  annuity  contract in a "tax-free"  exchange  under  Section 1035 of the
Internal  Revenue Code. You generally also can exchange a life insurance  policy
for an annuity  contract.  Before  making an exchange,  you should  compare both
contracts  carefully.  Remember that if you exchange a life insurance  policy or
annuity contract for the contract  described in this prospectus:  you might have
to pay a surrender  charge on your old  contract,  there will be a new surrender
charge period for the new contract,  other charges under the new contract may be
higher (or lower),  and the benefits may be different.  If the exchange does not
qualify for Section 1035 treatment,  you also may have to pay federal income tax
on the exchange.  You should not exchange  another  contract for this one unless
you determine that the exchange is in your best interest.


FAX APPLICATION

Allianz Life will accept Contract applications  delivered in writing, as well as
via fax. A manually signed faxed  application  will be treated as an application
delivered in writing.  We do not  currently  accept  applications  delivered via
e-mail or web site, or other electronic communications.


FREE LOOK


If you change your mind about owning the  Contract,  you can cancel it within 10
days after receiving it (or the period required in your state). You will receive
back the value of your  Contract on the day we receive  your  request,  less any
Annuity  Payments paid in states where permitted.  In certain states,  or if you
have  purchased the Contract as an IRA, we may be required to give you back your
Purchase  Payment if you  decide to cancel  your  Contract  within 10 days after
receiving  it (or the period  required in your state).  If that is the case,  we
reserve the right to allocate  your  Purchase  Payment to the USAZ Money  Market
Fund for 15 days  after we  receive  it.  (In some  states,  the  period  may be
longer.)  At the end of that  period,  we will  re-allocate  your  money  as you
selected.  Currently,  however,  we will  directly  allocate  your  money to the
Investment Option(s) you have selected.


VIP UNITS

The value of the portion of your Contract  allocated to the  Investment  Options
will go up or down  based  upon the  investment  performance  of the  Investment
Option(s)  you  choose.  The  value of your  Contract  will  also  depend on the
expenses of the  Contract.  In order to keep track of the value of your Contract
prior to the Annuity  Calculation  Date, we use a measurement  called a VIP Unit
(which is like a share of a mutual fund).  On and after the Annuity  Calculation
Date, we call it an Annuity Unit.

Every  business  day we  determine  the value of a VIP Unit for each  Investment
Option by multiplying the VIP Unit value for the previous period by a factor for
the current period. The factor is determined by:

1. dividing the value of an Investment  Option at the end of the current  period
by the value of an Investment Option for the previous period; and

2. multiplying it by one minus the daily amount of the insurance charges and any
charges for taxes.

The value of a VIP Unit may go up or down from day to day.

When you make the Purchase Payment,  we credit your Contract with VIP Units. The
number of VIP Units we credit your  Contract  with is determined by dividing the
amount of the Purchase Payment allocated to an Investment Option by the value of
the corresponding VIP Unit.

We calculate  the value of each VIP Unit after  regular  trading on the New York
Stock Exchange closes each day and then credit your Contract.

EXAMPLE:

On Monday we receive your Purchase Payment of $35,000. You have told us you want
this to go to the Franklin Growth and Income  Securities Fund. When the New York
Stock Exchange closes on that Tuesday, we determine that the value of a VIP Unit
based on an  investment  in the Franklin  Growth and Income  Securities  Fund is
$12.50.  We then divide  $35,000 by $12.50 and credit  your  Contract on Tuesday
night with 2800 VIP Units.  (This example  assumes there are no premium taxes in
your state.)



5    INVESTMENT OPTIONS
--------------------------------------------------------------------------------


The Contract offers the Investment  Options listed in the following  table.  The
Contract  also  offers  a Fixed  Payment  Option  of  Allianz  Life.  Additional
Investment  Options may be available in the future.  In the future,  we also may
eliminate Investment Options. You should read the Investment Option prospectuses
carefully.  The Investment  Options invest in different  types of securities and
follow varying investment strategies.  There are potential risks associated with
each of these types of securities and  investment  strategies.  For example,  an
Investment  Option's  performance  may be affected by risks  specific to certain
types  of  investments,  such as  foreign  securities,  derivative  investments,
non-investment  grade  debt  securities,  initial  public  offerings  (IPOs)  or
companies  with  relatively  small  market   capitalizations.   IPOs  and  other
investment  techniques may have a magnified  performance impact on an Investment
Option with a small asset base. An Investment Option may not experience  similar
performance as its assets grow. The operation of the Investment  Options and the
various  risks  associated  with the  Investment  Options are  described  in the
Investment Option  prospectuses.  To obtain a current  prospectus for any of the
Investment Options call 1-800-542-5427



Franklin  Templeton  Variable  Insurance  Products Trust, The Prudential  Series
Fund, Inc.,  USAllianz  Variable  Insurance  Products Trust, and Van Kampen Life
Investment Trust are the funds underlying your Contract.  Each Investment Option
has its own investment objective.


Franklin  Templeton  Variable  Insurance  Products  Trust  issues two classes of
shares which are  described in the attached  prospectus  for Franklin  Templeton
Variable  Insurance  Products Trust. Only Class 1 shares are available with your
Contract.

The investment objectives and policies of certain Investment Options are similar
to the  investment  objectives  and policies of other  portfolios  that the same
investment  advisers  manage.  Although  the  objectives  and  contracts  may be
similar, the investment results of the Investment Options may be higher or lower
than the results of such portfolios.  The investment  advisers cannot guarantee,
and make no  representation,  that the investment  results of similar Investment
Options  will be  comparable  even though the  Investment  Options have the same
investment advisers and objectives.

We offer other variable annuity contracts that may invest in the same Investment
Options.  These  contracts may have  different  charges and may offer  different
benefits  more  suitable  to  your  needs.  For  more  information  about  these
contracts, please contact us at the USAllianz Service Center.


The following is a list of the Investment  Options  available under the Contract
and the investment  advisers and  sub-advisers for each Investment  Option,  the
investment  option  objectives  for  each  Investment  Option  and  the  primary
investments of each Investment Option.



<TABLE>
<CAPTION>
                                                     INVESTMENT OPTIONS
--------------------------------------------------------------------------------
                                                      ASSET CATEGORIES
                                             -----------------------------------
<S>                        <C>                <C> <C><C> <C> <C> <C>  <C><C><C>     <C>                 <C>


Investment Management      Investment         SB  S  CE  IT  HB  IE   L  L  S  M    Objective(s)          Primary Investments
Company                    Option             ho  p  aq  ne  io  nq   a  a  m  i
----------------------                        on  e  su  tr  gn  tu   r  r  a  d
                                              rd  c  hi  em  hd  ei   g  g  l
   Adviser/Sub-Adviser                        ts  i   v  r    s  rt   e  e  l  C
                                              -   a   a  mB  Y   ny            a
                                              T   l   l  eo  i   a    V  G  C  p
                                              e   t   e  dn  e   t    a  r  a
                                              r   y   n  id  l   i    l  o  p
                                              m       t  as  d   o    u  w
                                                         t       n    e  t
                                                         e       a       h
                                                                               l
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
AIM                     USAZ AIM Basic Value                         X            Long-term growth of   At least 65% of total assets
o  managed by           Fund                                                      capital               in equity securities of U.S.
   USAllianz Advisers,                                                                                  issuers that have market
   LLC/ A I M Advisors,                                                                                 capitalizations of greater
   Inc.                                                                                                 than $500 million and that
                                                                                                        the portfolio managers
                                                                                                        believe to be undervalued
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ AIM Blue Chip                           X            Long-term growth of   At least 65% of total assets
                        Fund                                                      capital with a        in the common stocks of blue
                                                                                  secondary objective   chip companies
                                                                                  of current income
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ AIM Dent                                   X         Long-term growth of   Investment in securities of
                        Demographic Trends                                        capital               companies that are likely to
                        Fund                                                                            benefit from changing

                                                                                                        demographic,
                                                                                                        economic
                                                                                                        and
                                                                                                        lifestyle
                                                                                                        trends.
                                                                                                        May
                                                                                                        invest
                                                                                                        up
                                                                                                        to
                                                                                                        25%
                                                                                                        of
                                                                                                        total
                                                                                                        assets
                                                                                                        in
                                                                                                        foreign
                                                                                                        securities
                                                                                                        of
                                                                                                        which
                                                                                                        no
                                                                                                        more
                                                                                                        than
                                                                                                        15%
                                                                                                        of
                                                                                                        its
                                                                                                        total
                                                                                                        assets
                                                                                                        may
                                                                                                        be
                                                                                                        invested
                                                                                                        in
                                                                                                        securities
                                                                                                        of
                                                                                                        companies
                                                                                                        domiciled
                                                                                                        in
                                                                                                        developing
                                                                                                        countries.
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ AIM                                  X               Long-term growth of   At least 70% of net assets
                        International Equity                                      capital               in marketable equity
                        Fund                                                                            securities of foreign
                                                                                                        companies that are listed on
                                                                                                        a recognized foreign
                                                                                                        securities exchange or
                                                                                                        traded in a foreign
                                                                                                        over-the-counter market
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
ALLIANCE CAPITAL        USAZ Alliance Capital                        X            Income and long-term  At least 65% in dividend
o  managed by USAllianz Growth and Income                                         growth of capital     paying stocks of large
   Advisers, LLC/       Fund                                                                            well-established "blue
   Alliance Capital                                                                                     chip" companies
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ Alliance Capital X Long-term growth of At least 80%
                        of net assets Large Cap Growth Fund capital in equity
                        securities of U.S.

                                                                                                        companies
                                                                                                        judged
                                                                                                        by
                                                                                                        adviser
                                                                                                        likely
                                                                                                        to
                                                                                                        achieve
                                                                                                        superior
                                                                                                        earnings
                                                                                                        growth.
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ Alliance Capital     X                               Superior long-term    At least 80% of assets in
                        Technology Fund                                           growth of capital     securities of companies
                                                                                                        involved with innovative
                                                                                                        technologies
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
DAVIS                   Davis VA Financial        X                               Growth of capital     At least 65% in common stock
o  managed by Davis     Portfolio                                                                       of companies "principally
   Advisors                                                                                             engaged" in financial
                                                                                                        services
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Davis VA  Value                              X            Growth of capital     Common stock of U.S.
                        Portfolio                                                                       companies with market

                                                                                                        capitalizations
                                                                                                        of
                                                                                                        at
                                                                                                        least
                                                                                                        $5
                                                                                                        billion,
                                                                                                        which
                                                                                                        adviser
                                                                                                        believes
                                                                                                        are
                                                                                                        of
                                                                                                        high
                                                                                                        quality
                                                                                                        and
                                                                                                        whose
                                                                                                        shares
                                                                                                        are
                                                                                                        selling
                                                                                                        at
                                                                                                        attractive
                                                                                                        prices,
                                                                                                        stocks
                                                                                                        are
                                                                                                        selected
                                                                                                        with
                                                                                                        the
                                                                                                        intention
                                                                                                        of
                                                                                                        holding
                                                                                                        them
                                                                                                        for
                                                                                                        the
                                                                                                        long
                                                                                                        term
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
DREYFUS                 Dreyfus Small Cap                                  X      Match performance     Invests in a representative
o  managed by The       Stock Index Fund                                          of the Standard &     sample of stocks included in
   Dreyfus Corporation                                                            Poor's Small Cap      the S&P Small Cap 600 Index,
                                                                                  600 Index             and in futures whose
                                                                                                        performance is related to
                                                                                                        the index, rather than
                                                                                                        attempt to replicate the
                                                                                                        index
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Dreyfus Stock Index                             X         Match total return    Invests in all 500 stocks in
                        Fund                                                      of the S&P 500        the S&P 500 in proportion to
                                                                                  Composite Stock       their weighting in the index
                                                                                  Price Index
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
FRANKLIN TEMPLETON      Franklin Global           X                               Capital               At least 80% of net assets
o  managed by           Communications                                            appreciation and      in investments of
   Franklin             Securities Fund                                           current income        communications companies
   Advisers, Inc.
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Growth and                          X            Capital               At least 65% of total assets
                        Income Securities Fund                                    appreciation, with    in broadly diversified
                                                                                  current income as a   portfolio of equity
                                                                                  secondary goal        securities the adviser
                                                                                                        considers financially
                                                                                                        strong, but undervalued by
                                                                                                        the market
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin High Income                  X                   High level of         At least 65% of total assets
                        Fund                                                      current income;       in debt securities offering
                                                                                  secondary goal is     high yield and expected
                                                                                  capital appreciation  total return
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Income                       X                   Maximize income       Investment in debt and
                        Securities Fund                                           while maintaining     equity securities, including
                                                                                  prospects for         high yield, lower-rated
                                                                                  capital appreciation  bonds
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Large Cap                              X         Capital appreciation  At least 80% of net assets
                        Growth Securities Fund                                                          in investments of large

                                                                                                        capitalization
                                                                                                        companies.
                                                                                                        For
                                                                                                        this
                                                                                                        Fund,
                                                                                                        large
                                                                                                        capitalization
                                                                                                        companies
                                                                                                        are
                                                                                                        those
                                                                                                        with
                                                                                                        market
                                                                                                        capitalization
                                                                                                        values
                                                                                                        within
                                                                                                        the
                                                                                                        top
                                                                                                        50%
                                                                                                        of
                                                                                                        market
                                                                                                        capitalization
                                                                                                        values
                                                                                                        in
                                                                                                        the
                                                                                                        Russell
                                                                                                        1000
                                                                                                        Index
                                                                                                        at
                                                                                                        the
                                                                                                        time
                                                                                                        of
                                                                                                        purchase
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Real Estate      X                               Capital               At least 80% of net assets
                        Fund                                                      appreciation;         in investment of companies
                                                                                  secondary emphasis    operating in the real estate
                                                                                  on current income     sector
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Franklin  Franklin Rising                                        X  Long-term capital     At least 80% of net assets
   Advisory             Dividends Securities                                      appreciation; while   in investments of companies
   Services, LLC        Fund                                                      not a goal, capital   that have paid rising
                                                                                  preservation is a     dividends
                                                                                  secondary
                                                                                  consideration
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           Franklin Small Cap                                 X      Long-term capital     At least 80% of net assets
   Franklin             Fund                                                      growth                in investments of small
   Advisers, Inc.                                                                                       capitalization companies.

                                                                                                        For
                                                                                                        this
                                                                                                        Fund,
                                                                                                        small
                                                                                                        capitalization
                                                                                                        companies
                                                                                                        are
                                                                                                        those
                                                                                                        with
                                                                                                        market
                                                                                                        capitalization
                                                                                                        values
                                                                                                        not
                                                                                                        exceeding
                                                                                                        (i)
                                                                                                        $1.5
                                                                                                        billion;
                                                                                                        or
                                                                                                        (ii)
                                                                                                        the
                                                                                                        highest
                                                                                                        market
                                                                                                        capitalization
                                                                                                        values
                                                                                                        in
                                                                                                        the
                                                                                                        Russell
                                                                                                        2000
                                                                                                        Index;
                                                                                                        whichever
                                                                                                        is
                                                                                                        greater
                                                                                                        at
                                                                                                        the
                                                                                                        time
                                                                                                        of
                                                                                                        purchase
----------------------  --------------------  --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Franklin  Franklin Small Cap                                 X      Long term total       At least 80% of net assets
   Advisory             Value Securities Fund                                     return                in investments of small
   Services, LLC                                                                                        capitalization companies.

                                                                                                        For
                                                                                                        this
                                                                                                        Fund,
                                                                                                        small
                                                                                                        capitalization
                                                                                                        companies
                                                                                                        are
                                                                                                        those
                                                                                                        with
                                                                                                        market
                                                                                                        capitalization
                                                                                                        values
                                                                                                        not
                                                                                                        exceeding
                                                                                                        $2.5
                                                                                                        billion
                                                                                                        in
                                                                                                        assets.
                                                                                                        The
                                                                                                        Fund
                                                                                                        invests
                                                                                                        in
                                                                                                        equity
                                                                                                        securities
                                                                                                        of
                                                                                                        companies
                                                                                                        the
                                                                                                        adviser
                                                                                                        believes
                                                                                                        are
                                                                                                        undervalued
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Franklin  Franklin U.S.          X                                  Income                At least 80% of its net
       Advisers, Inc.   Government Fund                                                                 assets in U.S. government

                                                                                                        securities.
                                                                                                        The
                                                                                                        Fund
                                                                                                        currently
                                                                                                        invests
                                                                                                        primarily
                                                                                                        in
                                                                                                        fixed
                                                                                                        and
                                                                                                        variable
                                                                                                        rate
                                                                                                        mortgage-backed
                                                                                                        securities
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Zero Coupon              X                       As high an            At least 80% of net assets
                        Fund 2005                                                 investment return     in zero coupon debt
                                                                                  as is consistent      securities. The Fund invests
                                                                                  with capital          primarily in U.S. Treasury
                                                                                  preservation          issued stripped securities
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Franklin Zero Coupon              X                       As high an            At least 80% of net assets
                        Fund 2010                                                 investment return     in zero coupon debt
                                                                                  as is consistent      securities. The Fund invests
                                                                                  with capital          primarily in U.S. Treasury
                                                                                  preservation          issued stripped securities
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Franklin  Mutual Discovery                          X               Capital appreciation  At least 65% of total assets
   Mutual               Securities Fund                                                                 in equity securities of
   Advisers, LLC                                                                                        companies of any nation the

                                                                                                        adviser
                                                                                                        believes
                                                                                                        are
                                                                                                        available
                                                                                                        at
                                                                                                        market
                                                                                                        prices
                                                                                                        less
                                                                                                        than
                                                                                                        their
                                                                                                        value,
                                                                                                        based
                                                                                                        on
                                                                                                        certain
                                                                                                        recognized
                                                                                                        or
                                                                                                        objective
                                                                                                        criteria
                                                                                                        (intrinsic
                                                                                                        value)
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Mutual Shares                                          X  Capital               At least 65% of total assets
                        Securities Fund                                           appreciation, with    in equity securities of
                                                                                  income as a           companies the adviser
                                                                                  secondary goal        believes are available at
                                                                                                        market prices less than
                                                                                                        their value, based on
                                                                                                        certain recognized or
                                                                                                        objective criteria
                                                                                                        (intrinsic value)
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           Templeton Developing      X                               Long-term capital     At least 80% of net assets
   Templeton  Asset     Markets Securities                                        appreciation          in emerging market
   Management, Ltd.     Fund                                                                            investments, typically
                                                                                                        located in the Asia-Pacific
                                                                                                        region, Eastern Europe,
                                                                                                        Central and South America,
                                                                                                        and Africa
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by Templeton  Templeton Foreign                        X               Long-term capital     At least 80% of net asets in
   Investment            Securities Fund                                          growth                investments of issuers
   Counsel, LLC                                                                                         outside the U.S., including
                                                                                                        emerging markets
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           Templeton Growth                          X               Long-term capital     At least 65% of total assets
   Templeton            Securities Fund                                           growth                in the equity securities of
   Global  Advisors                                                                                     companies located anywhere
   Limited                                                                                              in the world, including
                                                                                                        those in the U.S. and
                                                                                                        emerging markets
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           USAZ Templeton                            X               Long-term capital     At least 80% of net assets
   USAllianz            Developed Markets Fund                                    appreciation          in equity securities of
   Advisers, LLC/                                                                                       companies located in any
   Templeton                                                                                            developed country outside
   Investment                                                                                           the U.S., with particular
   Counsel, LLC                                                                                         areas of interest in Western
                                                                                                        Europe, Australia, Canada
                                                                                                        New Zealand, Hong Kong,
                                                                                                        Japan, Bermuda and Singapore
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
JENNISON                Jennison 20/20 Focus                            X         Long-term growth of   Invests in up to 20 value
o  managed by           Portfolio                                                 capital               stocks and 20 growth stocks
   Prudential                                                                                           of mid-to-large size U.S.
   Investments Fund                                                                                     companies
   Management
   LLC/Jennison
   Associates, LLC
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        SP Jennison                               X               Long-term growth of   Equity-related securities of
                        International Growth                                      capital               foreign issuers
                        Portfolio
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        SP Strategic Partners                           X         Long-term growth of   At least 65% of total assets
                        Focused Growth                                            capital               in equity-related securities
                        Portfolio                                                                       of U.S. companies that the
                                                                                                        adviser believes to have
                                                                                                        strong capital appreciation
                                                                                                        potential
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
OPPENHEIMER             Oppenheimer Global                       X                Long-term capital     Securities - mainly common
o  managed by           Securities Fund/VA                                        appreciation          stocks, but also other
   Oppenheimer Funds,                                                                                   equity securities including
   Inc.                                                                                                 preferred stocks and

                                                                                                        securities
                                                                                                        convertible
                                                                                                        into
                                                                                                        common
                                                                                                        stock-of
                                                                                                        foreign
                                                                                                        issuers,
                                                                                                        "growth-type"
                                                                                                        companies,
                                                                                                        cyclical
                                                                                                        industries
                                                                                                        and
                                                                                                        special
                                                                                                        situations
                                                                                                        the
                                                                                                        adviser
                                                                                                        believes
                                                                                                        offer
                                                                                                        appreciation
                                                                                                        possibilities
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Oppenheimer High                     X                   High level of          High-yield fixed-income
                        Income Fund/VA                                            current income        securities of domestic and
                                                                                                        foreign issuers
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        Oppenheimer Main                            X            High total return      Common stocks of U.S.
                        Street Growth &                                           (which includes       companies; other equity
                        Income Fund/VA                                            growth in the value   securities -- such as
                                                                                  of its shares as      preferred stocks and
                                                                                  well as current       securities convertible into
                                                                                  income)               common stocks; debt
                                                                                                        securities
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           USAZ Oppenheimer                                   X      Capital appreciation  Invests in companies that
   USAllianz Advisers,  Emerging Growth Fund                                                            have the potential to become
   LLC/Oppenheimer                                                                                      leaders in new emerging
   Funds, Inc.                                                                                          markets
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
PIMCO                   PIMCO VIT High Yield                  X                   Maximum total         At least 80% of assets in
o  managed by Pacific   Portfolio                                                 return, consistent    high-yield securities ("junk
   Investment                                                                     with preservation     bonds") rated below
   Management Company                                                             of capital and        investment grade, but at
   LLC                                                                            prudent investment    least "B" by Moody's or S&P
                                                                                  management
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        PIMCO VIT StocksPLUS                            X         Total return          Substantially in S&P 500
                        Growth and Income                                         exceeding that of     derivatives, backed by a
                        Portfolio                                                 the S&P 500           portfolio of fixed income
                                                                                                        instruments
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        PIMCO VIT Total                   X                       Maximum total         At least 65% of assets in
                        Return Portfolio                                          return, consistent    fixed income instruments of
                                                                                  with preservation     varying maturities
                                                                                  of capital and
                                                                                  prudent investment
                                                                                  management
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by           USAZ PIMCO Growth &                          X            Long-term growth of   At least 65% of its total
   USAllianz Advisers,  Income Fund                                               capital ; secondary   assets in common stocks of
   LLC/ Allianz                                                                   emphasis on income    companies with market
   Dresdner Asset                                                                                       capitalizations of more than
   Management of                                                                                        $1 billion at the time of
   America L.P.                                                                                         investment
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ PIMCO                                             X  Long-term growth of   At least 65% of total assets
                        Renaissance Fund                                          capital and income    in common stocks of
                                                                                                        companies with below-average
                                                                                                        valuations whose business
                                                                                                        fundamentals are expected to
                                                                                                        improve
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ PIMCO Value Fund                        X            Long-term growth of   At least 65% of its total
                                                                                  capital and income    assets in common stocks of
                                                                                                        companies with market
                                                                                                        capitalizations of more than
                                                                                                        $5 billion at the time of
                                                                                                        investment
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
SELIGMAN                Seligman Small-Cap                                 X      Long-term capital     At least 80% of net assets
o  managed by J. & W.   Value Portfolio                                           appreciation          in common stocks of "value"
   Seligman & Co.                                                                                       companies with small market
   Incorporated                                                                                         capitalization (up to $2

                                                                                                        billion)
                                                                                                        at
                                                                                                        the
                                                                                                        time
                                                                                                        of
                                                                                                        purchase
                                                                                                        by
                                                                                                        the
                                                                                                        portfolio
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------



USAZ                    USAZ Money Market Fund        X                           Current income        At least 80% of total assets
o  managed by USAllianz                                                           consistent with       in portfolio of high
   Advisers, LLC/                                                                  stability of         quality, money market
   Allianz of America,                                                             principal            investments
   Inc.
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
VAN KAMPEN              USAZ Van Kampen                                        X  Capital growth        At least 65% of total assets
o  managed by USAllianz Aggressive Growth Fund                                                          in common stocks and other
   Advisers, LLC/Van                                                                                    equity securities the
   Kampen Investment                                                                                    adviser believes have an
   Advisory Corp.                                                                                       above-average potential for
                                                                                                        capital growth
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by USAllianz USAZ Van Kampen                              X            Capital growth and    Invests primarily
   Advisers, LLC/Van    Comstock Fund                                             income                in common stocks
   Kampen Asset
   Management Inc.
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ Van Kampen                                 X         Capital               Invests primarily
                        Emerging Growth Fund                                      appreciation          in portfolios of common
                                                                                                        stocks of emerging growth
                                                                                                        companies
                        --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
                        USAZ Van Kampen                              X            Income and            Invests primarily
                        Growth and Income Fund                                    long-term growth of   in income-producing

                                                                                                        capital
                                                                                                        equity
                                                                                                        securities,
                                                                                                        including
                                                                                                        common
                                                                                                        stocks
                                                                                                        and
                                                                                                        convertible
                                                                                                        securities;
                                                                                                        also
                                                                                                        in
                                                                                                        non-convertible
                                                                                                        preferred
                                                                                                        stocks
                                                                                                        and
                                                                                                        debt
                                                                                                        securities
                                                                                                        rated
                                                                                                        "investment
                                                                                                        grade"
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
o  managed by USAllianz USAZ Van Kampen                                        X  Capital growth        Invests primarily
   Advisers, LLC/Van    Growth Fund                                                                     in common stocks and other
   Kampen Investment                                                                                    equity securities of growth
   Advisory Corp.                                                                                       companies; also in preferred
                                                                                                        stocks and securities
                                                                                                        convertible into common
                                                                                                        stocks or other equity
                                                                                                        securities
----------------------  --------------------- --- -- --- --- --- --- -- -- -- --  ------------------- ------------------------------
</TABLE>


Shares of the  Investment  Options  may be offered in  connection  with  certain
variable  annuity  contracts  and variable  life  insurance  policies of various
insurance  companies  which  may or may not be  affiliated  with  Allianz  Life.
Certain  Investment  Options may also be sold directly to pension and retirement
plans that qualify under Section 401 of the Internal  Revenue Code. As a result,
a material conflict of interest may arise between insurance companies, owners of
different types of contracts and retirement  plans or their  participants.  Each
Fund's  Board of  Directors  will  monitor  for the  existence  of any  material
conflicts, and determine what action, if any, should be taken.

