As filed with the Securities and Exchange Commission on November 26, 2003

Registration No. 333-108794

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

American Equity
Investment Life Holding Company
(Exact Name of Registrant as Specified in Its Charter)

Iowa
(State or Other Jurisdiction of Incorporation or Organization)

6311
(Primary Standard Industrial Classification Code Number)

42-1447959
(I.R.S. Employer Identification Number)

David J. Noble
Chairman, Chief Executive Officer, President and Treasurer
American Equity Investment Life Holding Company
5000 Westown Parkway, Suite 440
West Des Moines, Iowa 50266
(515) 221-0002
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies To:

                  Approximate Date of Commencement of Proposed Sale to the Public:    As soon as practicable after the effective date of this Registration Statement.

                  If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

                  If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                  If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                  If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                  If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o

                  THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated November 13, 2003

P R O S P E C T U S

18,700,000 Shares

American Equity
Investment Life Holding Company

Common Stock

              This is our initial public offering. We are selling all of the offered shares.

              We expect the public offering price of the shares to be between $10.50 and $12.50 per share. Currently, no public market exists for our shares. We have been authorized to list our common stock on the New York Stock Exchange under the symbol "AEL."

              Investing in our common stock involves risks that are described in the "Risk Factors" section beginning on page 7 of this prospectus.

              The underwriters may also purchase up to an additional 2,805,000 shares from us at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments.

              Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

              The shares will be ready for delivery on or about                        , 2003.

The date of this prospectus is                        , 2003.

TABLE OF CONTENTS

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PROSPECTUS SUMMARY

              This summary highlights key aspects of our business and our common stock offering that are described more fully elsewhere in this prospectus. This summary does not contain all of the information that you should consider before making an investment decision. You should read this entire prospectus carefully, including "Risk Factors" and the consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this prospectus. In this prospectus, "we," "us," "our," "ours" and "our company" refer to American Equity Investment Life Holding Company and, where applicable, our life insurance subsidiaries, American Equity Investment Life Insurance Company and American Equity Investment Life Insurance Company of New York. "American Equity Life" refers to our life insurance subsidiary American Equity Investment Life Insurance Company.

Our Company

Overview

              We operate in one business segment as a full service underwriter of a broad line of annuity and insurance products. Our business consists primarily of the sale of fixed rate and index annuities. We develop, market, issue and administer these annuities and life insurance products through our life insurance subsidiaries, American Equity Investment Life Insurance Company and American Equity Investment Life Insurance Company of New York. We began selling annuities in November 1996. We have grown our annual deposits from the sale of new annuities from $141.9 million in 1997 to $2.4 billion before coinsurance in 2002 ($1.6 billion net of coinsurance). For the nine months ended September 30, 2003, our deposits from sales of new annuities before coinsurance were $1,353.2 million ($846.1 million net of coinsurance). The reduction in annuity deposits in 2003 resulted from actions taken by us to manage our capital position, including reductions in our interest crediting rates on both new and existing annuities, reductions in sales commissions and suspension of sales of one of our higher commission annuity products and our most popular multi-year rate guaranteed annuity product. We will continue to monitor our levels of production and take such actions as we believe appropriate to help maintain our rate of production within the range that the statutory capital and surplus of our life insurance subsidiaries will support. The purpose of this offering is to raise capital to support future growth of our business. If it is successful, we anticipate increasing the level of our sales. For instance, we anticipate the reinstatement of our full marketing program and development of new products. As of September 30, 2003, our total consolidated assets were approximately $6.6 billion.

              Our annuity product line includes fixed rate and index annuities, our primary focus, and to a lesser extent, variable annuities:

•

Fixed Rate Annuities.  Fixed rate annuities accounted for approximately 38% of the total annuity deposits that we collected during the nine months ended September 30, 2003 and approximately 39% during the year ended December 31, 2002. At September 30, 2003, approximately 79% of our annuities in force were annually adjustable rate annuities which have an interest rate, called the crediting rate, guaranteed for the first year and which we may adjust in subsequent years. We also sell single premium deferred annuities, or SPDAs, under which the annual crediting rate is guaranteed for either a three-year or a five-year period. Sales of multi-year rate guaranteed SPDAs accounted for approximately 4% of total annuity deposits during the nine months ended September 30, 2003 and approximately 13% during the year ended December 31, 2002.



•

Index Annuities.  Index annuities accounted for approximately 62% of the total annuity deposits that we collected during the nine months ended September 30, 2003 and approximately 61% during the year ended December 31, 2002. These products allow policyholders to earn returns linked to index appreciation without the risk of loss of their principal.

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•

Variable Annuities.  Variable annuities (which accounted for less than 1% of total annuity deposits for the nine months ended September 30, 2003 and for the year ended December 31, 2002) differ from equity index and fixed rate annuities in that the policyholder, rather than the insurance company, bears the investment risk, and the policyholder's return of principal and rate of return are dependent upon the performance of the particular investment option selected by the policyholder.

              In addition to our annuity products, we also provide traditional ordinary and term, universal life and other interest-sensitive life insurance products. We are one of the largest providers of life insurance for members of the state National Guard Associations, with approximately $2.2 billion of life insurance in force for these organizations as of September 30, 2003. We acquired this business in 1995. We intend to continue offering a complete line of life insurance products for individual and group markets. However, as these products represented less than 1% of our premiums and deposits for the first nine months of 2003 and for the year ended December 31, 2002, they are not reported as a separate business segment.

              We market our products through a variable cost distribution network which consisted of approximately 70 national marketing organizations and 42,000 independent agents as of September 30, 2003. We aggressively recruit new agents and expect to continue to expand our independent agency force. In addition, we provide high quality service to our agents and policyholders along with the prompt payment of commissions to our agents. We believe that this has been significant in building excellent relationships with our independent agency force. Our relationships with these agents are largely maintained through our national marketing organizations.

              We have developed what we believe to be one of the most experienced management teams in the industry. Our senior management team is led by David Noble, Chairman, Chief Executive Officer, President and Treasurer. Mr. Noble and the rest of the senior management team have worked together in the life insurance industry for the past 15 years. Overall, our senior management team and board of directors have more than 250 combined years of experience in the life insurance, annuity and financial services industries. Further, our executive officers and directors beneficially owned approximately 30% of our common stock as of September 30, 2003.

              We market our products primarily to individuals in the United States ages 45-75 who are seeking to accumulate tax-deferred savings. As of September 30, 2003, the average age of our policyholders was approximately 67 years. Our fixed rate and index annuity products are particularly attractive to this group as a result of the guarantee of the principal with respect to those products, competitive rates of credited interest, tax-deferred growth and alternative payout options. We believe significant growth opportunities exist for annuity products because of favorable demographic and economic trends. According to the U.S. Census Bureau, there were 35.0 million Americans age 65 and older in 2000, representing 12% of the U.S. population. By 2030, this sector of the population is expected to increase to 22% of the total population. Individual fixed annuity premium income was $143 billion in 2001 (according to A.M. Best Company), having risen at a 13% compound annual rate during the prior five-year period.

Our Strategy

              Our business strategy is to focus on our annuity business and earn predictable returns by managing investment spreads and investment risk. Elements of this strategy include the following:

•

Expand our Current Independent Agency Network.  We intend to grow and enhance our core distribution channel by expanding our relationships with national marketing organizations and independent agents, by addressing their product needs and by providing the highest quality service possible.

