Exhibit 99.1

FOR IMMEDIATE RELEASE	CONTACT:
August 2, 2006
	Debra J. Richardson, Sr. Vice President
	(515) 273-3551, drichardson@american-equity.com
	John M. Matovina, Vice Chairman
	(515) 457-1813, jmatovina@american-equity.com
	D. J. Noble, Chairman
	(515) 457-1705, dnoble@american-equity.com
	Julie LaFollette, Investor Relations
	(515) 273-3552, jlafollette@american-equity.com

American Equity Reports Record Earnings

WEST DES MOINES, Iowa (August 2, 2006) — American Equity Investment Life Holding Company (NYSE: AEL), a leading underwriter of fixed rate and index annuities, today reported 2006 second quarter operating income1 of a record $18.0 million, or $0.30 per diluted common share, an increase of 28% over 2005 second quarter operating income of $14.1 million, or $0.33 per diluted common share2.  Performance results for the quarter include:

·     Investment earnings of $169.2 million

·     Year-to-date gross spread on annuity reserves of 2.67%

·     Annuity sales of  $517 million

·Passed re-certification with the Insurance Marketing Standards Association (“IMSA”)

·Received final state license to conduct insurance business, completing licensure in all 50 states and the District of Columbia

1In addition to net income, American Equity has consistently utilized operating income, a non-GAAP financial measure commonly used in the life insurance industry, as an economic measure to evaluate its financial performance.  Operating income equals net income adjusted to eliminate the impact of (i) net realized gains and losses on investments; (ii) the impact of SFAS 133, dealing with the market value changes in derivatives; and (iii) the impact of consolidation under FIN 46 of American Equity Investment Service Company.  Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, American Equity believes a measure excluding their impact is useful in analyzing operating trends.  American Equity believes the combined presentation and evaluation of operating income together with net income, provides information that may enhance an investor’s understanding of American Equity’s underlying results and profitability.  A reconciliation of net income to operating income is provided in the accompanying tables.   

2 Per share amounts between periods are not comparable as a result of the issuance of approximately 15 million shares of common stock in December, 2005 in connection with a public offering of such stock.   

Net income of $42.9 million or $0.71 per diluted common share was impacted by a valuation adjustment under SFAS 133. The net adjustment of $24.7 million consists of a $0.4 million adjustment pertaining to the derivatives included in the Company’s index annuity business and a $24.3 million adjustment pertaining to the embedded derivative within the Company’s convertible debt.

27% GROWTH IN INVESTMENT INCOME

The driving factor of American Equity’s revenues is income from invested assets.  During the second quarter of 2006, investment income increased 27% to $169.2 million compared to $133.2 million for the same period in 2005.   Invested assets grew from $10.5 billion at December 31, 2005 to $11.1 billion at June 30, 2006.  The weighted average yield on invested assets, of which over 99% are investment grade, was 6.13% for the first six months.

The driving factor of American Equity’s net earnings is its gross spread on annuity liabilities.  During the first six months of 2006, American Equity earned a weighted average gross spread (aggregate yield on invested assets over the cost of money on annuities) of 2.67% on its aggregate annuity fund values, compared to 2.51% for the same period in 2005.  In the second quarter of 2006, this improvement was attributable primarily to a reduction in the Company’s cost of money on its annuity liabilities, including in particular the expirations of guaranteed interest rates on its 5-year rate-guaranteed products sold in 2001.

YEAR-TO-DATE SALES

Sales of annuity products, which hit record levels in 2005, have slowed during the first two quarters of 2006, with new annuity deposits down 25% compared to the same period in 2005.  However, current sales levels impact net earnings only indirectly and immaterially, since investment earnings, not sales, drive revenues.    As previously reported, both first and second quarter net operating earnings hit record levels, and the Company estimates that the reduction in sales had less than $0.01 impact on earnings per diluted common share in each period.

The slower pace of sales in 2006 is attributable to several factors.  First, attractive short-term interest rates on competing products such as bank certificates of deposits has

tapped some of the demand for fixed-rate and index annuities.  Assuming long-term rates continue to rise also, this impact will be abated.   Second, for those annuity sales agents who are duel licensed to sell both insurance and securities products, the NASD has created confusion and unwarranted impediments to sales by those agents.  The NASD, whose authority is limited to regulating sales of securities, has overstepped its bounds by attempting to regulate insurance products which are excluded from the coverage of the federal securities laws.   American Equity will explore courses of action to remedy this situation.   Third, short-term sales incentives by competitors have diverted some market share during the first six months of this year.   Such incentive programs are ordinary course of business in the insurance industry.  Since its inception American Equity has been competing effectively against new entrants into the market, new products and new sales incentives.