Allianz Life may enter into certain  arrangements  under which it is compensated
by the Investment  Options'  advisers,  distributors  and/or  affiliates for the
administrative  services which it provides to the Investment Options. The amount
of the  compensation  usually is based on the aggregate assets of the investment
options from  contracts  that we issue or  administer.  Some advisers may pay us
more or less than others, The amounts we receive under these arrangements may be
significant.  In addition,  our affiliate USAllianz Investor Services,  LLC, the
principal  underwriter for the Contracts,  will receive 12b-1 fees deducted from
certain  Investment  Options assets  attributable  to the Contract for providing
distribution  and  shareholder  support  services  to some  Investment  Options.
Because 12b-1 fees are paid out of a Investment Option  portfolio's assets on an
ongoing  basis,  over time  they  will  increase  the cost of an  investment  in
Investment Option.


SUBSTITUTION AND LIMITATION ON FURTHER INVESTMENTS

We may substitute  another  Investment Option for one of the Investment  Options
you  have  selected.   Substitutions  may  be  made  with  respect  to  existing
investments,  the  investment  of  future  Purchase  Payments,  or both.  New or
substitute  Investment  Options may have different fees and expenses,  and their
availability  may be  limited to certain  classes  of  purchasers.  We may limit
further  investment in or transfers to an Investment  Option if marketing or tax
considerations  or  investment   considerations   warrant.  We  also  may  close
Investment  Options to allocations of Purchase  Payments or Contract  value,  or
both, at any time and in our sole discretion.  The Investment Options which sell
shares of the Investment Options to us pursuant to participation  agreements may
terminate those  agreements and discontinue  offering their shares to us. We may
not  substitute  any shares without notice to you and prior approval of the SEC,
to the extent required by the Investment Company Act of 1940 or other applicable
law.


TRANSFERS


You can transfer money among the Investment  Options.  You cannot make transfers
from the Fixed Payment Option to the Investment Options.  Allianz Life currently
allows you to make as many transfers as you want each year. We may limit this in
the future.  However, you will always be allowed at least 6 transfers each year.
This product is not designed for  professional  market timing  organizations  or
other persons using programmed,  large, or frequent transfers. Such activity may
be  disruptive  to an  Investment  Option.  We may reject any specific  Purchase
Payment  allocation or transfer  request from any person,  if in the  Investment
Option  managers'  judgment,  an  Investment  Option  would be  unable to invest
effectively in accordance with its investment objectives and policies, or if the
Investment Option would be potentially adversely affected.


The following applies to any transfer:

1.   You cannot make transfers during the free look period.

2.   Your request for a transfer must clearly state which Investment Options or
     the Fixed Payment Option is involved in the transfer.

3.   Your request for a transfer must clearly state how much the transfer is
     for.

4.   You cannot make a transfer if it would cause any Investment Option or the
     Fixed Payment Option to provide less than 10% of the benefits under your
     Contract.

5.   You can make at least one allocation to the Fixed Payment Option. Both your
     initial allocation to the Fixed Payment Option and each transfer to the
     Fixed Payment Option will be treated as an allocation.

TELEPHONE TRANSFER

You can make  transfers  by  telephone  or by fax. We may allow you to authorize
someone else to make  transfers  by  telephone  on your  behalf.  If you own the
Contract  with a Joint  Owner,  unless  Allianz  Life is  instructed  otherwise,
Allianz Life will accept  instructions from either one of you. Allianz Life will
use reasonable  procedures to confirm that instructions given to us by telephone
are genuine.  If we do not use such procedures,  we may be liable for any losses
due to  unauthorized or fraudulent  instructions.  Allianz Life tape records all
telephone  instructions.  We  reserve  the right to  discontinue  or modify  the
telephone transfer privilege at any time and for any reason.



We do not currently accept transfer  instructions via e-mail, web site, or other
electronic communication. This service may be available in the future.

Please note that telephone,  fax and/or electronic  communication may not always
be available.  Any telephone,  fax, and/or computer system, whether it is yours,
your service  provider's,  or your  registered  representative,  can  experience
outages or slowdowns  for a variety of reasons.  These  outages or slowdowns may
delay  or  prevent  our  processing  of your  request.  Although  we have  taken
precautions  to help our systems  handle heavy use, we cannot  promise  complete
reliability  under all  circumstances.  If you are  experiencing  problems,  you
should make your transfer by writing to our service center.



EXCESSIVE TRADING

We may allow you to give third  parties  the right to effect  transfers  on your
behalf. However, when the same third party makes transfers for multiple Contract
owners,  the result can be  simultaneous  transfers  involving  large amounts of
Contract  value.  Such  transfers  can  disrupt the  orderly  management  of the
Portfolios, can result in higher costs to Contract owners, and generally are not
compatible with the long-range  goals of Contract  owners.  We believe that such
simultaneous  transfers  effected  by such third  parties may not be in the best
interests  of all  shareholders  of the  Portfolios  and the  management  of the
Portfolios share this position. Therefore, we may place restrictions designed to
prevent any use of a transfer right which we consider to be to the  disadvantage
of Contract owners.

VOTING PRIVILEGES

We are the  legal  owner  of the  Investment  Option  shares.  However,  when an
Investment Option solicits proxies in conjunction with a shareholder vote, which
affects  your  investment,  we will  obtain from you and other  Contract  Owners
instructions as to how to vote those shares. When we receive those instructions,
we will vote all of the shares we own in proportion to those instructions.  This
will also include any shares that we own on our own behalf. If we determine that
we are no longer  required to comply with the above,  we will vote the shares in
our own right.

SUBSTITUTION

Allianz Life may substitute one of the Investment Options you have selected with
another Investment Option. We will not do this without the prior approval of the
Securities and Exchange Commission, to the extent legally required. We will give
you notice of our intention to do this. We may also limit further  investment in
or transfers to an  Investment  Option if  marketing  or tax  considerations  or
investment considerations warrant.


6EXPENSES
--------------------------------------------------------------------------------


There are charges and other  expenses  associated  with the  Contract  that will
reduce your investment return. These charges and expenses are:

INSURANCE  CHARGES

Each day, we make a deduction for insurance  charges.  We do this as part of our
calculation of the value of the VIP Units and the Annuity  Units.  The insurance
charge has two parts:  1) the  mortality  and expense  risk  charge,  and 2) the
administrative expense charge.

Mortality and Expense Risk Charge.  This charge is equal, on an annual basis, to
1.25% of the average  daily  value of the  Contract  invested  in an  Investment
Option.  This charge  compensates us for all the insurance  benefits provided by
your Contract (for example, our contractual obligation to make Annuity Payments,
certain  expenses  related to the  Contract,  and for assuming the risk (expense
risk) that the current  charges will be  insufficient in the future to cover the
cost of administering the Contract).

Administrative Expense Charge. This charge is equal, on an annual basis, to .15%
of the average  daily value of the Contract  invested in an  Investment  Option.
This charge is for all the expenses  associated with the  administration  of the
Contract.  Some  of  these  expenses  include:   preparation  of  the  Contract,
confirmations,  annual  statements,  maintenance of Contract records,  personnel
costs, legal and accounting fees, filing fees, and computer and systems costs.

COMMUTATION FEE

Under  certain  circumstances,  you can liquidate  (withdraw)  all or part of an
Investment Option of the Contract.  When you make a liquidation,  the amount you
receive will be reduced by the commutation fee or as set forth in your contract.
The commutation fee is a percentage of the amount withdrawn. The commutation fee
is equal to:

            Contract Year        Charge
            ---------------------------
                  1                5%
                  2                5%
                  3                4%
                  4                3%
                  5                2%
          6 (& thereafter)         1%

After the first Contract year, you may make one  liquidation  from your Contract
each year if you have  selected  Annuity  Options  2 or 4. If you have  selected
Annuity  Option 6, you may make a  liquidation  once each year  beginning in the
first year.

PREMIUM TAXES

Some  states  and other  governmental  entities  (e.g.,  municipalities)  charge
premium  taxes or similar  taxes.  We are  responsible  for the payment of these
taxes. We will make a deduction from the value of the Contract for them. Some of
these  taxes are due when the  Contract is issued,  others are due when  Annuity
Payments  begin.  Premium taxes  generally range from 0% to 3.5% of the Purchase
Payment, depending on the state. For information regarding premium taxes in your
state, contact your agent or our USAllianz Service Center.

INCOME TAXES

We reserve the right to deduct from the  Contract  for any income taxes which we
may  incur  because  of the  Contract.  Currently,  we are not  making  any such
deductions.

INVESTMENT OPTION EXPENSES

There are  deductions  from the assets of the  various  Investment  Options  for
operating expenses  (including  management fees), which are described in the Fee
Table in this prospectus and the Investment Option prospectuses.

7TAXES
--------------------------------------------------------------------------------


NOTE: Allianz Life has prepared the following  information on taxes as a general
discussion of the subject.  It is not intended as tax advice to any  individual.
You should  consult your own tax adviser about your own  circumstances.  Allianz
Life has included an additional  discussion  regarding taxes in the Statement of
Additional Information.

ANNUITY CONTRACTS IN GENERAL

Annuity  contracts  are a means of setting  aside money for future needs and for
providing a series of  periodic  payments  for life or a fixed  number of years.
Congress recognized how important saving for retirement was and provided special
rules in the Internal Revenue Code (Code) for annuities.

Simply stated, these rules provide that you will not be taxed on the earnings on
the money held in your annuity  contract  until you take the money out.  This is
referred to as Tax  Deferral.  There are  different  rules as to how you will be
taxed  depending  on how you take the  money  out and the  type of  Contract  --
Qualified or Non-Qualified (see following sections).

QUALIFIED AND NON-QUALIFIED CONTRACTS

If  you  purchase  the  Contract  as an  individual  and  not  as an  individual
retirement annuity, your Contract is referred to as a Non-Qualified Contract.

If you purchase the Contract as an individual  retirement annuity, your Contract
is referred to as a Qualified Contract.

Qualified Contracts are subject to special rules and the terms of the retirement
plan   itself.   Adverse   tax   consequences   may  result  if   contributions,
distributions, and transactions in connection with the Qualified Contract do not
comply with the law. If you do not purchase the Contract under a Qualified plan,
your Contract is referred to as a Non-Qualified Contract.

A Qualified  Contract will not provide any necessary or additional  Tax Deferral
if it is used to fund a  Qualified  plan  that  is tax  deferred.  However,  the
Contract has features and benefits  other than Tax Deferral  that may make it an
appropriate investment for a Qualified plan. You should consult your tax adviser
regarding these features and benefits prior to purchasing a Qualified Contract.

LIQUIDATIONS -- NON-QUALIFIED CONTRACTS

You, as the Owner,  will not be taxed on increases in the value of your Contract
until a  distribution  occurs -- either as a surrender  or as Annuity  Payments.
When you make a surrender you are taxed on the amount of the surrender from your
Contract  that is earnings.  For Annuity  Payments,  different  rules  apply.  A
portion of each Annuity  Payment is treated as a partial return of your Purchase
Payment and will not be taxed. The remaining portion of the Annuity Payment will
be  treated as  ordinary  income.  How the  Annuity  Payment is divided  between
taxable and non-taxable  portions depends upon the period over which the Annuity
Payments  are  expected to be made.  Annuity  Payments  received  after you have
received all of your Purchase Payment are fully includible in income.

If the value of your Contract exceeds your Purchase Payment, any surrenders will
be included in taxable income to the extent of earnings in your Contract.

The Code also provides that any amount received under an annuity contract, which
is included in income, may be subject to a penalty. The amount of the penalty is
equal to 10% of the amount that is includible in income. Some distributions will
be exempt from the penalty. They include any amounts:

1) paid on or after you reach age 59 1/2

2) paid after you die;

3) paid if you become totally disabled (as that term is defined in the Code);

4) paid in a series of substantially equal payments made annually (or more
frequently) under a lifetime annuity;

5) paid as annuity payments under an immediate annuity; or

6) which come from purchase payments made prior to August 14, 1982.

The Code does not specifically address withdrawals (liquidations) from immediate
annuity  contracts.  A Private  Letter  Ruling  issued by the  Internal  Revenue
Service  concludes  that the  ability  to make  withdrawals  does not  prevent a
contract from qualifying as an immediate annuity.  However,  the Ruling does not
address  the issue of  whether a  withdrawal  would  affect  the  favorable  tax
treatment of the Annuity Payments made before and after the withdrawal under the
requirement that all immediate annuity payments must be substantially equal. The
loss of  favorable  tax  treatment  would mean that the  income  portion of each
Annuity Payment  received prior to your attaining age 59 1/2 would be subject to
a 10% penalty tax unless  another  exception to the penalty tax  applies.  While
Allianz Life currently  believes that such withdrawals will not adversely affect
the  favorable  tax  treatment of Annuity  Payments  received  before or after a
withdrawal  and  Allianz  Life  intends to perform its tax  reporting  functions
accordingly,  there can be no assurance that the Internal  Revenue  Service will
not take a contrary  position.  You should obtain  competent tax advice prior to
making a partial or total liquidation (withdrawal).

LIQUIDATIONS -- QUALIFIED CONTRACTS

If you make a  withdrawal  under an IRA  Contract,  a portion  of the  amount is
taxable,  generally  based on the ratio of your cost basis to the total  accrued
benefit  under the contract.  Often in the case of IRAs,  there is no cost basis
which  results in the full amount of the  withdrawal  being  included in taxable
income.  The Code  imposes  a 10%  penalty  tax on the  taxable  portion  of any
distributions  from qualified  retirement  plans,  including IRA Contracts.  The
penalty tax will not apply to the following distributions:

(a)  distributions  made  on or  after  the  date  you  reach  age 59  1/2;  (b)
distributions  following your death or disability (for this purposedisability is
as defined in Section 72(m)(7) of the Code);

(c)  distributions  that are part of a series of  substantially  equal  periodic
payments  made at least yearly for your life (or life  expectancy)  or the joint
lives (or joint life expectancies) of you and your designated Beneficiary;

(d) distributions made to you to the extent such distributions do not exceed the
amount  allowable as a deduction  under Code Section 213 for amounts paid during
the taxable year for medical care;

(e) distributions made on account of an IRS levy upon the Qualified Contract;

(f) distributions for the purchase of medical insurance (as described in Section
213(d)(1)(D)  of the Code) for you and your  spouse and  dependents  if you have
received unemployment compensation for at least 12 weeks (this exception will no
longer apply after you have been re-employed for at least 60 days);

(g)  distributions  made to you to the extent such  distributions  do not exceed
your qualified higher education  expenses (as defined in Section 72(t)(7) of the
Code) for the taxable year; and

(h)  distributions  which are qualified first time home buyer  distributions (as
defined in Section 72(t)(8) of the Code).

With  respect  to (c)  above,  if the  series of  substantially  equal  periodic
payments is modified  before the later of your  attaining  age 59 1/2 or 5 years
from the date of the  first  Annuity  Payment,  then the tax for the year of the
modification  is  increased  by the  penalty  tax that would  have been  imposed
without the  exception,  plus  interest for the tax years in which the exception
was used. A partial  liquidation may result in the modification of the series of
Annuity  Payments made after such  liquidation and therefore could result in the
imposition  of the 10%  penalty  tax and  interest  for the period as  described
above.  You should obtain  competent tax advice before you make any liquidations
from an IRA  Contract.  Any amounts  distributed  will only be paid to you, your
Annuitant  or your  Beneficiary.  Allianz  Life  will not  transfer  or pay such
amounts to another IRA or tax qualified plan.

Death Benefits

If an enhanced  death benefit is selected for a qualified  contract,  such death
benefits may be considered by the Internal Revenue Service as "incidental  death
benefits."  The Code imposes  limits on the amount of incidental  death benefits
allowable for qualified contracts, and if the death benefits selected by you are
considered to exceed such limits,  the  provisions of such benefits could result
in  currently  taxable  income  to  the  owners  of  the  qualified   contracts.
Furthermore,  the Code provides that the assets of an IRA (including  Roth IRAs)
may not be  invested  in life  insurance,  but may  provide in the case of death
during the  accumulation  phase for a death benefit payment equal to the greater
of purchase  payments or account value. The contract offers death benefits which
may exceed the greater of purchase  payments  or account  value.  If these death
benefits are  determined  by the  Internal  Revenue  Service as  providing  life
insurance,  the  contract  may not  qualify  as an IRA  (including  Roth  IRAs),
resulting  in the  immediate  taxation of amounts  hold in the  Contract and the
imposition of penalty by taxes.  You should  consult your tax adviser  regarding
these features and benefits  prior to purchasing a contract.  You should consult
your tax adviser  regarding  these  features and benefits  prior to purchasing a
contract.

Certain death  benefits may be purchased  under your  contract.  Although  these
types of benefits are used as investment  protection and should not give rise to
any adverse tax effects,  the Internal  Revenue  Service could take the position
that some or all of the charges for these death benefits  should be treated as a
partial  withdrawal  from the  Contract.  In such  case,  the  amount of partial
withdrawal may be includible in taxable income and subject to the 10% penalty if
the owner is under age 591/2.

DIVERSIFICATION

The Code provides that the underlying  investments  for a variable  annuity must
satisfy  certain  diversification  requirements  in  order to be  treated  as an
annuity  contract.  Allianz Life believes that the Investment  Options are being
managed so as to comply with the requirements.

Neither the Code nor the Internal  Revenue  Service  Regulations  issued to date
provide guidance as to the circumstances  under which you, because of the degree
of control you exercise over the  underlying  investments,  and not Allianz Life
would be considered  the owner of the shares of the Investment  Options.  If you
are  considered  the  owner of the  shares,  it will  result  in the loss of the
favorable tax treatment for the Contract.  It is unknown to what extent Contract
Owners are permitted to select Investment  Options,  to make transfers among the
Investment  Options or the number and type of Investment Options Contract Owners
may  select  from  without  being  considered  the owner of the  shares.  If any
guidance is provided which is considered a new position, then the guidance would
generally be applied prospectively.  However, if such guidance is considered not
to be a new position, it may be applied retroactively. This would mean that you,
as the Owner of the  Contract,  could be treated as the owner of the  Investment
Options.

Due to the  uncertainty in this area,  Allianz Life reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.


8.ACCESS TO YOUR MONEY
--------------------------------------------------------------------------------


If  you  have  chosen  Annuity  Option  2,  4 or 6  you  may  make  liquidations
(withdrawals)  from your  Contract  under the  certain  circumstances  described
below.

Annuity  Options  2 and 4: If you  have  selected  Annuity  Option  2 or 4 and a
portion of your payments come from the Investment Options,  you may make partial
liquidations  (withdrawals)  from your Contract.  You can only make liquidations
after the first Contract year. During the lifetime of the Annuitant(s) and while
the  number  of  Annuity  Payments  made is less than the  guaranteed  number of
payments  elected under the Annuity Option,  you can request a liquidation  once
each year. You can liquidate a portion of the Total  Liquidation  Value.  (Total
Liquidation  Value is referred to as "Total  Withdrawal  Value" in your Contract
and  endorsement.)  The Total Liquidation Value is equal to the present value of
the remaining  guaranteed Annuity Payments (allocated to the Investment Options)
to the end of the period certain commuted at the AIR, less a commutation fee, or
as set forth in your contract.  The total amount you can liquidate is guaranteed
to not be less  than 25% of the  Total  Liquidation  Value.  Currently,  you may
liquidate up to 75% of the Total Liquidation Value. Allianz Life may change this
amount in the future.  The  minimum  amount you can  liquidate  is the lesser of
$2,500 or the remaining  portion of the Total  Liquidation Value available to be
liquidated. Partial liquidations may not be available in your state.

After a partial  liquidation,  the subsequent monthly Annuity Payment during the
guaranteed  period  certain  will be  reduced  by the  percentage  of the  Total
Liquidation Value liquidated, including the commutation fee.

Annuity Option 6: If you have selected  Annuity Option 6, you can currently make
one liquidation each year. You may liquidate the Total Liquidation Value of your
Contract.  The  Total  Liquidation  Value is equal to the  present  value of the
remaining  Annuity Payments to the end of the period certain commuted at the AIR
less a  commutation  fee or as set  forth  in your  contract.  Allianz  Life may
restrict  the amount of a partial  liquidation  to a minimum  of $2,500.  We may
require  a  complete  liquidation  of  your  Contract  if  the  remaining  Total
Liquidation  Value  after you request a partial  liquidation  would be less than
$35,000. Allianz Life will require you to return your Contract before we pay the
entire commuted value.

We will process partial  liquidations on the next Annuity Calculation Date after
your written request for a liquidation.

Income taxes and tax penalties may apply to any liquidation you make.

SUSPENSION OF PAYMENTS OR TRANSFERS

We may be required to suspend or postpone payments for liquidations or transfers
for any period when:

1. the New York Stock  Exchange  is closed  (other  than  customary  weekend and
holiday closings);

2. trading on the New York Stock Exchange is restricted;

3. an emergency  exists as a result of which disposal of the  Investment  Option
shares  is  not  reasonably  practicable  or  we  cannot  reasonably  value  the
Investment Option shares;

4. during any other  period when the  Securities  and  Exchange  Commission,  by
order, so permits for the protection of Contract Owners.



9 PERFORMANCE AND ILLUSTRATIONS
--------------------------------------------------------------------------------


We  periodically  advertise  performance.   We  will  calculate  performance  by
determining  the  percentage  change  in the  value  of a unit by  dividing  the
increase  (decrease)  for that unit by the value of the unit at the beginning of
the period.  This  performance  number  reflects the  deduction of the insurance
charges  and the  expenses  of the  Investment  Options.  We may also  advertise
cumulative total return  information.  Cumulative total return is determined the
same way except that the results are not annualized. Performance information for
the underlying Investment Options may also be advertised -- see the accompanying
Investment Option prospectuses for more information.

We may in the future also advertise yield information. If we do, we will provide
you  with  information   regarding  how  yield  is  calculated.   More  detailed
information regarding how performance is calculated is found in the SAI.

We base any performance advertised on historical data. This performance does not
guarantee future results of the Investment Options.