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•

Continue to Introduce Innovative and Competitive Products.  We intend to be at the forefront of the fixed and index annuity industry in developing and introducing innovative and new competitive products. We believe that our continued focus on anticipating and being responsive to the product needs of our independent agents and policyholders will lead to increased customer loyalty, revenues and profitability.



•

Use our Expertise to Achieve Targeted Spreads on Annuity Products.  We intend to leverage our experience and expertise in managing the investment spread during a range of interest rate environments to achieve our targeted spreads.



•

Maintain our Profitability Focus and Improve Operating Efficiency.  We are committed to improving our profitability by advancing the scope and sophistication of our investment management and spread capabilities and continuously seeking out operating efficiencies within our company.



•

Take Advantage of the Growing Popularity of Some of Our Products.  We intend to capitalize on our reputation as a leading marketer of index annuities in this expanding segment of the annuity market.

Risks Related to Our Business Strategy

              You should also consider risks we face in our business that could limit our ability to implement our business strategy, including that:

•

we face competition from companies that have greater financial resources, broader arrays of products, higher ratings and stronger financial performance;



•

we might face reduced new sales, adverse effects on relationships with distributors and increased policy surrenders and withdrawals if our financial strength ratings were downgraded; and



•

changing interest rates and market volatility, in general, affect both the risks and returns on our products and investment portfolio.

              For a discussion of these and other factors that you should carefully consider before making an investment decision, see "Risk Factors" beginning on page 7 of this prospectus.

How to Contact Us

              We were incorporated in the State of Delaware on December 15, 1995, and reincorporated in the State of Iowa on January 7, 1998. Our executive offices are located at 5000 Westown Parkway, Suite 440, West Des Moines, IA 50266, and our telephone number is (515) 221-0002. Our web site address is www.american-equity.com. Information contained on our website does not constitute part of this prospectus.

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The Offering

(1)

One of our shareholders, Farm Bureau Life Insurance Company, or Farm Bureau, has a contractual right of first refusal to purchase up to 3,658,990 of the shares offered in this offering in order to maintain a 20% interest in our issued and outstanding equity securities on a fully diluted basis. There can be no assurance that Farm Bureau will purchase any shares in this offering pursuant to the exercise of its right of first refusal.

              The number of shares of our common stock outstanding immediately after this offering is based on the number of shares outstanding at September 30, 2003. This number excludes (i) 1,875,000 shares of common stock issuable upon the conversion of our series preferred stock, (ii) 2,591,014 shares issuable upon the conversion of the company-obligated convertible mandatorily redeemable preferred securities of our subsidiary trust, which we refer to as the 8% trust preferred securities, (iii) 2,157,375 shares issuable upon the exercise of outstanding management subscription rights, with an exercise price of $5.33 per share, (iv) 3,043,760 shares reserved for future issuances under our stock option plans, including 1,369,302 shares of common stock issuable upon the exercise of outstanding options with a weighted average exercise price of $6.57 per share, (v) 1,260,000 shares of common stock issuable upon the exercise of outstanding options under other stock option agreements with a weighted average exercise price of $4.63 per share, (vi) 1,059,292 shares of common stock reserved for issuance under the NMO Deferred Compensation Plan as described in note 10 to our audited consolidated financial statements and (vii) 310,723 shares of common stock reserved for issuance under deferred compensation agreements with certain employees and consultants. Please read "Capitalization" for an explanation of the shares of common stock that will be outstanding immediately following the consummation of this offering.

              Unless otherwise indicated, all information in this prospectus assumes that the underwriters will not exercise their over-allotment option.

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Summary Consolidated Financial and Other Data
(Dollars in thousands, except per share data)

              The following table sets forth our summary consolidated financial and other data. The summary consolidated statements of income and balance sheet data as of and for each of the five years in the period ended December 31, 2002 are derived from our audited consolidated financial statements and related notes, with 2002, 2001 and 2000 included elsewhere in this prospectus and 1999 and 1998 not included in this prospectus. The summary consolidated statements of income and balance sheet data as of September 30, 2003 and for the nine months ended September 30, 2003 and 2002 are derived from our unaudited interim consolidated financial statements included in this prospectus. The adjusted balance sheet data as of September 30, 2003 reflects our receipt of the estimated net proceeds of $198.3 million from this offering, assuming a public offering price of $11.50 per share, the mid-point of the price range shown on the cover of this prospectus, and the application of the proceeds therefrom. In the opinion of our management, all unaudited interim consolidated financial information presented in the table below reflects all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of our consolidated financial position and results of operations for such periods. The results of operations for the nine months ended September 30, 2003 are not necessarily indicative of the results to be expected for the full year.

              The summary consolidated financial and other data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and related notes included in this prospectus. The results for past periods are not necessarily indicative of results that may be expected for future periods.

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(a)

The accounting change resulted from the adoption of Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, which became effective on January 1, 2001.

(b)

Effective July 1, 2003 we adopted SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. See note 1 to our unaudited consolidated financial statements.

(c)

Our GAAP net income and statutory net loss in 2001 were affected by a decision to maintain a significant liquid investment position after the September 11, 2001 terrorist attacks. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Annual Results of Operations."

(d)

Book value per share is calculated as total stockholders' equity less the liquidation preference of our series preferred stock divided by the total number of shares of common stock outstanding.

(e)

We define return on equity as net income divided by average total equity. We calculate the returns for interim periods by using net income for the trailing twelve months.

(f)

Our statutory net loss in 2001 was also affected by (i) an increase in reserves related to new sales of certain of our multi-year rate guaranteed products, which have reserve requirements that are higher in earlier years and (ii) tax expense of $6.0 million caused by a difference between statutory and tax basis reserves and other timing differences.

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RISK FACTORS

              An investment in our common stock involves a number of risks. You should carefully consider each of the risks described below, together with all of the other information contained in this prospectus, before deciding to invest in shares of our common stock. If any of the following risks develop into actual events, our business, financial condition or results of operations could be negatively affected, the market price of your shares could decline and you may lose all or part of your investment.

Risks Relating to Our Company

We face competition from companies that have greater financial resources, broader arrays of products, higher ratings and stronger financial performance, which may impair our ability to retain existing customers, attract new customers and maintain our profitability and financial strength.

              We operate in a highly competitive industry. Many of our competitors are substantially larger and enjoy substantially greater financial resources, higher ratings by rating agencies, broader and more diversified product lines and more widespread agency relationships. Our annuity products compete with index, fixed rate and variable annuities sold by other insurance companies and also with mutual fund products, traditional bank investments and other retirement funding alternatives offered by asset managers, banks and broker-dealers. Our insurance products compete with those of other insurance companies, financial intermediaries and other institutions based on a number of factors, including premium rates, policy terms and conditions, service provided to distribution channels and policyholders, ratings by rating agencies, reputation and commission structures. While we compete with numerous other companies, we view the following as our most significant competitors:

•

Allianz Life Insurance of North America;



•

Midland National Life Insurance Company;



•

AmerUs Group Co.;



•

Jackson National Life Insurance Company; and



•

Jefferson Pilot Life Insurance Company.