“With our 52,000 independent sales agents, our unparalleled level of service, our strong product design and pricing philosophy, and over $1.1 billion in capital, we’ve never been better armed to compete in our markets,” commented David J. Noble, Chairman, CEO and President of American Equity.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995.  Forward-looking statements relate to future operations, strategies, financial results or other developments, and are subject to assumptions, risks and uncertainties.  Statements such as “guidance,” “expect,” “anticipate,” “believe,” “goal,” “objective,” “target,” “may,” “should,” “estimate,” “projects,” or similar words as well as specific projections of future results qualify as forward-looking statements.  Factors that may cause our actual results to differ materially from those contemplated by these forward looking statements can be found in the company’s Form 10-K filed with the Securities and Exchange Commission.   Forward-

looking statements speak only as of the date the statement was made and the company undertakes no obligation to update such forward-looking statements.  There can be no assurance that other factors not currently anticipated by the company will not materially and adversely affect our results of operations.  Investors are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf.

CONFERENCE CALL

American Equity will hold a conference call to discuss second quarter 2006 earnings on Thursday, August 3, 2006, at 10 a.m. CDT.   The conference call will be webcast live on the Internet.  Investors and interested parties who wish to listen to the call on the Internet may do so at www.american-equity.com.  The call may also be accessed by telephone at 866-761-0749, passcode 49437589 (international callers, please dial 617-614-2707).   An audio replay will be available shortly after the call on AEL’s web site.  An audio replay will also be available via telephone through August 16, 2006 by calling 888-286-8010, passcode 35224192 (international callers will need to dial 617-801-6888).

ABOUT AMERICAN EQUITY

Founded in 1995, American Equity Investment Life Holding Company is a full -service underwriter of a broad line of annuity and insurance products, with a primary emphasis on the sale of fixed-rate and index annuities. The company has approximately 290 employees and approximately 52,000 agents selling its products in 50 states and District of Columbia.

###

American Equity Investment Life Holding Company

Net Income/Operating Income (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
Revenues:
Traditional life and accident and health insurance premiums	$	3,211		$	3,264		$	6,735		$	7,020
Annuity and single premium universal life product charges	10,740			7,023			18,340			13,285
Net investment income	169,182			133,227			331,567			258,061
Realized gains on investments	331			220			289			452
Change in fair value of derivatives	(61,582		)	(1,972		)	(12,254		)	(37,962		)
Total revenues	121,882			141,762			344,677			240,856
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	2,269			1,967			4,667			4,538
Interest credited to account balances	108,582			70,807			201,128			133,350
Change in fair value of embedded derivatives	(111,321		)	15,226			(48,557		)	(3,365		)
Interest expense on notes payable	6,528			4,050			13,814			8,189
Interest expense on subordinated debentures	5,402			3,142			10,320			6,188
Interest expense on amounts due under repurchase agreements	8,532			2,235			14,331			3,663
Amortization of deferred policy acquisition costs	25,363			15,994			56,118			32,660
Other operating costs and expenses	9,931			9,733			20,111			17,878
Total benefits and expenses	55,286			123,154			271,932			203,101
Income before income taxes	66,596			18,608			72,745			37,755
Income tax expense	23,685			6,376			25,861			12,995
Net income	42,911			12,232			46,884			24,760
Realized gains on investments, net of offsets	(214		)	(143		)	(187		)	(294		)
Net effect of FIN 46	—			77			—			(43		)
Net effect of FAS 133	(24,746		)	1,944			(11,008		)	2,963
Operating income (a)	$	17,951		$	14,110		$	35,689		$	27,386
Earnings per common share	$	0.77		$	0.32		$	0.84		$	0.65
Earnings per common share - assuming dilution	$	0.71		$	0.29		$	0.78		$	0.58
Operating income per common share (a)	$	0.32		$	0.37		$	0.64		$	0.71
Operating income per common share - assuming dilution (a)	$	0.30		$	0.33		$	0.60		$	0.64
Weighted average common shares outstanding (in thousands):
Earnings per common share	55,644			38,379			55,599			38,376
Earnings per common share - assuming dilution	60,655			43,749			60,727			43,707

1

American Equity Investment Life Holding Company

Operating Income
Three months ended June 30, 2006 (Unaudited)