Allianz Life may also provide  illustrations to customers.  These  illustrations
provide  hypothetical  depictions  of  the  "payout,"  or  annuitization  phase.
Illustrations  may be  based  upon  historical  performance  of  the  Investment
Options, as adjusted for certain expenses.  (Any adjusted historical performance
information will be accompanied by "standardized"  performance  information.) In
the  alternative,  certain  illustrations  may be based upon an assumed  rate of
return not to exceed 12%. "Payout"  illustrations may have various features,  as
follows:



o    Payout  illustrations  are  designed  to show the  hypothetical  effect  of
     annuitizing a Contact,  or receiving a stream of periodic  payments.  These
     illustrations  may  depict  either  a  variable  annuitization  or a  fixed
     annuitization.  A  variable  payout  illustration  would  be  based  upon a
     combination of adjusted historical performance and an assumed interest rate
     (AIR),  whereas  a fixed  payout  illustration  would  be  based  upon  the
     annuitant's  age, the payout option  selected,  and the payout factor rates
     currently  in  effect  on the  date of the  illustration.  Variable  payout
     illustrations  may also show the  portion of each payout that is subject to
     income tax and the portion that is non-taxable. In addition to variable and
     fixed payout  illustrations,  an illustration  may also be prepared showing
     the  effect  of  required  minimum  distribution  payments  from  qualified
     Contracts.


The values illustrated will be calculated reflecting the deduction of Investment
Option  expenses for the specific  Investment  Options  selected,  mortality and
expense  risk  charges,   and  the  administrative  expense  charge.   Contract
maintenance  charges may or may not be deducted from a particular  illustration.
Illustrations  will not reflect the  deduction  of any state  premium tax or any
Federal or state income tax or penalties.


The  illustrations  that are given to  customers by Allianz Life are designed to
assist  customers  in  understanding  how a contract  may  function in different
scenarios.  They are not guarantees or  representations as to future performance
or any specific rate of return.

A sample  format of a customer  illustration  is  attached  as Appendix A to the
Statement of Additional Information and is incorporated herein by reference.




10. DEATH BENEFIT
--------------------------------------------------------------------------------


If you die before the Income Date and there is no Joint Annuitant, we will treat
your Contract as if we had never issued it. We will return the Purchase  Payment
to your estate.

If you have chosen either  Annuity  Option 3, 4 or 6 with a Joint  Annuitant and
either you or the Joint  Annuitant  dies  before the Income  Date,  the  Annuity
Option will be changed to Option 2 with 10 years of payments guaranteed.  If the
survivor's  life  expectancy  is less than 10 years,  the  period of  guaranteed
payments will be 5 years instead.

If you or the  Joint  Annuitant  dies on or after  the  Income  Date,  the death
benefit, if any, will be paid under the Annuity Option selected. We will require
proof of death.  We may delay paying the death  benefit until we receive any tax
consents and/or forms from a state.

DEATH OF BENEFICIARY

Unless you tell us  otherwise,  any amount  payable after your death and that of
any Joint Annuitant will be payable:


1. in equal shares to the surviving Beneficiaries;

2. if no  Beneficiary  is living,  payment  will be made in equal  shares to any
surviving contingent Beneficiaries;

3. if there is no surviving Beneficiary or contingent Beneficiary,  payment will
be made to your estate.



11. OTHER INFORMATION
--------------------------------------------------------------------------------


ALLIANZ LIFE

Allianz Life  Insurance  Company of North America  (Allianz  Life),  5701 Golden
Hills Drive, Minneapolis,  Minnesota 55416-1297, was organized under the laws of
the state of  Minnesota in 1896.  Allianz  Life offers  fixed and variable  life
insurance and annuities and group life,  accident and health insurance.  Allianz
Life is  licensed  to do  direct  business  in 49  states  and the  District  of
Columbia.  Allianz Life is a wholly-owned subsidiary of Allianz Versicherungs-AG
Holding.

THE SEPARATE ACCOUNT


Allianz Life  established  Allianz Life  Variable  Account B (Separate  Account)
under  Minnesota  insurance  law  on May  31,  1985.  The  Separate  Account  is
registered  with the  Securities  and Exchange  Commission as a unit  investment
trust under the  Investment  Company Act of 1940. The SEC does not supervise our
management of the Separate Account.

The Separate Account holds the assets that underlie the Contracts, except assets
allocated to the Fixed Account.  We keep the Separate  Account  assets  separate
from the assets of our general account and other separate accounts. The Separate
Account is divided into  sub-accounts  each of which  invests  exclusively  in a
single portfolio.

Allianz  Life owns the assets of the  Separate  Account.  We credit  gains to or
charge losses against the Separate  Account without regard to the performance of
other investment accounts.  The Separate Account's assets may not be used to pay
any of our  liabilities  other than those  arising  from the  Contracts.  If the
Separate Account's assets exceed the required reserves and other liabilities, we
may transfer the excess to our general account.



DISTRIBUTION

Our wholly-owned  subsidiary,  USAllianz  Investor Services,  LLC,  (USAllianz),
serves  as  principal  underwriter  for  the  Contracts.  USAllianz,  a  limited
liability company organized in Minnesota, is located at 5701 Golden Hills Drive,
Minneapolis,  MN 55416.  USAllianz is  registered  as a  Broker-Dealer  with the
Securities and Exchange Commission, under the Securities Exchange Act of 1934 as
well as with the securities  commission in the states in which it operates,  and
is a member of the National Association of Securities Dealers, Inc. (NASD). More
information about USAllianz is available at  http://www.nasdr.com  or by calling
1-800-289-9999.  You also can obtain an investor  brochure from NASD  Regulation
describing its Public Disclosure Program.

USAllianz  Investor  Services,  LLC,  5701 Golden Hills Drive,  Minneapolis,  MN
55416-1297,  acts  as the  distributor  of  the  Contracts.  USAllianz  Investor
Services, LLC, is an affiliate of Preferred Life.

Commissions   will  be  paid  to   Broker/Dealers   who  sell   the   Contracts.
Broker/Dealers  will be paid  commissions  at the time of purchase up to 4.0% of
the Purchase Payment.  Broker/Dealers  are also paid a trail commission of up to
..40% of the  remaining  payout  value that  remains  under your  Annuity  Option
invested in an  Investment  Option  (trail  commissions  are not paid on amounts
invested in the Fixed Payment  Option) We (by agreement with the  Broker/Dealer)
pay commissions as a combination of a certain  percentage  amount at the time of
sale and a trail  commission  (which when combined  could be more than 4% of the
Purchase Payment).  In addition,  Allianz Life may pay certain sellers for other
services  not  directly  related to the sale of the  Contracts  (such as special
marketing support allowances).


Other compensation options also may be made available. [USAllianz may enter into
selling  agreements with other  broker-dealers  registered  under the Securities
Exchange  Act of 1934.  Under the  agreements  with  those  broker-dealers,  the
commission paid to the broker-dealer on behalf of the registered  representative
will not exceed those  described  above;  selling  firms may retain a portion of
commissions.  We may pay additional  compensation  to the  broker-dealer  and/or
reimburse  the  broker-dealer  for  portions of  Contract  sales  expenses.  The
registered  representative  may receive a portion of the  expense  reimbursement
allowance paid to the broker-dealer.]

[USAllianz  does not retain  any  override  as  distributor  for the  Contracts.
However,  USAllianz's operating and other expenses are paid for by Allianz Life.
Also, USAllianz receives 12b-1 fees from several of the Investment Options.

Commissions paid on the Contract,  including other  incentives or payments,  are
not charged directly to the Contract owners or the Separate  Account.  We intend
to recoup  commissions and other sales expenses through fees and charges imposed
under the Contract

We offer the  Contracts  to the  public on a  continuous  basis.  We  anticipate
continuing  to offer the  Contracts,  but reserve the right to  discontinue  the
offering.



ADDITIONAL CREDITS FOR CERTAIN GROUPS

Allianz Life may credit  additional  amounts to a contract  instead of modifying
charges  because  of  special  circumstances  that  result  in  lower  sales  or
administrative  expenses  or  better  than  expected  mortality  or  persistency
experience.

ADMINISTRATION

We have hired  Delaware  Valley  Financial  Services,  Inc.  (USAllianz  Service
Center),   300  Berwyn   Park,   Berwyn,   Pennsylvania,   to  perform   certain
administrative  services regarding the Contracts.  The  administrative  services
include issuance of the Contracts and maintenance of Contract Owners records. To
reduce  expenses,  only one copy of most  financial  reports  and  prospectuses,
including reports and prospectuses for the Investment Options, will be mailed to
your  household,  even if you or other persons in your  household have more than
one contract issued by Allianz or an affiliate.  Call (800) 542-5427 if you need
additional copies of financial reports,  prospectuses, or annual and semi-annual
reports,  or if you would like to receive  one copy for each  contract in future
mailings.  FINANCIAL STATEMENTS The consolidated financial statements of Allianz
Life and the Separate  Account have been included in the Statement of Additional
Information.

TABLE OF CONTENTS
OF THE STATEMENT OFADDITIONAL INFORMATION
--------------------------------------------------------------------------------

Company ...........................................   2

Experts ...........................................   2

Legal Opinions ....................................   2

Distributor .......................................   2

Calculation of Performance Data ...................   2


Illustrations....................................... 8

Federal Tax Status ................................   8

Annuity Provisions ................................  14

Financial Statements ..............................  15


Appendix A-Illustration ..........................   16


<PAGE>


PRIVACY NOTICE

We Care About Your Privacy!

In compliance with  Gramm-Leach-Bliley  (GLB), this notice describes the privacy
policy  and  practices  followed  by  Allianz  Life  Insurance  Company of North
America, and their affiliated companies (herein referred to as "Allianz").

Your  privacy is a high  priority for us and it will be treated with the highest
degree of confidentiality. In order for us to be able to provide these insurance
products and services, we need to collect certain information from you. However,
we want to emphasize  that we are committed to  maintaining  the privacy of this
information  in  accordance  with law. All  individuals  with access to personal
information about our customers are required to follow this policy.

Non-public Information Collected.

o....Information  we receive  from you on  insurance  and annuity  applications,
     claim forms or other forms such as your name, address, date and location of
     birth,  marital status, sex, social security number,  medical  information,
     beneficiary information, etc.

o    Information  about your transactions with us, our affiliates or others such
     as premium payment history, tax information,  investment  information,  and
     accounting information; and

o    Information  we receive  from  consumer  reporting  agencies,  such as your
     credit history.

Non-public Information Disclosed.

o    We may provide the non-public  information that we collect to affiliated or
     nonaffiliated persons or entities involved in the underwriting, processing,
     servicing and  marketing of your Allianz  insurance  products.  We will not
     provide this  information to a  nonaffiliated  third party unless we have a
     written   agreement   that   requires   the  third  party  to  protect  the
     confidentiality of this information.

o    We may have to provide the above described  non-public  information that we
     collect to  authorized  persons or  entities  to comply  with a subpoena or
     summons by federal,  state or local  authorities and to respond to judicial
     process or regulatory  authorities having jurisdiction over our company for
     examination, compliance or other purposes as required by law.

o    We do not disclose any non-public personal  information about our customers
     to anyone except as permitted or required by law.

Confidentiality and Security of Your Non-public Personal Information.

o    We restrict  access of non-public  personal  information  about you to only
     those  persons  who need to know  about  that  information  to  underwrite,
     process, service or market Allianz insurance products and services.

o    We maintain  physical,  electronic,  and procedural  safeguards that comply
     with  state  and  federal  standards  to  guard  your  non-public  personal
     information.

o    If we become aware that an item of personal  information  may be materially
     inaccurate,  we will make  reasonable  effort to re-verify its accuracy and
     correct any error as appropriate.


Information about Former Customers.

Non-public  information about our former customers is maintained by Allianz on a
confidential  and secure basis.  If any such disclosure is made, it would be for
reasons and under the  conditions  described in this notice.  We do not disclose
any non-public personal  information about our former customers to anyone except
as permitted or required by law.

Further Information.

o    You  have a right  to  access  and  request  correction  of  your  personal
     information that is recorded with Allianz.

o    Information  obtained  from  a  report  prepared  by an  insurance  support
     organization  may be retained by the  insurance  support  organization  and
     disclosed to other persons.

*You are  entitled  to  receive,  upon  request  to  Allianz,  a  record  of any
subsequent  disclosures of medical record  information made by Allianz including
the following:

1.   the name,  address and  institutional  affiliation,  if any, of each person
     receiving or examining the medical  information  during the preceding three
     years prior to your receipt of this privacy notice;

2.   the date of the receipt or examination; and

1.   to the extent practicable, a description of the information disclosed.

         *For Montana residents only

If   you have any questions  about our privacy  policy,  please write,  call, or
     email:

Allianz Life Insurance Company of North America
PO Box 1344, Minneapolis, MN  55440-1344
800/328-5600, www.allianzlife.com



<PAGE>



APPENDIX A
--------------------------------------------------------------------------------

CONDENSED FINANCIAL INFORMATION

The consolidated financial statements of Allianz Life Insurance Company of North
America and the financial  statements of Allianz Life Variable  Account B may be
found in the Statement of Additional Information. The table below gives per unit
information  for the  periods  indicated.  This  information  should  be read in
conjunction  with the  financial  statements  and related  notes of the Separate
Account included in the Statement of Additional Information.
<TABLE>
<CAPTION>


(Number of units in Thousands)      USAZ Alliance       USAZ Alliance   USAZ Alliance   Franklin  Franklin
                                    Capital Growth      Capital Large   Cap Capital     Global    Growth &    Franklin
                                    and Income Fund     Growth Fund        Technology   Comm       Income       High
Investment Options:                                                         Fund   Securities   Securities      Income
---------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>           <C>              <C>           <C>          <C>       <C>
Year Ended Dec. 31, 2001
Unit value at beginning of period            NA           NA                  NA         $25.770      $30.424   $17.930
Unit value at end of period               $10.443      $10.526           $10.746         17.979     $29.3931   $18.433
Number of units outstanding at end of period 179          102                234         12,069       15,365     4,708
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 2000
Unit value at beginning of period               NA       NA              NA            $38.917       $26.147      $20.900
Unit value at end of period                     NA       NA              NA            $25.770       $30.424      $17.930
Number of units outstanding at end of period    NA       NA              NA             16,877        19,237        6,333
---------------------------------------------------------------------------------------------------------------------------


Year Ended Dec. 31, 1999
Unit value at beginning of period               NA      NA               NA           $28.308       $26.226       $21.208
Unit value at end of period                     NA      NA               NA           $38.917       $26.147       $20.900
Number of units outstanding at end of period    NA      NA               NA            21,687        27,634         9,493
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1998
Unit value at beginning of period               NA       NA              NA         $25.818          $24.551     $21.312
Unit value at end of period                     NA       NA              NA         $28.308          $26.226     $21.208
Number of units outstanding at end of period    NA       NA              NA          30,851          40,4801       4,987
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1997
Unit value at beginning of period               NA      NA               NA         $20.654         $19.490       $19.375
Unit value at end of period                     NA      NA               NA         $25.818         $24.551       $21.312
Number of units outstanding at end of period    NA      NA               NA          39,623         46,9621         8,871
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1996
Unit value at beginning of period               NA     NA                NA          $19.565          $17.310       $17.252
Unit value at end of period                     NA     NA                NA          $20.654          $19.490       $19.375
Number of units outstanding at end of period    NA     NA                NA           53,086           50,027        20,736
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1995
Unit value at beginning of period               NA      NA                 NA           $15.104           $13.215     $14.608
Unit value at end of period                     NA      NA                 NA           $19.565           $17.310     $17.252
Number of units outstanding at end of period    NA      NA                 NA            66,669           46,893       18,756
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1994
Unit value at beginning of period               NA      NA                  NA            $17.319        $13.677      $15.155
Unit value at end of period                     NA      NA                  NA            $15.104        $13.215      $14.608
Number of units outstanding at end of period    NA      NA                  NA             70,082         35,695       15,679
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1993
Unit value at beginning of period               NA      NA                  NA            $15.889      $12.574       $13.278
Unit value at end of period                     NA      NA                  NA            $17.319      $13.677       $15.155
Number of units outstanding at end of period    NA      NA                  NA             84,217      24,719         11,787
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1992
Unit value at beginning of period               NA     NA                  NA            $14.821     $11.949        $11.583
Unit value at end of period                     NA     NA                  NA             $15.889      $12.574      $13.278
Number of units outstanding at end of period    NA     NA                  NA              39,387       17,144        4,780
---------------------------------------------------------------------------------------------------------------------------
(Number of units in Thousands)                                 Franklin                  Franklin
                                            Franklin           Large Cap                  Rising     Franklin      Franklin
                                             Income           Growth       Franklin     Dividends     Small       Small Cap
Investment Options:                         Securities        Securities   Real Estate   Securities   Cap Value Securities
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 2001
Unit value at beginning of period           $28.728           $21.085      $27.827       $22.497    $23.878        $9.553
Unit value at end of period                 $28.604           $18.450      $29.684       $25.266    $20.009       $10.758
Number of units outstanding at end of period 13,514             7,467        3.005         9,153      6,886         1,463
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 2000
Unit value at beginning of period           $24.323          $20.218       $21.386      $18.846     $28.353        $7.736
Unit value at end of period                 $28.728          $21.085       $27.827      $22.497     $23.878        $9.553
Number of units outstanding at end of period 17,167           10,359         3,767       11,259       9,133         1,012
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1999
Unit value at beginning of period            $25.122       $15.574       $23.107      $21.165    $14.600        $7.717
Unit value at end of period                  $24.323      $20.218        $21.386      $18.846    $28.353        $7.736
Number of units outstanding at end of period 24,929        10,867           5,401      17,252     10,654           727
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1998
Unit value at beginning of period           $25.065        $13.130      $28.169        $20.074    $14.952       $10.000*
Unit value at end of period                 $25.122         15.574      $23.107        $21.165    $14.600         $7.717
Number of units outstanding at end of period 39,420          8,454        9,639         27,683     14,856            719
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1997
Unit value at beginning of period           $21.708        $11.254     $23.668        $15.303     $12.913          NA
Unit value at end of period                 $25.065        $13.130     $28.169        $20.074     $14.952          NA
Number of units outstanding at end of period 49,812          5,673       13,445        33,249       16,925         NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1996
Unit value at beginning of period            $19.785         $10.000*   $18.073        $12.498     $10.146          NA
Unit value at end of period                  $21.708         $11.254    $23.668        $15.303     $12.913          NA
Number of units outstanding at end of period  57,504          3,722      12,757         35,569      12,784          NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1995
Unit value at beginning of period            $16.392       NA       $15.594          $ 9.769     $10.000*           NA
Unit value at end of period                  $19.785       NA       $18.073          $12.498     $10.146            NA
Number of units outstanding at end of period  59,309       NA        10,998           33,789       1,302            NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1994
Unit value at beginning of period             $17.734     NA      $15.369          $10.327        NA               NA
Unit value at end of period                   $16.392     NA      $15.594           $9.769        NA               NA
Number of units outstanding at end of period   56,569     NA       11,645           28,778        NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1993
Unit value at beginning of period            $15.163       NA      $13.095      $10.848          NA               NA
Unit value at end of period                  $17.734       NA      $15.369       $10.327         NA               NA
Number of units outstanding at end of period  38,967       NA        5,589        26,256         NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1992
Unit value at beginning of period            $13.580       NA         $11.848    $10.000*        NA              NA
Unit value at end of period                  $15.163       NA         $13.095     $10.848        NA              NA
Number of units outstanding at end of period  11,397       NA           1,052       8,388        NA              NA
---------------------------------------------------------------------------------------------------------------------------



<PAGE>


(Number of units in Thousands)                                    FranklinFranklin                       Templeton
                                                      Franklin      Zero    Zero     Mutual    Mutual   Developing
                                                         US     Coupon     Coupon   Discovery  Shares     Markets
Investment Options:                                  Government-      2005 - 2010  SecuritiesSecurities Securities
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 2001
Unit value at beginning of period                     $20.481   $25.758    $28.289   $14.922   $14.831    $8.473
Unit value at end of period                          $21.733     27.667     29.462    14.771    15.692     7.679
Number of units outstanding at end of period           12,805     1,404      1,071     3,735     7,886     5.463
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 2000
Unit value at beginning of period                     $18.574   $23.205    $24.164   $13.701   $13.237   $12.188
Unit value at end of period                           $20.481   $25.758    $28.289   $14.922   $14.831    $8.473
Number of units outstanding at end of period           15,282     1,666      1,278     4,601     8,947     7,646
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1999
Unit value at beginning of period                     $19.014   $25.003    $27.920   $11.226   $11.837    $7.993
Unit value at end of period                           $18.574   $23.205    $24.164   $13.701   $13.237   $12.188
Number of units outstanding at end of period           20,938     2,011      1,851     5,796    12,423    11,226
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1998
Unit value at beginning of period                    $17.947    $22.532    $24.740   $11.983   $11.993   $10.340
Unit value at end of period                          $19.014    $25.003    $27.920   $11.226   $11.837    $7.993
Number of units outstanding at end of period           30,500     2,635      2,582     9,718    18,133    15,989
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1997
Unit value at beginning of period                     $16.650   $20.517    $21.522   $10.180   $10.330   $11.487
Unit value at end of period                           $17.947   $22.532    $24.740   $11.983   $11.993   $10.340
Number of units outstanding at end of period           36,347     2,910      2,998     9,940    18,744    23,005
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1996
Unit value at beginning of period                     $16.298   $20.914    $22.431  $10.000*  $10.000*    $9.582
Unit value at end of period                           $16.650   $20.517    $21.522   $10.180   $10.330   $11.487
Number of units outstanding at end of period               45     3,579      3,297     1,471     2,613    22,423
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1995
Unit value at beginning of period                     $13.835   $16.096    $15.930        NA        NA    $9.454
Unit value at end of period                           $16.298   $20.914    $22.431        NA        NA    $9.582
Number of units outstanding at end of period           34,313     3,504      3,437        NA        NA    15,618
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1994
Unit value at beginning of period                     $14.698   $18.050    $18.144        NA        NA  $10.000*
Unit value at end of period                           $13.835   $16.096    $15.930        NA        NA    $9.454
Number of units outstanding at end of period          36,490      2,780      2,589        NA        NA     9,774
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1993
Unit value at beginning of period                     $13.586   $14.975    $14.670        NA        NA        NA
Unit value at end of period                           $14.698   $18.050    $18.144        NA        NA        NA
Number of units outstanding at end of period           40,402     2,020      1,405        NA        NA        NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1992
Unit value at beginning of period                    $12.798    $13.705    $13.482        NA        NA        NA
Unit value at end of period                          $13.586    $14.975    $14.670        NA        NA        NA
Number of units outstanding at end of period           25,054     1,090        849        NA        NA        NA
---------------------------------------------------------------------------------------------------------------------------



<PAGE>


(Number of units in Thousands)
                                                                                                         SP Strategic
                                          Templeton   Templeton              USAZ           SP Jennison     Partners
                                           Foreign     Growth             Templeton           Int'l          Focused
Investment Options:                      Securities  Securities    Dev Market   Fund        Growth             Growth
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 2001
Unit value at beginning of period          $21.586    $19.529          NA                 $8.485             $7.949
Unit value at end of period                $17.932    $19.066         $10.227             $5.361              $6.605
Number of units outstanding at end of period15,753     13,408             8                54                 50
Year Ended Dec. 31, 2000
Unit value at beginning of period          $23.022    $19.466        NA                $10.000*            $10.000*
Unit value at end of period                $21.586    $19.529        NA               $8.485                 $7.949
Number of units outstanding at end of period19,667     17,978        NA                   NA                  NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1999
Unit value at beginning of period          $18.437    $16.309        NA                   NA                 NA
Unit value at end of period                $23.022    $19.466        NA                   NA                 NA
Number of units outstanding at end of period27,313     24,872        NA                   NA                 NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1998
Unit value at beginning of period          $17.711    $15.176        NA                   NA                 NA
Unit value at end of period                $18.437    $16.309        NA                   NA                 NA
Number of units outstanding at end of period44,256     34,226        NA                   NA                 NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1997
Unit value at beginning of period          $16.081    $13.560        NA                   NA                NA
Unit value at end of period                $17.711    $15.176        NA                   NA                NA
Number of units outstanding at end of period58,179     41,433        NA                   NA                NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1996
Unit value at beginning of period          $13.263    $11.339        NA                   NA               NA
Unit value at end of period                $16.081    $13.560        NA                   NA               NA
Number of units outstanding at end of period64,375     40,327        NA                   NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1995
Unit value at beginning of period          $12.161    $10.201        NA                   NA               NA
Unit value at end of period                $13.263    $11.339        NA                   NA               NA
Number of units outstanding at end of period59,883     28,309        NA                   NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1994
Unit value at beginning of period          $12.226   $10.000*        NA                   NA               NA
Unit value at end of period                $12.161    $10.201        NA                   NA               NA
Number of units outstanding at end of period60,464     14,637        NA                   NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1993
Unit value at beginning of period          $ 9.642         NA        NA                   NA               NA
Unit value at end of period                $12.226         NA        NA                   NA               NA
Number of units outstanding at end of period24,026         NA        NA                   NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1992
Unit value at beginning of period         $10.000*         NA        NA                  NA               NA
Unit value at end of period                $ 9.642         NA        NA                  NA               NA
Number of units outstanding at end of period 1,329         NA        NA                  NA               NA
---------------------------------------------------------------------------------------------------------------------------



