Aegon said the deal would reduce its dependence on the United States market.
The deal is the latest in a series of acquisitions by the Dutch company.
It paid £200m for Scottish Equitable in June 1993 and in November bought the Mutual Life Insurance Company of New York in a deal that gave an important boost to Aegon's presence in the US.
In a statement, the company said it believed the Norwegian market was on the move. "Aegon's ownership would secure Vital's access to future capital and help it forge a strategic alliance with Norwegian banks, which would strengthen the distribution of its products."
In recommending the deal, Vital's board said it believed membership in the Aegon group would be beneficial to customers and employees "because it will ensure the capital needed as a base for the continued growth of acitivities in Norway".
In 1994, over 30 per cent of Aegon's revenues of 20bn guilders came from the US. About 26 per cent was generated in Europe, outside the Netherlands. Aegon said it was seeking to expand in Europe.
Vital is the second-largest private life insurer in Norway with total assets of about Nkr42 bn (£4.1bn).
Premium income was about Nkr3.7bn (£362m) in 1994, and Vital has a share of about 20 per cent of the Norwegian market for life and pension insurance.
"Vital has grown substantially in the past five years, has a strong market position and an outstanding reputation and its strategy fits in well with that of Aegon," the company said.
Heinie Hakker, an analyst with BZW, said: "They are not paying goodwill for embedded value and if the takeover contributes to earnings from year one, shareholders will like it."
The takeover would boost its earnings per share from 1995 onwards, said the company.
Vital tried in vain in January to find a foreign buyer.
The deal must be approved by Norway's regulators as it involves a foreign institution owning more than 10 per cent of a financial institution.