				Adjustments
										Operating
	As Reported			Realized Gains			FAS 133			Income (a)
	(Dollars in thousands, except per share data)
Reserves:
Traditional life and accident and health insurance premiums	$	3,211		$	—		$	—		$	3,211
Annuity and single premium universal life product charges	10,740			—			—			10,740
Net investment income	169,182			—			—			169,182
Realized gains on investments	331			(331		)	—			—
Change in fair value of derivatives	(61,582		)	—			69,056			7,474
Total revenues	121,882			(331		)	69,056			190,607
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	2,269			—			—			2,269
Interest credited to account balances	108,582			—			(162		)	108,420
Change in fair value of embedded derivatives	(111,321		)	—			111,321			—
Interest expense on notes payable	6,528			—			(2,619		)	3,909
Interest expense on subordinated debentures	5,402			—			—			5,402
Interest expense on amounts due under repurchase agreements	8,532			—			—			8,532
Amortization of deferred policy acquisition costs	25,363			—			(890		)	24,473
Other operating costs and expenses	9,931			—			—			9,931
Total benefits and expenses	55,286			—			107,650			162,936
Income before income taxes	66,596			(331		)	(38,594		)	27,671
Income tax expense	23,685			(117		)	(13,848		)	9,720
Net income	$	42,911		$	(214	)	$	(24,746	)	$	17,951
Earnings per common share	$	0.77								$	0.32
Earnings per common share - assuming dilution	$	0.71								$	0.30

(a)In addition to net income, we have consistently utilized operating income, operating income per common share and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance.  Operating income equals net income adjusted to eliminate the impact of net realized gains and losses on investments, the impact of FIN 46, dealing with the consolidation of variable interest entities, and the impact of FAS 133, dealing with market value changes in derivatives.  Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, we believe measures excluding their impact are useful in analyzing operating trends.  We believe the combined presentation and evaluation of operating income together with net income, provides information that may enhance an investor’s understanding of our underlying results and profitability.

2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement

June 30, 2006

A.	Financial Highlights
	Condensed Consolidated Balance Sheets
	Consolidated Statements of Income
	Operating Income
	Six Months Ended June 30, 2006
	Three Months Ended June 30, 2006
	Quarterly Summary — Most Recent 5 quarters
	Capitalization/ Book Value per Share
B.	Product Summary
	Annuity Deposits by Product Type
	Surrender Charge Protection and Fund Values by Product Type
	Annuity Liability Characteristics
	Spread Results
C.	Investment Summary
	Summary of Invested Assets
	Credit Quality of Fixed Maturity Securities
	Watch List Securities and Aging of Gross Unrealized Losses
	Mortgage Loans by Region and Property Type
D.	Shareholder Information

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement — June 30, 2006

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	June 30, 2006		December 31, 2005
	(Unaudited)
Assets
Investments:
Fixed maturity securities:
Available for sale, at market	$	4,270,459	$	4,188,683
Held for investment, at amortized cost	5,006,210		4,711,427
Equity securities, available for sale, at market	73,322		84,846
Mortgage loans on real estate	1,573,201		1,321,637
Derivative instruments	180,213		185,391
Policy loans	391		362
Total investments	11,103,796		10,492,346
Cash and cash equivalents	35,627		112,395
Coinsurance deposits—related party	1,895,020		1,959,663
Accrued investment income	69,042		59,584
Deferred policy acquisition costs	1,117,495		977,015
Deferred sales inducements	402,681		315,848
Deferred income tax asset	97,458		94,288
Other assets	57,842		31,655
Total assets	$	14,778,961	$	14,042,794

1

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Dollars in thousands)

	June 30, 2006			December 31, 2005
	(Unaudited)
Liabilities and Stockholders’ Equity
Liabilities:
Policy benefit reserves	$	12,728,681		$	12,237,988
Other policy funds and contract claims	128,621			126,387
Other amounts due to related parties	22,180			27,677
Notes payable	269,736			281,043
Subordinated debentures	261,487			230,658
Amounts due under repurchase agreements	789,926			396,697
Other liabilities	78,129			222,986
Total liabilities	14,278,760			13,523,436
Stockholders’ equity:
Common Stock	55,661			55,527
Additional paid-in capital	380,173			379,107
Accumulated other comprehensive loss	(94,547		)	(27,306		)
Retained earnings	158,914			112,030
Total stockholders’ equity	500,201			519,358
Total liabilities and stockholders’ equity	$	14,778,961		$	14,042,794

2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005				2006				2005
Revenues:
Traditional life and accident and health insurance premiums	$	3,211		$	3,264		$		6,735		$		7,020
Annuity and single premium universal life product charges	10,740			7,023			18,340				13,285
Net investment income	169,182			133,227			331,567				258,061
Realized gains on investments	331			220			289				452
Change in fair value of derivatives	(61,582		)	(1,972		)	(12,254			)	(37,962			)
Total revenues	121,882			141,762			344,677				240,856
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	2,269			1,967			4,667				4,538
Interest credited to account balances	108,582			70,807			201,128				133,350
Change in fair value of embedded derivatives	(111,321		)	15,226			(48,557			)	(3,365			)
Interest expense on notes payable	6,528			4,050			13,814				8,189
Interest expense on subordinated debentures	5,402			3,142			10,320				6,188
Interest expense on amounts due under repurchase agreements	8,532			2,235			14,331				3,663
Amortization of deferred policy acquisition costs	25,363			15,994			56,118				32,660
Other operating costs and expenses	9,931			9,733			20,111				17,878
Total benefits and expenses	55,286			123,154			271,932				203,101
Income before income taxes	66,596			18,608			72,745				37,755
Income tax expense	23,685			6,376			25,861				12,995
Net income	$	42,911		$	12,232		$		46,884		$		24,760
Earnings per common share	$	0.77		$	0.32		$		0.84		$		0.65
Earnings per common share - assuming dilution (a)	$	0.71		$	0.29		$		0.78		$		0.58
Weighted average common shares outstanding (in thousands):
Earnings per common share	55,644			38,379			55,599				38,376
Earnings per common share - assuming dilution	60,655			43,749			60,727				43,707