Investment Options:                              PIMCO VIT              PIMCO VIT             PIMCO VIT       USAZ PIMCO
                                                 High Yield           VIT StockPLUS         Total Return    Growth & Income
                                                  Portfolio       Growth & Income Portfolio    Portfolio         Fund
---------------------------------------------------------------------------------------------------------------------------
Ended Dec. 31, 2001
Unit value at beginning of period               NA                   NA                        NA                    NA
Unit value at end of period                    $9.941               $8.266                  $11.720               $10.140
Number of units outstanding at end of period   160                   77                        362                    124
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 2000
Unit value at beginning of period               NA                   NA                          NA                 NA
Unit value at end of period                     NA                   NA                          NA                 NA
Number of units outstanding at end of period    NA                   NA                          NA                 NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1999
Unit value at beginning of period               NA                   NA                          NA                NA
Unit value at end of period                     NA                   NA                          NA                NA
Number of units outstanding at end of period    NA                   NA                          NA                NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1998
Unit value at beginning of period               NA                   NA                          NA                NA
Unit value at end of period                     NA                   NA                          NA                NA
Number of units outstanding at end of period    NA                   NA                          NA                NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1997
Unit value at beginning of period               NA                   NA                          NA               NA
Unit value at end of period                     NA                   NA                          NA               NA
Number of units outstanding at end of period    NA                   NA                          NA               NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1996
Unit value at beginning of period               NA                   NA                          NA               NA
Unit value at end of period                     NA                   NA                          NA               NA
Number of units outstanding at end of period    NA                   NA                          NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1995
Unit value at beginning of period               NA                   NA                           NA               NA
Unit value at end of period                     NA                   NA                           NA               NA
Number of units outstanding at end of period    NA                   NA                           NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1994
Unit value at beginning of period               NA                   NA                           NA               NA
Unit value at end of period                     NA                   NA                           NA               NA
Number of units outstanding at end of period    NA                   NA                           NA               NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1993
Unit value at beginning of period               NA                   NA                           NA               NA
Unit value at end of period                     NA                   NA                           NA               NA
Number of units outstanding at end of period    NA                   NA                           NA               NA
--------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1992
Unit value at beginning of period               NA                   NA                           NA               NA
Unit value at end of period                     NA                   NA                           NA               NA
Number of units outstanding at end of period    NA                   NA                           NA               NA
---------------------------------------------------------------------------------------------------------------------------


Investment Options:
---------------------------------------------------------------------------------------------------------------------------
                                                                                                 USAZ Van Kampen
                                             USAZ PIMCO           USAZ PIMCO   USAZ Money      Aggressive
                                           Renaissance Fund        Value Fund   Market Fund     Growth  Fund
Year Ended Dec. 31, 2001
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                    $10.995          $10.938              $10.580     $8.024
Number of units outstanding at end of period   274                  191                1,129       52
Year Ended Dec. 31, 2000
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1999
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1998
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1997
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1996
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1995
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1994
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1993
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1992
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

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


Investment Options:
---------------------------------------------------------------------------------------------------------------------------
                                                 USAZ Van Kampen   USAZ Van Kampen   USAZ Van Kampen  USAZ Van Kampen
                                                Comstock    Emerging Growth   Growth & Income         Growth
                                                Fund             Fund                 Fund                 Fund
Year Ended Dec. 31, 2001
Unit value at beginning of period               NA                   NA                   NA                 NA
Unit value at end of period                 $9.330               $9.134                  $9.667           $9.134
Number of units outstanding at end of period   266                  123                  145                123
Year Ended Dec. 31, 2000
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1999
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1998
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1997
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------
Year Ended Dec. 31, 1996
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1995
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1994
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1993
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------

Year Ended Dec. 31, 1992
Unit value at beginning of period               NA                   NA                   NA       NA
Unit value at end of period                     NA                   NA                   NA       NA
Number of units outstanding at end of period    NA                   NA                   NA       NA
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

There are no  accumulation  units shown for the USAZ AIM Basic Value Fund,  USAZ
AIM  Blue  Chip  Fund,  USAZ  AIM  Dent   Demographic   Trends  Fund,  USAZ  AIM
International  Equity  Fund,  Davis  VA  Financial  Portfolio,  Davis  VA  Value
Portfolio,  Dreyfus Small Cap Stock Index Fund,  Oppenheimer  Global  Securities
Fund/VA,  Oppenheimer  High Income  Fund/VA,  Oppenheimer  Main Street  Growth &
Income Fund/VA, USAZ Oppenheimer Emerging Growth Fund and the Seligman Small-Cap
Value Portfolio because they commenced  operations under this Contract as of May
1, 2002.




<PAGE>



APPENDIX B
--------------------------------------------------------------------------------


ILLUSTRATION OF ANNUITY INCOME

We have prepared the  following  tables to show you how  investment  performance
affects  variable  annuity income over time. The variable annuity income amounts
reflect three different  assumptions for a constant investment return before all
expenses of 0%, 6% and 12%. These are hypothetical rates of return. Allianz Life
does not guarantee that the Contract will earn these returns for any one year or
any sustained  period of time.  The tables are for  illustrative  purposes only.
They do not represent past or future investment returns.

Your  variable  annuity  income may be more or less than the income shown if the
actual  returns of the  Investment  Options you select are different  than those
shown below. Since it is very likely that investment returns will fluctuate over
time,  the  amount  of  variable  annuity  income  you will  receive  will  also
fluctuate.  The total amount of annuity income you actually  receive will depend
on the cumulative  investment  returns of the Investment Options you choose, how
long you live and the Annuity Option you choose.

Another factor which will affect the amount of variable  annuity income you will
receive is the Assumed  Investment  Return (AIR).  Income will increase from one
Income Date to the next if the annualized net rate of return during that time is
greater than the AIR you choose.  It will decrease if the annualized net rate of
return is less than the AIR. There are three  illustrations.  The first is based
on a 3% AIR,  the  second  is based on a 5% AIR,  and the third is based on a 7%
AIR. The 7% AIR may not be available in your state.  (Check with your registered
representative regarding availability).

The income amounts shown reflect the deduction of all fees and expenses.  Actual
Investment  Option  fees  and  expenses  will  vary  from  year to year and from
Investment Option to Investment  Option.  Actual expenses may be higher or lower
than the rate used in the  illustrations.  The  illustrations  assume  that each
Investment  Option will incur expenses at an average annual rate of 0.95% of the
average daily net assets of the  Investment  Option.  The insurance  charges are
calculated  at an annual  rate of 1.40% of the  average  daily net assets of the
Separate  Account.  After taking these expenses and charges into  consideration,
the illustrated  gross  investment  returns of 0%, 6% and 12% are  approximately
equal to net rates (which means after  expenses  have been  deducted) of -2.32%,
3.54% and 9.40%, respectively.


<PAGE>
<TABLE>
<CAPTION>

                                            VALUEMARK INCOME PLUS ILLUSTRATION
<S>                         <C>                                   <C>                               <C>



Annuitant:                   John Doe                      Annuity Purchase Amount:   $100,000
Date of Birth:               1/1/1932                      Effective Date:            12/1/2001
Annuity Income Option:       Single Life Annuity           First Annuity Income Date:  1/1/2002
Premium Tax:                 0%                            Frequency of Annuity Income:  Monthly
                                                           Assumed Investment Return:      3%

The amount of monthly  variable  annuity income shown in the table below and the
graph that follows assumes a constant annual  investment  return.  The amount of
variable  annuity income that you actually receive will depend on the investment
performance of the Investment  Option(s) you choose. The variable annuity income
can go up or down.  No  minimum  dollar  amount of  variable  annuity  income is
guaranteed. The amounts shown are based on a 3% AIR. Income will remain constant
at $625 per month when the net rate of return after expenses is 3% (annually).



                                            MONTHLY ANNUITY PAYMENTS
                                     Annual rate of return before expenses:         0%          6%          12%
Annuity Income Date           Age     Annual rate of return after expenses:       -2.32%       3.54%       9.40%
------------------------------------------------------------------------------------------------------------------

January 1, 2002               70                      622         625         628
January 1, 2003               71                      590         628         667
January 1, 2004               72                      559         631         708
January 1, 2005               73                      530         635         752
January 1, 2006               74                      503         638         799
January 1, 2011               79                      386         655       1,080
January 1, 2016               84                      296         672       1,461
January 1, 2021               89                      227         690       1,974
January 1, 2026               94                      174         708       2,669



<PAGE>


The  investment  rates of return  shown are  hypothetical  only.  You should not
consider them to represent past or future investment  performance.  Actual rates
of return  may be more or less than those  shown and will  depend on a number of
factors.


The following table summarizes  Annuity Income with an Assumed Investment Return
of 3%. This table is presented graphically in the printed prospectus.

                             Monthly Payment Amount
         ------------------------------------------------------------
               -2.32%               3.54%               9.40%
             Annual Rate         Annual Rate         Annual Rate
              of Return           of Return           of Return
  Year     After Expenses      After Expenses              After Expenses
--------------------------------------------------------------------------------

       1               $ 622               $ 625               $ 628
       2                 590                 628                 667
       3                 559                 631                 708
       4                 530                 635                 752
       5                 503                 638                 799
       6                 477                 641                 849
       7                 452                 645                 902
       8                 429                 648                 958
       9                 407                 652               1,017
      10                 386                 655               1,080
      11                 366                 658               1,148
      12                 347                 662               1,219
      13                 329                 665               1,295
      14                 312                 669               1,375
      15                 296                 672               1,461
      16                 281                 676               1,551
      17                 266                 679               1,648
      18                 252                 683               1,750
      19                 239                 686               1,859
      20                 227                 690               1,974
      21                 215                 694               2,097
      22                 204                 697               2,227
      23                 194                 701               2,366
      24                 184                 705               2,513
      25                 174                 708               2,669


<PAGE>


                       VALUEMARK INCOME PLUS ILLUSTRATION



Annuitant:                   John Doe                     Annuity Purchase Amount:  $100,000
Date of Birth:               1/1/1932                     Effective Date:    12/1/2001
Annuity Income Option:       Single Life Annuity          First Annuity Income Date:   1/1/2002
Premium Tax:                 0%                           Frequency of Annuity Income:  Monthly
                                                          Assumed Investment Return:  5%

The amount of monthly  variable  annuity income shown in the table below and the
graph that follows assumes a constant annual  investment  return.  The amount of
variable  annuity income that you actually receive will depend on the investment
performance of the Investment  Option(s) you choose. The variable annuity income
can go up or down.  No  minimum  dollar  amount of  variable  annuity  income is
guaranteed. The amounts shown are based on a 5% AIR. Income will remain constant
at $743 per month when the net rate of return after expenses is 5% (annually).


                                            MONTHLY ANNUITY PAYMENTS
                                     Annual rate of return before expenses:         0%          6%          12%
Annuity Income Date           Age     Annual rate of return after expenses:       -2.32%       3.54%       9.40%
---------------------------------------------------------------------------------------------------------------------------

January 1, 2002               70                                                   739          742         746
January 1, 2003               71                                                   687          732         777
January 1, 2004               72                                                   639          722         810
January 1, 2005               73                                                   595          712         844
January 1, 2006               74                                                   553          702         879
January 1, 2011               79                                                   385          654       1,079
January 1, 2016               84                                                   268          610       1,325
January 1, 2021               89                                                   187          569       1,627
January 1, 2026               94                                                   130          530       1,998


<PAGE>


The  investment  rates of return  shown are  hypothetical  only.  You should not
consider them to represent past or future investment  performance.  Actual rates
of return  may be more or less than those  shown and will  depend on a number of
factors.


The  following table summarizes Annuity Income with an Assumed Investment Return
     of 5%. This table is presented graphically in the printed prospectus.

                             Monthly Payment Amount
         ------------------------------------------------------------
               -2.32%               3.54%               9.40%
             Annual Rate         Annual Rate         Annual Rate
              of Return           of Return           of Return
  Year     After Expenses      After Expenses              After Expenses
--------------------------------------------------------------------------------

       1               $ 739               $ 742               $ 746
       2                 687                 732                 777
       3                 639                 722                 810
       4                 595                 712                 844
       5                 553                 702                 879
       6                 515                 692                 916
       7                 479                 682                 954
       8                 445                 673                 994
       9                 414                 664               1,036
      10                 385                 654               1,079
      11                 358                 645               1,125
      12                 333                 636               1,172
      13                 310                 627               1,221
      14                 289                 619               1,272
      15                 268                 610               1,325
      16                 250                 602               1,381
      17                 232                 593               1,439
      18                 216                 585               1,499
      19                 201                 577               1,562
      20                 187                 569               1,627
      21                 174                 561               1,696
      22                 162                 553               1,767
      23                 151                 545               1,841
      24                 140                 538               1,918
      25                 130                 530               1,998


<PAGE>


                       VALUEMARK INCOME PLUS ILLUSTRATION



Annuitant:                   John Doe                 Annuity Purchase Amount:   $100,000
Date of Birth:               1/1/1932                 Effective Date:                   12/1/2001
Annuity Income Option:       Single Life Annuity      First Annuity Income Date:        1/1/2002
Premium Tax:                 0%                       Frequency of Annuity Income:      Monthly
                                                      Assumed Investment Return:        7%

The amount of monthly  variable  annuity income shown in the table below and the
graph that follows assumes a constant annual  investment  return.  The amount of
variable  annuity income that you actually receive will depend on the investment
performance of the Investment  Option(s) you choose. The variable annuity income
can go up or down.  No  minimum  dollar  amount of  variable  annuity  income is
guaranteed. The amounts shown are based on a 7% AIR. Income will remain constant
at $866 per month when the net rate of return after  expenses is 7%  (annually).
The 7% AIR may not be available in your state.



                                            MONTHLY ANNUITY PAYMENTS
                                     Annual rate of return before expenses:         0%          6%          12%
Annuity Income Date           Age     Annual rate of return after expenses:       -2.32%       3.54%       9.40%
--------------------------------------------------------------------------------------------------------------------

January 1, 2002               70                               $859        $864        $868
January 1, 2003               71                                784         836         887
January 1, 2004               72                                716         809         907
January 1, 2005               73                                654         782         928
January 1, 2006               74                                597         757         948
January 1, 2011               79                                378         642       1,060
January 1, 2016               84                                240         545       1,184
January 1, 2021               89                                152         462       1,323
January 1, 2026               94                                 96         392       1,478


<PAGE>


The  investment  rates of return  shown are  hypothetical  only.  You should not
consider them to represent past or future investment  performance.  Actual rates
of return  may be more or less than those  shown and will  depend on a number of
factors.


The following table summarizes  Annuity Income with an Assumed Investment Return
of 7%. This table is presented graphically in the printed prospectus.

                             Monthly Payment Amount
         ------------------------------------------------------------
               -2.32%               3.54%               9.40%
             Annual Rate         Annual Rate         Annual Rate
              of Return           of Return           of Return
  Year     After Expenses      After Expenses              After Expenses
--------------------------------------------------------------------------------
       1               $ 859               $ 864               $ 868
       2                 784                 836                 887
       3                 716                 809                 907
       4                 654                 782                 928
       5                 597                 757                 948
       6                 545                 733                 970
       7                 497                 709                 991
       8                 454                 686               1,014
       9                 414                 664               1,036
      10                 378                 642               1,060
      11                 345                 622               1,083
      12                 315                 602               1,108
      13                 288                 582               1,133
      14                 263                 563               1,158
      15                 240                 545               1,184
      16                 219                 527               1,211
      17                 200                 510               1,238
      18                 182                 494               1,266
      19                 167                 478               1,294
      20                 152                 462               1,323
      21                 139                 447               1,353
      22                 127                 433               1,383
      23                 116                 419               1,414
      24                 106                 405               1,446
      25                  96                 392               1,478
</TABLE>





                                PART B SAI



                       STATEMENT OF ADDITIONAL INFORMATION
                              INDIVIDUAL IMMEDIATE
                           VARIABLE ANNUITY CONTRACTS
                                    issued by
                         ALLIANZ LIFE VARIABLE ACCOUNT B
                                       and
                 ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
                 May 1, 2002 , as supplemented December 9 , 2002




THIS IS NOT A PROSPECTUS.  THIS  STATEMENT OF ADDITIONAL  INFORMATION  SHOULD BE
READ IN CONJUNCTION  WITH THE PROSPECTUS FOR THE INDIVIDUAL  IMMEDIATE  VARIABLE
ANNUITY CONTRACTS WHICH ARE REFERRED TO HEREIN.

THE PROSPECTUS  CONCISELY  SETS FORTH  INFORMATION  THAT A PROSPECTIVE  INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS,  CALL OR WRITE THE
COMPANY AT: 5701 Golden Hills Drive Minneapolis, MN 55416-1297 (800) 542-5427.


THIS  STATEMENT OF ADDITIONAL  INFORMATION  AND THE  PROSPECTUS ARE DATED MAY 1,
2002, AND AS SUPPLEMENTED DECMEBER 9, 2002. MAY BE AMENDED FROM TIME TO TIME.




Table of Contents
Contents                                           Page
-------------------------------------------------------
Company .........................................     2
Experts .........................................     2
Legal Opinions ..................................     2
Distributor .....................................     2
Calculation of Performance Data .................     2
Illustration..........................................8
Federal Tax Status ..............................     8
Annuity Provisions ..............................    14
Financial Statements ............................    15
Appendix A- Illustrations............................16




                                                                     VIPSAI 1202



<PAGE>



Company
--------------------------------------------------------------------------------

Information  regarding  Allianz  Life  Insurance  Company of North  America (the
"Company")  and its  ownership is contained  in the  Prospectus.  The Company is
rated A++ by A.M. BEST, an independent  analyst of the insurance  industry.  The
financial  strength of an insurance  company may be relevant in that it may be a
reflection  as to the ability of a company to make fixed  annuity  payments from
its general account.


Experts
--------------------------------------------------------------------------------

The financial  statements  of Allianz Life Variable  Account B as of and for the
year ended December 31, 2001 and the  consolidated  financial  statements of the
Company as of December  31, 2001 and 2000 and for each of the years in the three
years ended December 31,  2001have been included in this Statement of Additional
Information  in reliance upon the reports of KPMG LLP,  independent  accountants
included in this Statement of Additional  Information  and upon the authority of
said firm as experts in  accounting  and auditing.  The insurance  company audit
report refers to a change in its method of accounting for derivative instruments
in 2001and a change in its method of calculating  deferred acquisition costs and
future benefit reserves for two-tiered annuities in 1999. The principal business
address of KPMG LLP is 4200 Wells Fargo Center, Minneapolis, MN


Legal Opinions
--------------------------------------------------------------------------------

Stewart  Gregg,  Senior  Counsel to Allianz Life,  has provided  legal advice on
certain matters in connection with the issuance of the Contracts.


Distributor
--------------------------------------------------------------------------------

USAllianz  Investor  Services,  LLC, a subsidiary  of the  Company,  acts as the
distributor. The offering is on a continuous basis.


Calculation of Performance Data
--------------------------------------------------------------------------------

Total Return

From time to time,  the  Company  may  advertise  the  performance  data for the
Investment   Options   in   sales   literature,   advertisements,   personalized
hypothetical  illustrations,  and Contract Owner communications.  Such data will
show the percentage change in the value of a unit based on the performance of an
Investment  Option over a stated  period of time which is determined by dividing
the  increase  (or  decrease)  in value for that  unit by the unit  value at the
beginning of the period.

Any such  performance  data will include total return figures for the one, five,
and 10 year (or since  inception)  time  periods  indicated.  Such total  return
figures will reflect the deduction of a 1.25% Mortality and Expense Risk Charge,
a  0.15%  Administrative  Expense  Charge  and  the  operating  expenses  of the
underlying Investment Options.

The hypothetical  value of a Contract  purchased for the time periods  described
will be  determined  by using the  actual  unit  values  for an  initial  $1,000
purchase  payment.  The  average  annual  total  return  is then  determined  by
computing the fixed interest rate that a $1,000  purchase  payment would have to
earn annually, compounded annually, to grow to the hypothetical value at the end
of the time  periods  described.  The  formula  used in these  calculations  is:
P(1+T)n = ERV

where:

P  = a hypothetical initial payment of $1,000;

T  = average annual total return;

n  = number of years;

ERV = ending redeemable value of a hypothetical $1,000 purchase payment made at
the beginning of the period at the end of the period.

The Company may also  advertise  cumulative  and total return  information  over
different  periods of time.  Cumulative  total return is calculated in a similar
manner as described above except that the results are not annualized.

Yield

The USAZ Money Market Fund. The Company may advertise yield  information for the
USAZ Money Market Fund's current yield may vary each day,  depending upon, among
other  things,  the  average  maturity  of the  underlying  Investment  Option's
investment  securities and changes in interest rates,  operating  expenses,  the
deduction of the Mortality and Expense Risk Charge, the  Administrative  Expense
Charge  and,  in  certain  instances,  the  value of the  underlying  Investment
Option's  investment  securities.  The fact that the Fund's  current  yield will
fluctuate  and  that the  principal  is not  guaranteed  should  be  taken  into
consideration when using the Fund's current yield as a basis for comparison with
savings accounts or other fixed-yield  investments.  The yield at any particular
time is not indicative of what the yield may be at any other time.

The USAZ Money Market  Fund's  current yield is computed on a base period return
of a  hypothetical  Contract  having  a  beginning  balance  of one  unit  for a
particular  period of time (generally  seven days).  The return is determined by
dividing the net change  (exclusive of any capital  changes) in such unit by its
beginning value, and then multiplying it by 365/7 to get the annualized  current
yield.  The  calculation of net change  reflects the value of additional  shares
purchased with the dividends paid by the Investment Option, and the deduction of
the Mortality and Expense Risk Charge and the Administrative Expense Charge.

The  effective  yield  reflects the effects of  compounding  and  represents  an
annualization  of the current return with all dividends  reinvested.  (Effective
yield = [(Base Period Return + 1)365/7]-1.)

For the seven-day  period  ending on 12/31/00,  the USAZ Money Market Fund had a
current yield of -0.42% and an effective yield of -0.42%.

Other Investment Options.  The Company may also quote yield in sales literature,
advertisements,  personalized  hypothetical  illustrations,  and Contract  Owner
communications for the other Investment  Options.  Each Investment Option (other
than  the USAZ  Money  Market  Fund)  will  publish  standardized  total  return
information with any quotation of current yield.

The yield  computation is determined by dividing the net  investment  income per
unit earned during the period (minus the deduction for the Mortality and Expense
Risk Charge and Administrative Expense Charge) by the unit value on the last day
of the period and annualizing the resulting  figure,  according to the following
formula:

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

where:

a = net  investment  income  earned during the period by the  Investment  Option
attributable to shares owned by the Investment Option;

b = expenses accrued for the period (net of reimbursements, if applicable);

c  = the average daily number of units outstanding during the period;

d  = the maximum offering price per unit on the last day of the period.

The above  formula will be used in  calculating  quotations  of yield,  based on
specified  30-day  periods (or one month)  identified  in the sales  literature,
advertisement, or communication.  The Company does not currently advertise yield
information for any Investment Option (other than the USAZ Money Market Fund).

Performance Ranking
The performance  based on each or all of the Investment  Options of the Variable
Account  may  be  compared  in  its  advertising  and  sales  literature  to the
performance of other variable  annuity  issuers in general or to the performance
of particular types of variable  annuities  investing in mutual funds, or series
of mutual funds with  investment  objectives  similar to each of the  Investment
Options of the Variable Account or indices.  Lipper  Analytical  Services,  Inc.
("Lipper")  and the Variable  Annuity  Research and Data Service  ("VARDS")  are
independent  services which monitor and rank the performance of variable annuity
issuers  in  each  of  the  major  categories  of  investment  objectives  on an
industry-wide basis.

Lipper's  rankings  include  variable  life issuers as well as variable  annuity
issuers.  VARDS rankings compare only variable annuity issuers.  The performance
analyses  prepared  by Lipper and VARDS rank such  issuers on the basis of total
return,  assuming reinvestment of distributions,  but do not take sales charges,
redemption fees or certain expense deductions at the variable account level into
consideration.  In  addition,  VARDS  prepares  risk  adjusted  rankings,  which
consider  the effects of market risk on total return  performance.  This type of
ranking may address the  question  as to which  Investment  Options  provide the
highest total return with the least amount of risk.  Other ranking  services may
be used as sources  of  performance  comparison,  such as  CDA/Weisenberger  and
Morningstar.