              Our ability to compete depends in part on product pricing which is driven by our investment performance. We will not be able to accumulate and retain assets under management for our products if our investment results underperform the market or the competition, since such underperformance likely would result in asset withdrawals and reduced sales.

              We compete for distribution sources for our products. We believe that our success in competing for distributors depends on factors such as our financial strength, the services we provide to, and the relationships we develop with, these distributors and offering competitive commission structures. Our distributors are generally free to sell products from whichever providers they wish, which makes it important for us to continually offer distributors products and services they find attractive. If our products or services fall short of distributors' needs, we may not be able to establish and maintain satisfactory relationships with distributors of our annuity and life insurance products. Our ability to compete in the past has also depended in part on our ability to develop innovative new products and bring them to market more quickly than our competitors. In order for us to compete in the future, we will need to continue to bring innovative products to market in a timely fashion. Otherwise, our revenues and profitability could suffer.

              National banks, with pre-existing customer bases for financial services products, may increasingly compete with insurers, as a result of legislation removing restrictions on bank affiliations with insurers. This legislation, the Gramm-Leach-Bliley Act of 1999, permits mergers that combine commercial banks, insurers and securities firms under one holding company. Until passage of the

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Gramm-Leach-Bliley Act, prior legislation had limited the ability of banks to engage in securities-related businesses and had restricted banks from being affiliated with insurance companies. The ability of banks to increase their securities-related business or to affiliate with insurance companies may materially and adversely affect sales of all of our products by substantially increasing the number and financial strength of our potential competitors.

In July 2002, A.M. Best Company and Standard & Poor's downgraded our financial strength ratings, and a further downgrade in our financial strength ratings may reduce new sales, adversely affect relationships with distributors, and increase policy surrenders and withdrawals.

              Financial strength ratings are important factors in establishing the competitive position of life insurance and annuity companies. A ratings downgrade, or the potential for a ratings downgrade, could have a number of adverse effects on our business. For example, distributors and sales agents for life insurance and annuity products use the ratings as one factor in determining which insurer's annuities to market. A ratings downgrade could cause those distributors and agents to seek alternative carriers. In addition, a ratings downgrade could materially increase the number of policy or contract surrenders we experience.

              Financial strength ratings generally involve quantitative and qualitative evaluations by rating agencies of a company's financial condition and operating performance. Generally, rating agencies base their ratings upon information furnished to them by the insurer and upon their own investigations, studies and assumptions. Ratings are based upon factors of concern to agents, policyholders and intermediaries and are not directed toward the protection of investors and are not recommendations to buy, sell or hold securities.

              American Equity Life has received financial strength ratings of "B++" (Very Good) with a negative outlook from A.M. Best Company and "BBB+" with a negative outlook from Standard & Poor's. A.M. Best has indicated that the negative outlook reflects the decline in risk-adjusted capitalization of our insurance operations due to the rapid growth of our core individual annuity operations. Standard & Poor's has indicated that the negative outlook reflects the risk on executing our short term initiative to improve our capitalization and our interest rate risk exposure. Standard & Poor's has also indicated that once these issues are resolved within the expected time frame, the outlook could be revised to stable. A.M. Best ratings currently range from "A++" (Superior) to "F" (In Liquidation), and include 16 separate ratings categories. Within these categories, "A++" (Superior) and "A+" (Superior) are the highest, followed by "A" (Excellent), "A-" (Excellent), B++ (Very Good) and B+ (Very Good). Publications of A.M. Best indicate that the "B++" rating is assigned to those companies that, in A.M. Best's opinion, have demonstrated a good ability to meet their ongoing obligations to policyholders. Standard & Poor's insurer financial strength ratings currently range from "AAA" to "NR", and include 21 separate ratings categories. Within these categories, "AAA" and "AA" are the highest, followed by "A" and "BBB". Publications of Standard & Poor's indicate that an insurer rated "BBB" or higher is regarded as having strong financial security characteristics, but is somewhat more likely to be affected by adverse business conditions than are higher rated insurers.

              A.M. Best and Standard & Poor's review their ratings of insurance companies from time to time. There can be no assurance that any particular rating will continue for any given period of time or that it will not be changed or withdrawn entirely if, in their judgment, circumstances so warrant. If our ratings were to be downgraded for any reason, we could experience a material adverse effect on the sales of our products and the persistency of our existing business.

              In July 2002, A.M. Best Company and Standard & Poor's adjusted our financial strength ratings from "A-"(Excellent) to "B++"(Very Good) and "A-" to "BBB+", respectively. The adjustments initially had no impact on sales of new annuity products or on lapses of existing balances. Beginning in November 2002, our monthly sales volumes began to decline primarily as a result of

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certain actions by us, including reductions in crediting rates and suspension of sales of one of our higher commission annuity products and our most popular multi-year rate guaranteed annuity product. The degree to which ratings adjustments also contributed to this decline is unknown. Our ability to grow sales of new annuities and the level of surrenders of our existing annuity contracts in force during 2003 may be affected by, among other things, the current ratings and our levels of statutory capital and surplus.

General economic conditions, including changing interest rates and market volatility, affect both the risks and the returns on both our products and our investment portfolio.

              The market value of our investments and our investment performance, including yields and realization of gains or losses, may vary depending on economic and market conditions. Such conditions include the shape of the yield curve, the level of interest rates and recognized equity and bond indices, including, without limitation, the S&P 500 Index®, the Dow Jones Index^SM and the NASDAQ-100 Index® (the "Indices"). Interest rate risk is our primary market risk exposure. Substantial and sustained increases and decreases in market interest rates can materially and adversely affect the profitability of our products, the market value of our investments and the reported value of stockholders' equity. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk" for a further discussion of our interest rate risk exposure.

              From time to time, for business or regulatory reasons, we may be required to sell certain of our investments at a time when their market value is less than the carrying value of these investments. Rising interest rates may cause declines in the value of our fixed maturity securities. With respect to our available for sale fixed maturity securities, such declines (net of income taxes and certain adjustments for assumed changes in amortization of deferred policy acquisition costs) reduce our reported stockholders' equity and book value per share. We have a portfolio of held for investment securities which consists principally of long duration bonds issued by U.S. government agencies, the value of which is also sensitive to interest rate changes.

              We may also have difficulty selling our commercial mortgage loans because they are less liquid than our publicly traded securities. As of September 30, 2003, our commercial mortgage loans represented approximately 9% of the value of our invested assets. If we require significant amounts of cash on short notice, we may have difficulty selling these loans at attractive prices or in a timely manner, or both.

              A key component of our net income is the investment spread. A narrowing of investment spreads may adversely affect operating results. Although we have the right to adjust interest crediting rates (referred to as "participation," "asset fee" or "cap" rates for index annuities) on most products, changes to crediting rates may not be sufficient to maintain targeted investment spreads in all economic and market environments. In general, our ability to lower crediting rates is subject to a minimum crediting rate filed with and approved by state regulators. In addition, competition and other factors, including the potential for increases in surrenders and withdrawals, may limit our ability to adjust or maintain crediting rates at levels necessary to avoid the narrowing of spreads under certain market conditions. Our policy structure generally provides for resetting of policy crediting rates at least annually and imposes withdrawal penalties for withdrawals during the first three to 16 years a policy is in force.