(a)The numerator for earnings per common share - assuming dilution is equal to net income plus the after tax cost of interest on convertible subordinated debentures issued to a subsidiary trust.  The after tax cost of such interest was $266 for the three months ended June 30, 2006, $300 for the three months ended June 30, 2005, $536 for the six months ended June 30, 2006 and $601 for the six months ended June 30, 2005.

3

Operating Income
Six months ended June 30, 2006

	As Reported			Realized Gain Adjustments			FAS 133 Adjustments			Operating Income (a)
	(Dollars in thousands, except per share data)
Revenues:
Traditional life and accident and health insurance premiums	$	6,735		$	—		$	—		$	6,735
Annuity and single premium universal life product charges	18,340			—			—			18,340
Net investment income	331,567			—			—			331,567
Realized gains on investments	289			(289		)	—			—
Change in fair value of derivatives	(12,254		)	—			13,160			906
Total revenues	344,677			(289		)	13,160			357,548
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	4,667			—			—			4,667
Interest credited to account balances	201,128			—			(3,257		)	197,871
Change in fair value of embedded derivatives	(48,557		)	—			48,557			—
Interest expense on notes payable	13,814			—			(5,970		)	7,844
Interest expense on subordinated debentures	10,320			—			—			10,320
Interest expense on amounts due under repurchase agreements	14,331			—			—			14,331
Amortization of deferred policy acquisition costs	56,118			—			(8,838		)	47,280
Other operating costs and expenses	20,111			—			—			20,111
Total benefits and expenses	271,932			—			30,492			302,424
Income before income taxes	72,745			(289		)	(17,332		)	55,124
Income tax expense	25,861			(102		)	(6,324		)	19,435
Net income	$	46,884		$	(187	)	$	(11,008	)	$	35,689
Earnings per common share	$	0.84								$	0.64
Earnings per common share — assuming dilution	$	0.78								$	0.60

(a) In addition to net income, we have consistently utilized operating income, operating income per common share and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance.  Operating income equals net income adjusted to eliminate the impact of net realized gains and losses on investments and the impact of FAS 133, dealing with market value changes in derivatives.  Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, we believe measures excluding their impact are useful in analyzing operating trends.  We believe the combined presentation and evaluation of operating income together with net income, provides information that may enhance an investor’s understanding of our underlying results and profitability.

Change in fair value of derivatives:
Proceeds received at expiration or gains recognized upon early termination	$	84,885		$	—	$	84,885
Cost of money for index annuities	(83,979		)	—		(83,979		)
Change in the difference between fair value and remaining option cost at beginning and end of period	(13,160		)	13,160		—
	$	(12,254	)	$	13,160	$	906
Index credits included in interest credited to account balances	$	86,551				$	86,551

4

Operating Income
Three months ended June 30, 2006

	As Reported			Realized Gain Adjustments			FAS 133 Adjustments			Operating Income (a)
	(Dollars in thousands, except per share data)
Revenues:
Traditional life and accident and health insurance premiums	$	3,211		$	—		$	—		$	3,211
Annuity and single premium universal life product charges	10,740			—			—			10,740
Net investment income	169,182			—			—			169,182
Realized gains on investments	331			(331		)	—			—
Change in fair value of derivatives	(61,582		)	—			69,056			7,474
Total revenues	121,882			(331		)	69,056			190,607
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	2,269			—			—			2,269
Interest credited to account balances	108,582			—			(162		)	108,420
Change in fair value of embedded derivatives	(111,321		)	—			111,321			—
Interest expense on notes payable	6,528			—			(2,619		)	3,909
Interest expense on subordinated debentures	5,402			—			—			5,402
Interest expense on amounts due under repurchase agreements	8,532			—			—			8,532
Amortization of deferred policy acquisition costs	25,363			—			(890		)	24,473
Other operating costs and expenses	9,931			—			—			9,931
Total benefits and expenses	55,286			—			107,650			162,936
Income before income taxes	66,596			(331		)	(38,594		)	27,671
Income tax expense	23,685			(117		)	(13,848		)	9,720
Net income	$	42,911		$	(214	)	$	(24,746	)	$	17,951
Earnings per common share	$	0.77								$	0.32
Earnings per common share — assuming dilution	$	0.71								$	0.30

(a) In addition to net income, we have consistently utilized operating income, operating income per common share and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance.  Operating income equals net income adjusted to eliminate the impact of net realized gains and losses on investments and the impact of FAS 133, dealing with market value changes in derivatives.  Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, we believe measures excluding their impact are useful in analyzing operating trends.  We believe the combined presentation and evaluation of operating income together with net income, provides information that may enhance an investor’s understanding of our underlying results and profitability.