Performance Information

Total returns reflect all aspects of an Investment  Option's  return,  including
the  automatic   reinvestment  by  Allianz  Life  Variable   Account  B  of  all
distributions  and any change in an Investment  Option's  value over the period.
The performance of the Investment Options reflects results achieved prior to the
date the Contracts first invested in the Investment Options.

The returns  reflect the  deduction  of the  Mortality  and Expense Risk Charge,
Administrative  Expense  Charge and the  operating  expenses of each  Investment
Option. Past performance does not guarantee future results.

The performance  figures in Table I reflect  Accumulation  Unit performance from
Separate  Account  Inception.  The  performance  figures  in  Table  II  reflect
Accumulation  Unit  performance  from  portfolio  inception,  which may pre-date
Separate Account inception and assumes that the Accumulation Units were invested
in each of the Investment  Options from the Investment Option inception dates as
listed on the table. The performance  figures in Table III reflects  performance
information for the Investment Options which does not include any contract fees,
expenses or sales charges.


<PAGE>
<TABLE>
<CAPTION>


Table I:Standardized Total Return

Actual Total Return for the period ended December 31, 2001

                                                 Column I (without) Actual                  Column II ( with) Actual
------------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                    <C>       <C>      <C>      <C>    <C>      <C>     <C>        <C>     <C>
                                Separate Account
                                   Inception   One    Three    Five      Ten     Since   One     Three    Five      Ten    Since
Investment Option                    Date     Year    Year     Year     Year   InceptionYear     Year     Year     Year  Inception
                              in Investment Option
------------------------------------------------------------------------------------------------------------------------------------

USAZ Alliance Capital Growth and   11/5/2001    N/A     N/A      N/A      N/A       4.44    #N/A     #N/A      #N/A    #N/A -0.76
Income
USAZ Alliance Capital Large Cap    11/5/2001    N/A     N/A      N/A      N/A       5.27    #N/A     #N/A      #N/A    #N/A  0.07
Growth
USAZ Alliance Capital Technology   11/5/2001    N/A     N/A      N/A      N/A       7.47    #N/A     #N/A      #N/A    #N/A  2.27
Franklin Global Communications     1/24/1989 -30.23  -14.04    -2.74     1.95       4.64  -35.43   -15.15     -2.90    1.88  4.58
Securities - Class 11
Franklin Growth and Income         1/24/1989  -3.39    3.87     8.56     9.42       8.69   -8.59     3.09      8.43    9.35  8.62
Securities - Class 11
Franklin High Income - Class 11    1/24/1989   2.81   -4.57    -0.99     4.76       4.84   -2.39    -5.49     -1.17    4.69  4.77
Franklin Income Securities -       1/24/1989  -0.43    4.42     5.67     7.73       8.46   -5.63     3.65      5.52    7.66  8.40
Class 11
Franklin Large Cap Growth           5/1/1996 -12.50    5.81    10.39      N/A      11.40  -17.70     5.07     10.27    #N/A 11.32
Securities - Class 11
Franklin Real Estate - Class 11,2  1/24/1989   6.67    8.71     4.63     9.62       8.77    1.47     7.99      4.47    9.55  8.70
Franklin Rising Dividends          1/27/1992  12.31    6.08    10.55      N/A       9.78    7.11     5.32     10.42    #N/A  9.71
Securities - Class 11
Franklin Small Cap - Class 11      11/1/1995 -16.20   11.08     9.15      N/A      11.90  -21.40    10.41      9.03    #N/A 11.83
Franklin Small Cap Value            5/1/1998   6.11    4.55     5.47     5.44       6.25    7.41    11.02      #N/A    #N/A  1.59
Securities - Class 11
Franklin U.S. Government - Class   3/14/1989  12.61   11.71      N/A      N/A       2.01    0.91     3.78      5.32    5.36  6.18
12
Franklin Zero Coupon 2005 - Class  3/14/1989   7.41    3.43     6.16     7.28       8.27    2.21     2.64      6.01    7.21  8.21
11,2
Franklin Zero Coupon 2010 - Class  3/14/1989   4.15    1.81     6.48     8.13       8.80   -1.05     0.99      6.34    8.06  8.74
11,2
Mutual Discovery Securities -      11/8/1996  -1.01    9.58     7.73      N/A       7.87   -6.21     8.88      7.59    #N/A  7.76
Class 11
Mutual Shares Securities - Class   11/8/1996   5.81    9.85     8.72      N/A       9.15    0.61     9.15      8.58    #N/A  9.06
11
Templeton Developing Markets        3/4/1996  -9.36   -1.32    -7.74      N/A      -3.33  -14.56    -2.17     -7.96    #N/A -3.40
Securities - Class 11,3
Templeton Foreign Securities -     1/27/1992 -16.93   -0.92     2.20      N/A       6.05  -22.13    -1.76      2.05    #N/A  5.99
Class 11,3
Templeton Growth Securities -      3/15/1994  -2.37    5.35     7.05      N/A       8.62   -7.57     4.59      6.92    #N/A  8.57
Class 11
USAZ Templeton Developed Markets   11/5/2001    N/A     N/A      N/A      N/A       2.28    #N/A     #N/A      #N/A    #N/A -2.92
SP Jennison International Growth*  12/15/2000-36.82     N/A      N/A      N/A     -35.84  -42.02     #N/A      #N/A    #N/A -39.46
SP Strategic Partners Focused      12/15/2000-16.90     N/A      N/A      N/A     -20.38  -22.10     #N/A      #N/A    #N/A -23.97
Growth
PIMCO VIT High Yield  - Admin.      2/1/2000   0.93     N/A      N/A      N/A      -0.32   -4.27     #N/A      #N/A    #N/A -2.27
Class
PIMCO VIT StocksPLUS Growth &       2/1/2000 -12.67     N/A      N/A      N/A     -10.05  -17.87     #N/A      #N/A    #N/A -12.19
Income - Admin. Class
PIMCO VIT Total Return - Admin.     2/1/2000   6.88     N/A      N/A      N/A       9.00    1.68     #N/A      #N/A    #N/A  7.20
Class
USAZ PIMCO Growth and Income       11/5/2001    N/A     N/A      N/A      N/A       1.41    #N/A     #N/A      #N/A    #N/A -3.79
USAZ PIMCO Renaissance             11/5/2001    N/A     N/A      N/A      N/A       9.97    #N/A     #N/A      #N/A    #N/A  4.77
USAZ PIMCO Value                   11/5/2001    N/A     N/A      N/A      N/A       9.39    #N/A     #N/A      #N/A    #N/A  4.19
USAZ Money Market                   2/1/2000   1.83     N/A      N/A      N/A       2.98   -3.37     #N/A      #N/A    #N/A  1.08
USAZ Van Kampen Aggressive Growth   5/1/2001    N/A     N/A      N/A      N/A     -19.75    #N/A     #N/A      #N/A    #N/A -24.95
USAZ Van Kampen Comstock            5/1/2001    N/A     N/A      N/A      N/A      -6.51    #N/A     #N/A      #N/A    #N/A -11.71
USAZ Van Kampen Emerging Growth     5/1/2001    N/A     N/A      N/A      N/A      -8.16    #N/A     #N/A      #N/A    #N/A -13.36
USAZ Van Kampen Growth and Income   5/1/2001    N/A     N/A      N/A      N/A      -3.32    #N/A     #N/A      #N/A    #N/A -8.52
USAZ Van Kampen Growth              5/1/2001    N/A     N/A      N/A      N/A      -4.80    #N/A     #N/A      #N/A    #N/A -10.00
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

1. Ongoing stock market volatility can dramatically change the Investment
Options' short-term performance; current results may differ.
--------------------------------------------------------------------------------

2. These returns reflect periods of rapidly rising stock markets and such gains
may not continue.

3. Performance prior to the 5/1/00 merger reflects the historical performance of
the Templeton Developing Markets and Foreign Securities Investment Options.

4. For Templeton Foreign Securities Fund, performance prior to the 5/1/00 merger
reflects the historical performance of Templeton International Fund.


There is no performance  shown for the USAZ AIM Basic Value Fund,  USAZ AIM Blue
Chip Fund, USAZ AIM Dent Demographic Trends Fund, USAZ AIM International  Equity
Fund, Davis VA Financial Portfolio, Davis VA Value Portfolio,  Dreyfus Small Cap
Stock Index Fund,  Dreyfus  Stock Index Fund,  Jennison  20/20 Focus  Portfolio,
Oppenheimer  Global  Securities   Fund/VA,   Oppenheimer  High  Income  Fund/VA,
Oppenheimer  Main Street  Growth & Income  Fund/VA,  USAZ  Oppenheimer  Emerging
Growth Fund and the Seligman  Small-Cap Value  Portfolio  because they commenced
operations under this Contract as of May 1, 2002.

<TABLE>
<CAPTION>

Table II Hypothetical Total Return for the periods ended December 31, 2001
---------------------------------------------------------------------------------
<S>                                <C>               <C>      <C>     <C>        <C>           <C>

---------------------------------------------------------------------------------------------------------------
                                   Inception           One     Three    Five      Ten           Since
---------------------------------------------------------------------------------------------------------------
Investment Option                    Date             Year     Year     Year     Year           Inception
---------------------------------------------------------------------------------------------------------------
                                Investment Option

USAZ Alliance Capital Growth and      11/5/2001         #N/A      #N/A      #N/A       #N/A    4.44
Income
USAZ Alliance Capital Large Cap       11/5/2001         #N/A      #N/A      #N/A       #N/A    5.27
Growth
USAZ Alliance Capital Technology      11/5/2001         #N/A      #N/A      #N/A       #N/A    7.47
Franklin Global Communications        1/24/1989       -30.23    -14.04     -2.74       1.95    4.64
Securities - Class 11
Franklin Growth and Income            1/24/1989        -3.39      3.87      8.56       9.42    8.69
Securities - Class 11
Franklin High Income - Class 11       1/24/1989         2.81     -4.57     -0.99       4.76    4.84
Franklin Income Securities -          1/24/1989        -0.43      4.42      5.67       7.73    8.46
Class 11
Franklin Large Cap Growth              5/1/1996       -12.50      5.81     10.39       #N/A   11.40
Securities - Class 11
Franklin Real Estate - Class 11,2     1/24/1989         6.67      8.71      4.63       9.62    8.77
Franklin Rising Dividends             1/27/1992        12.31      6.08     10.55       #N/A    9.78
Securities - Class 11
Franklin Small Cap - Class 11         11/1/1995       -16.20     11.08      9.15        N/A   11.90
Franklin Small Cap Value               5/1/1998        12.61     11.71       N/A        N/A    2.01
Securities - Class 11
Franklin U.S. Government - Class      3/14/1989         6.11      4.55      5.47       5.44    6.25
12
Franklin Zero Coupon 2005 - Class     3/14/1989         7.41      3.43      6.16       7.28    8.27
11,2
Franklin Zero Coupon 2010 - Class     3/14/1989         4.15      1.81      6.48       8.13    8.80
11,2
Mutual Discovery Securities -         11/8/1996        -1.01      9.58      7.73        N/A    7.87
Class 11
Mutual Shares Securities - Class      11/8/1996         5.81      9.85      8.72        N/A    9.15
11
Templeton Developing Markets           3/4/1996        -9.36     -1.32     -7.74        N/A   -3.33
Securities - Class 11,3
Templeton Foreign Securities -        1/27/1992       -16.93     -0.92      2.20        N/A    6.05
Class 11,3
Templeton Growth Securities -         3/15/1994        -2.37      5.35      7.05        N/A    8.62
Class 11
USAZ Templeton Developed Markets      11/5/2001          N/A       N/A       N/A        N/A    2.28
SP Jennison International Growth*    12/15/2000       -36.82       N/A       N/A        N/A  -35.84
SP Strategic Partners Focused        12/15/2000       -16.90       N/A       N/A        N/A  -20.38
Growth
PIMCO VIT High Yield  - Admin.         2/1/2000         0.93      0.07       N/A        N/A    0.29
Class
PIMCO VIT StocksPLUS Growth &          2/1/2000       -12.67     -2.70       N/A        N/A    4.26
Income - Admin. Class
PIMCO VIT Total Return  - Admin.       2/1/2000         6.88      4.42       N/A        N/A    5.08
Class
USAZ PIMCO Growth and Income          11/5/2001          N/A       N/A       N/A        N/A    1.41
USAZ PIMCO Renaissance                11/5/2001          N/A       N/A       N/A        N/A    9.97
USAZ PIMCO Value                      11/5/2001          N/A       N/A       N/A        N/A    9.39
USAZ Money Market                      2/1/2000         1.83       N/A       N/A        N/A    2.98
USAZ Van Kampen Aggressive Growth      5/1/2001          N/A       N/A       N/A        N/A  -19.75
USAZ Van Kampen Comstock               5/1/2001          N/A       N/A       N/A        N/A   -6.51
USAZ Van Kampen Emerging Growth        5/1/2001          N/A       N/A       N/A        N/A   -8.16
USAZ Van Kampen Growth and Income      5/1/2001          N/A       N/A       N/A        N/A   -3.32
USAZ Van Kampen Growth                 5/1/2001          N/A       N/A       N/A        N/A   -4.80
----------------------------------------------------------------------------------------------------
</TABLE>

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

1. Ongoing stock market volatility can dramatically change the Investment
Options' short-term performance; current results may differ.

2. These returns reflect periods of rapidly rising stock markets and such gains
may not continue.

3. Performance prior to the 5/1/00 merger reflects the historical performance of
the Templeton Developing Markets and Foreign Securities Investment Options.

4. For Templeton Foreign Securities Fund, performance prior to the 5/1/00 merger
reflects the historical performance of Templeton International Fund.

<TABLE>
<CAPTION>

Table III Investment Option Performance (No Contract Charges)

Total Return for the periods ended December 31, 2001
--------------------------------------------------------------------------------------------
<S>                                                      <C>    <C>        <C>       <C>
                                                         One     Five       Ten       Since
Investment Option                                       Year     Year      Year     Inception
                                                          %        %         %          %


USAZ Alliance Capital Growth and Income                   N/A       N/A       N/A        4.67
USAZ Alliance Capital Large Cap Growth                    N/A       N/A       N/A        5.50
USAZ Alliance Capital Technology                          N/A       N/A       N/A        7.70
Franklin Global Communications Securities - Class      -29.24     -1.36      3.47        6.09
11
Franklin Growth and Income Securities - Class 11        -2.02     10.10     11.30       10.21
Franklin High Income - Class 1                           4.26      0.41      6.26        6.30
Franklin Income Securities - Class 11                    0.98      7.16      9.34        9.97
Franklin Large Cap Growth Securities - Class 11        -11.26     11.95       N/A       12.97
Franklin Real Estate - Class 11,2                        8.19      6.11     11.54       10.29
Franklin Rising Dividends Securities - Class 11         13.90     12.11       N/A       11.32
Franklin Small Cap - Class 11                          -15.02     10.69       N/A       13.59
Franklin Small Cap Value Securities - Class 11          14.21       N/A       N/A        3.45
Franklin U.S. Government - Class 1                       7.62      6.96      6.99        7.75
Franklin Zero Coupon 2005 - Class 1                      8.93      7.66      8.93        9.80
Franklin Zero Coupon 2010 - Class 1                      5.62      7.98      9.87       10.34
Mutual Discovery Securities - Class 11                   0.39      9.25       N/A        9.40
Mutual Shares Securities - Class 11                      7.31     10.25       N/A       10.69
Templeton Developing Markets Securities - Class         -8.08    -11.59       N/A      -10.94
11,3
Templeton Foreign Securities - Class 11,3,4            -15.75      4.88       N/A        9.78
Templeton Growth Securities - Class 11                  -0.98      8.56       N/A       10.16
USAZ Templeton Developed Markets - Class 1                N/A       N/A       N/A        2.50
SP Jennison International Growth                       -35.92       N/A       N/A      -37.67
SP Strategic Partners Focused Growth                   -20.80       N/A       N/A      -19.93
PIMCO VIT High Yield - Admin. Class                      2.35       N/A       N/A        1.70
PIMCO VIT StocksPLUS Growth & Income - Admin. Class    -11.43       N/A       N/A        5.73
PIMCO VIT Total Return - Admin. Class                    8.37       N/A       N/A        6.55
USAZ PIMCO Growth and Income                              N/A       N/A       N/A        1.63
USAZ PIMCO Renaissance                                    N/A       N/A       N/A       10.20
USAZ PIMCO Value                                          N/A       N/A       N/A        9.63
USAZ Money Market                                        3.27       N/A       N/A        4.24
USAZ Van Kampen Aggressive Growth                         N/A       N/A       N/A      -19.00
USAZ Van Kampen Comstock                                  N/A       N/A       N/A       -5.63
USAZ Van Kampen Emerging Growth                           N/A       N/A       N/A       -7.80
USAZ Van Kampen Growth and Income                         N/A       N/A       N/A       -2.41
USAZ Van Kampen Growth                                    N/A       N/A       N/A       -3.90
</TABLE>

1.   Ongoing stock market  volatility  can  dramatically  change the  Investment
     Options' short-term performance; current results may differ.

2.   These  returns  reflect  periods of rapidly  rising stock  markets and such
     gains may not continue.

3.   Performance prior to the 5/1/00 merger reflects the historical  performance
     of the  Templeton  Developing  Markets  and Foreign  Securities  Investment
     Options.



4.   For Templeton  Foreign  Securities  Fund,  performance  prior to the 5/1/00
     merger reflects the historical performance of Templeton International Fund.


There is no performance  shown for the USAZ AIM Basic Value Fund,  USAZ AIM Blue
Chip Fund, USAZ AIM Dent Demographic Trends Fund, USAZ AIM International  Equity
Fund, Davis VA Financial Portfolio, Davis VA Value Portfolio,  Dreyfus Small Cap
Stock Index Fund,  Dreyfus  Stock Index Fund,  Jennison  20/20 Focus  Portfolio,
Oppenheimer  Global  Securities   Fund/VA,   Oppenheimer  High  Income  Fund/VA,
Oppenheimer  Main Street  Growth & Income  Fund/VA,  USAZ  Oppenheimer  Emerging
Growth Fund and the Seligman  Small-Cap Value  Portfolio  because they commenced
operations under this Contract as of May 1, 2002.

Current Name  Previous Name Franklin  Small Cap Value  Securities  Fund Franklin
Value Securities Fund Templeton Foreign Securities Fund Templeton  International
Securities  Fund  PIMCO  VIT High  Yield  Portfolio  PIMCO VIT High  Yield  Bond
Portfolio PIMCO VIT Total Return Portfolio PIMCO VIT Total Return Bond Portfolio
USAZ Money  Market Fund AZOA Money Market Fund USAZ Van Kampen  Emerging  Growth
Fund USAZ American Growth Fund

The Company may also  present  performance  information  computed on a different
basis.

Contract  Owners should note that  investment  results will fluctuate over time,
and any  presentation of total return for any period should not be considered as
a representation  of what an investment may earn or what an Owner's total return
may be in any future period. Annuity Income

Periodic  annuity  income  amounts  may  be  illustrated  using  the  historical
performance of the Investment Options, the Standard & Poor's 500 Composite Stock
Price Index or other recognized  investment  benchmark  Investment Options.  All
illustrations  will reflect the 1.25% annual  Mortality  and Expense Risk Charge
and the 0.15%  Administrative  Expense  Charge and actual or assumed  Investment
Option expenses.


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


ILLUSTRATIONS


Allianz Life may also provide  illustrations to customers.  These  illustrations
provide  hypothetical  depictions  of  the  "payout,"  or  annuitization  phase.
Illustrations  may be  based  upon  historical  performance  of  the  Investment
Options, as adjusted for certain expenses.  (Any adjusted historical performance
information will be accompanied by "standardized"  performance  information.) In
the  alternative,  certain  illustrations  may be based upon an assumed  rate of
return not to exceed 12%. "Payout"  illustrations may have various features,  as
follows:


o    Payout  illustrations  are  designed  to show the  hypothetical  effect  of
     annuitizing a Contact,  or receiving a stream of periodic  payments.  These
     illustrations  may  depict  either  a  variable  annuitization  or a  fixed
     annuitization.  A  variable  payout  illustration  would  be  based  upon a
     combination of adjusted historical performance and an assumed interest rate
     (AIR),  whereas  a fixed  payout  illustration  would  be  based  upon  the
     annuitant's  age, the payout option  selected,  and the payout factor rates
     currently  in  effect  on the  date of the  illustration.  Variable  payout
     illustrations  may also show the  portion of each payout that is subject to
     income tax and the portion that is non-taxable. In addition to variable and
     fixed payout  illustrations,  an illustration  may also be prepared showing
     the  effect  of  required  minimum  distribution  payments  from  qualified
     Contracts.


The values illustrated will be calculated reflecting the deduction of Investment
Option  expenses for the specific  Investment  Options  selected,  mortality and
expense  risk  charges,   and  the  administrative   expense  charge.   Contract
maintenance  charges may or may not be deducted from a particular  illustration.
Illustrations  will not reflect the  deduction  of any state  premium tax or any
Federal or state income tax or penalties.


The  illustrations  that are given to  customers by Allianz Life are designed to
assist  customers  in  understanding  how a contract  may  function in different
scenarios.  They are not guarantees or  representations as to future performance
or any specific rate of return.

A sample  format of a customer  illustration  is  attached  as Appendix A to the
Statement of Additional Information and is incorporated


Federal Tax Status
--------------------------------------------------------------------------------

NOTE:  The following  description is based upon the Company's  understanding  of
current  federal income tax law applicable to annuities in general.  The Company
cannot  predict  the  probability  that any  changes  in such laws will be made.
Purchasers are cautioned to seek competent tax advice  regarding the possibility
of such changes. The Company does not guarantee the tax status of the Contracts.
Purchasers  bear the  complete  risk that the  Contracts  may not be  treated as
"annuity  contracts"  under  federal  income  tax laws.  It  should  be  further
understood  that the  following  discussion is not  exhaustive  and that special
rules not described herein may be applicable in certain situations. Moreover, no
attempt has been made to consider any applicable state or other tax laws.

General

Section 72 of the Internal Revenue Code of 1986, as amended (the "Code") governs
taxation of annuities in general.  A Contract Owner is not taxed on increases in
the value of a Contract until distribution occurs,  either in the form of a lump
sum payment or as annuity payments under the Annuity Option elected. For annuity
payments, the portion of a payment includible in income equals the excess of the
payment over the exclusion amount.  The exclusion amount for payments based on a
variable annuity option is determined by dividing the investment in the Contract
(adjusted  for any period  certain or refund  guarantee)  by the number of years
over  which  the  annuity  is  expected  to  be  paid  (determined  by  Treasury
Regulations).  The exclusion amount for payments based on a fixed annuity option
is determined by multiplying the payment by the ratio that the cost basis of the
Contract  (adjusted  for any period  certain or refund  guarantee)  bears to the
expected  return under the Contract.  Payments  received after the investment in
the Contract has been recovered (i.e. the total of the excludable  amounts equal
the  investment in the Contract) are fully  taxable.  The taxable  portion of an
annuity  payment  is  taxed at  ordinary  income  rates.  For  certain  types of
Qualified Plans there may be no cost basis in the Contract within the meaning of
Section 72 of the Code. Contract Owners,  annuitants and beneficiaries under the
Contracts  should seek competent  financial advice about the tax consequences of
any distributions.

The Company is taxed as a life  insurance  company  under the Code.  For federal
income tax  purposes,  the  Separate  Account is not a separate  entity from the
Company, and its operations form a part of the Company.

Diversification

Section  817(h) of the Code  imposes  certain  diversification  standards on the
underlying  assets of  variable  annuity  contracts.  The Code  provides  that a
variable  annuity  contract  will not be treated as an annuity  contract for any
period (and any subsequent  period) for which the investments are not adequately
diversified  in  accordance  with  regulations  prescribed  by the United States
Treasury Department ("Treasury Department"). Disqualification of the Contract as
an annuity  contract would result in the imposition of federal income tax to the
Contract  Owner with respect to earnings  allocable to the Contract prior to the
receipt  of  payments  under  the  Contract.  The Code  contains  a safe  harbor
provision  which provides that annuity  contracts such as the Contracts meet the
diversification  requirements if, as of the end of each quarter,  the underlying
assets meet the diversification standards for a regulated investment company and
no more than fifty-five  percent (55%) of the total assets consist of cash, cash
items, U.S. government  securities and securities of other regulated  investment
companies.