              Our spreads may be compressed in declining interest rate environments. A substantial portion of our fixed income securities have call features and are subject to redemption currently or in the near future. We have reinvestment risk related to these redemptions to the extent we cannot reinvest the net proceeds in assets with credit quality and yield characteristics similar to or better than those of the redeemed bonds.

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              Managing the investment spread on our index annuities is more complex than it is for fixed rate annuity products. Index products are credited with a percentage (known as the "participation rate") of gains in the Indices. Some of our index products have an annual asset fee which is deducted from the amount credited to the policy. In addition, caps are set on some products to limit the maximum amount which may be credited on a particular product. To fund the earnings to be credited to the index products, we purchase options on the Indices. The price of such options increases with increases in the volatility in the Indices and interest rates, which may either narrow the spread or cause us to lower participation rates. Thus, the volatility of the Indices adds an additional degree of uncertainty to the profitability of the index products. We attempt to mitigate this risk by resetting participation rates and asset fees annually and adjusting the applicable caps.

Our investment portfolio is also subject to credit quality risks which may diminish the value of our invested assets and affect our sales, profitability and reported book value per share.

              We are subject to the risk that the issuers of our fixed maturity securities and other debt securities (other than our U.S. agency securities), and borrowers on our commercial mortgages, will default on principal and interest payments, particularly if a major downturn in economic activity occurs. At September 30, 2003, 89% of our invested assets consisted of fixed maturity securities, of which 1% were below investment grade. At September 30, 2003, there were no delinquencies in our commercial mortgage loan portfolio. An increase in defaults on our fixed maturity securities and commercial mortgage loan portfolios could harm our financial strength and reduce our profitability.

              We use derivative instruments to fund the annual credits on our index annuities. We purchase derivative instruments, consisting primarily of one-year call options, from a number of counterparties. Our policy is to acquire such options only from counterparties rated BBB+ or better by a nationally recognized rating agency. If, however, our counterparties fail to honor their obligations under the derivative instruments, we will have failed to provide for crediting to policyholders related to the appreciation in the applicable indices. Any such failure could harm our financial strength and reduce our profitability.

Our reinsurance program involves risks because we remain liable with respect to the liabilities ceded to reinsurers if the reinsurers fail to meet the obligations assumed by them.

              Our life subsidiaries cede insurance to other insurance companies through reinsurance. In particular, effective August 1, 2001, American Equity Life entered into a coinsurance agreement with Equitrust Life Insurance Company, or Equitrust, an affiliate of Farm Bureau, covering 70% of our non-multi year rate guarantee fixed annuities and index annuities issued from August 1, 2001 through December 31, 2001, and 40% of those contracts for 2002 and 2003. At September 30, 2003, the aggregate policy benefit reserve transferred to Equitrust was approximately $1.8 billion. Equitrust has been assigned a financial strength rating of "A" by A.M. Best Company. We remain liable with respect to the policy liabilities ceded to Equitrust should it fail to meet the obligations assumed by it. As of September 30, 2003, Farm Bureau beneficially owned 32% of our common stock.

              In addition, we have entered into other types of reinsurance transactions including indemnity and financial reinsurance. Should any of these reinsurers fail to meet the obligations assumed under such reinsurance, we remain liable with respect to the liabilities ceded.

We may experience volatility in net income due to changes in standards for accounting for derivatives.

              The Financial Accounting Standards Board issued Statement of Financial Accounting Standards, or SFAS No. 133, which became effective for us on January 1, 2001. Under SFAS No. 133, as amended, all derivative instruments (including certain derivative instruments embedded in other contracts) are recognized in the balance sheet at their fair values and changes in fair value are

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recognized immediately in earnings. This impacts the items of revenue and expense we report on our equity index business in three ways.

•

We must mark to market the purchased call options we use to fund the annual index credits on our index annuities based upon quoted market prices from related counterparties. We record the change in fair value of these options as a component of our revenues. Included within the change in fair value of the options is an element reflecting the time value of the options, which initially is their purchase cost declining to zero at the end of their one-year lives. For the nine months ended September 30, 2003 and the years ended December 31, 2002 and 2001, the change in fair value of derivatives was $25.1 million, $(57.8) million and $(55.2) million, respectively.



•

Under SFAS No. 133, the future annual index credits on our index annuities are treated as a "series of embedded derivatives" over the expected life of the applicable contracts. We are required to estimate the fair value of these embedded derivatives. Our estimates of the fair value of these embedded derivatives are based on assumptions related to underlying policy terms (including annual cap rates, participation rates, asset fees and minimum guarantees), index values, notional amounts, strike prices and expected lives of the policies. The change in fair value of embedded derivatives increases with increases in volatility in the Indices and interest rates. The change in fair value of the embedded derivatives will not correspond to the change in fair value of the purchased options because the purchased options are one-year options while the options valued in the fair value of embedded derivatives cover the expected life of the contract which typically exceeds 10 years. The change in estimated fair value of the series of embedded options included in policyholder benefits in the consolidated statements of income was $40.9 million, $(5.0) million and $12.9 million for the nine months ended September 30, 2003 and the years ended December 31, 2002 and 2001, respectively.



•

We adjust the amortization of deferred policy acquisition costs to reflect the impact of the two items discussed above. Amortization of deferred policy acquisition costs decreased by $0.5 million during the nine months ended September 30, 2003, increased by $1.4 million for the year ended December 31, 2002 and decreased by $0.8 million for the year ended December 31, 2001.

              The application of SFAS No. 133 in future periods to the revenues and expenses related to our index annuity business may cause volatility in our reported net income.

If we do not manage our growth effectively, our financial performance could be adversely affected; our historical growth rates may not be indicative of our future growth.

              We have experienced rapid growth since our formation in December 1995. Our annuity deposits have grown from approximately $141.9 million in 1997 to $2.4 billion before coinsurance ($1.6 billion net of coinsurance) in 2002. For the nine months ended September 30, 2003, our deposits from sales of new annuities before coinsurance were $1,353.2 million ($846.1 million net of coinsurance). Our work force has grown from approximately 65 employees and 4,000 independent agents as of December 31, 1997 to approximately 200 employees and 42,000 independent agents as of September 30, 2003. We intend to continue to grow by recruiting new independent agents, increasing the productivity of our existing agents, expanding our insurance distribution network, making strategic acquisitions, developing new products, expanding into new product lines, becoming licensed in all 50 states and continuing to develop new incentives for our sales agents. Future growth will impose significant added responsibilities on our management, including the need to identify, recruit, maintain and integrate additional employees, including management. There can be no assurance that our systems, procedures and controls will be adequate to support our operations as they expand. In

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addition, due to our rapid growth and resulting increased size, it may be necessary to expand the scope of our investing activities to asset classes in which we historically have not invested or have not had significant exposure. If we are unable to adequately manage our investments in these classes, our financial condition or operating results in the future could be less favorable than in the past. Further, we have utilized reinsurance to support our growth and the future availability of reinsurance is uncertain. Our failure to manage growth effectively, or our inability to recruit, maintain and integrate additional qualified employees and independent agents, could have a material adverse effect on our business, financial condition or results of operations. In addition, due to our rapid growth, our historical growth rates are not likely to accurately reflect our future growth rates or our growth potential. We cannot assure you that our future revenues will increase or that we will continue to be profitable.

We must retain and attract key employees or else we may not grow or be successful.

              We are dependent upon our executive management for the operation and development of our business. Our executive management team includes:

•

David J. Noble, Chairman, Chief Executive Officer, President and Treasurer;



•

John M. Matovina, Vice Chairman;



•

Kevin R. Wingert, President of American Equity Life;



•

James R. Gerlach, Executive Vice President;



•

Terry A. Reimer, Executive Vice President;



•

Debra J. Richardson, Senior Vice President; and



•

Wendy L. Carlson, General Counsel and Chief Financial Officer.

              Although we have change in control agreements with members of our executive management team, we do not have employment contracts with any of the members of our executive management team. Although none of our executive management team has indicated that they intend to terminate their employment with us, there can be no assurance that these employees will remain with us for any particular period of time. Also, we do not maintain "key person" life insurance for any of our personnel.

If we are unable to attract and retain national marketing organizations and independent agents, sales of our products may be reduced.

              We distribute our annuity products through a variable cost distribution network which included approximately 70 national marketing organizations and 42,000 independent agents as of September 30, 2003. We must attract and retain such marketers and agents to sell our products. Insurance companies compete vigorously for productive agents. We compete with other life insurance companies for marketers and agents primarily on the basis of our financial position, support services, compensation and product features. Such marketers and agents may promote products offered by other life insurance companies that may offer a larger variety of products than we do. Our competitiveness for such marketers and agents also depends upon the long-term relationships we develop with them. If we are unable to attract and retain sufficient marketers and agents to sell our products, our ability to compete and our revenues would suffer.

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We may require additional capital to support sustained future growth which may not be available when needed or may be available only on unfavorable terms.

              Our long-term strategic capital requirements will depend on many factors including the accumulated statutory earnings of our life subsidiaries and the relationship between the statutory capital and surplus of our life subsidiaries and (i) the rate of growth in sales of our products; and (ii) the levels of credit risk and/or interest rate risk in our invested assets. To support long-term capital requirements, we may need to increase or maintain the statutory capital and surplus of our life subsidiaries through additional financings, which could include debt, equity, financial reinsurance and/or other surplus relief transactions. Such financings, if available at all, may be available only on terms that are not favorable to us. In the case of additional equity offerings, dilution to our shareholders could result, and/or such securities may have rights, preferences and privileges that are senior to those of the common stock offered hereby. In the case of debt offerings or placements, the holders of the debt will have rights preferences and privileges that are senior to those of the common stock offered hereby. If we cannot maintain adequate capital, we may be required to limit growth in sales of new annuity products, and such action could adversely affect our business, financial condition or results of operations.

Changes in state and federal regulation may affect our profitability.

              We are subject to regulation under applicable insurance statutes, including insurance holding company statutes, in the various states in which our life subsidiaries write insurance. Our life subsidiaries are domiciled in New York and Iowa. We are currently licensed to sell our products in 46 states and the District of Columbia.

              Insurance regulation is intended to provide safeguards for policyholders rather than to protect shareholders of insurance companies or their holding companies. Regulators oversee matters relating to trade practices, policy forms, claims practices, guaranty funds, types and amounts of investments, reserve adequacy, insurer solvency, minimum amounts of capital and surplus, transactions with related parties, changes in control and payment of dividends.

              State insurance regulators and the National Association of Insurance Commissioners, or NAIC, continually reexamine existing laws and regulations, and may impose changes in the future.

              Our life subsidiaries are subject to the NAIC's risk-based capital requirements which are intended to be used by insurance regulators as an early warning tool to identify deteriorating or weakly capitalized insurance companies for the purpose of initiating regulatory action. Our life subsidiaries also may be required, under solvency or guaranty laws of most states in which they do business, to pay assessments up to certain prescribed limits to fund policyholder losses or liabilities of insolvent insurance companies.

              Although the federal government does not directly regulate the insurance business, federal legislation and administrative policies in several areas, including pension regulation, age and sex discrimination, financial services regulation, securities regulation and federal taxation, can significantly affect the insurance business. As increased scrutiny has been placed upon the insurance regulatory framework, a number of state legislatures have considered or enacted legislative proposals that alter, and in many cases increase, state authority to regulate insurance companies and holding company systems. In addition, legislation has been introduced in Congress which could result in the federal government assuming some role in the regulation of the insurance industry. The regulatory framework at the state and federal level applicable to our insurance products is evolving. The changing regulatory framework could affect the design of such products and our ability to sell certain products. Any changes in these laws and regulations could materially and adversely affect our business, financial condition or results of operations.

              From time to time, various tax law changes have been proposed that could have an adverse effect on our business, including the elimination of all or a portion of the income tax advantage for annuities and life insurance. If the legislation were enacted to eliminate the tax deferral for annuities, such a change would have a material adverse effect on our ability to sell non-qualified annuities.

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Changes in federal income taxation laws, including recent reductions in individual income tax rates, may affect sales of our products and profitability.

              The annuity products that we market generally offer tax advantages to the policyholders, as compared to other savings instruments such as certificates of deposit and taxable bonds. This tax preference is the deferral of income tax on the earnings during the accumulation period of the annuity as opposed to the current taxation of other savings instruments. From time to time, Congress has considered proposals to revise or eliminate this tax deferral. There is no such proposal currently pending in Congress, nor has the current Administration announced any consideration of such a proposal. Legislation eliminating the tax deferral for certain annuities would have a material adverse effect on our ability to sell non-qualified annuities. Non-qualified annuities are annuities that are sold to a policyholder other than an individual retirement account or other qualified retirement plan.

              In June 2001, the Economic Growth and Tax Relief Reconciliation Act of 2001 (the "2001 Act") was signed into law. The 2001 Act contains provisions that will, over time, significantly lower individual income tax rates. The 2001 Act will have the effect of reducing the benefits of deferral on the build-up of value of annuities and life insurance products. Some of these changes might hinder sales of our annuities and result in the increased surrender of annuities. We cannot predict the overall effect on the sales or surrenders of our products of the tax law changes included in the 2001 Act.

              In May 2003, the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "2003 Act") was signed into law. The 2003 Act provisions accelerate the individual income tax rate reductions passed in the 2001 Act. The 2003 Act will have the effect of reducing the benefits of deferral on the build-up of value of annuities and life insurance products. In addition, the 2003 Act significantly reduced the individual income tax rate on corporate dividends which might cause investors to view annuities as somewhat less attractive when compared to investments in equity securities that pay dividends than they were prior to the 2003 Act. Therefore, these changes could have the result of reducing sales of our annuities.

We face risks relating to litigation, including the costs of such litigation, management distraction and the potential for damage awards, which may adversely impact our business.

              We are occasionally involved in litigation, both as a defendant and as a plaintiff. In addition, state regulatory bodies, such as state insurance departments, the SEC, the National Association of Securities Dealers, Inc., the Department of Labor, and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, the Employee Retirement Income Security Act of 1974, as amended, and laws governing the activities of broker-dealers. Companies in the life insurance and annuity business have faced litigation, including class action lawsuits, alleging improper product design, improper sales practices and similar claims. We are currently a defendant in two purported class action lawsuits filed in state courts alleging improper sales practices. In both lawsuits, the plaintiffs are seeking returns of premiums and other compensatory and punitive damages. However, in neither lawsuit have damage amounts been specified. In neither case has the class been certified at this time. Although we have denied all allegations in these lawsuits and intend to vigorously defend against them, the lawsuits are in the early stages of litigation and their outcomes cannot at this time be determined. While we do not believe that these lawsuits will have a material adverse effect on our business, financial condition or results of operations, there can be no assurance that such litigation, or any future litigation, will not have such an effect, whether financially, through distraction of our management or otherwise.

Risks Relating to This Offering

An active trading market may not develop for our common stock.

              You may find it difficult to sell your shares of common stock because an active trading market for our common stock may not develop. There is no existing trading market for our common stock, and there can be no assurance regarding the future development of a market for our common stock, or the ability of the holders of our common stock to sell their shares of common stock or the price at which

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such holders may be able to sell their shares of common stock. If such a market were to develop, our common stock could trade at prices that may be higher or lower than the initial offering price of our common stock depending on many factors, including the number of holders of our common stock, our future operating results and financial condition, the interest of securities dealers in making a market in our common stock, the market for similar securities and general economic and market conditions. We cannot predict the effects these factors will have on future trading prices of our common stock offered pursuant to this prospectus.

              We have been authorized to list our common stock on the New York Stock Exchange under the symbol "AEL." We do not know the extent to which investor interest will lead to the development of a trading market or how liquid that market might be. Although the underwriters have informed us that they intend to make a market in our common stock, they are not obligated to do so, and any market-making may be discontinued at any time without notice. Therefore, there can be no assurance as to the liquidity of any trading market for our common stock or that an active market for our common stock will develop or, if developed, that it will continue. As a result, the market price of our common stock, as well as your ability to sell our common stock, could be adversely affected.

The value of your investment may be subject to sudden decreases due to the potential volatility of the price for our common stock.

              The market price of our common stock may be highly volatile and subject to wide fluctuations in response to numerous factors, including the following:

•

actual or anticipated fluctuations in our operating results;



•

changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;



•

the operating and stock performance of our competitors;



•

announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;



•

changes in interest rates;



•

general domestic or international economic, market and political conditions;



•

additions or departures of key personnel; and



•

future sales of our common stock.

              In addition, the stock markets from time to time experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of companies. These broad fluctuations may adversely affect the trading price of our common stock, regardless of our actual operating performance.

              In the past, some shareholders have brought securities class action lawsuits against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and divert management's attention and resources.

Possible future sales of our common stock by our officers and others could cause the market price of our common stock to decrease and make equity capital raising more difficult.

              Sales of significant amounts of our common stock after this offering or the perception that such sales will occur could adversely affect the market price of our common stock or our future ability to raise capital through an offering of equity securities. After this offering, we will have outstanding 33,294,035 shares of common stock. All of the shares of common stock to be sold in this offering will be freely tradable without restriction or further registration under the federal securities laws unless purchased by our "affiliates" within the meaning of Rule 144 under the Securities Act. The 14,594,035 remaining shares of outstanding common stock upon completion of this offering will be "restricted securities" under the Securities Act, subject to restrictions on the timing, manner and volume of sales of those shares.

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              All of our directors and officers and certain shareholders, including Farm Bureau and the NMO Deferred Compensation Trust, holding an aggregate of 84% of our outstanding common stock prior to this offering have entered into 180-day lock-up agreements as described in "Shares Eligible for Future Sale" and "Underwriting". Each of the remaining shareholders that have entered into these lock-up agreements held less than 3% of our outstanding common stock prior to this offering. Subject to these lock-up agreements, holders of up to 2,242,250 shares of common stock will have the right to request the registration of their shares under the Securities Act. Upon the effectiveness of that registration, all shares covered by that registration statement will be freely transferable. Following the closing of this offering, we also intend to file a registration statement on Form S-8 under the Securities Act covering 6,161,135 shares of common stock reserved for issuance under our stock option plans and other stock options and rights granted to members of management. Accordingly, subject to applicable vesting requirements and exercise with respect to options, shares registered under that registration statement will be available for sale in the open market immediately after the 180-day lock-up agreements expire. For a more detailed description of additional shares that may be sold in the future, please refer to "Shares Eligible for Future Sale" on page 85 and "Underwriting" on page 89.

Our ability to meet our payment obligations is dependent upon distributions from our subsidiaries, but our subsidiaries' ability to make distributions is limited by law and several contractual agreements.

              We are a holding company and, by virtue of our holding company structure, our common stock in effect will be junior in right of payment to all existing and future liabilities of our life subsidiaries. Our principal assets are the shares of the capital stock and surplus notes of our life subsidiaries and a note receivable from American Equity Investment Service Company, or the Service Company. As a holding company without independent means of generating operating revenues, we depend on dividends, interest on surplus notes, investment advisory fees and other payments from our life subsidiaries to fund our obligations and meet our cash needs. We also receive principal and interest payments on our note receivable from the Service Company. For a more detailed description of our note receivable from the Service Company, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity of Parent Company" on page 48.

              The transfer of funds by American Equity Life is restricted by certain covenants in our loan agreement which, among other things, require American Equity Life to maintain statutory capital and surplus (including the asset valuation and interest maintenance reserves) of $140 million plus 25% of statutory net income and 75% of the capital contributions to American Equity Life for periods subsequent to December 31, 1999. Under the most restrictive of these limitations, $25.9 million of our earned surplus at September 30, 2003 and December 31, 2002 was available for distribution by American Equity Life to the parent company in the form of dividends or other distributions. As disclosed in the unaudited and audited consolidated financial statements included elsewhere in this prospectus, our loan agreement has been amended from time to time to maintain our continuing compliance with these and other restrictive covenants.

              The payment of dividends or distributions, including surplus note payments, by our life subsidiaries is subject to regulation by each such subsidiary's state of domicile's insurance department. Currently, our life subsidiaries may pay dividends or make other distributions without the prior approval of their state of domicile's insurance department, unless such payments, together with all other such payments within the preceding twelve months, exceed, in Iowa, the greater of, and in New York, the lesser of (1) the life subsidiary's net gain from operations for the preceding calendar year, or (2) 10% of the life subsidiary's statutory surplus at the preceding December 31. For 2003, up to $25.9 million can be distributed as dividends or surplus note payments by American Equity Life without prior approval of the Iowa insurance department. In addition, dividends and surplus note payments may be made only out of earned surplus, and all surplus note payments are subject to prior approval by regulatory authorities in the life subsidiary's state of domicile. American Equity Life had approximately

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$48.3 million and $47.4 million of earned surplus at September 30, 2003 and December 31, 2002, respectively.

              In addition, our life subsidiaries are subject to the NAIC's risk-based capital, or RBC, requirement set forth in the Risk-Based Capital for Insurers Model Act, or the Model Act. The main purpose of the Model Act is to provide a tool for insurance regulators to evaluate the capital of insurers relative to the risks assumed by them and determine whether there is a need for possible corrective action. U.S. insurers and reinsurers are required to report the results of their RBC calculations as part of the statutory annual statements filed with state insurance regulatory authorities.

              The Model Act provides for four different levels of regulatory actions based on annual statements, each of which may be triggered if an insurer's total adjusted capital, as defined in the Model Act, is less than a corresponding RBC.