Change in fair value of derivatives:
Proceeds received at expiration or gains recognized upon early termination	$	51,627		$	—	$	51,627
Cost of money for index annuities	(44,153		)	—		(44,153		)
Change in the difference between fair value and remaining option cost at beginning and end of period	(69,056		)	69,056		—
	$	(61,582	)	$	69,056	$	7,474
Index credits included in interest credited to account balances	$	55,389				$	55,389

5

Operating Income/Net Income
Quarterly Summary — Most Recent 5 Quarters

	Q2 2006		Q1 2006			Q4 2005			Q3 2005			Q2 2005
	(Dollars in thousands, except per share data
Revenues:
Traditional life and accident and health insurance premiums	$	3,211	$	3,524		$	3,019		$	3,539		$	3,264
Annuity and single premium universal life product charges	10,740		7,600			6,296			6,105			7,023
Net investment income	169,182		162,385			153,707			142,492			133,365
Change in fair value of derivatives	7,474		(6,568		)	(12,550		)	10,722			(8,955		)
Total revenues	190,607		166,941			150,472			162,858			134,697
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	2,269		2,398			1,619			2,401			1,963
Interest credited to account balances	108,420		89,451			83,181			97,174			72,102
Interest expense on General Agency Commission and Servicing Agreement	—		—			—			778			874
Interest expense on notes payable	3,909		3,935			4,053			3,554			3,446
Interest expense on subordinated debentures	5,402		4,918			4,131			3,826			3,142
Interest expense on amounts due under repurchase agreements	8,532		5,799			4,455			3,162			2,235
Amortization of deferred policy acquisition costs	24,473		22,807			20,734			20,764			19,955
Other operating costs and expenses	9,931		10,180			9,370			8,554			9,474
Total benefits and expenses	162,936		139,488			127,543			140,213			113,191
Operating income before income taxes	27,671		27,453			22,929			22,645			21,506
Income tax expense	9,720		9,715			8,290			7,567			7,396
Operating income (a)	17,951		17,738			14,639			15,078			14,110
Realized gains (losses) on investments, net of offsets	214		(27		)	(348		)	(2,599		)	143
Net effect of FIN 46 and state income tax contingency	—		—			(905		)	(2,836		)	(77		)
Net effect of FAS 133	24,746		(13,738		)	(2,317		)	(2,480		)	(1,944		)
Net income	$	42,911	$	3,973		$	11,069		$	7,163		$	12,232
Operating income per common share (a)	$	0.32	$	0.32		$	0.35		$	0.39		$	0.37
Operating income per common share — assuming dilution (a)	$	0.30	$	0.30		$	0.32		$	0.35		$	0.33
Earnings per common share	$	0.77	$	0.07		$	0.26		$	0.19		$	0.32
Earnings per common share — assuming dilution	$	0.71	$	0.07		$	0.24		$	0.17		$	0.29
Weighted average common shares outstanding (in thousands):
Earnings per common share	55,644		55,554			42,053			38,497			38,379
Earnings per common share — assuming dilution	60,655		60,799			46,823			43,786			43,749

(a)     In addition to net income, we have consistently utilized operating income, operating income per common share and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance.  Operating income equals net income adjusted to eliminate the impact of net realized gains and losses on investments, the impact of FIN 46, dealing with the consolidation of variable interest entities, the impact of the establishment of a state income tax contingency liability, and the impact of FAS 133, dealing with market value changes in derivatives. Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, we believe measures excluding their impact are useful in analyzing operating trends.  We believe the combined presentation and evaluation of operating income together with net income, provides information that may enhance an investor’s understanding of our underlying results and profitability.