On March 2, 1989,  the  Treasury  Department  issued  regulations  (Treas.  Reg.
1.817-5)  which  established  diversification  requirements  for the  investment
Options  underlying  variable  contracts such as the Contracts.  The regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor  provision  described  above.
Under  the  regulations,   an  Investment   Option  will  be  deemed  adequately
diversified  if:  (1) no more than 55% of the  value of the total  assets of the
Investment Option is represented by any one investment;  (2) no more than 70% of
the value of the total assets of the Investment Option is represented by any two
investments;  (3) no more  than 80% of the  value  of the  total  assets  of the
Investment Option is represented by any three investments;  and (4) no more than
90% of the value of the total assets of the Investment  Option is represented by
any four investments.

The  Code  provides  that  for  purposes  of  determining  whether  or  not  the
diversification standards imposed on the underlying assets of variable contracts
by Section  817(h) of the Code have been met,  "each  United  States  government
agency or instrumentality shall be treated as a separate issuer."

The Company  intends that all  Investment  Options of the Trust  underlying  the
Contracts  will be managed  by the  investment  advisers  in such a manner as to
comply with these diversification requirements.

The Treasury  Department has indicated that the  diversification  Regulations do
not provide guidance regarding the circumstances in which Contract Owner control
of the  investments of the Separate  Account will cause the Contract Owner to be
treated as the owner of the assets of the Separate Account, thereby resulting in
the loss of favorable tax treatment for the Contract.  At this time it cannot be
determined whether  additional  guidance will be provided and what standards may
be contained in such guidance.

The amount of Contract  Owner control which may be exercised  under the Contract
is different in some respects from the situations addressed in published rulings
issued by the  Internal  Revenue  Service  in which it was held that the  policy
owner was not the owner of the  assets of the  separate  account.  It is unknown
whether  these  differences,  such as the Contract  Owner's  ability to transfer
among investment choices or the number and type of investment choices available,
would cause the Contract  Owner to be  considered  as the owner of the assets of
the Separate  Account  resulting in the  imposition of federal income tax to the
Contract  Owner with  respect to earnings  allocable  to the  Contract  prior to
receipt of payments under the Contract.

In the event any forthcoming guidance or ruling is considered to set forth a new
position,  such guidance or ruling will generally be applied only prospectively.
However,  if such  ruling  or  guidance  was not  considered  to set forth a new
position, it may be applied retroactively  resulting in the Contract Owner being
retroactively determined to be the owner of the assets of the Separate Account.

Due to the  uncertainty in this area,  the Company  reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.

Multiple Contracts

Section  72(e)(11) of the Code  provides  that  multiple  non-qualified  annuity
contracts  which are issued  within a calendar  year period to the same contract
owner by one company or its affiliates  are treated as one annuity  contract for
purposes of determining the tax consequences of any distribution. Such treatment
may result in adverse tax  consequences,  including  more rapid  taxation of the
distributed  amounts from such  combination  of contracts.  For purposes of this
rule, contracts received in a Section 1035 exchange will be considered issued in
the year of the exchange. The legislative history of Section 72(e)(11) indicates
that  it was  not  intended  to  apply  to  immediate  annuities.  However,  the
legislative  history also states that no inference is intended as to whether the
Treasury  Department,  under its authority to prescribe rules to enforce the tax
laws, may treat the combination  purchase of a deferred annuity contract with an
immediate  annuity contract as a single contract for purposes of determining the
tax consequences of any distribution.

Partial 1035 Exchanges

Section 1035 of the Code provides that an annuity contract may be exchanged in a
tax-free transaction for another annuity contract. Historically, it was presumed
that only the exchange of an entire contract,  as opposed to a partial exchange,
would be accorded tax-free status. In 1998 in Conway vs.  Commissioner,  the Tax
Court held that the direct transfer of a portion of a deferred  annuity contract
into another deferred annuity contract qualified as a non-taxable  exchange.  On
November 22,  1999,  the Internal  Revenue  Service  filed an Action on Decision
which indicated that it acquiesced in the Tax Court decision in Conway. However,
in its  acquiescence  with the decision of the Tax Court,  the Internal  Revenue
Service stated that it will challenge  transactions where taxpayers enter into a
series of  partial  exchanges  and  annuitizations  as part of a design to avoid
application  of the 10%  premature  distribution  penalty  or other  limitations
imposed on annuity  contracts under the Code. In the absence of further guidance
from the Internal  Revenue  Service it is unclear what specific types of partial
exchange  designs and  transactions  will be challenged by the Internal  Revenue
Service. Due to the uncertainty in this area owners should consult their own tax
advisers  prior to  entering  into a partial  exchange  of an annuity  contract.
Required Distributions

     In order to be  treated  as an  annuity  contract  for  Federal  income tax
     purposes,  Section 72(s) of the Code requires any Non-Qualified Contract to
     contain  certain  provisions  specifying  how your interest in the Contract
     will be  distributed in the event of the death of an owner of the Contract.
     Specifically, section 72(s) requires that (a) if any owner dies on or after
     the annuity starting date, but prior to the time the entire interest in the
     contract has been distributed,  the entire interest in the contract will be
     distributed at least as rapidly as under the method of  distribution  being
     used as of the date of such owner's death;  and (b) if any owner dies prior
     to the annuity  starting date, the entire  interest in the contract will be
     distributed  within five years after the date of such owner's death.  These
     requirements  will be considered  satisfied as to any portion of an owner's
     interest which is payable to or for the benefit of a designated beneficiary
     and which is distributed  over the life of such  designated  beneficiary or
     over a period not extending beyond the life expectancy of that beneficiary,
     provided  that such  distributions  begin  within  one year of the  owner's
     death. The designated  beneficiary refers to a natural person designated by
     the owner as a beneficiary  and to whom ownership of the contract passes by
     reason of death.  However,  if the designated  beneficiary is the surviving
     spouse of the  deceased  owner,  the  contract  may be  continued  with the
     surviving  spouse  as the new  owner.  If the  owner of the  contract  is a
     non-natural  person, then the death or change of an annuitant is treated as
     the death of the owner.

     The Non-Qualified  Contracts contain provisions that are intended to comply
     with these Code  requirements,  although no regulations  interpreting these
     requirements  have yet been issued. We intend to review such provisions and
     modify them if  necessary  to assure  that they comply with the  applicable
     requirements   when  such  requirements  are  clarified  by  regulation  or
     otherwise.

Other rules may apply to Qualified Contracts.

Tax Treatment of Distributions - Non-Qualified Contracts

Section  72  of  the  Code  governs  treatment  of  distributions  from  annuity
contracts. It provides that if the Contract Value exceeds the aggregate purchase
payments  made,  any amount  withdrawn  will be treated as coming first from the
earnings and then,  only after the income  portion is exhausted,  as coming from
the principal.  Withdrawn  earnings are  includible in gross income.  It further
provides that a ten percent  (10%)  penalty will apply to the income  portion of
any distribution.  However, the penalty is not imposed on amounts received:  (a)
after the  taxpayer  reaches  age 59 1/2;  (b)  after the death of the  Contract
Owner; (c) if the taxpayer is totally  disabled (for this purpose  disability is
as defined in Section  72(m)(7) of the Code);  (d) in a series of  substantially
equal periodic  payments made not less frequently than annually for the life (or
life expectancy) of the taxpayer and his Beneficiary;  (e) as an annuity payment
under an immediate annuity; or (f) which are allocable to purchase payments made
prior to August 14, 1982.

The above information does not apply to Qualified Contracts.  However,  separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See "Tax Treatment of  Distributions  - IRA  Contracts.")  The  availability of
total or partial withdrawals from an immediate annuity is not expressly provided
for in the  Code or  Treasury  Regulations.  The  only  tax  guidance  currently
available for such issue is a Private  Letter  Ruling  holding that the right to
make  withdrawals  does not prevent a contract  from  qualifying as an immediate
annuity.  However,  the  Private  Letter  Ruling  does not  address the issue of
whether the making of a withdrawal  would  adversely  affect the  favorable  tax
treatment  of annuity  payments  made  before or after such  partial  withdrawal
because  of  the  requirement  that  all  immediate  annuity  payments  must  be
"substantially  equal." The loss of favorable tax treatment  would mean that the
income  portion  of  each  annuity  payment  received  prior  to the  taxpayer's
attaining  age 59 1/2 would be  subject  to a 10%  penalty  tax  unless  another
exception to the penalty tax applies.  While the Company currently believes that
such  withdrawals  will not  adversely  affect the  favorable  tax  treatment of
annuity  payments  received before or after a withdrawal and the Company intends
to perform its tax reporting  functions  accordingly,  there can be no assurance
that the Internal  Revenue Service will not take a contrary  position.  Contract
Owners  should  obtain  competent  tax advice prior to making a partial or total
withdrawal.

Qualified Plans

The Contracts  offered by the  Prospectus may also be used with a plan qualified
under Section 408(b) of the Code ("IRA Contracts").  Contract Owners, annuitants
and  beneficiaries  are  cautioned  that  benefits  under an IRA Contract may be
subject  to the terms and  conditions  of the plan  regardless  of the terms and
conditions  of  the  Contracts  issued  pursuant  to  the  plan.  The  following
discussion of IRA Contracts is not exhaustive  and is for general  informational
purposes only.  The tax rules  regarding IRA Contracts are very complex and will
have differing  applications  depending on individual  facts and  circumstances.
Each  purchaser  should  obtain  competent  tax advice prior to  purchasing  IRA
Contracts.   IRA  Contracts  include  special  provisions  restricting  Contract
provisions  that may  otherwise be  available  as described in this  Prospectus.
Generally,   IRA  Contracts  are  not  transferable  except  upon  surrender  or
annuitization.

A Qualified  Contract will not provide any necessary or additional  tax deferral
if it is used to fund a  Qualified  Plan  that  is tax  deferred.  However,  the
Contract has features and benefits  other than tax deferral  that may make it an
appropriate investment for a Qualified Plan. You should consult your tax adviser
regarding these features and benefits prior to purchasing a Qualified Contract.

Various  penalty and excise taxes may apply to  contributions  or  distributions
made in violation of applicable  limitations.  Furthermore,  certain  withdrawal
penalties and restrictions may apply to distributions  from IRA Contracts.  (See
"Tax Treatment of Distributions - IRA Contracts.")

On July 6, 1983,  the Supreme  Court decided in Arizona  Governing  Committee v.
Norris that optional  annuity  benefits  provided  under an employer's  deferred
compensation  plan could not,  under Title VII of the Civil  Rights Act of 1964,
vary between men and women.  IRA Contracts will utilize  annuity tables which do
not differentiate on the basis of sex because of the use of the IRA Contracts in
a Simplified  Employee  Pension.  Such annuity tables will also be available for
use in connection with certain non-qualified deferred compensation plans.

Under  applicable  limitations,  certain  amounts may be  contributed  to an IRA
Contract which will be deductible from the individual's gross income. These IRAs
are subject to limitations on eligibility,  contributions,  transferability  and
distributions.  (See "Tax Treatment of  Distributions - IRA  Contracts.")  Under
certain conditions,  distributions from other IRAs and other qualified plans may
be rolled over or  transferred  on a  tax-deferred  basis into an IRA  Contract.
Sales of Contracts for use as IRA Contracts are subject to special  requirements
imposed  by the Code,  including  the  requirement  that  certain  informational
disclosure  be given to persons  desiring to  establish  an IRA.  Purchasers  of
Contracts to be qualified  as  Individual  Retirement  Annuities  should  obtain
competent  tax  advice  as to the  tax  treatment  and  suitability  of  such an
investment.

A Qualified  Contract will not provide any necessary or additional  Tax Deferral
if it is used to fund a  Qualified  Plan  that  is tax  deferred.  However,  the
Contract has features and benefits  other than Tax Deferral  that may make it an
appropriate investment for a Qualified Plan. You should consult your tax adviser
regarding these features and benefits prior to purchasing a Qualified Contract.

Many  withdrawals  from  Qualified  Contracts  can be  rolled  over to an IRA or
another qualified  retirement plan. If you receive a withdrawal from a Qualified
Contract  that  could  be  rolled  over  and you do not  elect  to make a direct
rollover of that amount to an IRA or qualified  plan,  20% of the taxable amount
must by law be withheld by us for taxes. In situations  where this mandatory tax
withholding  does not apply,  other tax amounts may be withheld unless you elect
out of the withholding.  You may request more detailed  information about income
tax withholding at the time of a withdrawal.

Tax Treatment of Distributions - IRA Contracts

In the case of a  withdrawal  under an IRA  Contract,  a ratable  portion of the
amount  received is taxable,  generally  based on the ratio of the  individual's
cost basis to the individual's  total accrued benefit under the retirement plan.
Special tax rules may be available  for certain  distributions  from a Qualified
Contract.

Section  72(t) of the Code  imposes a 10% penalty tax on the taxable  portion of
any distribution from qualified  retirement plans,  including IRA Contracts.  To
the extent  amounts are not  includible  in gross income  because they have been
rolled over to an IRA or to another eligible qualified plan, no tax penalty will
be imposed. The tax penalty will not apply to the following  distributions:  (a)
if distribution is made on or after the date on which the Annuitant  reaches age
59 1/2;

(b)  distributions  following the death or disability of the Annuitant (for this
     purpose disability is as defined in Section 72(m)(7) of the Code);

(c)  distributions  that are part of a series of  substantially  equal  periodic
     payments  made  not less  frequently  than  annually  for the life (or life
     expectancy)   of  the   Annuitant   or  the  joint  lives  (or  joint  life
     expectancies) of the Annuitant and his or her designated Beneficiary;

(d)  distributions made to the Annuitant to the extent such distributions do not
     exceed the amount  allowable  as a deduction  under Code Section 213 to the
     Annuitant for amounts paid during the taxable year for medical care;

(e)  distributions  from an IRA Contract  for the purchase of medical  insurance
     (as  described in Section  213(d)(1)(D)  of the Code) for the Annuitant and
     his or her spouse and dependents if the Annuitant has received unemployment
     compensation  for at least 12 weeks (this  exception  will no longer  apply
     after the Annuitant has been re-employed for at least 60 days.);

(f)  distributions  from an Individual  Retirement Annuity made to the Annuitant
     to the  extent  such  distributions  do not  exceed  the  qualified  higher
     education  expenses  (as  defined in Section  72(t)(7)  of the Code) of the
     Annuitant for the taxable year;

(g)  distributions  made on account of an IRS levy upon the Qualified  Contract;
     and

(h)  distributions  from an Individual  Retirement Annuity made to the Annuitant
     which are  qualified  first-time  home buyer  distributions  (as defined in
     Section 72(t)(8) of the Code).

With  respect  to (c)  above,  if the  series of  substantially  equal  periodic
payments is modified before the later of the Annuitant  attaining age 591/2 or 5
years from the date of the first annuity  payment,  then the tax for the year of
the  modification  is  increased  by an amount equal to the tax which would have
been imposed (the 10% penalty tax) but for the exception,  plus interest for the
tax years in which the  exception was used. A partial  withdrawal  may result in
the  modification  of the series of annuity  payments made after such withdrawal
and therefore could result in the imposition of the 10% penalty tax and interest
for the period as described above. Competent tax advice should be obtained prior
to making any withdrawals  from an IRA Contract.  Any amounts  distributed  will
only be paid to the Annuitant, Joint Annuitant or Beneficiary.  The Company will
not transfer or pay such amounts to another IRA or tax qualified plan.

Generally,  distributions from an IRA Contract must commence no later than April
1 of the  calendar  year,  following  the  later  of:  (a) the year in which the
employee  attains  age 70 1/2 or (b) the  calendar  year in which  the  employee
retires.  The date set forth in (b) does not apply to an  Individual  Retirement
Annuity  or to a "5%  owner"  (as  defined  in the  Code).  Generally,  required
distributions must be over a period not exceeding the life or life expectancy of
the individual or the joint lives or life expectancies of the individual and his
or her designated  beneficiary.  If the required minimum  distributions  are not
made, a 50% penalty tax is imposed as to the amount not distributed.

Assignments, Pledges and Gratuitous Transfers

Other  than in the  case of  Qualified  Contracts  (which  generally  cannot  be
assigned or pledged),  any  assignment  or pledge of (or  agreement to assign or
pledge) any portion of the Accumulation  Value is treated for federal income tax
purposes  as a  surrender  of such  amount or  portion.  The  investment  in the
Contract is  increased by the amount  includible  as income with respect to such
amount  or  portion,  though  it is not  affected  by any  other  aspect  of the
assignment or pledge  (including its release).  If a Contract Owner  transfers a
Contract  without  adequate  consideration  to a person  other than the Contract
Owner's spouse (or to a former spouse  incident to divorce),  the Contract Owner
will be taxed on the difference  between his or her  Accumulation  Value and the
investment  in the  Contract  at  the  time  of  transfer.  In  such  case,  the
transferee's  investment  in the  Contract  will be  increased  to  reflect  the
increase in the transferor's income.

The transfer or assignment of ownership of the Contract,  the  designation of an
Annuitant,  the selection of certain Annuity  starting dates, or the exchange of
the Contract may result in certain other tax consequences that are not discussed
herein.  A  Contract  Owner  contemplating  any such  transfer,  assignment,  or
exchange should consult a tax advisor as to the tax consequences.

Death Benefits

Any death benefits paid under the Contract are taxable to the  beneficiary.  The
rules governing the taxation of payments from an annuity contract,  as discussed
above,  generally  apply to the payment of death  benefits and depend on whether
the death benefits are paid as a lump sum or as annuity  payments.  Estate taxes
may also apply. Income Tax Withholding

All distributions or the portion thereof which is includible in the gross income
of the Contract Owner are subject to federal income tax withholding.  Generally,
amounts are withheld from periodic payments at the same rate as wages and at the
rate of 10% from  non-periodic  payments.  However,  the Contract Owner, in most
cases,  may elect not to have taxes  withheld or to have  withholding  done at a
different rate.

Annuity Provisions
--------------------------------------------------------------------------------

Variable Annuity Payout

A variable annuity is an annuity with payments which:

(1) are not predetermined as to dollar amount; and

(2)  will vary in  amount  with the net  investment  results  of the  applicable
     Sub-account (s) of the Separate Account.

Annuity  payments  also  depend  upon  the Age of the  Annuitant  and any  Joint
Annuitant  and the  Assumed  Net  Investment  Factor  utilized.  On the  Annuity
Calculation Date, a fixed number of Annuity Units will be purchased,  determined
as follows:

The first  Annuity  Payment  is equal to the  Contract  Value  allocated  to the
Separate  Account divided first by $1,000 and then multiplied by the appropriate
Annuity Payment amount for each $1,000 of value for the Annuity Option selected.
In each  Investment  Option,  the fixed number of Annuity Units is determined by
dividing  the  amount  of  the  initial  Annuity  Payment  determined  for  each
Investment  Option by the Annuity  Unit value on the Annuity  Calculation  Date.
Thereafter,  the  number of  Annuity  Units in each  Investment  Option  remains
unchanged  unless the  Contract  Owner  elects to  transfer  between  Investment
Options.  All  calculations  will  appropriately  reflect  the  annuity  payment
frequency selected.

On each subsequent Annuity Payment date, the total Annuity Payment is the sum of
the Annuity Payments  determined for each Investment Option. The Annuity Payment
in each  Investment  Option is determined by  multiplying  the number of Annuity
Units then  allocated  to such  Investment  Option by the Annuity Unit value for
that Investment Option.

For  each  Investment  Option,  the  value  of an  Annuity  Unit  was  initially
established at $1.00. On each subsequent  Valuation Date the value of an Annuity
Unit is determined in the following way:

FIRST: The Net Investment Factor is determined by dividing (a) by (b) and adding
(c) to the result, where:

a. is the net  increase  or  decrease  in the Net  Asset  Value per share of the
Investment  Option (or other Eligible  Investment)  plus the per share amount of
any  dividend or capital gain  distribution  paid by the  Investment  Option (or
Eligible  Investment)  during the  Valuation  Period,  plus or minus a per share
charge or credit for any taxes  incurred  by or reserved  for in the  Investment
Option  as of  the  end  of the  current  Valuation  Period  which  the  Company
determines to have resulted from maintenance of the Investment Option; and

b. is the Net Asset Value per share of the Investment  Option (or other Eligible
Investment) at the beginning of the Valuation Period,  plus or minus a per share
charge or credit for any taxes  incurred  by or reserved  for in the  Investment
Option as of the end of the  immediately  preceding  Valuation  Period which the
Company  determines to have resulted from maintenance of the Investment  Option;
and

c. is the net result of 1.000 less the Valuation Period deduction for the
charges to the Investment Option.

The Net Investment Factor may be more or less than one.

SECOND: The value of an Annuity Unit for a Valuation Date is equal to:

a. the value of the Annuity Unit on the immediately preceding Valuation Date;

b.  multiplied by the Net Investment  Factor for the Valuation  Period ending on
the current Valuation Date;

c. divided by the Assumed Net  Investment  Factor (see below) for the  Valuation
Period.

The Assumed Net  Investment  Factor is equal to one plus the Assumed  Investment
Return  which is used in  determining  the basis for the purchase of an Annuity,
adjusted to reflect the  particular  Valuation  Period.  For example,  with a 5%
Assumed  Investment  Return,  the Assumed Net  Investment  Factor for a one-year
Valuation Period would be 1.05. For a one-day Valuation Period,  the Assumed Net
Investment Factor would be 1.00013368062.

The  Assumed  Investment  Return is the  investment  return  upon which  Annuity
Payments are based.  Income will  increase  from one annuity  Income Date to the
next if the  annualized  Net Rate of Return during that time is greater than the
Assumed Investment Return and will decrease if the annualized Net Rate of Return
is less than the Assumed Investment Return.

A Contract Owner may choose either a 7%, 5% or a 3% Assumed  Investment  Return.
If the  Contract  Owner does not choose one,  the 5% Assumed  Investment  Return
automatically  applies.  Choosing a higher Assumed Investment Return will result
in a higher  initial  amount of income,  but income  will  increase  more slowly
during  periods of good  investment  performance  of the Trust and decrease more
rapidly during periods of poor investment performance. THE 7% ASSUMED INVESTMENT
RETURN IS NOT  AVAILABLE  IN ALL STATES  UNTIL  APPROVED BY THE STATE  INSURANCE
DEPARTMENTS. (CHECK WITH YOUR REGISTERED REPRESENTATIVE REGARDING AVAILABILITY).

The variable  annuity  benefits  provided for under the Contract are based upon:
(a) the  1983(a)  Blended  Unisex  Mortality  Table  with  50%  female  content,
projected to the year 2000 with Projection  Scale G; (b) the Assumed  Investment
Return, and (c) any applicable taxes. Fixed Annuity Payout

Annuity  payments  from the Fixed Payment  Option (not  available in all states)
will  be  equal  payments  unless  otherwise  specified  by the  Annuity  Option
selected.

Financial Statements
--------------------------------------------------------------------------------

The audited  consolidated  financial statements of the Company as of and for the
year ended  December 31, 2001,  included  herein  should be  considered  only as
bearing  upon the  ability  of the  Company  to meet its  obligations  under the
Contracts.  The audited  financial  statements of the Separate Account as of and
for the year ended December 31, 2001 is also included herein.

APPENDIX A-ILLUSTRATIONS                                                   A-1

                              IMPORTANT DISCLOSURES
             Hypothetical Variable and/or Fixed Payout Illustration

This  illustration  depicts  how a payment  option may work when you  purchase a
Valuemark Income Plus immediate  variable  annuity.  This  illustration is not a
contract,  and it is not a  representation  or guarantee of future returns or of
any specific payout amount.

You may elect to receive your  Annuity  Payments as a variable  payout,  a fixed
payout,  or a  combination  of  both.  If you  choose  to have  any part of your
payments come from the Variable  Investment  Options,  the dollar amount of your
payments may go up or down based on the performance of the investment options.

You can elect to have illustrated either a "variable" payout option or a "fixed"
payout option, or, you may elect to receive both a variable payout  illustration
and a fixed payout  illustration.  The "variable" payout option  illustration is
based upon actual historical  performance of one or more investment options over
the specified period, as adjusted for all applicable  investment option expenses
and applicable  contract expenses.  The principal purpose of the variable payout
illustration is to demonstrate how the performance of the underlying  investment
options  could affect  contract  values and payout  amounts when the contract is
annuitized.  Additionally, you can select a hypothetical return (maximum of 12%)
to  illustrate  the effect of varying  returns on the payout  option and assumed
investment  return (AIR) you have  selected.  Investment  returns and  principal
value will fluctuate with market  conditions so that units, when redeemed may be
with more or less than the original cost.