•

The company action level is triggered if an insurer's total adjusted capital is less than 250% of its authorized control level RBC, as defined in the Model Act. At the company action level, the insurer must submit a plan to the regulatory authority that discusses proposed corrective actions to improve its capital position.



•

The regulatory action level is triggered if an insurer's total adjusted capital is less than 150% of its authorized control level RBC. At the regulatory action level, the regulatory authority will perform a special examination of the insurer and issue an order specifying corrective actions that must be followed.



•

If an insurer's total adjusted capital is less than its authorized control level RBC, the regulatory authority is authorized (although not mandated) to take regulatory control of the insurer.



•

The mandatory control level is triggered if an insurer's total adjusted capital is less than 70% of its authorized control level RBC, and at that level the regulatory authority must take regulatory control of the insurer. Regulatory control may lead to rehabilitation or liquidation of an insurer.

              As of September 30, 2003, the total adjusted capital of our life subsidiaries exceeded the company action level.

              Although we believe our current sources of funds provide adequate cash flow to us to meet our current and reasonably forseeable future obligations, there can be no assurance that we will continue to have access to these sources in the future.

Anti-takeover provisions affecting us could prevent our shareholders from obtaining a change of control premium for their shares of our common stock and could impede an attempt to replace or remove our board of directors or management.

              Our articles of incorporation, as amended, our amended and restated bylaws and Iowa law contain anti-takeover provisions that could have the effect of delaying or preventing changes in control that a shareholder may consider favorable. The provisions in our charter documents include the following:

•

our amended articles of incorporation and bylaws provide for a classified board of directors pursuant to which our directors are divided into three classes, with three-year staggered terms;



•

our amended articles of incorporation provide our board of directors the ability to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without shareholder approval;

17

•

our bylaws provide that shareholder action may be taken only at a special or regular meeting or by written consent signed by the holders of outstanding shares having not less than 90% of the votes entitled to be cast at a meeting at which all shares entitled to vote on the action were present and voted;



•

our bylaws limit our shareholders' ability to make proposals at shareholder meetings; and



•

our bylaws establish advance notice procedures for nominating candidates to our board of directors.

              The foregoing provisions could have the effect of entrenching our board of directors or management, or delaying, deferring or preventing a change in control of our company; discourage bids for our common stock at a premium over the market price; or adversely affect the market price of, and the voting and other rights of the holders of, our common stock. We are subject to certain Iowa laws that could have similar effects. One of these laws, Section 490.1110 of the Iowa Business Corporation Act, prohibits us from engaging in a business combination with any interested shareholder for a period of three years from the date the person became an interested shareholder unless certain conditions are met.

You will incur immediate and substantial dilution in net tangible book value.

              We expect that the initial public offering price of our common stock will be substantially higher than the net tangible book value of each outstanding share of common stock. If you purchase common stock in this offering, you will suffer immediate and substantial dilution. Assuming a public offering price of $11.50 per share, the mid-point of the price range shown on the cover of this prospectus, the dilution will be $3.06 per share in the net tangible book value of the common stock from the initial public offering price. This means that investors who purchase shares in this offering will:

•

pay a price per share that substantially exceeds the value of our assets after subtracting our liabilities; and



•

contribute 76.5% of the total amount to fund the company but will own only 56.2% of the shares outstanding.

              For a more detailed discussion of dilution, please refer to "Dilution" on page 23.

After the offering, our executive officers, directors, and parties related to them, in the aggregate, will control 11% of our voting stock and may have the ability to control matters requiring shareholder approval, and another shareholder may control 20% of our voting stock and may also have the ability to significantly influence matters requiring shareholder approval.

              Our executive officers, directors and parties related to them own a large enough stake in us to have an influence on the matters presented to shareholders. As a result, these shareholders may have the ability to control matters requiring shareholder approval, including the election and removal of directors, the approval of significant corporate transactions, such as any merger, consolidation or sale of all or substantially all of our assets, and the control of our management and affairs. One of our shareholders, Farm Bureau, has a "right of first refusal" to maintain a 20% interest in our issued and outstanding equity securities on a fully diluted basis in certain circumstances, including in connection with this offering. See "Principal Shareholders." If Farm Bureau elects to exercise this right in full and maintain its ownership at 20% of our issued and outstanding equity securities on a fully diluted basis, it may have the ability to significantly influence matters requiring shareholder approval, including the matters listed above. There can be no assurance that Farm Bureau will purchase any shares in this offering pursuant to the exercise of this right. Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change in control of us, impede a merger, consolidation, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could have

18

an adverse effect on the market price of our common stock. In addition, some of Farm Bureau's affiliates have entered into transactions with us (see "Certain Relationships and Related Party Transactions") and, as a result, Farm Bureau may have interests that are different from or in addition to its interest as a shareholder in our company. Farm Bureau may seek to use its position as a major shareholder to further those other interests.

Our management will have broad discretion in allocating proceeds from this offering.

              The net proceeds to us from this offering, after deducting underwriting commissions and expenses payable by us, are estimated to be approximately $198.3 million, assuming a public offering price of $11.50 per share, the mid-point of the price range shown on the cover of this prospectus. The primary purpose of this offering is to increase the capital and surplus of our life subsidiaries to support future growth of our business. Our management will retain broad discretion as to the allocation of the proceeds of this offering. The failure of management to apply these funds effectively could negatively impact our business and prospects. See "Use of Proceeds."

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FORWARD-LOOKING STATEMENTS

              All statements, trend analyses and other information contained in this prospectus and elsewhere (such as in filings by us with the Securities and Exchange Commission, press releases, presentations by us or our management or oral statements) relative to markets for our products and trends in our operations or financial results, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," and other similar expressions, constitute forward-looking statements. We caution that these statements may and often do vary from actual results and the differences between these statements and actual results can be material. Accordingly, we cannot assure you that actual results will not differ materially from those expressed or implied by the forward-looking statements. Factors that could contribute to these differences include, among other things:

•

general economic conditions and other factors, including prevailing interest rate levels and stock and credit market performance which may affect (among other things) our ability to sell our products, our ability to access capital resources and the costs associated therewith, the market value of our investments and the lapse rate and profitability of policies;



•

customer response to new products and marketing initiatives;



•

changes in Federal income tax laws and regulations which may affect the relative income tax advantages of our products;



•

increasing competition in the sale of annuities;



•

regulatory changes or actions, including those relating to regulation of financial services affecting (among other things) bank sales and underwriting of insurance products and regulation of the sale, underwriting and pricing of products; and



•

the factors discussed in the section entitled "Risk Factors" and elsewhere in this prospectus.

              You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this prospectus. Except as otherwise required by applicable laws, we undertake no obligation to publicly update or revise any forward-looking statements or the risk factors described in this prospectus, whether as a result of new information, future events, changed circumstances or any other reason after the date of this prospectus.

              You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

              You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations or prospects may have changed since that date.

USE OF PROCEEDS

              We estimate that we will receive net proceeds of approximately $198.3 million from the sale of shares of our common stock in this offering, after deducting underwriting discounts and commissions and estimated offering expenses, assuming a public offering price of $11.50 per share, the mid-point of the price range shown on the cover of this prospectus. If the underwriters' over-allotment option is exercised in full, we estimate that our net proceeds will be aproximately $228.3 million.