6

Capitalization/ Book Value per Share

	June 30, 2006			December 31, 2005
	(Dollars in thousands, except per share data)
Capitalization:
Notes payable	$	269,736		$	281,043
Subordinated debentures payable to subsidiary trusts	261,487			230,658
Total debt	531,223			511,701
Total stockholders’ equity	500,201			519,358
Total capitalization	1,031,424			1,031,059
Accumulated other comprehensive loss (AOCL)	94,547			27,306
Total capitalization excluding AOCL (a)	$	1,125,971		$	1,058,365
Total stockholders’ equity	$	500,201		$	519,358
Accumulated other comprehensive loss	94,547			27,306
Total stockholders’ equity excluding AOCL (a)	$	594,748		$	546,664
Common shares outstanding	55,661,173			55,527,180
Book Value per Share: (b)
Book value per share including AOCL	$	8.99		$	9.35
Book value per share excluding AOCL (a)	$	10.69		$	9.84
Debt-to-Capital Ratios: (c)
Senior debt / Total capitalization	24.0		%	26.6		%
Adjusted debt / Total capitalization	33.4		%	33.7		%

(a)Total capitalization, total stockholders’ equity and book value per share excluding AOCL, non-GAAP financial measures, are based on stockholders’ equity excluding the effect of accumulated other comprehensive loss.  Since AOCL fluctuates from quarter to quarter due to unrealized changes in the fair market value of available for sale investments caused principally by changes in market interest rates, we believe these non-GAAP financial measures provide useful  supplemental information.

 (b)Book value per share including and excluding AOCL is calculated as total stockholders’ equity and total stockholders’ equity  excluding AOCL divided by the total number of shares of common stock outstanding.

(c)Debt-to-capital ratios are computed using total capitalization excluding AOCL.  Adjusted debt includes senior debt and the portion of the total subordinated debentures payable to subsidiary trusts outstanding (qualifying trust preferred securities) that exceeds 15% of total capitalization including AOCL.

7

Annuity Deposits by Product Type

	Six Months Ended June 30,				Year Ended December 31,
Product Type	2006		2005		2005
	(Dollars in thousands)
Index Annuities:
Index Strategies	$	695,019	$	862,002	$	1,780,092
Fixed Strategy	340,622		446,242		908,868
	1,035,641		1,308,244		2,688,960
Fixed Rate Annuities:
Single-Year Rate Guaranteed	44,063		121,934		193,288
Multi-Year Rate Guaranteed	2,682		8,260		12,807
	46,745		130,194		206,095
Total before coinsurance ceded	1,082,386		1,438,438		2,895,055
Coinsurance ceded	1,834		3,116		4,688
Net after coinsurance ceded	$	1,080,552	$	1,435,322	$	2,890,367

Surrender Charge Protection and Fund Values by Product Type

Annuity Surrender Charges and Net (of coinsurance) Fund Values at June 30, 2006

	Surrender Charge				Net Fund Value
Product Type	Avg. Years At Issue	Avg. Years Remaining	Avg. % Remaining		Dollars in Thousands		%
Index Annuities	13.7	11.4	14.7	%	$	8,112,543	75.8	%
Single-Year Fixed Rate Guaranteed Annuities	10.6	6.3	9.4	%	1,731,696		16.2	%
Multi-Year Fixed Rate Guaranteed Annuities	6.3	2.6	5.5	%	855,512		8.0	%
Total	12.6	9.9	13.1	%	$	10,699,751	100.0	%

8

Annuity Liability Characteristics

	Fixed Annuities Account  Value		Index  Annuities Account Value
	(Dollars in thousands)
SURRENDER CHARGE PERCENTAGES (1):
No surrender charge	$	287,780	$	51,444
1.0% < 2.0%	15,106		4,216
2.0% < 3.0%	12,881		5,843
3.0% < 4.0%	18,499		7,887
4.0% < 5.0%	122,928		35,502
5.0% < 6.0%	214,913		41,941
6.0% < 7.0%	150,761		103,027
7.0% < 8.0%	193,439		255,209
8.0% < 9.0%	308,688		397,754
9.0% < 10.0%	327,595		698,798
10.0% or greater	934,618		6,510,922
	$	2,587,208	$	8,112,543

	Fixed and		Weighted
	Index		Average
	Annuities		Surrender
	Account Value		Charge
	(Dollars in thousands)
SURRENDER CHARGE EXPIRATION BY YEAR
Out of Surrender Charge	$	339,224	0.00	%
2006	195,729		5.24	%
2007	132,846		4.77	%
2008	143,700		5.92	%
2009	420,435		8.00	%
2010	486,862		7.61	%
2011	460,581		8.06	%
2012	676,199		8.78	%
2013	733,028		9.43	%
2014	654,522		10.92	%
2015	573,255		12.90	%
2016	778,502		13.97	%
2017	974,013		14.43	%
2018	651,470		15.28	%
2019	257,047		15.57	%
2020	623,728		16.30	%
2021	655,909		17.86	%
2022	1,279,365		19.64	%
2023	663,336		20.00	%
	$	10,699,751	13.50	%

9

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement – June 30, 2006

Annuity Liability Characteristics

	Fixed Annuities Account Value		Index Annuities Account Value
	(Dollars in thousands)
APPLICABLE GUARANTEE PERIOD:
Annual reset (2)	$	1,992,937	$	7,986,251
Multi-year (3 - 5 years)	594,271		126,292
	$	2,587,208	$	8,112,543
ULTIMATE MINIMUM GUARANTEE RATE (3):
2.00%	—		$	8,728
2.20%	10,475		86,831
2.25% (4)	260,709		2,789,132
3.00%	2,206,814		3,743,235
3.50% (5)	—		1,484,617
4.00%	109,210		—
	$	2,587,208	$	8,112,543
CREDITED RATE (INCLUDING BONUS INTEREST) VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL (6) (7):
No differential	$	99,812	$	—
> 0.0% - 0.5%	1,600,685		947,126
> 0.5% - 1.0%	258,341		1,262,012
> 1.0% - 1.5%	158,339		118,347
> 1.5% - 2.0%	23,211		267
> 2.0% - 2.5%	103,569		1,403
> 2.5% - 3.0%	261,206		6,310
Greater than 3.0%	82,045		14
Cumulative floor (3)	—		5,777,064
	$	2,587,208	$	8,112,543

(1)In addition, $1,505,490 (58%) of the Fixed Annuities Account Value have market value adjustment protection.

(2)The contract features for substantially all of the Index Annuities Account Value provide for the annual reset of contractual features that effect the cost of money.  The contract features for less than .5% of the Index Annuities Account Value are reset every two years.

(3)Index Annuities provide guarantees based on a cumulative floor over the term of the product.  Rates used to determine the cumulative floor may be applied to less than 100% of the annuity deposits received.

(4)Products have a guarantee of 2.25% for the first 10 years, & 3.00% thereafter.

(5)Rates applicable to the minimum guaranteed surrender value are 3.50% for the first 5 years, & 3.00% thereafter (applied to less than 100% of the annuity deposits received).  Minimum guaranteed rates for amounts allocated to the fixed rate strategy are 2.25% for the first 10 years, and 3.00% thereafter.

(6)Recent issues may contain bonus interest rates ranging from 1.0% to 3.0%.

(7)Includes products with multi-year guarantees for which the credited rate cannot be decreased to the ultimate minimum guaranteed rate until the end of the multi-year period.  The weighted average differential between the current credited rate and the ultimate minimum guaranteed rate on the multi-year guarantee fixed annuity account values was approximately 215 basis points.

10

Spread Results

	Six Months Ended
	June 30,				FY
	2006		2005		2005
Average yield on invested assets	6.13	%	6.20	%	6.18	%
Cost of Money
Aggregate	3.46	%	3.69	%	3.70	%
Average net cost of money for index annuities	3.27	%	3.33	%	3.38	%
Average crediting rate for fixed rate annuities:
Annually adjustable	3.25	%	3.33	%	3.32	%
Multi-year rate guaranteed	5.12	%	5.52	%	5.56	%
Investment spread:
Aggregate	2.67	%	2.51	%	2.48	%
Index annuities	2.86	%	2.87	%	2.80	%
Fixed rate annuities:
Annually adjustable	2.88	%	2.87	%	2.86	%
Multi-year rate guaranteed	1.01	%	0.68	%	0.62	%

11

Summary of Invested Assets

	June 30,				December 31,
	2006				2005
	Carrying Amount		Percent		Carrying Amount		Percent
	(Dollars in thousands)
Fixed maturity securities:
United States Government full faith and credit	$	2,677	—		$	2,774	—
United States Government sponsored agencies	7,781,613		70.1	%	7,445,474		71.0	%
Public utilities	133,222		1.2	%	133,346		1.3	%
Corporate securities	746,554		6.7	%	674,230		6.4	%
Redeemable preferred stocks	61,294		0.5	%	46,896		0.4	%
Mortgage and asset-backed securities:
Government	187,146		1.7	%	220,379		2.1	%
Non-Government	364,163		3.3	%	377,011		3.6	%
Total fixed maturity securities	9,276,669		83.5	%	8,900,110		84.8	%
Equity securities	73,322		0.7	%	84,846		0.8	%
Mortgage loans on real estate	1,573,201		14.2	%	1,321,637		12.6	%
Derivative instruments	180,213		1.6	%	185,391		1.8	%
Policy loans	391		—		362		—
Total investments	$	11,103,796	100.0	%	$	10,492,346	100.0	%

12

Credit Quality of Fixed Maturity Securities

		June 30,				December 31,
		2006				2005
NAIC Designation	Rating Agency Equivalent	Carrying Amount		Percent		Carrying Amount		Percent
		(Dollars in thousands)
1	Aaa/Aa/A	$	8,691,132	93.7	%	$	8,368,330	94.0	%
2	Baa	487,038		5.2	%	416,614		4.7	%
3	Ba	82,039		0.9	%	93,335		1.0	%
4	B	4,579		—		3,396		0.1	%
5	Caa and lower	7,110		0.1	%	11,719		0.1	%
6	In or near default	4,771		0.1	%	6,716		0.1	%
	Total fixed maturity securities	$	9,276,669	100.0	%	$	8,900,110	100.0	%

Watch List Securities - Aging of Gross Unrealized Losses - June 30, 2006

Issuer	Amortized Cost		Unrealized Losses			Estimated Fair Value		Maturity Date	Months Below Amortized Cost
	(Dollars in thousands)
Ford Motor Company	$	5,003	$	(1,503	)	$	3,500	07/16/2031	10
	$	5,003	$	(1,503	)	$	3,500

13

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement – June 30, 2006

Mortgage Loans by Region and Property Type

	June 30, 2006				December 31, 2005
	Carrying Amount		Percent		Carrying Amount		Percent
	(Dollars in thousands)
Geographic distribution
East	$	342,271	21.8	%	$	283,085	21.4	%
Middle Atlantic	108,921		6.9	%	93,579		7.1	%
Mountain	247,005		15.7	%	198,476		15.0	%
New England	43,886		2.8	%	47,839		3.6	%
Pacific	140,175		8.9	%	117,977		8.9	%
South Atlantic	273,496		17.4	%	213,423		16.1	%
West North Central	285,827		18.2	%	258,181		19.6	%
West South Central	131,620		8.3	%	109,077		8.3	%
Total mortgage loans	$	1,573,201	100.0	%	$	1,321,637	100.0	%
Property type distribution
Office	$	481,044	30.6	%	$	384,606	29.1	%
Medical Office	79,647		5.1	%	75,716		5.7	%
Retail	357,671		22.7	%	285,715		21.6	%
Industrial/Warehouse	380,156		24.2	%	346,461		26.2	%
Hotel	60,936		3.9	%	52,274		4.0	%
Apartments	86,266		5.4	%	68,795		5.2	%
Mixed use/other	127,481		8.1	%	108,070		8.2	%
Total mortgage loans	$	1,573,201	100.0	%	$	1,321,637	100.0	%

14

Shareholder Information

Corporate Offices:

American Equity Investment Life Holding Company

5000 Westown Parkway Suite 440

West Des Moines, IA 50266

Inquiries:

Debra J. Richardson, Investor Relations	D. J. Noble, Chairman
(515) 273-3551, drichardson@american-equity.com	(515) 457-1703, dnoble@american-equity.com

John M. Matovina, Vice Chairman

(515) 457-1813 jmatovina@american-equity.com

Common Stock and Dividend Information:

New York Stock Exchange symbol: “AEL”

2006	High		Low		Close		Dividend Declared
First Quarter	$	14.34	$	12.76	$	14.34	$	0.00
Second Quarter	$	14.60	$	10.66	$	10.66	$	0.00
2005
First Quarter	$	12.92	$	10.14	$	12.79	$	0.00
Second Quarter	$	12.79	$	10.08	$	11.88	$	0.00
Third Quarter	$	11.96	$	10.41	$	11.35	$	0.00
Fourth Quarter	$	13.06	$	10.83	$	13.05	$	0.04
2004
First Quarter	$	13.15	$	10.05	$	12.85	$	0.00
Second Quarter	$	13.10	$	9.75	$	9.95	$	0.00
Third Quarter	$	10.22	$	8.79	$	9.49	$	0.00
Fourth Quarter	$	11.00	$	9.41	$	10.77	$	0.02

Transfer Agent:	Analyst Coverage:
Comptershare Trust Company, N.A.	Steven Schwartz	E. Stewart Johnson
P.O. Box 43010	Raymond James & Associates, Inc.	Friedman, Billings, Ramsey & Co., Inc.
Providence, RI 02940-0310	(312) 612-7686	(212) 381-9219
Phone: (877) 282-1169	steven.schwartz@raymondjames.com	sjohnson@fbr.com
Fax: (781) 575-2723
www.computershare.com	Richard Sbaschnig	Mark Finkelstein
	Oppenheimer & Co., Inc.	Cochran Caronia Waller
	(212) 668-4474	(312) 425-4079
	richard.sbaschnig@opco.com	mfinkelstein@ccwco.com
	David O. Lewis	Yaron Shashoua
	SunTrust Robinson Humphrey	Fox-Pitt, Kelton
	(404) 926-5097	(212) 857-6189
	david_lewis@rhco.com	yshashoua@foxpitt.com

Annual Report and Other Information:

Shareholders may receive when available, without charge, a copy of American Equity’s Annual Report, SEC filings and/or press releases by calling Debra J. Richardson, Senior Vice President, at (515) 457-1704 by visiting our web site at www.american-equity.com.

15