The  illustration  has not  been  adjusted  for  state  or  federal  income  tax
liability,  10% federal penalty tax for withdrawals  prior to age 59 1/2, or any
applicable  state premium taxes;  values would be lower if such  adjustments had
been made.

This illustration may illustrate adjusted historical performance for one or more
investment   options.  If  more  than  one  investment  option  is  illustrated,
performance  may be shown as aggregate  performance  for all investment  options
selected.  In  addition,  if you elect to  illustrate  more than one  investment
option and to  hypothetically  allocate more money to one investment option than
to other investment options (for example, 50% to one investment option, 30% to a
second investment option, and 20% to a third investment option), performance may
be shown as weighted aggregate performance.

The "fixed" payout option  illustration is not based upon any sort of historical
performance, but rather is based upon fixed payout factors that are in effect on
the date of the  illustration.  These factors can change,  up until the date you
annuitize your contract.

Variable  Payout  Annuity-  Variable  Annuity  payouts  depend on a  variety  of
factors,  including  the amount  annuitized,  annuity  payout  option  selected,
assumed  investment  rate  (AIR),  and will  vary  with the  performance  of the
invesment option(s) selected.  The variable income can increase or decrease from
the initial  monthly  payment and no minimum dollar amount of variable income is
guaranteed.  Actual  performance  may be more or less than that reflected in the
hypothetical  rates of return and will depend on a number of factors,  including
the  choice  of  variable  investment  options.  The  AIR was  selected  by your
registered  representative.  The 3% AIR payments start at a lower level than the
5% or 7% AIR,  with the  potential  for more rapid  increase in payments  during
later years.  Conversely  if a 7% AIR is chosen there is a potential  for a more
rapid decrease in payments  during the later years.  The 7% AIR is not available
in the states of Oregon,  Texas and New Jersey.  The value of a variable annuity
will fluctuate,  based on the performance of the underlying  investment options,
and the investor may experience a gain or loss.  Actual  performance may be more
or less  than that  shown on this  illustration  and will  depend on a number of
factors,  including the choice of variable  investment  options.  In some cases,
"variable"  payouts will be shown based upon some assumed  fixed rate of return.
This type of  illustration  is used to depict the interplay  between the rate of
return, the AIR, and the increasing and decreasing annuity payouts.  In general,
if the assumed rate is higher that the AIR,  annuity payments  increase.  If the
assumed rate is lower than the AIR,  annuity  payments  decrease.  If "variable"
payouts  are shown  using an assumed  fixed rate of return,  this rate of return
will be an  amount  not in  excess  of 12% and a 0%  return  will also be shown.
Please see important disclosures on accompanying pages. This illustration is not
valid without all pages. 9/10/01

                                                              Page x of y
                                                                   L30196
VIP-046 (04/2002)                                            State of Issue:



<PAGE>


                                                                             A-2
Fixed Payout  Annuity-  Fixed  payments will depend on a variety of factors,
including  the amount  annuitized,  payout  factor  rates when the  contract  is
annuitized,  date of birth,  and annuity payout option  selected.  Fixed Annuity
payouts, once commenced, will not vary.

Costs and Expenses: The Contract has insurance features and investment features,
and there are costs  related  to each.  Allianz  Life  deducts a  mortality  and
expense risk charge that is equal,  on an annual basis,  to 1.25% of the average
daily value of the  contract  allocated  to an  investment  option.  This charge
compensates   for  the  insurance   benefits   provided  by  the  contract.   An
Administrative  Expense Charge equal, on an annual basis, to .15% of the average
daily value of the contract allocated to an investment option is charged for all
the expenses associated with the administration of the contract. If you withdraw
money out of the  Contract,  Allianz  Life may  assess a  commutation  fee.  The
commutation  fee starts at 5% of the amount taken in the first Contract year and
declines to 1% in contract year 6 and thereafter. After the first contract year,
one withdrawal  from the contract is allowed for Life Annuity with 5, 10, 15, or
20 Year Payments  Guaranteed and Joint and Last Survivor Annuity with 5, 10, 15,
or 20 Year Payments Guaranteed. A withdrawal is allowed once each year beginning
in the first year for the Specified Period Certain Annuity. There are also daily
investment  option charges that currently range, on an annual basis,  from 0.57%
to 1.81% of the average daily value of the investment option, depending upon the
investment   option.   Some  states  and  other   governmental   entities  (e.g.
municipalities)  charge premium taxes or similar taxes that are not reflected in
the  illustration.  Please refer to the prospectus for details regarding premium
taxes.

Important Considerations: Past performance is not a guarantee of future results.
Investment  returns and principal value will fluctuate with market conditions so
that units,  when  redeemed  may be worth more or less than the  original  cost.
Product and features may not be available in all states.  All product guarantees
are based on the claims  paying  ability of Allianz  Life  Insurance  Company of
North America.

High yield  securities  inherently have a high degree of market risk in addition
to credit risk and potential illiquidity. Index investment options seek to match
the performance of specified  market indexes.  Investors  cannot invest directly
into indexes.  Money  invested in a specific  sector or industry is subject to a
higher  degree of risk than money that is  diversified.  Small cap stocks may be
more  volatile  than  large  cap  or  more  established  companies'  securities.
International  investing involves some risks not present with U.S.  investments,
such as currency  fluctuation  and  political  volatility.  An investment in the
Money  Market fund is neither  insured nor  guaranteed  by the FDIC or any other
governmental agency. Although the fund seeks to preserve your $1.00 per unit, it
is possible to lose money in the fund.

USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate,  USAllianz Investor Services, LLC, 5701 Golden
Hills  Drive,   Minneapolis,   MN   55416-1297.   Member   NASD.   800-542-5427.
www.usallianz.com.  For more  complete  information  about  USAllianz  Valuemark
Income Plus,  including fees and expenses,  send for a prospectus from USAllianz
Investor Services, LLC.

Past performance is not a guarantee of future results.

The first Annuity Payment is assumed paid 30 days after the Purchase Payment
Date.

Please  see important disclosures   on accompanying  pages.

This illustration is not  valid  without all pages.      9/10/01

                                   Page x of y                            L30196
VIP-046 (04/2002)                                                State of Issue:



<PAGE>
<TABLE>
<CAPTION>



                                                                            A-3
                       USAllianz Valuemark(R) Income Plus

Prepared For:                  Purchase Payment Information
-------------                  ----------------------------
John Doe, Age 45               Purchase Payment Date:             07/20/2001
Mary Doe, Age 50               Purchase Payment Amount:  $500,000.00



                               Hypothetical Variable & Fixed Payout Illustration

Cost Basis:                         $xxx,xxx.xx
Fixed Payout Allocation:            50%
Variable Payout Allocation:         50%
Payout Option:                      Life Annuity
Assumed Investment Rate:   3% (3, 5 or 7%)

**Note to programmer......have subtotals every 10 years.
<S>     <C>     <C>        <C>          <C>            <C>          <C>               <C>            <C>                 <C>


   ----------- -------- ------------- --------------- ------------- -------------- ---------------- --------------- ----------------
    Year        Payout     Variable       First         First
                 Age       Payout Rate   (modal)      (modal)       Total           Withdrawals      Exclusion      Taxable
                           of Return     Variable      Fixed        Payout                           Amount         Amount
                                          Payout       Payout       Amount
   ----------- -------- ------------- --------------- ------------- -------------- ---------------- --------------- ----------------
</TABLE>




This  hypothetical  is based on the selected gross rate of return and calculates
the  annuity  payments.  Hypothetical  gross rate of return does not include any
expenses  and  charges.  However,  all annuity  payments  reflect  the  contract
maintenance  charge,  net rate of return,  which  takes into  consideration  the
applicable  M&E  charge,  administration  charge and  average  portfolio  fee of
..xxxx%.

This  hypothetical  illustration  is for  illustrative  purposes  only and is no
guarantee of return or future performance.


The  modal  payout  column  represents  the  first  payment  based on the  modal
selected,  either  monthly,   quarterly,   semi-annually,or  annual.  Subsequent
payments will increase or decrease based on a variety of factors, to include the
annuitized amount, payout option selected, AIR rate of return.



An  illustration  showing a hypothetical 0% gross rate of return is contained on
the following page.

Please see important disclosures on accompanying pages. This illustration is not
valid without all pages. 9/10/01

                                   Page x of y
                                                                 L30196
VIP-046 (04/2002)                                                State of Issue:



<PAGE>
<TABLE>
<CAPTION>


                                                                             A-4
                       USAllianz Valuemark(R) Income Plus

Prepared For:              Purchase Payment Information
-------------              ----------------------------
John Doe, Age 45           Purchase Payment Date:     07/20/2001
Mary Doe, Age 50           Purchase Payment Amount:  $500,000.00



                Hypothetical Variable & Fixed Payout Illustration

Cost Basis:                         $xxx,xxx.xx
Fixed Payout Allocation:            50%
Variable Payout Allocation:         50%
Payout Option:                      Life Annuity
Assumed Investment Rate:   3% (3, 5 or 7%)

**Note to programmer......have subtotals every 10 years.

Gross Rate of Return 0.00%
--------------------------------------------------------------------------------

      <C>         <C>       <C>            <C>           <C>    <C>     <C>              <C>            <C>                <C>
   ----------- -------- ------------- --------------- ------------- -------------- ---------------- --------------- ----------------
                                          First          First
        Year     Payout     Variable     (modal)        (modal)     Total Payout     Withdrawals      Exclusion     Taxable Amount
   ----------    Age    Payout Rate      Variable        Fixed         Amount                           Amount
                         of Return       Payout         Payout
</TABLE>




This  hypothetical  is based on the selected gross rate of return and calculates
the  annuity  payments.  Hypothetical  gross rate of return does not include any
expenses  and  charges.  However,  all annuity  payments  reflect  the  contract
maintenance  charge,  net rate of return,  which  takes into  consideration  the
applicable  M&E  charge,  administration  charge and  average  portfolio  fee of
..xxxx%.

This  hypothetical  illustration  is for  illustrative  purposes  only and is no
guarantee of return or future performance.


The  modal  payout  column  represents  the  first  payment  based on the  modal
selected,  either  monthly,   quarterly,   semi-annually,or  annual.  Subsequent
payments will increase or decrease based on a variety of factors, to include the
annuitized amount, payout option selected, AIR rate of return.



Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:



<PAGE>



                                                                             A-5
                              IMPORTANT DISCLOSURES
                    Hypothetical Variable Payout Illustration



This  illustration  depicts  how a payment  option may work when you  purchase a
Valuemark Income Plus immediate  variable  annuity.  This  illustration is not a
contract,  and it is not a  representation  or guarantee of future returns or of
any specific payout amount.

You may elect to receive your  Annuity  Payments as a variable  payout,  a fixed
payout,  or a  combination  of  both.  If you  choose  to have  any part of your
payments come from the Variable  Investment  Options,  the dollar amount of your
payments may go up or down based on the performance of the investment options.

You can elect to have illustrated either a "variable" payout option or a "fixed"
payout option, or, you may elect to receive both a variable payout  illustration
and a fixed payout  illustration.  The "variable" payout option  illustration is
based upon actual historical  performance of one or more investment options over
the specified period, as adjusted for all applicable  investment option expenses
and applicable  contract expenses.  The principal purpose of the variable payout
illustration is to demonstrate how the performance of the underlying  investment
options  could affect  contract  values and payout  amounts when the contract is
annuitized.  Additionally, you can select a hypothetical return (maximum of 12%)
to  illustrate  the effect of varying  returns on the payout  option and assumed
investment  return (AIR) you have  selected.  Investment  returns and  principal
value will fluctuate with market  conditions so that units, when redeemed may be
with more or less than the original cost.

The  illustration  has not  been  adjusted  for  state  or  federal  income  tax
liability,  10% federal penalty tax for withdrawals  prior to age 59 1/2, or any
applicable  state premium taxes;  values would be lower if such  adjustments had
been made.

This illustration may illustrate adjusted historical performance for one or more
investment   options.  If  more  than  one  investment  option  is  illustrated,
performance  may be shown as aggregate  performance  for all investment  options
selected.  In  addition,  if you elect to  illustrate  more than one  investment
option and to  hypothetically  allocate more money to one investment option than
to other investment options (for example, 50% to one investment option, 30% to a
second investment option, and 20% to a third investment option), performance may
be shown as weighted aggregate performance.

Variable  Payout  Annuity-  Variable  Annuity  payouts  depend on a  variety  of
factors,  including  the amount  annuitized,  annuity  payout  option  selected,
assumed  investment  rate  (AIR),  and will  vary  with the  performance  of the
invesment option(s) selected.  The variable income can increase or decrease from
the initial  monthly  payment and no minimum dollar amount of variable income is
guaranteed.  Actual  performance  may be more or less than that reflected in the
hypothetical  rates of return and will depend on a number of factors,  including
the choice of variable investment options.
The AIR was  selected by your  registered  representative.  The 3% AIR  payments
start at a lower level than the 5% or 7% AIR,  with the potential for more rapid
increase in payments during later years.  Conversely if a 7% AIR is chosen there
is a potential for a more rapid decrease in payments during the later years. The
7% AIR is not available in the states of Oregon, Texas and New Jersey. The value
of a variable annuity will fluctuate, based on the performance of the underlying
investment  options,  and the  investor may  experience  a gain or loss.  Actual
performance  may be more or less than that shown on this  illustration  and will
depend on a number of  factors,  including  the  choice of  variable  investment
options.

Please see important disclosures on accompanying pages. This illustration is not
valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:
                                                                            A-6

In some cases,  "variable"  payouts will be shown based upon some assumed  fixed
rate of  return.  This  type of  illustration  is used to depict  the  interplay
between the rate of return,  the AIR, and the increasing and decreasing  annuity
payouts.  In  general,  if the  assumed  rate is  higher  that the AIR,  annuity
payments  increase.  If the assumed rate is lower than the AIR, annuity payments
decrease. If "variable" payouts are shown using an assumed fixed rate of return,
this rate of return  will be an amount not in excess of 12% and a 0% return will
also be shown.

Standardized  Average Annual Return: The historical variable payout illustration
that  is  based  upon  adjusted   historical   performance   is  accompanied  by
Standardized  Average Annual Return for each  investment  option depicted in the
illustration.  Standardized  return is calculated  using  uniform  guidelines as
mandated by the Securities and Exchange Commission.  Standardized return figures
assume a one-time  lump sum purchase  payment,  and do not reflect the effect of
taxation.  Standardized  return is shown  for the most  recent 1, 5, and 10 year
periods,  or from the inception  date of the  investment  option,  if later.  In
contrast,  illustration  material may depict  returns from the inception date of
the  applicable  investment  option,  if earlier than the inception  date of the
investment  option.  Standardized  return  includes the effect of all investment
option  expenses  and all  contract  expenses,  except the  commutation  fee. If
withdrawals  are taken  from the  contract  the  performance  will be lower as a
result of the  commutation  fee. If contract  expenses vary depending upon which
features are selected,  standardized  return will reflect the highest  potential
expenses.  In contrast,  an  illustration  may reflect  only  certain  expenses.
Standardized  return is computed as of the most recent calendar  quarter.

Costs and Expenses: The Contract has insurance features and investment features,
and there are costs  related  to each.  Allianz  Life  deducts a  mortality  and
expense risk charge that is equal,  on an annual basis,  to 1.25% of the average
daily value of the  contract  allocated  to an  investment  option.  This charge
compensates   for  the  insurance   benefits   provided  by  the  contract.   An
Administrative  Expense Charge equal, on an annual basis, to .15% of the average
daily value of the contract allocated to an investment option is charged for all
the expenses associated with the administration of the contract. If you withdraw
money out of the  Contract,  Allianz  Life may  assess a  commutation  fee.  The
commutation  fee starts at 5% of the amount taken in the first Contract year and
declines to 1% in contract year 6 and thereafter. After the first contract year,
one withdrawal  from the contract is allowed for Life Annuity with 5, 10, 15, or
20 Year Payments  Guaranteed and Joint and Last Survivor Annuity with 5, 10, 15,
or 20 Year Payments Guaranteed. A withdrawal is allowed once each year beginning
in the first year for the Specified Period Certain Annuity. There are also daily
investment  option charges that currently range, on an annual basis,  from 0.57%
to 1.81% of the average daily value of the investment option, depending upon the
investment   option.   Some  states  and  other   governmental   entities  (e.g.
municipalities)  charge premium taxes or similar taxes that are not reflected in
the  illustration.  Please refer to the prospectus for details regarding premium
taxes.

Important Considerations: Past performance is not a guarantee of future results.
Investment  returns and principal value will fluctuate with market conditions so
that units,  when  redeemed  may be worth more or less than the  original  cost.
Product and features may not be available in all states.  All product guarantees
are based on the claims  paying  ability of Allianz  Life  Insurance  Company of
North America.

High yield  securities  inherently have a high degree of market risk in addition
to credit risk and potential illiquidity. Index investment options seek to match
the performance of specified  market indexes.  Investors  cannot invest directly
into indexes.  Money  invested in a specific  sector or industry is subject to a
higher  degree of risk than money that is  diversified.  Small cap stocks may be
more  volatile  than  large  cap  or  more  established  companies'  securities.
International  investing involves some risks not present with U.S.  investments,
such as currency  fluctuation  and  political  volatility.  An investment in the
Money  Market fund is neither  insured nor  guaranteed  by the FDIC or any other
governmental agency. Although the fund seeks to preserve your $1.00 per unit, it
is possible to lose money in the fund.


<PAGE>


For more complete  information about USAllianz Valuemark Income Plus,  including
fees and expenses,  send for a prospectus from USAllianz Investor Services, LLC.
USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate,  USAllianz Investor Services, LLC, 5701 Golden
Hills  Drive,   Minneapolis,   MN   55416-1297.   Member   NASD.   800-542-5427.
www.usallianz.com.

Please see important disclosures on accompanying pages. This illustration is not
valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:
                                                                             A-7
                       Standardized Average Annual Return
                          And Adjusted Portfolio Return

As of  [12/31/2000],  a one time purchase  payment of $1,000 if withdrawn  would
have generated the following  Standardized  Average  Annual Return,  taking into
consideration all contract charges but without regard to taxes:
<TABLE>
<CAPTION>
<S>                      <C>                            <C>            <C>        <C>           <C>
                                                         Since          Date of     Since        Date of
                         Portfolio Inception           Portfolio       Portfolio   Sub-Account  Sub-Account
Investment Option  1 Year      5 Year     10 Years     Inception       Inception   Inception    Inception
                   (24.76%)     7.29%                   10.00%         4/19/1995     35.00%      1/22/2001

</TABLE>

ABC Fund

Standardized  average annual return  figures are  calculated  from the inception
date of the  applicable  Allianz Life  investment  option.  Figures  reflect the
deduction  of all  contract and  Sub-Account  charges.  Where there is a varying
charge depending upon which features  selected,  the highest potential charge is
shown.  Sub-Account  returns  prior to  investment  option  inception  have been
adjusted for contract expenses.



Past performance is not a guarantee of future results.

The first Annuity Payment is assumed paid 30 days after the Purchase Payment
Date.

Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                         L30196
VIP-046 (04/2002)                                                State of Issue:


<PAGE>


<TABLE>
<CAPTION>

                                                                             A-8
                       USAllianz Valuemark(R) Income Plus

Prepared For:                    Purchase Payment Information
-------------                    ----------------------------
John Doe, Age 45                 Purchase Payment Date:             07/20/2001
Mary Doe, Age 50                 Purchase Payment Amount:  $500,000.00



                     Historical Variable Payout Illustration

Cost Basis:                         $xxx,xxx.xx
Purchase Payment Allocation:        100% Variable
Payout Option:                      Life Annuity
Assumed Investment Rate:   3% (3, 5 or 7%)



  Investment Option                    Allocation    Investment Option                Allocation
  -----------------                    ----------    -----------------                ----------
  Alger American Growth Fund              90%     USAllianz Strategic Growth Fund         10%

<S>     <C>            <C>              <C>                  <C>                   <C>             <C>                   <C>


                                                             First
        Year           Rate             Payout              {modal}                               Exclusion Amount    Taxable Amount
                      of return           Age                 Payout             Withdrawals
 ------------------- ------------ ------------------- -------------------- -------------------- --------------------- --------------


</TABLE>


This illustration is based upon historical  returns during the period indicated.
Past  performance is not a guarantee of future results.  Investment  returns and
principal  value will  fluctuate  with market  conditions  so that  units,  when
redeemed  may be worth more or less than the  original  cost.  The  Standardized
Average  Annual  Return in the  Important  Disclosures  depicts  the  historical
Investment Option rate of return.


The  modal  payout  column  represents  the  first  payment  based on the  modal
selected,  either  monthly,   quarterly,   semi-annually,or  annual.  Subsequent
payments will increase or decrease based on a variety of factors, to include the
annuitized amount, payout option selected, AIR rate of return.



Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:


<PAGE>




                                                                             A-9
                              IMPORTANT DISCLOSURES
                    Hypothetical Variable Payout Illustration


This  illustration  depicts  how a payment  option may work when you  purchase a
Valuemark Income Plus immediate  variable  annuity.  This  illustration is not a
contract,  and it is not a  representation  or guarantee of future returns or of
any specific payout amount.

You may elect to receive your  Annuity  Payments as a variable  payout,  a fixed
payout,  or a  combination  of  both.  If you  choose  to have  any part of your
payments come from the Variable  Investment  Options,  the dollar amount of your
payments may go up or down based on the performance of the investment options.

You can elect to have illustrated either a "variable" payout option or a "fixed"
payout option, or, you may elect to receive both a variable payout  illustration
and a fixed payout  illustration.  The "variable" payout option  illustration is
based upon actual historical  performance of one or more investment options over
the specified period, as adjusted for all applicable  investment option expenses
and applicable  contract expenses.  The principal purpose of the variable payout
illustration is to demonstrate how the performance of the underlying  investment
options  could affect  contract  values and payout  amounts when the contract is
annuitized.  Additionally, you can select a hypothetical return (maximum of 12%)
to  illustrate  the effect of varying  returns on the payout  option and assumed
investment  return (AIR) you have  selected.  Investment  returns and  principal
value will fluctuate with market  conditions so that units, when redeemed may be
with more or less than the original cost.

The  illustration  has not  been  adjusted  for  state  or  federal  income  tax
liability,  10% federal penalty tax for withdrawals  prior to age 59 1/2, or any
applicable  state premium taxes;  values would be lower if such  adjustments had
been made.

This illustration may illustrate adjusted historical performance for one or more
investment   options.  If  more  than  one  investment  option  is  illustrated,
performance  may be shown as aggregate  performance  for all investment  options
selected.  In  addition,  if you elect to  illustrate  more than one  investment
option and to  hypothetically  allocate more money to one investment option than
to other investment options (for example, 50% to one investment option, 30% to a
second investment option, and 20% to a third investment option), performance may
be shown as weighted aggregate performance.

Variable  Payout  Annuity-  Variable  Annuity  payouts  depend on a  variety  of
factors,  including  the amount  annuitized,  annuity  payout  option  selected,
assumed  investment  rate  (AIR),  and will  vary  with the  performance  of the
investment option(s) selected. The variable income can increase or decrease from
the initial  monthly  payment and no minimum dollar amount of variable income is
guaranteed.  Actual  performance  may be more or less than that reflected in the
hypothetical  rates of return and will depend on a number of factors,  including
the choice of variable investment options.

The AIR was  selected by your  registered  representative.  The 3% AIR  payments
start at a lower level than the 5% or 7% AIR,  with the potential for more rapid
increase in payments during later years.  Conversely if a 7% AIR is chosen there
is a potential for a more rapid decrease in payments during the later years. The
7% AIR is not available in the states of Oregon, Texas and New Jersey.



<PAGE>




                                                                            A-10

The value of a variable annuity will fluctuate,  based on the performance of the
underlying  investment options,  and the investor may experience a gain or loss.
Actual  performance may be more or less than that shown on this illustration and
will depend on a number of factors,  including the choice of variable investment
options.

In some cases,  "variable"  payouts will be shown based upon some assumed  fixed
rate of  return.  This  type of  illustration  is used to depict  the  interplay
between the rate of return,  the AIR, and the increasing and decreasing  annuity
payouts.  In  general,  if the  assumed  rate is  higher  that the AIR,  annuity
payments  increase.  If the assumed rate is lower than the AIR, annuity payments
decrease. If "variable" payouts are shown using an assumed fixed rate of return,
this rate of return  will be an amount not in excess of 12% and a 0% return will
also be shown.

