497 1 sticker.txt INTEGRITY LIFE INSURANCE COMPANY Supplement dated January 1, 2008 to Prospectuses dated May 1, 2007 for ANNUICHOICE(R) II, GRANDMASTER FLEX3, IQ ADVISOR, PINNACLEPLUS, AND PINNACLE V FLEXIBLE PREMIUM VARIABLE ANNUITIES Issued by INTEGRITY LIFE INSURANCE COMPANY Through its Separate Account I and Separate Account II This is a supplement to the prospectuses identified above, which describes a change in the operating expenses of the Touchstone VST Portfolios available through the Variable Investment Options in your variable annuity. Please retain this supplement to your prospectus for future reference. Effective on January 1, 2008, the Touchstone Variable Series Trust ("Trust") will implement a Shareholder Servicing Plan ("Plan"), which adds a fee in the amount of 0.25% of assets to all classes of all portfolios of the Trust. The existing 12b-1 Plan on the service class shares of the Trust's Portfolios will become dormant as of January 1, 2008. Effective on January 1, 2008, PART 1 - FEES AND EXPENSE TABLES AND SUMMARY, in the section titled "TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES," your prospectus is amended as follows: The table below shows the total operating expenses charged by the Touchstone portfolios. This information replaces the information in the table in your prospectus with regard to the Touchstone VST Portfolios. More detail concerning these fees and expenses is contained in the Touchstone VST Portfolio prospectuses. TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES Gross Portfolio annual expenses prior to any waivers and reimbursements as a percentage of average net assets in each Portfolio:
--------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- 12B-1 ACQUIRED PORTFOLIO MANAGEMENT FEE OR OTHER FUND FEES TOTAL FEES SERVICE EXPENSES AND ANNUAL FEES EXPENSES EXPENSES --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Balanced Fund(11) 0.80% 0.25% 0.53% N/A 1.58% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Baron Small Cap Fund(11) 1.05% 0.25% 0.50% N/A 1.80% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Core Bond Fund(11) 0.55% 0.25% 0.46% N/A 1.26% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Eagle Capital Appreciation Fund(11) 0.75% 0.25% 0.48% 0.01% 1.49% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Growth & Income Fund(11) 0.80% 0.25% 0.51% 0.02% 1.58% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST High Yield Fund(11) 0.50% 0.25% 0.48% N/A 1.23% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Large Cap Core Equity Fund(11), (14) 0.65% 0.25% 0.55% N/A 1.45% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Mid Cap Growth Fund(11) 0.80% 0.25% 0.48% N/A 1.53% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Money Market Fund, Service Class (11) 0.18% 0.25% 0.37% N/A 0.80% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Third Avenue Value Fund(11) 0.79% 0.25% 0.36% 0.02% 1.42% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Value Plus Fund(11) 0.75% 0.25% 0.69% 0.01% 1.70% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Aggressive ETF Fund, Service Class(11), (12) 0.40% 0.25% 0.77% 0.20% 1.62% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Conservative ETF Fund, Service Class(11), 0.40% 0.25% 0.99% 0.18% 1.82% (12) --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Enhanced ETF Fund, Service Class(11), (12) 0.40% 0.25% 0.45% 0.26% 1.36% --------------------------------------------------------------- --------------- ---------- ------------- ------------- ------------- Touchstone VST Moderate ETF Fund, Service Class(11), (12) 0.40% 0.25% 0.62% 0.20% 1.47% --------------------------------------------------------------- --------------- ---------- ------------- ------------- -------------
(11) The advisor has contractually agreed until at least December 31, 2008 to waive a portion of its advisory fee and/or reimburse certain fund expenses in order to limit net expenses as follows:
--------------------------------- -------------------------------------------- ------------------------------------------------ Touchstone Variable Series Net Total Expenses after Waivers and Net Total Expenses after Waivers and Trust Portfolio Reimbursements with Acquired Fund Fees and Reimbursements without Acquired Fund Fees and Expenses Expenses --------------------------------- -------------------------------------------- ------------------------------------------------ Balanced 1.15% 1.15% --------------------------------- -------------------------------------------- ------------------------------------------------ Baron Small Cap 1.55% 1.55% --------------------------------- -------------------------------------------- ------------------------------------------------ Core Bond 1.00% 1.00% --------------------------------- -------------------------------------------- ------------------------------------------------ 1 --------------------------------- -------------------------------------------- ------------------------------------------------ Touchstone Variable Series Net Total Expenses after Waivers and Net Total Expenses after Waivers and Trust Portfolio Reimbursements with Acquired Fund Fees and Reimbursements without Acquired Fund Fees and Expenses Expenses --------------------------------- -------------------------------------------- ------------------------------------------------ Eagle Capital Appreciation 1.14% 1.13% --------------------------------- -------------------------------------------- ------------------------------------------------ Growth & Income 1.12% 1.10% --------------------------------- -------------------------------------------- ------------------------------------------------ High Yield 1.05% 1.05% --------------------------------- -------------------------------------------- ------------------------------------------------ Large Cap Core Equity 1.00% 1.00% --------------------------------- -------------------------------------------- ------------------------------------------------ Mid Cap Growth 1.17% 1.17% --------------------------------- -------------------------------------------- ------------------------------------------------ Money Market, Service Class 0.75% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------ Third Avenue Value 1.11% 1.09% --------------------------------- -------------------------------------------- ------------------------------------------------ Value Plus 1.41% 1.40% --------------------------------- -------------------------------------------- ------------------------------------------------ Aggressive ETF, Service Class 0.95% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------ Conservative ETF, Service Class 0.93% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------ Enhanced ETF, Service Class 1.01% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------ Moderate ETF, Service Class 0.95% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------
(12) The Service Class shares began operations in July, 2006. Integrity Life Insurance Company, which is the parent of National Integrity, and Touchstone Advisors have agreements which provide that Integrity is responsible for payment of expenses exceeding the expense caps on the ETF Portfolios. (14) Formerly Touchstone VST Enhanced Dividend 30 Part 10 - PRIOR CONTRACTS section of the GRANDMASTER FLEX3 AND PINNACLE V prospectuses are amended as follows: The table below shows the total operating expenses charged by Touchstone portfolios. This information replaces the information in the table in your prospectus with regard to the Touchstone VST Portfolios. Gross Portfolio annual expenses prior to any waivers and reimbursements as a percentage of average net assets in each Portfolio:
---------------------------------------------------------- ------------------ ---------- ------------- ------------- ------------- 12B-1 ACQUIRED PORTFOLIO MANAGEMENT FEE OR OTHER FUND FEES TOTAL FEES SERVICE EXPENSES AND ANNUAL FEES EXPENSES EXPENSES ---------------------------------------------------------- ------------------ ---------- ------------- ------------- ------------- Touchstone VST Money Market Fund, Initial Class* 0.18% 0.25 % 0.37% N/A 0.80% ---------------------------------------------------------- ------------------ ---------- ------------- ------------- ------------- Touchstone VST Aggressive ETF Fund, Initial Class* 0.40% 0.25% 0.77% 0.20% 1.62% ---------------------------------------------------------- ------------------ ---------- ------------- ------------- ------------- Touchstone VST Conservative ETF Fund, Initial Class* 0.40% 0.25 % 0.99% 0.18% 1.82% ---------------------------------------------------------- ------------------ ---------- ------------- ------------- ------------- Touchstone VST Enhanced ETF Fund, Initial Class* 0.40% 0.25% 0.45% 0.26% 1.36% ---------------------------------------------------------- ------------------ ---------- ------------- ------------- ------------- Touchstone VST Moderate ETF Fund, Initial Class* 0.40% 0.25% 0.62% 0.20% 1.47% ---------------------------------------------------------- ------------------ ---------- ------------- ------------- -------------
* The advisor has contractually agreed until at least December 31, 2008 to waive a portion of its advisory fee and/or reimburse certain fund expenses in order to limit net expenses as follows:
--------------------------------- -------------------------------------------- ------------------------------------------------ Touchstone Variable Series Net Total Expenses after Waivers and Net Total Expenses after Waivers and Trust Portfolio Reimbursements with Acquired Fund Fees and Reimbursements without Acquired Fund Fees and Expenses Expenses --------------------------------- -------------------------------------------- ------------------------------------------------ Money Market, Initial Class 0.75% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------ Aggressive ETF, Initial Class 0.95% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------ Conservative ETF, Initial Class 0.93% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------ Enhanced ETF, Initial Class 1.01% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------ Moderate ETF, Initial Class 0.95% 0.75% --------------------------------- -------------------------------------------- ------------------------------------------------