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              We expect to contribute substantially all of the proceeds directly or indirectly to the capital and surplus of our life subsidiaries.

DIVIDEND POLICY

              In 2002 and 2001, we paid a cash dividend of $0.01 per share on our common stock and $0.03 on our series preferred stock. We intend to continue to pay an annual cash dividend on such shares so long as we have sufficient capital and/or future earnings to do so. However, we anticipate retaining most of our future earnings, if any, for use in our operations and the expansion of our business. Any further determination as to dividend policy will be made by our board of directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition and future prospects and such other factors as our board of directors may deem relevant.

              Our credit agreement contains a restrictive covenant which limits our ability to declare or pay dividends in any fiscal year to 25% of our consolidated net income for the prior year. In addition, since we are a holding company, our ability to pay cash dividends depends in large measure on our subsidiaries' ability to make distributions of cash or property to us.

              The transfer of funds by American Equity Life is restricted by certain covenants in our loan agreement which, among other things, require American Equity Life to maintain statutory capital and surplus (including the asset valuation and interest maintenance reserves) of $140 million plus 25% of statutory net income and 75% of the capital contributions to American Equity Life for periods subsequent to December 31, 1999. Under the most restrictive of these limitations, $25.9 million of our earned surplus at September 30, 2003 and December 31, 2002 was available for distribution by American Equity Life to the parent company in the form of dividends or other distributions. As disclosed in the unaudited and audited consolidated financial statements included elsewhere in this prospectus, our loan agreement has been amended from time to time to maintain our continuing compliance with these and other restrictive covenants.

              The payment of dividends or distributions, including surplus note payments, by our life subsidiaries is subject to regulation by each such subsidiary's state of domicile's insurance department. Currently, our life subsidiaries may pay dividends or make other distributions without the prior approval of their state of domicile's insurance department, unless such payments, together with all other such payments within the preceding twelve months, exceed, in Iowa, the greater of, and in New York, the lesser of (1) the life subsidiary's net gain from operations for the preceding calendar year, or (2) 10% of the life subsidiary's statutory surplus at the preceding December 31. For 2003, up to approximately $25.9 million can be distributed as dividends or surplus note payments by American Equity Life without prior approval of the Iowa insurance department. In addition, dividends and surplus note payments may be made only out of earned surplus, and all surplus note payments are subject to prior approval by regulatory authorities in the life subsidiary's state of domicile. American Equity Life had approximately $48.3 million and $47.4 million of earned surplus at September 30, 2003 and December 31, 2002, respectively.

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CAPITALIZATION

              The following table sets forth our capitalization as of September 30, 2003 and as adjusted to reflect our receipt of the estimated net proceeds of $198.3 million from this offering and the application of the proceeds therefrom, assuming a public offering price of $11.50 per share, the mid-point of the price range shown on the cover of this prospectus. The table set forth below should be read in conjunction with our consolidated financial statements, related notes and other financial information included elsewhere in this prospectus.

              The table above excludes (i) 1,875,000 shares of common stock issuable upon the conversion of our series preferred stock and (ii) 2,591,014 shares issuable upon the conversion of the 8% trust preferred securities at a conversion price of $10.00 per share (based upon an assumed offering price of $11.50 per share). The table above also excludes (i) 2,157,375 shares of common stock issuable upon the exercise of outstanding management subscription rights, with an exercise price of $5.33 per share and (ii) 4,303,760 shares reserved for future issuances under our stock option plans and other stock option agreements including shares of common stock issuable upon the exercise of outstanding stock options. See "Management—Executive Compensation". The table above also excludes 1,059,292 shares reserved for issuance under the NMO Deferred Compensation Plan as described in note 10 to our audited consolidated financial statements and 310,723 shares reserved for issuance under deferred compensation agreements with certain employees and consultants.

(a)

Ratio of debt to total capitalization excludes from debt the company-obligated convertible mandatorily redeemable preferred securities of American Equity Capital Trust I.

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DILUTION

              Purchasers of our common stock in this offering will suffer an immediate and substantial dilution in net tangible book value per share. Dilution is the amount by which the offering price paid by the purchasers of our common stock to be sold in this offering exceeds the net tangible book value per share of our common stock after the offering. Net tangible book value per share is determined by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of our common stock deemed to be outstanding on the date the book value is determined.

              Our net tangible book value as of September 30, 2003 was approximately $82.8 million, or $5.68 per share of common stock taking into effect the liquidation preference of our series preferred stock. After giving effect to the sale of 18,700,000 shares of common stock in this offering at an assumed public offering price of $11.50 per share, the mid-point of the price range shown on the cover of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses and after giving effect to the application of the estimated net proceeds, our net tangible book value as of September 30, 2003, would have been $281.1 million or $8.44 per share. This represents an immediate increase in net tangible book value of $2.76 per share to the existing shareholders and an immediate dilution of $3.06 per share to new investors purchasing shares in this offering. The following table illustrates this per share dilution:

              The following table summarizes, as of September 30, 2003, the differences between existing shareholders and new investors with respect to the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid before deducting estimated underwriting discounts, commissions and other expenses payable by us.

              The tables and calculations above exclude (i) 1,875,000 shares of common stock issuable upon the conversion of our series preferred stock, (ii) 2,591,014 shares issuable upon the conversion of the 8% trust preferred securities, (iii) 2,157,375 shares issuable upon the exercise of outstanding management subscription rights, with an exercise price of $5.33 per share, (iv) 3,043,760 shares reserved for future issuances under our stock option plans, including 1,369,302 shares of common stock issuable upon the exercise of outstanding options with a weighted average exercise price of $6.57 per share, (v) 1,260,000 shares of common stock issuable upon the exercise of outstanding options under other stock option agreements with a weighted average exercise price of $4.63 per share, (vi) 1,059,292 shares reserved for issuance under the NMO Deferred Compensation Plan as described in note 10 to our audited consolidated financial statements and (vii) 310,723 shares of common stock reserved for issuance under deferred compensation agreements with certain employees and consultants. To the extent that these options are exercised or these shares are issued under the NMO Deferred Compensation Plan, there will be further dilution to new investors. See "Management—Executive Compensation."

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(Dollars in thousands except per share data)

              The following table sets forth our selected consolidated financial and other data. The selected consolidated statements of income and balance sheet data as of and for each of the five years in the period ended December 31, 2002 are derived from our audited consolidated financial statements and related notes, with 2002, 2001 and 2000 included elsewhere in this prospectus and 1999 and 1998 not included in this prospectus. The selected consolidated statements of income and balance sheet data as of September 30, 2003 and for the nine months ended September 30, 2003 and 2002 are derived from our unaudited interim consolidated financial statements included in this prospectus. The adjusted balance sheet data as of September 30, 2003 reflects our receipt of the estimated net proceeds of $198.3 million from this offering, assuming a public offering price of $11.50 per share, the mid-point of the price range shown on the cover of this prospectus and the application of the proceeds therefrom. In the opinion of our management, all unaudited interim consolidated financial information presented in the table below reflects all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of our consolidated financial position and results of operations for such periods. The results of operations for the nine months ended September 30, 2003 are not necessarily indicative of the results to be expected for the full year.

              The summary consolidated financial and other data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and related notes included in this prospectus. The results for past periods are not necessarily indicative of results that may be expected for future periods.

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