Costs and Expenses: The Contract has insurance features and investment features,
and there are costs  related  to each.  Allianz  Life  deducts a  mortality  and
expense risk charge that is equal,  on an annual basis,  to 1.25% of the average
daily value of the  contract  allocated  to an  investment  option.  This charge
compensates   for  the  insurance   benefits   provided  by  the  contract.   An
Administrative  Expense Charge equal, on an annual basis, to .15% of the average
daily value of the contract allocated to an investment option is charged for all
the expenses associated with the administration of the contract. If you withdraw
money out of the  Contract,  Allianz  Life may  assess a  commutation  fee.  The
commutation  fee starts at 5% of the amount taken in the first Contract year and
declines to 1% in contract year 6 and thereafter. After the first contract year,
one withdrawal  from the contract is allowed for Life Annuity with 5, 10, 15, or
20 Year Payments  Guaranteed and Joint and Last Survivor Annuity with 5, 10, 15,
or 20 Year Payments Guaranteed. A withdrawal is allowed once each year beginning
in the first year for the Specified Period Certain Annuity. There are also daily
investment  option charges that currently range, on an annual basis,  from 0.57%
to 1.81% of the average daily value of the investment option, depending upon the
investment   option.   Some  states  and  other   governmental   entities  (e.g.
municipalities)  charge premium taxes or similar taxes that are not reflected in
the  illustration.  Please refer to the prospectus for details regarding premium
taxes. Important  Considerations:  Past performance is not a guarantee of future
results.  Investment  returns and  principal  value will  fluctuate  with market
conditions  so that  units,  when  redeemed  may be worth  more or less than the
original  cost.  Product and features  may not be  available in all states.  All
product  guarantees  are based on the claims  paying  ability  of  Allianz  Life
Insurance Company of North America.

High yield  securities  inherently have a high degree of market risk in addition
to credit risk and potential illiquidity. Index investment options seek to match
the performance of specified  market indexes.  Investors  cannot invest directly
into indexes.  Money  invested in a specific  sector or industry is subject to a
higher  degree of risk than money that is  diversified.  Small cap stocks may be
more  volatile  than  large  cap  or  more  established  companies'  securities.
International  investing involves some risks not present with U.S.  investments,
such as currency  fluctuation  and  political  volatility.  An investment in the
Money  Market fund is neither  insured nor  guaranteed  by the FDIC or any other
governmental agency. Although the fund seeks to preserve your $1.00 per unit, it
is possible to lose money in the fund.
For more complete  information about USAllianz Valuemark Income Plus,  including
fees and expenses,  send for a prospectus from USAllianz Investor Services, LLC.
USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate,  USAllianz Investor Services, LLC, 5701 Golden
Hills  Drive,   Minneapolis,   MN   55416-1297.   Member   NASD.   800-542-5427.
www.usallianz.com.

Past performance is not a guarantee of future results.

The first  Annuity  Payment is assumed paid 30 days after the  Purchase  Payment
Date.






Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:
<PAGE>

<TABLE>
<CAPTION>
                                                                            A-11
                       USAllianz Valuemark(R) Income Plus

Prepared For:                         Purchase Payment Information
-------------                         ----------------------------
John Doe, Age 45                      Purchase Payment Date:      07/20/2001
Mary Doe, Age 50                      Purchase Payment Amount:  $500,000.00



Hypothetical Variable Payout Illustration

Cost Basis:                         $xxx,xxx.xx
Purchase Payment Allocation:        100% Variable
Payout Option:                      Life Annuity
Assumed Investment Rate:   3% (3, 5 or 7%)
**Note to programmer......have subtotals every 10 years.

<S>    <C>          <C>              <C>              <C>               <C>            <C>                <C>

                                                        First
         Year        Payout Age      Variable          (modal)                         Exclusion Amount  Taxable Amount
                                     Payout Rate        Payout          Withdrawals
                                    of Return
   ---------------- ------------ ---------------- ------------------- ---------------- ----------------- ----------------
</TABLE>

This  hypothetical  is based on the selected gross rate of return and calculates
the  annuity  payments.  Hypothetical  gross rate of return does not include any
expenses  and  charges.  However,  all annuity  payments  reflect  the  contract
maintenance  charge,  net rate of return,  which  takes into  consideration  the
applicable  M&E  charge,  administration  charge and  average  portfolio  fee of
..xxxx%.

This  hypothetical  illustration  is for  illustrative  purposes  only and is no
guarantee of return or future performance.

The  modal  payout  column  represents  the  first  payment  based on the  modal
selected,  either  monthly,   quarterly,   semi-annually,or  annual.  Subsequent
payments will increase or decrease based on a variety of factors, to include the
annuitized amount, payout option selected, AIR rate of return.


An  illustration  showing a hypothetical 0% gross rate of return is contained on
the following page.





Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:
<PAGE>



<TABLE>
<CAPTION>
                                                                            A-12
                       USAllianz Valuemark(R) Income Plus

Prepared For:                           Purchase Payment Information
-------------                           ----------------------------
John Doe, Age 45                        Purchase Payment Date:        07/20/2001
Mary Doe, Age 50                        Purchase Payment Amount:  $500,000.00



                    Hypothetical Variable Payout Illustration

Cost Basis:                         $xxx,xxx.xx
Purchase Payment Allocation:        100% Variable
Payout Option:                      Life Annuity
Assumed Investment Rate:   3% (3, 5 or 7%)
            **Note to programmer......have subtotals every 10 years.
                           Gross Rate of Return 0.00%
<S>     <C>         <C>             <C>               <C>              <C>             <C>               <C>


   ---------------- ------------ ---------------- ------------------- ---------------- ----------------- ----------------
                                                        First
         Year        Payout Age      Variable           (modal)                         Exclusion Amount  Taxable Amount
                                   Payout Rate          Payout          Withdrawals
</TABLE>
                                    of Return


This  hypothetical  is based on the selected gross rate of return and calculates
the  annuity  payments.  Hypothetical  gross rate of return does not include any
expenses  and  charges.  However,  all annuity  payments  reflect  the  contract
maintenance  charge,  net rate of return,  which  takes into  consideration  the
applicable  M&E  charge,  administration  charge and  average  portfolio  fee of
..xxxx%.

This  hypothetical  illustration  is for  illustrative  purposes  only and is no
guarantee of return or future performance.


The  modal  payout  column  represents  the  first  payment  based on the  modal
selected,  either  monthly,   quarterly,   semi-annually,or  annual.  Subsequent
payments will increase or decrease based on a variety of factors, to include the
annuitized amount, payout option selected, AIR rate of return.



Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:

<PAGE>


                                                                           A-13
                              IMPORTANT DISCLOSURES
             Hypothetical Variable and/or Fixed Payout Illustration

This  illustration  depicts  how a payment  option may work when you  purchase a
Valuemark Income Plus immediate  variable  annuity.  This  illustration is not a
contract,  and it is not a  representation  or guarantee of future returns or of
any specific payout amount.

You may elect to receive your  Annuity  Payments as a variable  payout,  a fixed
payout,  or a  combination  of  both.  If you  choose  to have  any part of your
payments come from the Variable  Investment  Options,  the dollar amount of your
payments may go up or down based on the performance of the investment options.

You can elect to have illustrated either a "variable" payout option or a "fixed"
payout option, or, you may elect to receive both a variable payout  illustration
and a fixed payout  illustration.  The "variable" payout option  illustration is
based upon actual historical  performance of one or more investment options over
the specified period, as adjusted for all applicable  investment option expenses
and applicable  contract expenses.  The principal purpose of the variable payout
illustration is to demonstrate how the performance of the underlying  investment
options  could affect  contract  values and payout  amounts when the contract is
annuitized.  Additionally, you can select a hypothetical return (maximum of 12%)
to  illustrate  the effect of varying  returns on the payout  option and assumed
investment  return (AIR) you have  selected.  Investment  returns and  principal
value will fluctuate with market  conditions so that units, when redeemed may be
with more or less than the original cost.

The  illustration  has not  been  adjusted  for  state  or  federal  income  tax
liability,  10% federal penalty tax for withdrawals  prior to age 59 1/2, or any
applicable  state premium taxes;  values would be lower if such  adjustments had
been made.

This illustration may illustrate adjusted historical performance for one or more
investment   options.  If  more  than  one  investment  option  is  illustrated,
performance  may be shown as aggregate  performance  for all investment  options
selected.  In  addition,  if you elect to  illustrate  more than one  investment
option and to  hypothetically  allocate more money to one investment option than
to other investment options (for example, 50% to one investment option, 30% to a
second investment option, and 20% to a third investment option), performance may
be shown as weighted aggregate performance.

The "fixed" payout option  illustration is not based upon any sort of historical
performance, but rather is based upon fixed payout factors that are in effect on
the date of the  illustration.  These factors can change,  up until the date you
annuitize your contract.

Variable  Payout  Annuity-  Variable  Annuity  payouts  depend on a  variety  of
factors,  including  the amount  annuitized,  annuity  payout  option  selected,
assumed  investment  rate  (AIR),  and will  vary  with the  performance  of the
invesment option(s) selected.  The variable income can increase or decrease from
the initial  monthly  payment and no minimum dollar amount of variable income is
guaranteed.  Actual  performance  may be more or less than that reflected in the
hypothetical  rates of return and will depend on a number of factors,  including
the choice of variable investment options.

The AIR was  selected by your  registered  representative.  The 3% AIR  payments
start at a lower level than the 5% or 7% AIR,  with the potential for more rapid
increase in payments during later years.  Conversely if a 7% AIR is chosen there
is a potential for a more rapid decrease in payments during the later years. The
7% AIR is not available in the states of Oregon, Texas and New Jersey.



<PAGE>
                                                                            A-14
The value of a variable annuity will fluctuate, based on the performance of
the  underlying  investment  options,  and the investor may experience a gain or
loss.  Actual  performance  may  be  more  or  less  than  that  shown  on  this
illustration  and will  depend on a number of factors,  including  the choice of
variable investment options.
In some cases,  "variable"  payouts will be shown based upon some assumed  fixed
rate of  return.  This  type of  illustration  is used to depict  the  interplay
between the rate of return,  the AIR, and the increasing and decreasing  annuity
payouts.  In  general,  if the  assumed  rate is  higher  that the AIR,  annuity
payments  increase.  If the assumed rate is lower than the AIR, annuity payments
decrease. If "variable" payouts are shown using an assumed fixed rate of return,
this rate of return  will be an amount not in excess of 12% and a 0% return will
also be shown.

Standardized  Average Annual Return: The historical variable payout illustration
that  is  based  upon  adjusted   historical   performance   is  accompanied  by
Standardized  Average Annual Return for each  investment  option depicted in the
illustration.  Standardized  return is calculated  using  uniform  guidelines as
mandated by the Securities and Exchange Commission.  Standardized return figures
assume a one-time  lump sum purchase  payment,  and do not reflect the effect of
taxation.  Standardized  return is shown  for the most  recent 1, 5, and 10 year
periods,  or from the inception  date of the  investment  option,  if later.  In
contrast,  illustration  material may depict  returns from the inception date of
the  applicable  investment  option,  if earlier than the inception  date of the
investment  option.  Standardized  return  includes the effect of all investment
option  expenses  and all  contract  expenses,  except the  commutation  fee. If
withdrawals  are taken  from the  contract  the  performance  will be lower as a
result of the  commutation  fee. If contract  expenses vary depending upon which
features are selected,  standardized  return will reflect the highest  potential
expenses.  In contrast,  an  illustration  may reflect  only  certain  expenses.
Standardized return is computed as of the most recent calendar quarter.

Fixed  Payout  Annuity-  Fixed  payments  will  depend on a variety of  factors,
including  the amount  annuitized,  payout  factor  rates when the  contract  is
annuitized,  date of birth,  and annuity payout option  selected.  Fixed Annuity
payouts, once commenced, will not vary.

Costs and Expenses: The Contract has insurance features and investment features,
and there are costs  related  to each.  Allianz  Life  deducts a  mortality  and
expense risk charge that is equal,  on an annual basis,  to 1.25% of the average
daily value of the  contract  allocated  to an  investment  option.  This charge
compensates   for  the  insurance   benefits   provided  by  the  contract.   An
Administrative  Expense Charge equal, on an annual basis, to .15% of the average
daily value of the contract allocated to an investment option is charged for all
the expenses associated with the administration of the contract. If you withdraw
money out of the  Contract,  Allianz  Life may  assess a  commutation  fee.  The
commutation  fee starts at 5% of the amount taken in the first Contract year and
declines to 1% in contract year 6 and thereafter. After the first contract year,
one withdrawal  from the contract is allowed for Life Annuity with 5, 10, 15, or
20 Year Payments  Guaranteed and Joint and Last Survivor Annuity with 5, 10, 15,
or 20 Year Payments Guaranteed. A withdrawal is allowed once each year beginning
in the first year for the Specified Period Certain Annuity. There are also daily
investment  option charges that currently range, on an annual basis,  from 0.57%
to 1.81% of the average daily value of the investment option, depending upon the
investment   option.   Some  states  and  other   governmental   entities  (e.g.
municipalities)  charge premium taxes or similar taxes that are not reflected in
the  illustration.  Please refer to the prospectus for details regarding premium
taxes.
Important Considerations: Past performance is not a guarantee of future results.
Investment  returns and principal value will fluctuate with market conditions so
that units,  when  redeemed  may be worth more or less than the  original  cost.
Product and features may not be available in all states.  All product guarantees
are based on the claims  paying  ability of Allianz  Life  Insurance  Company of
North America.
High yield  securities  inherently have a high degree of market risk in addition
to credit risk and potential illiquidity. Index investment options seek to match
the performance of specified  market indexes.  Investors  cannot invest directly
into indexes.  Money  invested in a specific  sector or industry is subject to a
higher  degree of risk than money that is  diversified.  Small cap stocks may be
more  volatile  than  large  cap  or  more  established  companies'  securities.
International  investing involves some risks not present with U.S.  investments,
such as currency  fluctuation  and  political  volatility.  An investment in the
Money  Market fund is neither  insured nor  guaranteed  by the FDIC or any other
governmental agency. Although the fund seeks to preserve your $1.00 per unit, it
is possible to lose money in the fund.


<PAGE>


For more complete  information about USAllianz Valuemark Income Plus,  including
fees and expenses,  send for a prospectus from USAllianz Investor Services, LLC.
USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate,  USAllianz Investor Services, LLC, 5701 Golden
Hills  Drive,   Minneapolis,   MN   55416-1297.   Member   NASD.   800-542-5427.
www.usallianz.com.  Please see important disclosures on accompanying pages. This
illustration is not valid without all pages. 9/10/01

                                   Page x of y
                                                                         L30196
VIP-046 (04/2002)                                                State of Issue:

<TABLE>
<CAPTION>

                                                                            A-15

                       Standardized Average Annual Return
                          And Adjusted Portfolio Return

As of  [12/31/2000],  a one time purchase  payment of $1,000 if withdrawn  would
have generated the following  Standardized  Average  Annual Return,  taking into
consideration all contract charges but without regard to taxes:
<S>               <C>         <C>                      <C>             <C>         <C>         <C>

                                                        Since          Date of     Since        Date of
                             Portfolio Inception       Portfolio       Portfolio   Sub-Account  Sub-Account
Investment Option  1 Year      5 Year     10 Years     Inception       Inception   Inception    Inception
                   (24.76%)     7.29%                   10.00%         4/19/1995     35.00%      1/22/2001

ABC Fund
</TABLE>

Standardized  average annual return  figures are  calculated  from the inception
date of the  applicable  Allianz Life  investment  option.  Figures  reflect the
deduction  of all  contract and  Sub-Account  charges.  Where there is a varying
charge depending upon which feature  selected,  the highest  potential charge is
shown. Sub-Account returns prior to Sub-Account inception have been adjusted for
contract expenses.



Past performance is not a guarantee of future results.

The first Annuity Payment is assumed paid 30 days after the Purchase Payment
Date.

Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:



<PAGE>



                                                                            A-16
                       USAllianz Valuemark(R) Income Plus

Prepared For:            Purchase Payment Information
-------------            ----------------------------
John Doe, Age 45         Purchase Payment Date:             07/20/2001
Mary Doe, Age 50         Purchase Payment Amount:  $500,000.00


<TABLE>
<CAPTION>

                Historical Variable and Fixed Payout Illustration

Cost Basis:                         $xxx,xxx.xx
Fixed Payout Allocation:            50%
Variable Payout Allocation:         50%
Payout Option:                      Life Annuity
Assumed Investment Rate:   3% (3, 5 or 7%)



  Investment Option                Allocation    Investment Option                   Allocation
  -----------------                ----------    -----------------                   ----------
  Alger American Growth Fund         90%     USAllianz Strategic Growth Fund           10%



**Note to programmer......have subtotals every 10 years.
<S>           <C>        <C>           <C>             <C>         <C>               <C>               <C>
                                                          First
                           Variable      First           (modal)     Total Payout
      Year     Payout   Payout Rate      (modal)         Fixed         Amount                         Exclusion     Taxable Amount
                 Age      of Return      Variable        Payout                      Withdrawals        Amount
                                          Payout
   ----------- -------- ------------- --------------- ------------- -------------- ---------------- --------------- ----------------
</TABLE>



This illustration is based upon historical  returns during the period indicated.
Past  performance is not a guarantee of future results.  Investment  returns and
principal  value will  fluctuate  with market  conditions  so that  units,  when
redeemed  may be worth more or less than the  original  cost.  The  Standardized
Average  Annual  Return in the  Important  Disclosures  depicts  the  historical
Investment Option rate of return.

This  hypothetical  illustration  is for  illustrative  purposes  only and is no
guarantee of return or future performance.


The  modal  payout  column  represents  the  first  payment  based on the  modal
selected,  either  monthly,   quarterly,   semi-annually,or  annual.  Subsequent
payments will increase or decrease based on a variety of factors, to include the
annuitized amount, payout option selected, AIR rate of return.


Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                       L30196
VIP-046 (04/2002)                                                State of Issue:


<PAGE>




                                                                            A-17
                              IMPORTANT DISCLOSURES
                    Hypothetical Variable Payout Illustration


This illustration depicts how a payment option may work when you purchase a
Valuemark Income Plus immediate variable annuity. This illustration is not a
contract, and it is not a representation or guarantee of future returns or of
any specific payout amount.

You may elect to receive your  Annuity  Payments as a variable  payout,  a fixed
payout,  or a  combination  of  both.  If you  choose  to have  any part of your
payments come from the Variable  Investment  Options,  the dollar amount of your
payments may go up or down based on the performance of the investment options.

You can elect to have illustrated either a "variable" payout option or a "fixed"
payout option, or, you may elect to receive both a variable payout  illustration
and a fixed payout  illustration.  The "variable" payout option  illustration is
based upon actual historical  performance of one or more investment options over
the specified period, as adjusted for all applicable  investment option expenses
and applicable  contract expenses.  The principal purpose of the variable payout
illustration is to demonstrate how the performance of the underlying  investment
options  could affect  contract  values and payout  amounts when the contract is
annuitized.  Additionally, you can select a hypothetical return (maximum of 12%)
to  illustrate  the effect of varying  returns on the payout  option and assumed
investment  return (AIR) you have  selected.  Investment  returns and  principal
value will fluctuate with market  conditions so that units, when redeemed may be
with more or less than the original cost.

The  illustration  has not  been  adjusted  for  state  or  federal  income  tax
liability,  10% federal penalty tax for withdrawals  prior to age 59 1/2, or any
applicable  state premium taxes;  values would be lower if such  adjustments had
been made.

This illustration may illustrate adjusted historical performance for one or more
investment   options.  If  more  than  one  investment  option  is  illustrated,
performance  may be shown as aggregate  performance  for all investment  options
selected.  In  addition,  if you elect to  illustrate  more than one  investment
option and to  hypothetically  allocate more money to one investment option than
to other investment options (for example, 50% to one investment option, 30% to a
second investment option, and 20% to a third investment option), performance may
be shown as weighted aggregate performance.

The "fixed" payout option  illustration is not based upon any sort of historical
performance, but rather is based upon fixed payout factors that are in effect on
the date of the  illustration.  These factors can change,  up until the date you
annuitize your contract.


Fixed  Payout  Annuity-  Fixed  payments  will  depend on a variety of  factors,
including  the amount  annuitized,  payout  factor  rates when the  contract  is
annuitized,  date of birth,  and annuity payout option  selected.  Fixed Annuity
payouts, once commenced, will not vary.

Costs and Expenses: The Contract has insurance features and investment features,
and there are costs  related  to each.  Allianz  Life  deducts a  mortality  and
expense risk charge that is equal,  on an annual basis,  to 1.25% of the average
daily value of the  contract  allocated  to an  investment  option.  This charge
compensates   for  the  insurance   benefits   provided  by  the  contract.   An
Administrative  Expense Charge equal, on an annual basis, to .15% of the average
daily value of the contract allocated to an investment option is charged for all
the expenses associated with the administration of the contract. If you withdraw
money out of the  Contract,  Allianz  Life may  assess a  commutation  fee.  The
commutation  fee starts at 5% of the amount taken in the first Contract year and
declines to 1% in contract year 6 and thereafter. After the first contract year,
one withdrawal  from the contract is allowed for Life Annuity with 5, 10, 15, or
20 Year Payments  Guaranteed and Joint and Last Survivor Annuity with 5, 10, 15,
or 20 Year Payments Guaranteed. A withdrawal is allowed once each year beginning
in the first year for the Specified Period Certain Annuity. There are also daily
investment  option charges that currently range, on an annual basis,  from 0.57%
to 1.81% of the average daily value of the investment option, depending upon the
investment   option.   Some  states  and  other   governmental   entities  (e.g.
municipalities)  charge premium taxes or similar taxes that are not reflected in
the  illustration.  Please refer to the prospectus for details regarding premium
taxes.
Important Considerations: Past performance is not a guarantee of future results.
Investment  returns and principal value will fluctuate with market conditions so
that units,  when  redeemed  may be worth more or less than the  original  cost.
Product and features may not be available in all states.  All product guarantees
are based on the claims  paying  ability of Allianz  Life  Insurance  Company of
North America.
High yield  securities  inherently have a high degree of market risk in addition
to credit risk and potential illiquidity. Index investment options seek to match
the performance of specified  market indexes.  Investors  cannot invest directly
into indexes.  Money  invested in a specific  sector or industry is subject to a
higher  degree of risk than money that is  diversified.  Small cap stocks may be
more  volatile  than  large  cap  or  more  established  companies'  securities.
International  investing involves some risks not present with U.S.  investments,
such as currency  fluctuation  and  political  volatility.  An investment in the
Money  Market fund is neither  insured nor  guaranteed  by the FDIC or any other
governmental agency. Although the fund seeks to preserve your $1.00 per unit, it
is possible to lose money in the fund.

For more complete  information about USAllianz Valuemark Income Plus,  including
fees and expenses,  send for a prospectus from USAllianz Investor Services, LLC.
USAllianz products are issued by Allianz Life Insurance Company of North America
and distributed by its affiliate,  USAllianz Investor Services, LLC, 5701 Golden
Hills  Drive,   Minneapolis,   MN   55416-1297.   Member   NASD.   800-542-5427.
www.usallianz.com.

Please see important disclosures on accompanying pages. This illustration is not
     valid without all pages. 9/10/01

                                   Page x of y
                                                                          L30196
VIP-046 (04/2002)                                                State of Issue:


<PAGE>



                                                                          A-18


Prepared For:             Purchase Payment Information
-------------             ----------------------------
John Doe, Age 45          Purchase Payment Date:             07/20/2001
Mary Doe, Age 50          Purchase Payment Amount:  $500,000.00
                          Purchase Payment Allocation:       100% Fixed



                     Hypothetical Fixed Payout Illustration



                              {Modal}          Exclusion         Taxable
 Annuity Option               Payout            Amount           Amount
 -------------------------------------------------------------------------------
Life Annuity
Life Annuity w/Payment Certain 5 years
Life Annuity w/Payment Certain 10 years
Life Annuity w/Payment Certain 15 years
Life Annuity w/Payment Certain 20 years
Refund Life Annuity
Joint and Last Survivor 100%
Joint and Last Survivor 75%
Joint and Last Survivor 50%
Joint and Last Survivor 100% Payments Certain 5 years
Joint and Last Survivor 100% Payments Certain 10 years
Joint and Last Survivor 100% Payments Certain 15 years
Joint and Last Survivor 100% Payments Certain 20 years




This  hypothetical  illustration  is based upon payout factor rates currently in
effect.  These are  subject  to  change,  and may be  higher  or lower  when you
annuitize your contract.


The  modal  payout  column  represents  the  first  payment  based on the  modal
selected,  either  monthly,   quarterly,   semi-annually,or  annual.  Subsequent
payments will increase or decrease based on a variety of factors, to include the
annuitized amount, payout option selected, AIR rate of return.


Please see important disclosures on accompanying pages. This illustration is not
valid without all pages. 9/10/01

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VIP-046 (04/2002)                                                State of Issue: