As filed with the Securities and Exchange Commission on April 5, 2006
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FILE NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ALLSTATE LIFE INSURANCE COMPANY
(Exact Name of Registrant)
ILLINOIS 36-2554642
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
3100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
847/402-5000
(Address and Phone Number of Principal Executive Office)
MICHAEL J. VELOTTA
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ALLSTATE LIFE INSURANCE COMPANY
3100 SANDERS ROAD, SUITE J5B
NORTHBROOK, ILLINOIS 60062
847/402-5000
(Name, Complete Address and Telephone Number of Agent for Service)
COPIES TO:
CHARLES M. SMITH, ESQUIRE
ALLSTATE LIFE INSURANCE COMPANY
3100 SANDERS ROAD, SUITE J5B
NORTHBROOK, IL 60062
Approximate date of commencement of proposed sale to the public: The annuity
contracts and interests thereunder covered by this registration statement are to
be issued promptly and from time to time 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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
CALCULATION OF REGISTRATION FEE
- -------------------------------- --------------------- -------------------------- ------------------------------- -----------------
Title of securities to be Amount to be Proposed maximum Proposed maximum Amount of
registered registered(1) offering price per unit aggregate offering price(1) registration fee(3)
- ------------------------------ ---------------------- -------------------------- ----------------------------- -----------------
Deferred annuity contracts $300,000,000 (2) $300,000,000 $32,100
and participating interests
therein
- -------------------------------- ---------------------- -------------------------- ------------------------------ -----------------
(1) Estimated solely for purpose of determining the registration fee.
(2) The Contract does not provide for a predetermined amount or number of units.
(3) Of the $300,000,000 of units of interest under deferred annuity contracts
previously registered under Registration Statement No. 333-119706, $51,767,115
for which a filing fee was previously paid, are being carried forward pursuant
to Rule 429.
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 Commission, acting pursuant to Section 8(a), may
determine.
EXPLANATORY NOTE
Registrant is filing this registration statement for the following purposes: (1)
to register additional interests under a deferred annuity contract previously
described in the prospectus contained in Registrant's Form S-3 registration
statement (File No. 333-119706); and (2) to generally update the disclosure
contained in the Registration Statement.
ALLSTATE(R) TREASURY-LINKED ANNUITY PLUS
ALLSTATE LIFE INSURANCE COMPANY
STREET ADDRESS: 2940 S. 84TH STREET, LINCOLN, NE 68506-4142
MAILING ADDRESS: P.O. BOX 80469, LINCOLN, NE 68501-0469
TELEPHONE NUMBER: 1-800-203-0068
FAX NUMBER: 1-866-628-1006 PROSPECTUS DATED MAY 1, 2006
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Allstate Life Insurance Company ("ALLSTATE LIFE") is offering the Allstate(R)
Treasury-Linked Annuity Plus, a group and individual single premium deferred
annuity contract ("CONTRACT"). This prospectus contains information about the
Contract that you should know before investing. Please keep it for future
reference.
The Contracts are available through Allstate Distributors, L.L.C., the principal
underwriter for the Contracts.
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") HAS NOT
APPROVED OR DISAPPROVED THE SECURITIES DESCRIBED IN THIS
PROSPECTUS, NOR HAS IT PASSED ON THE ACCURACY OR THE
ADEQUACY OF THIS PROSPECTUS. ANYONE WHO TELLS YOU OTHERWISE
IS COMMITTING A FEDERAL CRIME.
THE CONTRACTS MAY BE DISTRIBUTED THROUGH BROKER-DEALERS
THAT HAVE RELATIONSHIPS WITH BANKS OR OTHER FINANCIAL
INSTITUTIONS OR BY EMPLOYEES OF SUCH BANKS. HOWEVER, THE
CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
IMPORTANT BY SUCH INSTITUTIONS OR ANY FEDERAL REGULATORY AGENCY.
INVESTMENT IN THE CONTRACTS INVOLVES INVESTMENT RISKS,
NOTICES INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE
MADE. WE DO NOT AUTHORIZE ANYONE TO PROVIDE ANY INFORMATION
OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS.
THE CONTRACTS ARE NOT FDIC INSURED.
THE CONTRACTS MAY NOT BE AVAILABLE IN ALL STATES.
1 PROSPECTUS
TABLE OF CONTENTS
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PAGE
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OVERVIEW
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Important Terms 3
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The Contract At A Glance 4
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How the Contract Works 5
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CONTRACT FEATURES
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The Contract 6
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Purchase Payments 7
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Contract Value 7
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Guarantee Periods 7
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Expenses 11
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Access To Your Money 13
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PAGE
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Income Payments 14
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Death Proceeds 15
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OTHER INFORMATION
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More Information 17
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Allstate Life 17
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The Contract 17
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Annuities Held Within A Qualified Plan 18
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Legal Matters 18
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Taxes 19
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Annual Reports and Other Documents 25
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Appendix A - Market Value Adjustment 26
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2 PROSPECTUS
IMPORTANT TERMS
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This prospectus uses a number of important terms with which you may not be
familiar. The index below identifies the page that describes each term. The
first use of each term in this prospectus appears in bolded text.
PAGE
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Accumulation Phase 5
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Adjusted Withdrawal Request Amount 13
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Allstate Life ("We") 17
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Annuitant 6
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Beneficiary 6
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Bonus Rate 8
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Bonus Rate Specified Amount 8
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*Contract 6
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Contract Owner ("You") 6
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Contract Value 7
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Death Proceeds 15
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Due Proof of Death 15
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Free Withdrawal Amount 11
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Guarantee Period Accounts 7
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Income Plans 14
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PAGE
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Interest Enhancement 8
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Issue Date 5
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Market Value Adjustment 9
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New Account Start Date 9
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Payout Phase 5
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Payout Start Date 14
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Tax Qualified Contracts 21
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Treasury Rate 8
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Treasury Participation Rate 8
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Trial Examination Period 4
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SEC 1
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Systematic Withdrawal Program 13
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Window Period 4
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Withdrawal Request Amount 13
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*
In certain states a Contract is available only as a group Contract. In these
states we issued you a certificate that represents your ownership and
summarizes the provisions of the group Contract. References to "Contract" in
this prospectus include certificates unless the context requires otherwise.
3 PROSPECTUS
THE CONTRACT AT A GLANCE
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The following is a snapshot of the Contract. Please read the remainder of this
prospectus for more information.
PURCHASE PAYMENT You can purchase a Contract with as little as $10,000.
We reserve the right to accept a lesser purchase
payment amount for the Contract. We may limit the
amount of the purchase payment to a maximum of
$1,000,000. You cannot make any additional purchase
payments at any time.
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TRIAL EXAMINATION You may cancel your Contract within 20 days of receipt
PERIOD or any longer period as your state may require ("TRIAL
EXAMINATION PERIOD"). Upon cancellation, we will return
your purchase payment less any withdrawals to you. See
"Right to Cancel" for details.
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EXPENSES You will bear the following expenses:
.Withdrawal charges ranging from 0%-9% of amounts
withdrawn (with certain exceptions).
.A MARKET VALUE ADJUSTMENT (which can be positive or
negative) for withdrawals except those taken during
the 45 day window period ("WINDOW PERIOD") following
the end of a Guarantee Period.
. State premium tax (if your state imposes one).
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SYSTEMATIC WITHDRAWAL You may choose to receive systematic withdrawal
PROGRAM payments on a monthly, quarterly, semi-annual, or
annual basis.
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INCOME PAYMENTS The Contract offers three income payment plans:
.life income with or without guaranteed payment
period;
.a joint and survivor life income with or without
guaranteed payment period; or
. guaranteed payment period (5 to 50 years)
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DEATH PROCEEDS If you or the ANNUITANT (if the Contract Owner is a
non-living person) dies before the PAYOUT START DATE,
we will pay benefits as described in the Contract.
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WITHDRAWALS You may withdraw some or all of your Contract value
("CONTRACT VALUE") at any time prior to the Payout
Start Date. A withdrawal charge and/or a Market Value
Adjustment may apply. For federal income tax purposes,
distributions or withdrawals taken prior to the Payout
Start Date are generally considered to come from the
earnings in the Contract first. If the Contract is
tax-qualified, generally all withdrawals are treated as
distributions of earnings. Withdrawals of earnings are
taxed as ordinary income and, if taken prior to age
59 1/2, may be subject to an additional 10% federal tax
penalty.
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4 PROSPECTUS
HOW THE CONTRACT WORKS
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The Contract basically works in two ways.
First, the Contract can help you (we assume you are the "CONTRACT OWNER") save
for retirement because you can invest in the Contract and generally pay no
federal income taxes on any earnings until you withdraw them. You do this during
what we call the "ACCUMULATION PHASE" of the Contract. The Accumulation Phase
begins on the date we issue your Contract (we call that date the "ISSUE DATE")
and continues until the "PAYOUT START DATE," which is the date we apply your
money to provide income payments. During the Accumulation Phase, you allocate
your purchase payment to a Guarantee Period Account. You will earn a fixed rate
of interest that we declare periodically.
Second, the Contract can help you plan for retirement because you can use it to
receive retirement income for life and/ or for a pre-set number of years by
selecting one of the income payment options (we call these "INCOME PLANS")
described at "Income Payments - Income Plans." You receive income payments
during what we call the "PAYOUT PHASE" of the Contract, which begins on the
Payout Start Date and continues until we make the last income payment required
by the Income Plan you select. During the Payout Phase we guarantee the amount
of your payments, which will remain fixed. The amount of money you accumulate
under your Contract during the Accumulation Phase and apply to an Income Plan
will determine the amount of your income payments during the Payout Phase.
The timeline below illustrates how you might use your Contract.
Issue Payout Start
Date Accumulation Phase Date Payout Phase
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You buy You save for retirement You elect to receive You can receive Or you can receive
a Contract income payments income payments income payments
for a set period for life
As the Contract Owner, you exercise all of the rights and privileges provided by
the Contract. If you die, any surviving Contract Owner or, if none, the
BENEFICIARY will exercise the rights and privileges provided by the Contract.
See "The Contract." In addition, if you die before the Payout Start Date we will
pay DEATH PROCEEDS to any surviving Contract Owner or, if there is none, to your
Beneficiary. (See "Death Proceeds.")
Please call us at 1-800-203-0068 if you have any questions about how the
Contract works.
5 PROSPECTUS
THE CONTRACT
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CONTRACT OWNER
The Allstate(R) Treasury-Linked Annuity Plus is a contract between you, the
Contract Owner, and Allstate Life, a life insurance company. As the Contract
Owner, you may exercise all of the rights and privileges provided to you by the
Contract. That means it is up to you to select or change (to the extent
permitted):
.. the amount and timing of your withdrawals,
.. the programs you want to use to withdraw money,
.. the income payment plan you want to use to receive retirement income,
.. the Annuitant (either yourself or someone else) on whose life the income
payments will be based,
.. the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract Owner dies, and
.. any other rights that the Contract provides.
If you die, any surviving Contract Owner or, if none, the Beneficiary may
exercise the rights and privileges provided to them by the Contract. If the sole
surviving Contract Owner dies after the Payout Start Date, the Beneficiary will
receive any guaranteed income payments scheduled to continue.
The Contract cannot be jointly owned by both a non-living person and a living
person. The age of the oldest Contract Owner cannot exceed 90 as of the date
we receive the completed application.
The Contract can also be purchased as an IRA or TSA (also known as a 403(b)).
The endorsements required to qualify these annuities under the Internal Revenue
Code of 1986, as amended, ("Code") may limit or modify your rights and
privileges under the Contract. We use the term "Qualified Contract" to refer to
a Contract issued as an IRA, 403(b), or with a qualified plan.
Except for certain Qualified Contracts, you may change the Contract Owner at any
time by written notice in a form satisfactory to us. Until we receive your
written notice to change the Contract Owner, we are entitled to rely on the most
recent information in our files. We will provide a change of ownership form to
be signed by you and filed with us. Once we accept your change request, any
change will be effective on the date you sign the written request. We will not
be liable for any payment we make or other action we take before accepting any
written request from you. Accordingly, if you wish to change the Contract Owner,
you should deliver your written request to us promptly. Each change is subject
to any payment we make or other action we take before we accept it.
Changing ownership of this Contract may cause adverse tax consequences and may
not be allowed under qualified plans. Please consult with a competent tax
advisor prior to making a request for a change of Contract Owner.
ANNUITANT
The Annuitant is the individual whose life determines the amount and duration of
income payments (other than under Income Plans with guaranteed payments for a
specified period). The Contract requires that there be an Annuitant at all times
during the Accumulation Phase and on the Payout Start Date. The Annuitant must
be a living person. The Annuitant may not be older than 90 as of the date we
receive the completed application.
You initially designate an Annuitant in your application. You (or the youngest
Contract Owner if there is more than one) will be the Annuitant unless a
different person is named. If the Contract Owner is a living person, you may
change the Annuitant at any time prior to the Payout Start Date in a form
satisfactory to us.
Once we accept your change request, any change will be effective on the date you
sign the written request. We are not liable for any payment we make or other
action we take before accepting any written request from you.
If you select Income Plan 2, you may designate a joint Annuitant, who is a
second person on whose life income payments depend. A joint Annuitant
designation is effective only on the Payout Start Date and remains effective
thereafter.
BENEFICIARY
You may name one or more primary and contingent Beneficiaries when you apply for
a Contract. The primary Beneficiary is the person who may, in accordance with
the terms of the Contract, elect to receive the Death Proceeds or become the new
Contract Owner pursuant to the Contract if the sole surviving Contract Owner
dies before the Payout Start Date. If the sole surviving Contract Owner dies on
or after the Payout Start Date, the primary Beneficiary will receive any
guaranteed income payments scheduled to continue. A contingent Beneficiary is
the person selected by the Contract Owner who will exercise the rights of the
primary Beneficiary if all named primary Beneficiaries die before the death of
the sole surviving Contract Owner.
You may change or add Beneficiaries at any time, unless you have designated an
irrevocable Beneficiary. We will provide a change of Beneficiary request form
to be signed by you and filed with us. Until we receive your written request to
change a Beneficiary, we are entitled to rely on the most recent Beneficiary
information in our files. Once we accept your change request, any change will be
effective on the date you sign the written request. We are not liable for any
payment we make or other action we take before accepting any written request
from you. Accordingly, if you wish to change your Beneficiary, you should
deliver your written request to us promptly.
If you did not name a Beneficiary or, unless otherwise provided in the
Beneficiary designation, if no named
6 PROSPECTUS
Beneficiary is living when the sole surviving Contract Owner dies, the new
Beneficiary will be:
.. your spouse, or if he or she is no longer alive,
.. your surviving children equally, or if you have no surviving children,
.. your estate.
Children, as used in this prospectus, are natural and adopted children only,
either minor or adult.
If more than one Beneficiary survives you, we will divide the Death Proceeds
among the surviving Beneficiaries according to your most recent written
instructions. If you have not given us written instructions in a form
satisfactory to us, we will pay the Death Proceeds in equal amounts to the
surviving Beneficiaries. If there is more than one Beneficiary in a class
(e.g., more than one primary Beneficiary) and one of the Beneficiaries
predeceases the Contract Owner, the remaining Beneficiaries in that class will
divide the deceased Beneficiary's share in proportion to the original share of
the remaining Beneficiaries.
For purposes of the Contract, in determining whether a living person, including
a Contract Owner, primary Beneficiary, contingent Beneficiary, or Annuitant
("Living Person A") has survived another living person, including a Contract
Owner, primary Beneficiary, contingent Beneficiary, or Annuitant ("Living Person
B"), Living Person A must survive Living Person B by at least 24 hours.
Otherwise, Living Person A will be conclusively deemed to have predeceased
Living Person B.
MODIFICATION OF THE CONTRACT
Only an officer of Allstate Life may approve a change in or waive any provision
of the Contract. Any change or waiver must be in writing. None of our agents has
the authority to change or waive the provisions of the Contract. We may not
change the terms of the Contract without your consent, except to conform the
Contract to applicable law or changes in the law or except as otherwise
permitted in the Contract. If a provision of the Contract is inconsistent with
state law, we will follow state law.
ASSIGNMENT
No Contract Owner has a right to assign any interest in a Contract as collateral
or security for a loan, and we will not honor an assignment of an interest in a
Contract as collateral or security for a loan. However, you may otherwise assign
periodic income payments under the Contract prior to the Payout Start Date. No
Beneficiary may assign benefits under the Contract until they are due. We will
not be bound by any assignment until you sign and file it with us. We are not
responsible for the validity of any assignment. Federal law prohibits or
restricts the assignment of benefits under many types of retirement plans and
the terms of such plans may themselves contain restrictions on assignments. An
assignment may also result in taxes or tax penalties. YOU SHOULD CONSULT WITH AN
ATTORNEY BEFORE TRYING TO ASSIGN YOUR CONTRACT.
PURCHASE PAYMENT
This is a single premium annuity which allows for only one purchase payment.
Your purchase payment must be at least $10,000. The maximum amount of the
purchase payment we will accept for the Contract without our prior approval is
$1,000,000. We reserve the right to reject any application or waive this
limitation in our sole discretion.
Your purchase payment becomes part of our general account, which supports our
insurance and annuity obligations. The general account consists of our general
assets other than those in segregated asset accounts. We have sole discretion to
invest the assets of the general account, subject to applicable law. You do not
share in the investment experience of the general account.
CONTRACT VALUE
Your Contract Value at any time during the Accumulation Phase is equal to the
amount of the purchase payment;
.. plus credited interest and any INTEREST ENHANCEMENTS to the GUARANTEE PERIOD
ACCOUNT;
.. less withdrawals of the purchase payment and/or less withdrawals of interest;
and
.. if any such withdrawal is a Net Withdrawal (see "Access to Your Money"),
. any applicable Withdrawal Charge and taxes imposed for such withdrawal also
will be deducted from the Contract Value; and
. the withdrawal will be subject to a Market Value Adjustment, which may
decrease or increase the Contract Value.
Under a Gross Withdrawal, a negative Market Value Adjustment and deductions for
withdrawal charges and taxes are deducted from the Contract Value, while a
positive Market Value Adjustment is added to the Contract Value. See "Access to
Your Money".
RIGHT TO CANCEL
You may cancel your Contract within the Trial Examination Period, which is the
20-day period following receipt of your Contract, or such longer period that
your state may require. You may cancel the Contract by delivering it or mailing
it to us. If you exercise this right to cancel, the Contract (and if applicable,
your Contract purchased as an IRA) terminates and we will return your purchase
payment, less any withdrawals, to you.
GUARANTEE PERIODS
Your Contract Value allocated to a Guarantee Period will earn interest at a
specified rate that we guarantee. We offer a Guarantee Period of 5 years in
length. A new Guarantee Period Account is established when:
.. you make your original purchase payment; and
7 PROSPECTUS
.. the Contract Value of an expiring Guarantee Period is applied to establish a
new Guarantee Period Account.
INTEREST RATES
We will tell you what interest rates we are offering at a particular time. We
will not change the interest rate that we credit to a Guarantee Period Account
until it expires. The rates we quote will fluctuate from time to time and will
vary depending upon the date a Guarantee Period Account begins. We have no
specific formula for determining the annualized effective interest rate that we
will declare initially or in the future. We will set interest rates based on
investment returns available at the time of the determination. In addition, we
may consider various other factors in determining interest rates including
regulatory and tax requirements, sales commissions and administrative expenses,
general economic trends, and competitive factors. We determine the interest
rates to be declared in our sole discretion. We can neither predict nor
guarantee what those rates will be in the future. For current interest rate
information, please contact your financial representative or Allstate Life at
1-800-203-0068.
From time to time we may offer an increase in the annualized effective interest
rate ("BONUS RATE") that we will apply to a new Guarantee Period Account. For
the Bonus Rate to apply, your Contract Value must equal or exceed a specified
amount ("BONUS RATE SPECIFIED AMOUNT") on the date the Guarantee Period Account
is established and on the day after:
.. the Trial Examination Period ends; or
.. the Window Period ends.
Once the Trial Examination Period or the Window Period ends (as applicable), we
will apply the Bonus Rate retroactively from the beginning of the applicable
Guarantee Period.
The Bonus Rate that applies to a new Guarantee Period Account will not change
until the Guarantee Period Account expires. Bonus Rates and Bonus Rate Specified
Amounts will fluctuate from time to time and will vary depending upon the date a
Guarantee Period Account begins.
We declare Bonus Rates and Bonus Rate Specified Amounts in our sole discretion.
We can neither predict nor guarantee what those Bonus Rates or Bonus Rate
Specified Amounts will be, or whether we will declare Bonus Rates in the future.
For current Bonus Rate and Bonus Rate Specified Amount information, please
contact your financial representative or Allstate Life at 1-800-203-0068.
TREASURY RATE
The TREASURY RATE is the U.S. Treasury Constant Maturity 5 Year yield as most
recently available to us in Federal Reserve Board Statistical Release H.15. If
such yield ceases to be available in Federal Reserve Board Statistical Release
H.15, then we will use an alternate source for such information at our
discretion. In addition, if the calculation of the U.S. Treasury Constant
Maturity 5 Year yield is changed substantially or is eliminated, then we will
use an alternate yield at our discretion.
INTEREST ENHANCEMENT
We calculate the INTEREST ENHANCEMENT by comparing the Treasury Rate on a
Contract anniversary ("CONTRACT ANNIVERSARY") to the Treasury Rate on the date
the Guarantee Period Account was established.
The Interest Enhancement for a "Contract Year", which we measure from the Issue
Date, is determined from the following, where:
TRA = the Treasury Rate on the Contract Anniversary;
TRE = the Treasury Rate on the date the Guarantee Period Account was
established; and
TPR = the Treasury Participation Rate, described below.
The Interest Enhancement is determined from the following formula:
(TRA - TRE) x TPR
If the Interest Enhancement is positive, then the amount of the Interest
Enhancement will be added to the annualized effective interest rate for the
following Contract Year. If the Interest Enhancement is not positive, then the
Interest Enhancement will equal 0%.
An Interest Enhancement will not apply during the first year of a Guarantee
Period Account.
The TREASURY PARTICIPATION RATE is the percentage of the change in the Treasury
Rate used to calculate the Interest Enhancement for a Contract Year. The
Treasury Participation Rate will vary from time to time. Allstate sets the
Treasury Participation Rate in its sole discretion based on a variety of
factors, such as its investment returns, regulatory and tax requirements, sales
commissions and administrative expenses, general economic trends, and
competitive factors. The initial Treasury Participation Rate applicable to the
first 5 year Guarantee Period will appear on the Contract data page. At the end
of each 5 year Guarantee Period, we will send the Contract Owner a renewal
notice that will include the Trasury Participation Rate applicable to the 5 year
renewal Guarantee Period. The Treasury Participation Rate for a Guarantee Period
Account will remain the same throughout the term length of that Guarantee Period
Account. For further information about available Treasury Participation Rates,
please check with your financial representative.
HOW WE CREDIT INTEREST
We will credit interest to your purchase payment beginning on the Issue Date.
The interest credited to the initial Guarantee Period Account will depend on the
annualized effective interest rate we declared when your purchase payment was
applied to a Guarantee Period
8 PROSPECTUS
Account. Interest will be credited to a renewed Guarantee Period Account at the
annualized effective interest rate declared by us at our discretion, from the
day immediately following the day the prior Guarantee Period Account expires
("NEW ACCOUNT START DATE"). Interest will be credited daily at a rate which
compounds over each year to such annualized effective interest rate. Your
annualized effective interest rate includes Bonus Rates and Interest
Enhancements, if applicable.
The following example illustrates how a $10,000 purchase payment would grow, if
allocated to a 5 year Guarantee Period, crediting a hypothetical 4.50%
annualized effective interest rate:
Purchase Payment $10,000
Guarantee Period 5year
Annualized Effective Interest Rate 4.50%
END OF CONTRACT YEAR
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
---------- ---------- ---------- ---------- ------------
Beginning Contract
Value................ $10,000.00
X (1 + Annual
Interest Rate) 1.045
----------
$10,450.00
Contract Value at end
of Contract Year..... $10,450.00
X (1 + Annual
Interest Rate) 1.045
----------
$10,920.25
Contract Value at end
of Contract Year..... $10,920.25
X (1 + Annual
Interest Rate) 1.045
----------
$11,411.66
Contract Value at end
of Contract Year..... $11,411.66
X (1 + Annual
Interest Rate) 1.045
----------
$11,925.19
Contract Value at end
of Contract Year..... $11,925.19
X (1 + Annual
Interest Rate) 1.045
-----------
$12,461.82
The example above assumes no Interest Enhancement and also assumes that no
withdrawals were made during the entire 5 year example period shown. If you were
to make a partial withdrawal, you may be required to pay a withdrawal charge
(see "Withdrawal Charge"). In addition, the amount withdrawn may be increased or
decreased by a Market Value Adjustment that reflects changes in Treasury Rates
since the time you invested the amount withdrawn (see "Market Value
Adjustment"). The hypothetical annualized effective interest rate is for
illustrative purposes only and is not intended to predict future interest rates
to be declared under the Contract. Actual interest rates declared for any given
Guarantee Period may be more or less than shown above.
RENEWALS. At the end of each Guarantee Period, we will mail you a notice
informing you of the options available to you for the expiring Guarantee Period
Account. During the Window Period, you may either:
1) apply the Contract Value to a new Guarantee Period Account. The new Guarantee
Period Account will begin on the New Account Start Date at the annualized
effective interest rate we declared for the new Guarantee Period Account; or
2) withdraw all or a portion of your money without incurring a withdrawal charge
or a Market Value Adjustment.
If we do not receive an election from you within the Window Period, a new
Guarantee Period Account is automatically established at the annualized
effective interest rate declared for the new Guarantee Period Account.
If you choose to make a withdrawal from an expiring Guarantee Period Account
during the Window Period and we receive your request on or before the New
Account Start Date, then the withdrawal will be deemed to have occurred on the
New Account Start Date. If we receive your request to make a withdrawal during
the Window Period, then the withdrawal will be made on the day we process your
withdrawal request and the amount withdrawn will earn interest, at the
annualized effective rate of interest declared for the new Guarantee Period
Account, for the period beginning on the New Account Start Date and ending on
the day your withdrawal is processed. Any remaining balance not withdrawn will
earn interest for the term of the new Guarantee Period Account at the annualized
effective interest rate declared for such account.
MARKET VALUE ADJUSTMENT
Withdrawals, unless expressly exempted, may be subject to a Market Value
Adjustment.
Market Value Adjustments will not be made to the following withdrawals:
9 PROSPECTUS
.. withdrawals you make to satisfy IRS minimum distribution rules for the
Contract;
.. withdrawals made within the FREE WITHDRAWAL AMOUNT, described under "Expenses"
below;
.. withdrawals made during the Window Period;
.. amounts paid during the Payout Phase; or
.. amounts paid as Death Proceeds in a lump sum.
We apply the Market Value Adjustment to reflect changes in Treasury Rates from
the date a Guarantee Period Account was established to the time you make the
withdrawal.
We calculate the Market Value Adjustment by comparing the Treasury Rate for the
week prior to the date the Guarantee Period Account begins to the Treasury Rate
for the week prior to the date we receive your withdrawal request.
The Market Value Adjustment may be positive or negative, depending on changes in
the Treasury Rate. As a result, you bear the investment risk associated with
changes in the Treasury Rate. If the Treasury Rate increases significantly from
the time the Guarantee Period Account began, the Market Value Adjustment, any
applicable withdrawal charge, premium taxes, and income tax withholding (if
applicable) could reduce the amount you receive upon full withdrawal of your
Contract Value to an amount that is less than your purchase payment or less than
the beginning value of your Guarantee Period Account.
Generally, if the Treasury Rate at the beginning of the Guarantee Period Account
is lower than the current Treasury Rate upon withdrawal, then the Market Value
Adjustment will result in a lower amount payable to you. Conversely, if the
Treasury Rate at the beginning of the Guarantee Period Account is higher than
the current Treasury Rate, then the Market Value Adjustment will result in a
higher amount payable to you.
For example, assume that you purchase a Contract and the Treasury Rate on the
day you purchase the Contract is 4.50%. Assume that at the end of 3 years, you
make a partial withdrawal in excess of the Free Withdrawal Amount. If, at that
later time, the Treasury Rate is 4.00%, then the Market Value Adjustment will be
positive, which will result in an increase in the amount payable to you.
Conversely, if the Treasury Rate is 5.00%, then the Market Value Adjustment will
be negative, which will result in a decrease in the amount payable to you.
The Market Value Adjustment also depends upon the amount of time remaining prior
to the expiration of the current Guarantee Period Account. The formula for
calculating Market Value Adjustments is set forth in Appendix A to this
prospectus, which also contains additional examples of the application of the
Market Value Adjustment.
For a "GROSS WITHDRAWAL" the Market Value Adjustment equals a Market Value
Adjustment Factor multiplied by the amount by which your "Withdrawal Request
Amount" exceeds the "Free Withdrawal Amount" for the Guarantee Period Account.
For a "Net Withdrawal" the Market Value Adjustment is calculated such that you
receive the full Withdrawal Request Amount. The calculation of the Market Value
Adjustment takes into consideration your Withdrawal Request Amount, the Free
Withdrawal Amount, "Withdrawal Charges", and taxes.
See below for definitions of "Gross Withdrawal", "Withdrawal Request Amount",
"Free Withdrawal Amount", "Net Withdrawal", and "Withdrawal Charges".
10 PROSPECTUS
EXPENSES
- --------------------------------------------------------------------------------
As a Contract Owner, you will bear the charges and expenses described below.
WITHDRAWAL CHARGE
We may assess a withdrawal charge on withdrawals from the Contract during the
Accumulation Phase. However, each Contract Year you may withdraw up to the "FREE
WITHDRAWAL AMOUNT" without paying a withdrawal charge. The Free Withdrawal
Amount in a Contract Year is equal to 10% of the Contract Value immediately
before you make the first withdrawal in that Contract Year. Unused portions of
this 10% Free Withdrawal Amount are not carried forward to future Contract
Years.
The withdrawal charge is as follows:
NUMBER OF COMPLETE
CONTRACT YEARS WITHDRAWAL CHARGE:
SINCE ISSUE DATE: ------------------
-----------------
0 9%
1 8%
2 8%
3 7%
4 6%
5 5%
6 4%
7 3%
8 2%
9 1%
10+ 0%
The withdrawal charge is determined by multiplying the Withdrawal Charge
Percentage corresponding to the number of complete Contract Years in the table
above by the amount of each Withdrawal Request Amount (for a "Gross Withdrawal")
or Adjusted Withdrawal Request Amount (for a "Net Withdrawal") that exceeds the
Free Withdrawal Amount.
If you make a withdrawal before the Payout Start Date, we will apply the
withdrawal percentage in effect on the date of the withdrawal or the withdrawal
percentage in effect on the following day, whichever is lower. We will deduct
applicable withdrawal charges from the amount of your withdrawal request and/or
the Contract Value. See Access to Your Money for more details.
For federal income tax purposes, earnings under your Contract are considered to
come out first. This means you pay taxes on your withdrawal to the extent of any
earnings in the Contract.
We do not apply a withdrawal charge in the following situations:
.. withdrawals taken during the 45 day Window Period;
.. withdrawals taken to satisfy IRS minimum distribution rules for the Contract;
.. withdrawals that qualify for a waiver.
We use the amounts obtained from the withdrawal charge to recover the cost of
sales commissions and other promotional or distribution expenses associated with
marketing the Contracts.
Withdrawals may be subject to income tax withholding and penalties, and Market
Value Adjustments. You should consult your own tax counsel or other tax advisers
regarding any withdrawals.
CONFINEMENT WAIVER. We will waive the withdrawal charge on any applicable
withdrawal taken under your Contract if the following conditions are satisfied:
1. you or the Annuitant, if the Contract Owner is not a living person, are first
confined to a long term care facility or a hospital for at least 90 consecutive
days. You or the Annuitant must enter the long term care facility or hospital at
least 30 days after the Issue Date,
2. we receive your request for withdrawal and Due Proof of confinement no later
than 90 days following the end of your or the Annuitant's confinement at the
long term care facility or hospital, and
3. a physician must have prescribed the confinement and the confinement must be
medically necessary (as defined in the Contract).
"DUE PROOF" includes, but is not limited to, a letter signed by a physician
stating the dates the Owner or Annuitant was confined, the name and location of
the Long Term Care Facility or Hospital, a statement that the confinement was
medically necessary, and, if released, the date the Owner or Annuitant was
released from the Long Term Care Facility or Hospital.
TERMINAL ILLNESS WAIVER. We will waive the withdrawal charge on any applicable
withdrawal under your Contract if:
1. you or the Annuitant, if the Contract Owner is not a living person, are
diagnosed by a physician as having a terminal illness (as defined in the
Contract) at least 30 days after the Issue Date, and
2. you provide Due Proof of diagnosis to us before or at the time you request
the withdrawal.
"DUE PROOF" includes, but is not limited to, a letter signed by a physician
stating that the Owner or Annuitant has a Terminal Illness and the date the
Terminal Illness was first diagnosed.
UNEMPLOYMENT WAIVER. We will waive the withdrawal charge on one partial or a
full withdrawal taken under your Contract, if you meet the following
requirements:
1. you or the Annuitant, if the Contract Owner is not a living person, become
unemployed at least one year after the Issue Date,
11 PROSPECTUS
2. you or the Annuitant receive Unemployment Compensation for at least 30
consecutive days as a result of that unemployment, and
3. you or the Annuitant claim this benefit within 180 days of your or the
Annuitant's initial receipt of Unemployment Compensation.
Before we will waive any withdrawal charges, you must give us Due Proof prior
to, or at the time of, the withdrawal request, that you or the Annuitant have
been unemployed and have been granted Unemployment Compensation for at least 30
consecutive days.
"UNEMPLOYMENT COMPENSATION" means unemployment compensation received from a unit
of state or federal government in the U.S. "DUE PROOF" includes, but is not
limited to, a legible photocopy of an unemployment compensation payment that
meets the above described criteria with regard to dates and a signed letter from
you stating that you or the Annuitant meet the above described criteria.
You may exercise this benefit once over the term of the Contract. Amounts
withdrawn may be subject to Market Value Adjustments.
Please refer to your Contract for more detailed information about the terms and
conditions of these waivers.
The laws of your state may limit the availability of these waivers and may also
change certain terms and/or benefits available under the waivers. You should
consult your Contract for further details on these variations. Also, even if you
do not pay a withdrawal charge because of these waivers, a Market Value
Adjustment may apply and you still may be required to pay taxes or tax penalties
on the amount withdrawn. You should consult your tax advisor to determine the
effect of a withdrawal on your taxes.
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. We are responsible for paying these taxes and
will deduct them from your Contract Value. Some of these taxes are due when the
Contract is issued, others are due when income payments begin or upon surrender.
Our current practice is not to charge anyone for these taxes until income
payments begin or when a total withdrawal occurs, including payment upon death.
We may, sometime in the future, discontinue this practice and deduct premium
taxes from the purchase payments. Premium taxes generally range from 0% to 4%,
depending on the state.
At the Payout Start Date, we deduct the charge for premium taxes from the total
Contract Value before applying the Contract Value to an Income Plan.
12 PROSPECTUS
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
You can withdraw some or all of your money at any time prior to the Payout Start
Date. You may not make any withdrawals or surrender your Contract once the
Payout Phase has begun.
The minimum you may withdraw is $250. If the amount you withdraw reduces the
Contract Value to less than $1,000, we may treat the withdrawal request as a
request to surrender the Contract.
The amount you receive may be reduced by a withdrawal charge, income tax
withholding and any premium taxes. The amount you receive may be also increased
or reduced by a Market Value Adjustment. If you request a total withdrawal, we
may require that you return your Contract to us.
When you make a withdrawal, you must specify whether you choose to make a Gross
Withdrawal or a Net Withdrawal.
Under a Gross Withdrawal, applicable Market Value Adjustments and deductions are
calculated based upon the amount of your withdrawal request ("WITHDRAWAL REQUEST
AMOUNT"). The withdrawal payment that you receive from us will reflect these
adjustments. Withdrawal Charges, taxes, and negative Market Value Adjustments
are deducted from your Contract Value and will decrease the amount you receive.
Positive Market Value Adjustments will not be added to your Contract Value, but
rather will be included in the withdrawal payment you receive.
Under a Net Withdrawal, Market Value Adjustments and deductions are made to your
Contract Value and are calculated such that you receive a withdrawal payment
equal to your full Withdrawal Request Amount. In making these calculations, we
determine an adjusted Withdrawal Request Amount ("Adjusted Withdrawal Request
Amount"), which is the amount that after applicable Market Value Adjustments and
deductions, results in your full Withdrawal Request Amount.
If you do not specify whether your withdrawal is a Gross Withdrawal or a Net
Withdrawal, it will be deemed to be a Gross Withdrawal. A withdrawal of the
entire Contract Value will always be a Gross Withdrawal.
For a Gross Withdrawal, the Free Withdrawal Amount in a Contract Year is reduced
by the Withdrawal Request Amount, and for a Net Withdrawal, the Free Withdrawal
Amount in a Contract Year is reduced by the Adjusted Withdrawal Request Amount.
If the Free Withdrawal Amount for a Contract Year falls to less than zero, the
deficit is not carried forward to future Contract Years.
For Contracts issued in certain states if you withdraw the entire Contract
Value, the amount that we will pay you will never be less than 90% of the
purchase payment, less any prior withdrawals, accumulated at the minimum
interest rate required to be credited under the relevant nonforfeiture law of
such respective states. For additional information concerning these states,
please contact your financial representative or Allstate Life at 1-800-203-0068.
For federal income tax purposes, distributions taken prior to the Payout Start
Date are generally considered to come from the earnings in the Contract first.
If the Contract is tax-qualified, generally all withdrawals are treated as
distributions of earnings. Withdrawals of earnings are taxed as ordinary income
and, if taken prior to age 59 1/2, may be subject to an additional 10% federal
tax penalty.
SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly,
quarterly, semi-annual, or annual basis at any time prior to the Payout Start
Date. The minimum amount of each systematic withdrawal is $50. We will deposit
systematic withdrawal payments into a designated account. Please consult with
your financial representative for details.
Distributions taken prior to annuitization (referred to in this prospectus as
the Payout Phase) are generally considered to come from the earnings in the
Contract first. If you have a TAX QUALIFIED CONTRACT, generally all withdrawals
are treated as distributions of earnings. Withdrawals of earnings are taxed as
ordinary income and, if taken prior to age 59 1/2, may be subject to an
additional 10% federal tax penalty.
We may modify or suspend the SYSTEMATIC WITHDRAWAL PROGRAM and charge a
processing fee for the service. If we modify or suspend the Systematic
Withdrawal Program, existing systematic withdrawal payments will not be
affected.
POSTPONEMENT OF PAYMENTS
We may defer payment of withdrawals for up to 6 months from the date we receive
your withdrawal request. If we delay payment for 30 days or more, we will pay
interest as required by law.
MINIMUM CONTRACT VALUE
If the amount you withdraw reduces your Contract Value to less than $1,000, we
may treat it as a request to withdraw your entire Contract Value. Your Contract
will terminate if you withdraw all of your Contract Value. We will, however, ask
you to confirm your withdrawal request before terminating your Contract. Before
terminating any Contract whose value has been reduced by withdrawals to less
than $1,000, we will inform you in writing of our intention to terminate your
Contract and give you at least 30 days in which to modify your withdrawal
request to maintain your Contract's value to the contractual minimum of $1,000.
If we terminate your
13 PROSPECTUS
Contract, we will distribute to you its Contract Value, adjusted by any Market
Value Adjustments, withdrawal charges and applicable taxes.
INCOME PAYMENTS
- --------------------------------------------------------------------------------
PAYOUT START DATE
The Payout Start Date is the day that we apply your Contract Value, less any
applicable taxes, to an Income Plan. The Payout Start Date must be:
.. at least 30 days after the Issue Date; and
.. no later than the Annuitant's 90th birthday, or
.. the 10th Contract anniversary, if later.
You may change the Payout Start Date at any time by notifying us in writing of
the change at least 30 days before the scheduled Payout Start Date. Absent a
change, we will use the Payout Start Date stated in your Contract.
INCOME PLANS
An Income Plan is a series of scheduled payments to you or someone you
designate. You may choose only one Income Plan. You may choose and change your
choice of Income Plan until 30 days before the Payout Start Date. If you do not
select an Income Plan, we will make income payments in accordance with Income
Plan 1 with guaranteed payments for 10 years. After the Payout Start Date, you
may not make withdrawals or change your choice of Income Plan.
A portion of each payment will be considered taxable and the remaining portion
will be a non-taxable return of your investment in the Contract, which is also
called the "basis". Once the investment in the Contract is depleted, all
remaining payments will be fully taxable. If the Contract is tax-qualified,
generally, all payments will be fully taxable. Taxable payments taken prior to
age 59 1/2, may be subject to an additional 10% federal tax penalty.
The three Income Plans available under the Contract are:
INCOME PLAN 1 - LIFE INCOME WITH AND WITHOUT GUARANTEED NUMBER OF PAYMENTS.
Under this plan, we make periodic income payments for at least as long as the
Annuitant lives. If the Annuitant dies in the Payout Phase, we will continue to
pay income payments until the guaranteed number of payments has been paid. The
number of months guaranteed ("Guaranteed Payment Period") may range from 0 to
360 months. If you choose 0 months, payments will continue only as long as the
Annuitant lives. If the Annuitant is age 90 or older as of the Payout Start
Date, the Guaranteed Payment Period may range from 60 to 360 months.
INCOME PLAN 2 - JOINT AND SURVIVOR LIFE INCOME WITH AND WITHOUT GUARANTEED
NUMBER OF PAYMENTS. Under this plan, we make periodic income payments for at
least as long as either the Annuitant or the joint Annuitant, named at the time
the Income Plan was selected, lives. If both the Annuitant and joint Annuitant
die in the Payout Phase, we will continue to pay the income payments until the
guaranteed number of payments has been paid. The Guaranteed Payment Period may
range from 0 to 360 months. If you choose 0 months, payments will continue only
as long as the Annuitant or joint Annuitant lives. If either the Annuitant or
joint Annuitant is age 90 or older as of the Payout Start Date, the Guaranteed
Payment Period may range from 60 to 360 months.
INCOME PLAN 3 - GUARANTEED NUMBER OF PAYMENTS. Under this plan, we make periodic
income payments for the period you have chosen. These payments do not depend on
the Annuitant's life. The shortest number of months guaranteed is 60 (120 if the
Payout Start Date occurs before the third Contract anniversary). The longest
number of months guaranteed is 360 or the number of months between the Payout
Start Date and the date that the Annuitant reaches age 100, if greater. In no
event may the number of months guaranteed exceed 600.
The length of any Guaranteed Payment Period under your selected Income Plan
generally will affect the dollar amount of each income payment. As a general
rule, longer guarantee periods result in lower income payments, all other things
being equal. For example, if you choose an Income Plan with payments that depend
on the life of the Annuitant but with no minimum specified period for guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a minimum specified period for guaranteed
payments. As a general rule, plans with a joint Annuitant also will result in
lower income payments. Income plans may vary from state to state.
We may make other Income Plans available, including ones that you and we agree
upon. You may obtain information about them by writing or calling us.
If the Contract Owner dies after the Payout Start Date, the new Contract Owner
will be the surviving Contract Owner. If there is no surviving Contract Owner,
the new Contract Owner will be the Beneficiary(ies). Any remaining income
payments will be paid to the new Contract Owner as scheduled.
If you choose Income Plan 1 or 2, or, if available, another Income Plan with
payments that continue for the life of the Annuitant or joint Annuitant, we will
require proof of age and sex of the Annuitant or joint Annuitant before starting
income payments, and may require proof that the Annuitant or joint Annuitant are
alive before we make each payment. Please note that under such Income Plans, if
you elect to take no guaranteed payments, it is possible
14 PROSPECTUS
that the payee could receive no income payments if the Annuitant and any joint
Annuitant both die before the first income payment, or only one income payment
if they die before the second income payment, and so on.
We will apply your Contract Value less any applicable premium tax, to your
Income Plan on the Payout Start Date. For Contracts issued in certain states the
amount that we will apply to an Income Plan will never be less than 90% of the
purchase payment, less any prior withdrawals, accumulated at the minimum
interest rate required to be credited under the relevant nonforfeiture law of
such respective states. For additional information concerning these states,
please contact your financial representative or Allstate Life at 1-800-203-0068.
If the amount available to apply under an Income Plan is less than $3,000, or if
your initial monthly payment would be less than $20, and state law permits, we
reserve the right to:
.. reduce the frequency of your payments so that each payment will be at least
$20; or
.. terminate the Contract and pay you the Contract Value less any applicable
taxes, in a lump sum instead of the periodic payments you have chosen.
INCOME PAYMENTS
Subject to your Income Plan selection, we may guarantee income payment amounts
for the duration of the Income Plan. We calculate income payments by:
1. determining your Contract Value as of the Payout Start Date;
2. deducting any applicable premium tax; and
3. applying the resulting amount to the greater of:
(a) the appropriate value from the income payment table in your Contract; or
(b) such other value as we are offering at that time.
We may defer making fixed income payments for a period of up to six months or
such shorter time state law may require. If we defer such payments for 30 days
or more, we will pay interest as required by law from the date we receive the
withdrawal request to the date we make payment.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contract offered by this prospectus contains income payment tables that
provide for different payments to men and women of the same age, except in
states that require unisex tables. We reserve the right to use income payment
tables that do not distinguish on the basis of sex, to the extent permitted by
law. In certain employment-related situations, employers are required by law to
use the same income payment tables for men and women. Accordingly, if the
Contract is used in connection with an employment-related retirement or benefit
plan and we do not offer unisex annuity tables in your state, you should consult
with legal counsel as to whether the Contract is appropriate.
DEATH PROCEEDS
- --------------------------------------------------------------------------------
Under certain conditions, described below, we will pay a death settlement
("DEATH PROCEEDS") for your Contract on the death of the Contract Owner or the
death of the Annuitant (if the Contract Owner is a non-living person) if the
death occurs prior to the Payout Start Date. If the Contract Owner or Annuitant
(if the Contract Owner is a non-living person) dies after the Payout Start Date,
we will pay remaining income payments as described in the "Payout Phase" section
of your Contract. See "Income Payments" above, for more details.
The Contract offers Death Proceeds prior to the Payout Start Date on the earlier
of:
1. the death of any Contract Owner; or
2. the death of the Annuitant, if the Contract Owner is a non-living person.
We will pay the Death Proceeds to the new Contract Owner as determined
immediately after the death. The new Contract Owner will be the surviving
Contract Owner(s) or, if there are none, the Beneficiary(ies).
A claim for settlement of the Death Proceeds must include Due Proof of Death. We
will accept the following documentation as "DUE PROOF OF DEATH":
.. a certified copy of a death certificate;
.. a certified copy of a decree of a court of competent jurisdiction as to the
finding of death; or
.. any other proof acceptable to us.
Prior to the Payout Start Date, the Death Proceeds are equal to the Contract
Value.
We will calculate the value of the Death Proceeds as of the date we receive the
first complete request for settlement of the Death Proceeds from any Owner.
For Contracts issued in certain states the amount of the Death Proceeds that we
will pay you will never be less than 90% of the purchase payment, less any prior
withdrawals, accumulated at the minimum interest rate required to be credited
under the relevant nonforfeiture law of such respective states. For additional
information concerning these states, please contact your financial
representative or Allstate Life at 1-800-203-0068.
DEATH PROCEEDS PAYMENTS
DEATH OF CONTRACT OWNER. If any Contract Owner dies before the Payout Start
Date, the new Contract Owner will be the surviving Contract Owner. If there is
no surviving Contract Owner, the new Contract Owner will be the Beneficiary(ies)
as described in the Beneficiary provision.
15 PROSPECTUS
If there is more than one new Contract Owner taking a share of the Death
Proceeds each new Contract Owner will be treated as a separate and independent
Contract Owner of his or her respective share of the Death Proceeds. Each new
Contract Owner will exercise all rights related to his or her share of the Death
Proceeds, including the sole right to elect one of the Option(s) below for his
or her respective share. Each new Contract Owner may designate a
Beneficiary(ies) for his or her respective share, but that designated
Beneficiary(ies) will be restricted to the Option chosen by the original new
Contract Owner.
The Options available to the new Contract Owner will be determined by the
applicable Category described below in which the new Contract Owner is defined.
An Option will be deemed to have been chosen on the day we receive written
notification in a form satisfactory to us.
CATEGORY 1. If your spouse is the sole new Contract Owner of the entire
Contract, the Contract will continue in the Accumulation Phase, unless your
spouse chooses from Options A, B, or C, described below.
If you also were the Annuitant, then your spouse will be the new Annuitant
unless he or she names a new Annuitant, as described in the Annuitant provision,
above. Your spouse may make a single withdrawal of any amount within one year of
the date of your death without incurring a withdrawal charge; however the amount
withdrawn may be subject to a Market Value Adjustment.
CATEGORY 2. If the new Contract Owner is a living person who is not your
spouse, or if there are multiple living new Contract Owners, the new Contract
Owner(s) must (each) choose from Options A, B or C, described below. If a new
Contract Owner does not choose one of these Options, Option A will apply for
such new Contract Owner.
CATEGORY 3. If the new Contract Owner is a corporation, trust or other
non-living person, the new Contract Owner must choose between Options A or C,
described below. If the new Contract Owner does not choose either of these
Options, Option A will apply.
The following Death of Contract Owner Options are available, as applicable:
OPTION A. The new Contract Owner may elect to receive the Contract Value
payable within 5 years of the date of your death. Withdrawal charges will be
waived for any withdrawals made during this 5 year period; however the amounts
withdrawn may be subject to Market Value Adjustments.
If the new Contract Owner dies prior to the end of the 5 year period and before
the complete liquidation of the Contract Value, then the new Contract Owner's
Beneficiary(ies) will receive the remaining Contract Value. This amount must be
fully withdrawn within 5 years of the date of your death.
OPTION B. The new Contract Owner may elect, within 11 months of the date of
your death, to receive the Death Proceeds paid out under one of the Income Plans
described in the Income Payments section, subject to the following conditions:
Income payments must begin within one year of your date of death. Income
payments must be payable:
(i) Over the life of the new Contract Owner; or
(ii) for a guaranteed payment period of at least 5 years, but not to exceed
the life expectancy of the new Contract Owner; or
(iii) over the life of the new Contract Owner with a guaranteed payment
period of at least 5 years, but not to exceed the life expectancy of the new
Contract Owner.
OPTION C. The new Contract Owner may elect to receive the Death Proceeds
immediately in a lump sum but no later than five years from the date of death.
Death Proceeds received under this Option in a lump sum are not subject to a
Market Value Adjustment.
All ownership rights subject to the conditions described in this provision or
any restrictions previously placed upon the Beneficiary, will be available to
the new Contract Owner from the date of your death until the date on which the
Death Proceeds are paid.
We reserve the right to offer additional Death of Contract Owner Options.
If the Contract Owner dies after the Payout Start Date, refer to the Income
Payments section.
DEATH OF ANNUITANT. If the Annuitant who is also the Contract Owner dies before
the Payout Start Date, the Death of Contract Owner provision, described above
will apply. If the Annuitant who is not also the Contract Owner dies before the
Payout Start Date, the Options available to the Contract Owner will be
determined by the applicable Category described below in which the Contract
Owner is defined.
CATEGORY 1. If the Contract Owner is a living person, the Contract will
continue in the Accumulation Phase with a new Annuitant. The new Annuitant will
be:
. A person you name by written request subject to the conditions described in
the Annuitant provision on page 6; otherwise,
. The youngest Contract Owner; otherwise,
. The youngest Beneficiary.
CATEGORY 2. If the Contract Owner is a corporation, trust or other non-living
person, the Contract Owner must receive the Contract Value payable within 5
years of the Annuitant's date of death. Withdrawal charges will be waived for
any withdrawals made during this 5 year period; however the amounts withdrawn
may be subject to Market Value Adjustments.
16 PROSPECTUS
All ownership rights provided by the Contract will be available to the Contract
Owner from the date of the Annuitant's death until the date on which the Death
Proceeds are paid.
We reserve the right to offer additional Death of Annuitant Options.
MORE INFORMATION
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ALLSTATE LIFE
Allstate Life is the issuer of the Contract. Allstate Life was organized in 1957
as a stock life insurance company under the laws of the State of Illinois.
Allstate Life is a wholly owned subsidiary of Allstate Insurance Company, a
stock property-liability insurance company organized under the laws of the State
of Illinois. All of the capital stock issued and outstanding of Allstate
Insurance Company is owned by The Allstate Corporation.
Allstate Life is licensed to operate in the District of Columbia, Puerto Rico,
and all jurisdictions except the State of New York. We intend to offer the
Contract in those jurisdictions in which we are licensed. Our home office is
located at 3100 Sanders Road, Northbrook, Illinois, 60062.
THE CONTRACT
DISTRIBUTION. Allstate Distributors, L.L.C. ("Allstate Distributors"), located
at 3100 Sanders Road, Northbrook, IL 60062, is the principal underwriter and
distributor of the Contract. Allstate Distributors is a wholly owned subsidiary
of Allstate Life. Allstate Distributors is registered as a broker-dealer under
the Securities Exchange Act of 1934, as amended, and is a member of the National
Association of Securities Dealers, Inc. ("NASD").
Allstate Distributors does not sell Contracts directly to purchasers. Allstate
Distributors enters into selling agreements with affiliated and unaffiliated
broker-dealers and banks to sell the Contracts through their registered
representatives. The broker-dealers are registered with the SEC and are NASD
member firms. Their registered representatives are also licensed as insurance
agents by applicable state insurance authorities and appointed as agents of
Allstate Life in order to sell the Contracts. Contracts also may be sold by
representatives or employees of banks that may be acting as broker-dealers
without separate registration under the Exchange Act, pursuant to legal and
regulatory exceptions.
We will pay commissions to broker-dealers and banks which sell the Contracts.
Commissions paid vary, but we may pay up to a maximum sales commission of 7.25%
of total purchase payments. In addition, we may pay ongoing annual compensation
of up to 1.25% of Contract Value. Individual representatives receive a portion
of compensation paid to the broker-dealer or bank with which they are associated
in accordance with the broker-dealer's or bank's practices. We estimate that
commissions and annual compensation, when combined, will not exceed 8.5% of
total purchase payments. However, commissions and annual compensation could
exceed that amount because ongoing annual compensation is related to Contract
Value and the number of years the Contract is held.
From time to time, we pay asset-based compensation and/or marketing allowances
to banks and broker-dealers. These payments vary among individual banks and
broker dealers, and the asset-based payments may be up to 0.25% of Contract
Value annually. These payments are intended to contribute to the promotion and
marketing of the Contracts, and they vary among banks and broker-dealers. The
marketing and distribution support services include but are not limited to: (1)
placement of the Contracts on a list of preferred or recommended products in the
bank's or broker-dealer's distribution system; (2) sales promotions with regard
to the Contracts; (3) participation in sales conferences; and (4) helping to
defray the costs of sales conferences and educational seminars for the bank or
broker-dealer's registered representatives. For more information on the
compensation associated with this Contract that your registered representative
or his or her bank or brokerage firm may receive, please consult your registered
representative.
Allstate Life does not pay Allstate Distributors a commission for distribution
of the Contracts. Allstate Distributors compensates its representatives who act
as wholesalers, and their sales management personnel, for Contract sales. This
compensation is based on a percentage of premium payments and/or a percentage of
Contract Values. The underwriting agreement with Allstate Distributors provides
that we will reimburse Allstate Distributors for expenses incurred in
distributing the Contracts, including any liability to Contract Owners arising
out of services rendered or Contracts issued.
ADMINISTRATION. We have primary responsibility for all administration of the
Contracts. We provide the following administrative services, among others:
.. issuance of the Contracts;
.. maintenance of Contract Owner records;
.. Contract Owner services; and
.. preparation of Contract Owner reports.
You should notify us promptly in writing of any address change. You should read
your statements and confirmations carefully and verify their accuracy. You
should contact us promptly if you have a question about a periodic statement. We
will investigate all complaints and
17 PROSPECTUS
make any necessary adjustments retroactively, but you must notify us of a
potential error within a reasonable time after the date of the questioned
statement. If you wait too long, we reserve the right to make the adjustment as
of the date that we receive notice of the potential error.
We also will provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.
ANNUITIES HELD WITHIN A QUALIFIED PLAN
If you use the Contract within an employer sponsored qualified retirement plan,
the plan may impose different or additional conditions or limitations on
withdrawals, waivers of withdrawal charges, death benefits, Payout Start Dates,
income payments, and other Contract features. In addition, adverse tax
consequences may result if qualified plan limits on distributions and other
conditions are not met. Please consult your qualified plan administrator for
more information. Allstate Life no longer issues deferred annuities to employer
sponsored qualified retirement plans.
LEGAL MATTERS
Certain matters of state law pertaining to the Contracts, including the validity
of the Contracts and Allstate Life's right to issue such Contracts under
applicable state insurance law, have been passed upon by Michael J. Velotta,
General Counsel of Allstate Life.
18 PROSPECTUS
TAXES
- --------------------------------------------------------------------------------
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. ALLSTATE
LIFE MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR
TRANSACTION INVOLVING A CONTRACT.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on your individual circumstances.
If you are concerned about any tax consequences with regard to your individual
circumstances, you should consult a competent tax adviser.
TAXATION OF ALLSTATE LIFE INSURANCE COMPANY
Allstate Life is taxed as a life insurance company under Part I of Subchapter L
of the Code.
TAXATION OF FIXED ANNUITIES IN GENERAL
TAX DEFERRAL. Generally, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where the Contract Owner is
a natural person.
NON-NATURAL OWNERS. Non-natural owners are also referred to as Non Living
Owners in this prospectus. As a general rule, annuity contracts owned by
non-natural persons such as corporations, trusts, or other entities are not
treated as annuity contracts for federal income tax purposes. The income on such
contracts does not enjoy tax deferral and is taxed as ordinary income received
or accrued by the non-natural owner during the taxable year.
EXCEPTIONS TO THE NON-NATURAL OWNER RULE. There are several exceptions to the
general rule that annuity contracts held by a non-natural owner are not treated
as annuity contracts for federal income tax purposes. Contracts will generally
be treated as held by a natural person if the nominal owner is a trust or other
entity which holds the contract as agent for a natural person. However, this
special exception will not apply in the case of an employer who is the nominal
owner of an annuity contract under a non-Qualified deferred compensation
arrangement for its employees. Other exceptions to the non-natural owner rule
are: (1) contracts acquired by an estate of a decedent by reason of the death of
the decedent; (2) certain qualified contracts; (3) contracts purchased by
employers upon the termination of certain Qualified Plans; (4) certain contracts
used in connection with structured settlement agreements; and (5) immediate
annuity contracts, purchased with a single premium, when the annuity starting
date is no later than a year from purchase of the annuity and substantially
equal periodic payments are made, not less frequently than annually, during the
annuity period.
GRANTOR TRUST OWNED ANNUITY. Contracts owned by a grantor trust are considered
owned by a non-natural owner. Grantor trust owned contracts receive tax
deferral as described in the Exceptions to the Non-Natural Owner Rule section.
In accordance with the Code, upon the death of the annuitant, the death benefit
must be paid. According to your Contract, the Death Benefit is paid to the
surviving Contract Owner. Since the trust will be the surviving Contract Owner
in all cases, the Death Benefit will be payable to the trust notwithstanding any
beneficiary designation on the annuity contract. A trust, including a grantor
trust, has two options for receiving any death benefits: 1) a lump sum payment;
or 2) payment deferred up to five years from date of death.
TAXATION OF PARTIAL AND FULL WITHDRAWALS. If you make a partial withdrawal
under a non-Qualified Contract, amounts received are taxable to the extent the
Contract Value, without regard to surrender charges, exceeds the investment in
the Contract. The investment in the Contract is the gross premium paid for the
contract minus any amounts previously received from the Contract if such amounts
were properly excluded from your gross income. If you make a total withdrawal
under a non-Qualified Contract, the amount received will be taxable only to the
extent it exceeds the investment in the Contract.
You should contact a competent tax advisor about the potential tax consequences
of a Market Value Adjustment, as no definitive guidance exists on the proper tax
treatment of Market Value Adjustments.
TAXATION OF ANNUITY PAYMENTS. Generally, the rule for income taxation of
annuity payments received from a non-Qualified Contract provides for the return
of your investment in the Contract in equal tax-free amounts over the payment
period. The balance of each payment received is taxable. For fixed annuity
payments, the amount excluded from income is determined by multiplying the
payment by the ratio of the investment in the Contract (adjusted for any refund
feature or period certain) to the total expected value of annuity payments for
the term of the Contract. The annuity payments will be fully taxable after the
total amount of the investment in the Contract is excluded using these ratios.
The federal tax treatment of annuity payments is unclear in some respects. As a
result, if the IRS should provide further guidance, it is possible that the
amount we calculate and report to the IRS as taxable could be different. If you
die, and annuity payments cease before the total amount of the investment in the
Contract is recovered, the unrecovered amount will be allowed as a deduction for
your last taxable year.
WITHDRAWALS AFTER THE PAYOUT START DATE. Federal tax law is unclear regarding
the taxation of any additional withdrawal received after the Payout Start Date.
It is possible that a greater or lesser portion of such a payment could be
taxable than the amount we determine.
19 PROSPECTUS
DISTRIBUTION AT DEATH RULES. In order to be considered an annuity contract for
federal income tax purposes, the Contract must provide:
.. if any Contract Owner dies on or after the Payout Start Date but before the
entire interest in the Contract has been distributed, the remaining portion of
such interest must be distributed at least as rapidly as under the method of
distribution being used as of the date of the Contract Owner's death;
.. if any Contract Owner dies prior to the Payout Start Date, the entire interest
in the Contract will be distributed within 5 years after the date of the
Contract Owner's death. These requirements are satisfied if any portion of the
Contract Owner's interest that is payable to (or for the benefit of) a
designated Beneficiary is distributed over the life of such Beneficiary (or
over a period not extending beyond the life expectancy of the Beneficiary) and
the distributions begin within 1 year of the Contract Owner's death. If the
Contract Owner's designated Beneficiary is the surviving spouse of the
Contract Owner, the Contract may be continued with the surviving spouse as the
new Contract Owner;
.. if the Contract Owner is a non-natural person, then the Annuitant will be
treated as the Contract Owner for purposes of applying the distribution at
death rules. In addition, a change in the Annuitant on a Contract owned by a
non-natural person will be treated as the death of the Contract Owner.
TAXATION OF ANNUITY DEATH BENEFITS. Death Benefit amounts are included in
income as follows:
.. if distributed in a lump sum, the amounts are taxed in the same manner as a
total withdrawal, or
.. if distributed under an Income Plan, the amounts are taxed in the same manner
as annuity payments.
PENALTY TAX ON PREMATURE DISTRIBUTIONS. A 10% penalty tax applies to the
taxable amount of any premature distribution from a non-Qualified Contract. The
penalty tax generally applies to any distribution made prior to the date you
attain age 59 1/2. However, no penalty tax is incurred on distributions:
.. made on or after the date the Contract Owner attains age 59 1/2,
.. made as a result of the Contract Owner's death or becoming totally disabled,
.. made in substantially equal periodic payments over the Contract Owner's life
or life expectancy, or over the joint lives or joint life expectancies of the
Contract Owner and the Beneficiary,
.. made under an immediate annuity, or
.. attributable to investment in the Contract before August 14, 1982.
You should consult a competent tax advisor to determine how these exceptions may
apply to your situation.
SUBSTANTIALLY EQUAL PERIODIC PAYMENTS. With respect to non-Qualified Contracts
using substantially equal periodic payments or immediate annuity payments as an
exception to the penalty tax on premature distributions, any additional
withdrawal or other material modification of the payment stream would violate
the requirement that payments must be substantially equal. Failure to meet this
requirement would mean that the income portion of each payment received prior to
the later of 5 years or the Contract Owner's attaining age 59 1/2 would be
subject to a 10% penalty tax unless another exception to the penalty tax
applied. The tax for the year of the modification is increased by the penalty
tax that would have been imposed without the exception, plus interest for the
years in which the exception was used. A material modification does not include
permitted changes described in published IRS rulings. You should consult a
competent tax advisor prior to creating or modifying a substantially equal
periodic payment stream.
TAX FREE EXCHANGES UNDER INTERNAL REVENUE CODE SECTION 1035. A 1035 exchange is
a tax-free exchange of a non-qualified life insurance contract, endowment
contract or annuity contract into a non-Qualified annuity contract. The contract
owner(s) must be the same on the old and new contract. Basis from the old
contract carries over to the new contract so long as we receive that information
from the relinquishing company. If basis information is never received, we will
assume that all exchanged funds represent earnings and will allocate no cost
basis to them.
PARTIAL EXCHANGES. The IRS has issued a ruling that permits partial exchanges
of annuity contracts. Under this ruling, if you take a withdrawal from a
receiving or relinquishing annuity contract within 24 months of the partial
exchange, then special aggregation rules apply for purposes of determining the
taxable amount of a distribution. The IRS has issued limited guidance on how to
aggregate and report these distributions. The IRS is expected to provide
further guidance; as a result, it is possible that the amount we calculate and
report to the IRS as taxable could be different. Your Contract may not permit
partial exchanges.
TAXATION OF OWNERSHIP CHANGES. If you transfer a non-Qualified Contract without
full and adequate consideration to a person other than your spouse (or to a
former spouse incident to a divorce), you will be taxed on the difference
between the Contract Value and the investment in the Contract at the time of
transfer. Any assignment or pledge (or agreement to assign or pledge) of the
Contract Value is taxed as a withdrawal of such amount or portion and may also
incur the 10% penalty tax.
AGGREGATION OF ANNUITY CONTRACTS. The Code requires that all non-Qualified
deferred annuity contracts issued by Allstate Life (or its affiliates) to the
same Contract Owner during any calendar year be aggregated
20 PROSPECTUS
and treated as one annuity contract for purposes of determining the taxable
amount of a distribution.
INCOME TAX WITHHOLDING
Generally, Allstate Life is required to withhold federal income tax at a rate of
10% from all non-annuitized distributions. The customer may elect out of
withholding by completing and signing a withholding election form. If no
election is made, we will automatically withhold the required 10% of the taxable
amount. In certain states, if there is federal withholding, then state
withholding is also mandatory.
Allstate Life is required to withhold federal income tax using the wage
withholding rates for all annuitized distributions. The customer may elect out
of withholding by completing and signing a withholding election form. If no
election is made, we will automatically withhold using married with three
exemptions as the default. If no U.S. taxpayer identification number is
provided, we will automatically withhold using single with zero exemptions as
the default. In certain states, if there is federal withholding, then state
withholding is also mandatory.
Election out of withholding is valid only if the customer provides a U.S.
residence address and taxpayer identification number.
Generally, Code Section 1441 provides that Allstate Life as a withholding agent
must withhold 30% of the taxable amounts paid to a non-resident alien. A
non-resident alien is someone other than a U.S. citizen or resident alien.
Withholding may be reduced or eliminated if covered by an income tax treaty
between the U.S. and the non-resident alien's country of residence if the payee
provides a U.S. taxpayer identification number on a fully completed Form W-8BEN.
A U.S. taxpayer identification number is a social security number or an
individual taxpayer identification number ("ITIN"). ITINs are issued by the IRS
to non-resident alien individuals who are not eligible to obtain a social
security number. The U.S. does not have a tax treaty with all countries nor do
all tax treaties provide an exclusion or lower withholding rate for annuities.
TAX QUALIFIED CONTRACTS
The income on tax sheltered annuity (TSA) and IRA investments is tax deferred,
and the income from annuities held by such plans does not receive any additional
tax deferral. You should review the annuity features, including all benefits and
expenses, prior to purchasing an annuity as a TSA or IRA. Tax Qualified
Contracts are contracts purchased as or in connection with:
.. Individual Retirement Annuities (IRAs) under Code Section 408(b);
.. Roth IRAs under Code Section 408A;
.. Simplified Employee Pension (SEP IRA) under Code Section 408(k);
.. Savings Incentive Match Plans for Employees (SIMPLE IRA) under Code Section
408(p);
.. Tax Sheltered Annuities under Code Section 403(b);
.. Corporate and Self Employed Pension and Profit Sharing Plans under Code
Section 401; and
.. State and Local Government and Tax-Exempt Organization Deferred Compensation
Plans under Code Section 457.
Allstate Life reserves the right to limit the availability of the Contract for
use with any of the retirement plans listed above or to modify the Contract to
conform with tax requirements. If you use the Contract within an employer
sponsored qualified retirement plan, the plan may impose different or additional
conditions or limitations on withdrawals, waiver of charges, death benefits,
Payout Start Dates, income payments, and other Contract features. In addition,
adverse tax consequences may result if Qualified Plan limits on distributions
and other conditions are not met. Please consult your Qualified Plan
administrator for more information. Allstate Life no longer issues deferred
annuities to employer sponsored qualified retirement plans.
The tax rules applicable to participants with tax qualified annuities vary
according to the type of contract and the terms and conditions of the
endorsement. Adverse tax consequences may result from certain transactions such
as excess contributions, premature distributions, and, distributions that do not
conform to specified commencement and minimum distribution rules. Allstate Life
can issue an individual retirement annuity on a rollover or transfer of proceeds
from a decedent's IRA, TSA, or employer sponsored retirement plan under which
the decedent's surviving spouse is the beneficiary. Allstate Life does not offer
an individual retirement annuity that can accept a transfer of funds for any
other, non-spousal, beneficiary of a decedent's IRA, TSA, or employer sponsored
qualified retirement plan.
Please refer to your Endorsement for IRAs or 403(b) plans, if applicable, for
additional information on your death settlement options. In the case of certain
Qualified Plans, the terms of the Qualified Plan Endorsement and the plans may
govern the right to benefits, regardless of the terms of the Contract.
TAXATION OF WITHDRAWALS FROM AN INDIVIDUALLY OWNED TAX QUALIFIED CONTRACT. If
you make a partial withdrawal under a Tax Qualified Contract other than a Roth
IRA, the portion of the payment that bears the same ratio to the total payment
that the investment in the Contract (i.e., nondeductible IRA contributions)
bears to the Contract Value, is excluded from your income. We do not keep track
of nondeductible contributions, and generally all tax reporting of distributions
from Tax Qualified Contracts other than Roth IRAs will indicate that the
distribution is fully taxable.
"Qualified distributions" from Roth IRAs are not included in gross income.
"Qualified distributions" are
21 PROSPECTUS
any distributions made more than five taxable years after the taxable year of
the first contribution to any Roth IRA and which are:
.. made on or after the date the Contract Owner attains age 59 1/2,
.. made to a beneficiary after the Contract Owner's death,
.. attributable to the Contract Owner being disabled, or
.. made for a first time home purchase (first time home purchases are subject to
a lifetime limit of $10,000).
"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions.
REQUIRED MINIMUM DISTRIBUTIONS. Generally, Tax Qualified Contracts (excluding
Roth IRAs) require minimum distributions upon reaching age 70 1/2. Failure to
withdraw the required minimum distribution will result in a 50% tax penalty on
the shortfall not withdrawn from the Contract. Not all income plans offered
under the Contract satisfy the requirements for minimum distributions. Because
these distributions are required under the Code and the method of calculation is
complex, please see a competent tax advisor.
THE DEATH BENEFIT AND TAX QUALIFIED CONTRACTS. Pursuant to the Code and IRS
regulations, an IRA (e.g., traditional IRA, Roth IRA, SEP IRA and SIMPLE IRA)
may not invest in life insurance contracts. However, an IRA may provide a death
benefit that equals the greater of the purchase payments or the Contract Value.
The Contract offers a death benefit that in certain circumstances may exceed the
greater of the purchase payments or the Contract Value. We believe that the
Death Benefits offered by your Contract do not constitute life insurance under
these regulations.
It is also possible that certain death benefits that offer enhanced earnings
could be characterized as an incidental death benefit. If the death benefit were
so characterized, this could result in current taxable income to a Contract
Owner. In addition, there are limitations on the amount of incidental death
benefits that may be provided under Qualified Plans, such as in connection with
a TSA or employer sponsored qualified retirement plan.
Allstate Life reserves the right to limit the availability of the Contract for
use with any of the Qualified Plans listed above.
PENALTY TAX ON PREMATURE DISTRIBUTIONS FROM TAX QUALIFIED CONTRACTS. A 10%
penalty tax applies to the taxable amount of any premature distribution from a
Tax Qualified Contract. The penalty tax generally applies to any distribution
made prior to the date you attain age 59 1/2. However, no penalty tax is
incurred on distributions:
.. made on or after the date the Contract Owner attains age 59 1/2,
.. made as a result of the Contract Owner's death or total disability,
.. made in substantially equal periodic payments over the Contract Owner's life
or life expectancy, or over the joint lives or joint life expectancies of the
Contract Owner and the Beneficiary,
.. made after separation from service after age 55 (does not apply to IRAs),
.. made pursuant to an IRS levy,
.. made for certain medical expenses,
.. made to pay for health insurance premiums while unemployed (applies only for
IRAs),
.. made for qualified higher education expenses (applies only for IRAs), and
.. made for a first time home purchase (up to a $10,000 lifetime limit and
applies only for IRAs).
During the first 2 years of the individual's participation in a SIMPLE IRA,
distributions that are otherwise subject to the premature distribution penalty,
will be subject to a 25% penalty tax.
You should consult a competent tax advisor to determine how these exceptions may
apply to your situation.
SUBSTANTIALLY EQUAL PERIODIC PAYMENTS ON TAX QUALIFIED CONTRACTS. With respect
to Tax Qualified Contracts using substantially equal periodic payments as an
exception to the penalty tax on premature distributions, any additional
withdrawal or other material modification of the payment stream would violate
the requirement that payments must be substantially equal. Failure to meet this
requirement would mean that the income portion of each payment received prior to
the later of 5 years or the taxpayer's attaining age 59 1/2 would be subject to
a 10% penalty tax unless another exception to the penalty tax applied. The tax
for the year of the modification is increased by the penalty tax that would have
been imposed without the exception, plus interest for the years in which the
exception was used. A material modification does not include permitted changes
described in published IRS rulings. You should consult a competent tax advisor
prior to creating or modifying a substantially equal periodic payment stream.
INCOME TAX WITHHOLDING ON TAX QUALIFIED CONTRACTS. Generally, Allstate Life is
required to withhold federal income tax at a rate of 10% from all non-annuitized
distributions that are not considered "eligible rollover distributions." The
customer may elect out of withholding by completing and signing a withholding
election form. If no election is made, we will automatically withhold the
required 10% from the
22 PROSPECTUS
taxable amount. In certain states, if there is federal withholding, then state
withholding is also mandatory. Allstate Life is required to withhold federal
income tax at a rate of 20% on all "eligible rollover distributions" unless you
elect to make a "direct rollover" of such amounts to an IRA or eligible
retirement plan. Eligible rollover distributions generally include all
distributions from Tax Qualified Contracts, including TSAs but excluding IRAs,
with the exception of:
.. required minimum distributions, or,
.. a series of substantially equal periodic payments made over a period of at
least 10 years, or,
.. a series of substantially equal periodic payments made over the life (joint
lives) of the participant (and beneficiary), or,
.. hardship distributions.
For all annuitized distributions that are not subject to the 20% withholding
requirement, Allstate Life is required to withhold federal income tax using the
wage withholding rates. The customer may elect out of withholding by completing
and signing a withholding election form. If no election is made, we will
automatically withhold using married with three exemptions as the default. If no
U.S. taxpayer identification number is provided, we will automatically withhold
using single with zero exemptions as the default. In certain states, if there
is federal withholding, then state withholding is also mandatory.
Election out of withholding is valid only if the customer provides a U.S.
residence address and taxpayer identification number.
Generally, Code Section 1441 provides that Allstate Life as a withholding agent
must withhold 30% of the taxable amounts paid to a non-resident alien. A
non-resident alien is someone other than a U.S. citizen or resident alien or to
certain other 'foreign persons'. Withholding may be reduced or eliminated if
covered by an income tax treaty between the U.S. and the non-resident alien's
country of residence if the payee provides a U.S. taxpayer identification number
on a fully completed Form W-8BEN. A U.S. taxpayer identification number is a
social security number or an individual taxpayer identification number ("ITIN").
ITINs are issued by the IRS to non-resident alien individuals who are not
eligible to obtain a social security number. The U.S. does not have a tax
treaty with all countries nor do all tax treaties provide an exclusion or lower
withholding rate for annuities.
INDIVIDUAL RETIREMENT ANNUITIES. Code Section 408(b) permits eligible
individuals to contribute to an individual retirement program known as an
Individual Retirement Annuity (IRA). Individual Retirement Annuities are subject
to limitations on the amount that can be contributed and on the time when
distributions may commence. Certain distributions from other types of qualified
retirement plans may be "rolled over" on a tax-deferred basis into an Individual
Retirement Annuity.
ROTH INDIVIDUAL RETIREMENT ANNUITIES. Code Section 408A permits eligible
individuals to make nondeductible contributions to an individual retirement
program known as a Roth Individual Retirement Annuity. Roth Individual
Retirement Annuities are subject to limitations on the amount that can be
contributed and on the time when distributions may commence.
Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth Individual Retirement
Annuity. The income portion of a conversion or rollover distribution is taxable
currently, but is exempted from the 10% penalty tax on premature distributions.
ANNUITIES HELD BY INDIVIDUAL RETIREMENT ACCOUNTS (COMMONLY KNOWN AS CUSTODIAL
IRAS). Code Section 408 permits a custodian or trustee of an Individual
Retirement Account to purchase an annuity as an investment of the Individual
Retirement Account. If an annuity is purchased inside of an Individual
Retirement Account, then the Annuitant must be the same person as the beneficial
owner of the Individual Retirement Account.
Generally, the death benefit of an annuity held in an Individual Retirement
Account must be paid upon the death of the Annuitant. However, in most states,
the Contract permits the custodian or trustee of the Individual Retirement
Account to continue the Contract in the accumulation phase, with the Annuitant's
surviving spouse as the new Annuitant, if the following conditions are met:
1) The custodian or trustee of the Individual Retirement Account is the owner of
the annuity and has the right to the Death Proceeds otherwise payable under
the Contract;
2) The deceased Annuitant was the beneficial owner of the Individual Retirement
Account;
3) We receive a complete request for settlement for the death of the Annuitant;
and
4) The custodian or trustee of the Individual Retirement Account provides us
with a signed certification of the following:
(a) The Annuitant's surviving spouse is the sole beneficiary of the Individual
Retirement Account;
(b) The Annuitant's surviving spouse has elected to continue the Individual
Retirement Account as his or her own Individual Retirement Account; and
(c) The custodian or trustee of the Individual Retirement Account has
continued the Individual Retirement Account pursuant to the surviving spouse's
election.
23 PROSPECTUS
SIMPLIFIED EMPLOYEE PENSION IRA. Code Section 408(k) allows eligible employers
to establish simplified employee pension plans for their employees using
individual retirement annuities. These employers may, within specified limits,
make deductible contributions on behalf of the employees to the individual
retirement annuities. Employers intending to use the Contract in connection with
such plans should seek competent tax advice.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE IRA). Code Section 408(p)
allows eligible employers with 100 or fewer employees to establish SIMPLE
retirement plans for their employees using individual retirement annuities. In
general, a SIMPLE IRA consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to purchase the Contract as a SIMPLE IRA should seek competent tax and
legal advice.
TO DETERMINE IF YOU ARE ELIGIBLE TO CONTRIBUTE TO ANY OF THE ABOVE LISTED IRAS
(TRADITIONAL, ROTH, SEP, OR SIMPLE), PLEASE REFER TO IRS PUBLICATION 590 AND
YOUR COMPETENT TAX ADVISOR.
TAX SHELTERED ANNUITIES. Code Section 403(b) provides tax-deferred retirement
savings plans for employees of certain non-profit and educational organizations.
Under Section 403(b), any contract used for a 403(b) plan must provide that
distributions attributable to salary reduction contributions made after
12/31/88, and all earnings on salary reduction contributions, may be made only
on or after the date the employee:
.. attains age 59 1/2,
.. severs employment,
.. dies,
.. becomes disabled, or
.. incurs a hardship (earnings on salary reduction contributions may not be
distributed on account of hardship).
These limitations do not apply to withdrawals where Allstate Life is directed to
transfer some or all of the Contract Value to another 403(b) plan. Generally,
we do not accept funds in 403(b) contracts that are subject to the Employee
Retirement Income Security Act of 1974 (ERISA).
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS.
Section 401(a) of the Code permits corporate employers to establish various
types of tax favored retirement plans for employees. Self-employed individuals
may establish tax favored retirement plans for themselves and their employees
(commonly referred to as "H.R.10" or "Keogh"). Such retirement plans may permit
the purchase of annuity contracts. Allstate Life no longer issues annuity
contracts to employer sponsored qualified retirement plans.
There are two owner types for contracts intended to qualify under Section
401(a): a qualified plan fiduciary or an annuitant owner.
.. A qualified plan fiduciary exists when a
qualified plan trust that is intended to qualify under Section 401(a) of the
Code is the owner. The qualified plan trust must have its own tax identification
number and a named trustee acting as a fiduciary on behalf of the plan. The
annuitant should be the person for whose benefit the contract was purchased.
.. An annuitant owner exists when the tax identification number of the owner and
annuitant are the same, or the annuity contract is not owned by a qualified plan
trust. The annuitant should be the person for whose benefit the contract was
purchased.
If a qualified plan fiduciary is the owner of the contract, the qualified plan
must be the beneficiary so that death benefits from the annuity are distributed
in accordance with the terms of the qualified plan. Annuitant owned contracts
require that the beneficiary be the annuitant's spouse (if applicable), which is
consistent with the required IRS language for qualified plans under Section
401(a). A completed Annuitant Owned Qualified Plan Designation of Beneficiary
form is required in order to change the beneficiary of an annuitant owned
Qualified Plan contract.
STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION DEFERRED COMPENSATION
PLANS
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current taxes. The employees must be participants in an eligible deferred
compensation plan. In eligible governmental plans, all assets and income must be
held in a trust/ custodial account/annuity contract for the exclusive benefit of
the participants and their beneficiaries. To the extent the Contracts are used
in connection with a non-governmental eligible plan, employees are considered
general creditors of the employer and the employer as owner of the Contract has
the sole right to the proceeds of the Contract. Under eligible 457 plans,
contributions made for the benefit of the employees will not be includible in
the employees' gross income until distributed from the plan. Allstate Life no
longer issues annuity contracts to employer sponsored qualified retirement
plans.
24 PROSPECTUS
ANNUAL REPORTS AND OTHER DOCUMENTS
- --------------------------------------------------------------------------------
Allstate Life's Annual Report on Form 10-K for the year ended December 31, 2005,
is incorporated herein by reference, which means that it is legally a part of
this prospectus.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Exchange Act are also incorporated herein by reference, which means
that they also legally become a part of this prospectus.
Statements in this prospectus, or in documents that we file later with the SEC
and that legally become a part of this prospectus, may change or supersede
statements in other documents that are legally part of this prospectus.
Accordingly, only the statement that is changed or replaced will legally be a
part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q, electronically on the SEC's
"EDGAR" system using the identifying number CIK No. 0000352736. The SEC
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
The address of the site is http://www.sec.gov. You also can view these materials
at the SEC's Public Reference Room at 100 F Street NE, Room 1580, Washington, DC
20549-2001. For more information on the operations of the SEC's Public Reference
Room, call 1-800-SEC-0330.
If you have received a copy of this prospectus, and would like a free copy of
any document incorporated herein by reference (other than exhibits not
specifically incorporated by reference into the text of such documents), please
write or call us at P.O. Box 80469, Lincoln, NE 68501-0469 (telephone:
1-800-203-0068).
ANNUAL STATEMENTS
- --------------------------------------------------------------------------------
At least once a year prior to the Payout Start Date, we will send you a
statement containing information about your Contract Value. For more
information, please contact your financial representative or call our customer
support unit at 1-800-203-0068.
25 PROSPECTUS
APPENDIX A- MARKET VALUE ADJUSTMENT
- --------------------------------------------------------------------------------
The Market Value Adjustment is based on the following:
I = the Treasury Rate for the week preceding the establishment of the
Guarantee Period Account;
J = the Treasury Rate for the week preceding our receipt of your
withdrawal request.
N = the number of whole and partial years from the date we receive
your request until the end of the relevant Guarantee Period.
Treasury Rate means the U.S. Treasury Note Constant Maturity 5 Year yield as
reported in Federal Reserve Board Statistical Release H.15. If such yield ceases
to be available in Federal Reserve Bulletin Release H.15, then we will use an
alternate source for such information in our discretion.
The Market Value Adjustment factor is determined from the following formula:
.9 X [I-(J + .0025)] X N
The Market Value Adjustment equals the adjustment factor multiplied by the
amount withdrawn from the Contract that exceeds the Free Withdrawal Amount for
that account.
EXAMPLES OF MARKET VALUE ADJUSTMENT
Purchase Payment: $10,000 allocated to the Guarantee Period Account
Guarantee Period: 5 years
Annualized Effective
Interest Rate: 4.50%
Full Withdrawal: Beginning of Contract Year 5
Contract Value at time of
full surrender $11,925.19
NOTE: These examples assume that premium taxes are not applicable.
EXAMPLE 1: (ASSUMES DECLINING INTEREST RATES)
Step 1: Calculate Contract = $11,925.19
Value at Beginning of
Contract Year 5:
Step 2: Calculate the Amount FREE WITHDRAWAL AMOUNT (.10 X $11,925.19)
in excess of the Free = $1,192.52
Withdrawal Amount: AMOUNT IN EXCESS: $11,925.19 - $1,192.52 =
$10,732.67
Step 3: Calculate the .= 06 X $10,732.67 = $643.96
Withdrawal Charge:
Step 4: Calculate the Market I = 4.50%
Value Adjustment: J = 4.20%
N = 1 year
Market Value Adjustment Factor: .9 X [I -
(J + .0025)] X N
= .9 X [.045 - (.042 + .0025)] X 1= .00045
Market Value Adjustment = Market Value
Adjustment Factor X Amount Subject To
Market Value Adjustment:
= .00045 X $10,732.67 = $4.83
Step 5: Calculate the amount = $11,925.19 - $643.96 + $4.83 =
received by Contract Owner as $11,286.06
a result of full withdrawal
at the beginning of Contract
Year 5:
EXAMPLE 2: (ASSUMES RISING INTEREST RATES)
Step 1: Calculate Contract Value at Beginning of = $11,925.19
Contract Year 5:
Step 2: Calculate The Amount in excess of Free FREE WITHDRAWAL AMOUNT (.10 X $11,925.19) = $1,192.52
Withdrawal Amount: AMOUNT IN EXCESS: $11,925.19 - $1,192.52 = $10,732.67
Step 3: Calculate the Withdrawal Charge: = .06 X $10,732.67 = $643.96
Step 4: Calculate the Market Value Adjustment: I = 4.50%
J = 4.80%
N = 1 year
Market Value Adjustment Factor: .9 X [I - (J + .0025)] X N
= .9 X [(.045 - (.048 + .0025)] X 1= -0.00495
Market Value Adjustment = Market Value Adjustment Factor X Amount
Subject To Market Value Adjustment:
= -.00495 X $10,732.67 = -($53.13)
Step 5: Calculate the amount received by Contract Owner = $11,925.19 - $643.96 - $53.13 = $11,228.10
as a result of full withdrawal at the beginning of
Contract Year 5:
26 PROSPECTUS
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-laws of Allstate Life Insurance Company ("Registrant") provide that
Registrant will indemnify all of its directors, former directors, officers and
former officers, to the fullest extent permitted under law, who were or are a
party or are threatened to be made a party to any proceeding by reason of the
fact that such persons were or are directors or officers of Registrant, against
liabilities, expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by them. The indemnity shall not be deemed exclusive of
any other rights to which directors or officers may be entitled by law or under
any articles of incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise. In addition, the indemnity shall inure to
the benefit of the legal representatives of directors and officers or of their
estates, whether such representatives are court appointed or otherwise
designated, and to the benefit of the heirs of such directors and officers. The
indemnity shall extend to and include claims for such payments arising out of
any proceeding commenced or based on actions of such directors and officers
taken prior to the effectiveness of this indemnity; provided that payment of
such claims had not been agreed to or denied by Registrant before such date.
The directors and officers of Registrant have been provided liability insurance
for certain losses arising from claims or charges made against them while acting
in their capacities as directors or officers of Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit No. Description
(1) Underwriting Agreement between Allstate Life Insurance Company and Allstate
Distributors, L.L.C. (Incorporated herein by reference to Pre-Effective
Amendment No. 1 to the Form N-4 Registration Statement of Allstate Life
Insurance Company Separate Account A (File No. 333-31288) dated April 27, 2000).
(2) None
(4) Form of Single Premium Deferred Annuity Certificate and Application
(Previously filed in Registrant's initial Form S-3 Registration Statement (File
No. 333-104789) dated April 28, 2003).
(5)(a) Opinion and Consent of General Counsel re: Legality (Previously filed in
Pre-Effective Amendment No. 1 to this Registration Statement (File No.
333-104789) dated July 9, 2003).
(b) Opinion and Consent of General Counsel re: Legality (Previously filed in
Registrant's Form S-3 Registration Statement (File No. 333-119706) dated October
12, 2004).
(c) Opinion and Consent of General Counsel re: Legality filed herewith.
(8) None
(11) None
(12) None
(15) None
(23) Consent of Independent Registered Public Accounting Firm filed herewith
(24) (a) Powers of Attorney for Michael J. Velotta, David A. Bird, Edward M.
Liddy, John C. Lounds, Samuel H. Pilch, Eric A. Simonson, Kevin R. Slawin and
Thomas J. Wilson, II. (Incorporated herein by reference to Allstate Life
Insurance Company's initial Form S-3 Registration Statement (File No.
333-100068) filed September 25, 2002).
(24)(b) Powers of Attorney for Casey J. Sylla and Danny L. Hale (Previously
filed in Registrant's initial Form S-3 Registration Statement (File No.
333-104789) dated April 28, 2003).
(24)(c) Powers of Attorney for John C. Pintozzi and Douglas B. Welch (Previously
filed in Post-Effective Amendment No. 1 (File No. 333-119706) dated April
5, 2005).
(25) None
(26) None
(27) Not applicable
(99) Experts filed herewith
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to the registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof ) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) (a) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(3) (b) That, for purposes of determining any liability under the Securities Act
of 1933, each filing if the registrant's annual report pursuant to Section 13(a)
of 15 (d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant, Allstate Life Insurance Company, pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the
Township of Northfield, State of Illinois on the 3rd day of April, 2006.
ALLSTATE LIFE INSURANCE COMPANY
(REGISTRANT)
By: /s/MICHAEL J. VELOTTA
---------------------------------------
Michael J. Velotta
Senior Vice President, Secretary
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated
on the 3rd day of April, 2006.
*/DAVID A. BIRD Director and Senior Vice President
- -----------------------
David A. Bird
*/DANNY L. HALE Director
- ----------------------
Danny L. Hale
*/EDWARD M. LIDDY Director
- -----------------------
Edward M. Liddy
*/JOHN C. LOUNDS Director and Senior Vice President
- -----------------------
John C. Lounds
*/SAMUEL H. PILCH Controller and Group Vice President
- ------------------------ (Principal Accounting Officer)
Samuel H. Pilch
*/JOHN C. PINTOZZI Director, Senior Vice President and Chief
- ------------------------ Financial Officer
John C. Pintozzi (Principal Financial Officer)
*/ERIC A. SIMONSON Director, Senior Vice President and Chief
- ------------------------- Investment Officer
Eric A. Simonson
*KEVIN R. SLAWIN Director and Senior Vice President
- -----------------------
Kevin R. Slawin
*/CASEY J. SYLLA Director, Chairman of the Board and
- ---------------------- President (Principal Executive Officer)
Casey J. Sylla
/s/MICHAEL J. VELOTTA Director, Senior Vice President, General
- ---------------------- Counsel and Secretary
Michael J. Velotta
*DOUGLAS B. WELCH Director and Senior Vice President
- -----------------------
Douglas B. Welch
*/THOMAS J. WILSON II Director
- -----------------------
Thomas J. Wilson II
*/ By Michael J. Velotta, pursuant to Power of Attorney, filed herewith or
previously filed.
EXHIBIT LIST
The following exhibits are filed herewith:
Exhibit No. Description
5(c) Opinion and Consent of General Counsel re: Legality
(23) Consent of Independent Registered Public Accounting Firm
(99) Experts
Exhibit 5(c)
ALLSTATE LIFE INSURANCE COMPANY
3100 Sanders Road
Northbrook, Illinois 60062
MICHAEL J. VELOTTA DIRECT DIAL: 847-402-2400
SENIOR VICE PRESIDENT, FACSIMILE: 847-326-6742
SECRETARY AND GENERAL COUNSEL
April 3, 2006
TO: ALLSTATE LIFE INSURANCE COMPANY
NORTHBROOK, IL 60062
FROM: MICHAEL J. VELOTTA
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
RE: FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 FILE NO. 333-119706
ALLSTATE TREASURY-LINKED ANNUITY PLUS
With reference to the Form S-3 Registration Statement filed by Allstate Life
Insurance Company (the "Company"), as Registrant, with the Securities and
Exchange Commission covering the Allstate Treasury-Linked Annuity Plus Contract
described therein (the "Contracts"), I have examined such documents and such law
as I have considered necessary and appropriate, and on the basis of such
examination, it is my opinion that as of April 3, 2006:
1. The Company is duly organized and existing under the laws of the
State of Illinois and has been duly authorized to do business and to issue the
Contracts by the Director of Insurance of the State of Illinois.
2. The securities registered by the above Registration Statement when
issued will be valid, legal and binding obligations of the Company.
I hereby consent to the filing of this opinion as an exhibit to the above
referenced Registration Statement and to the use of my name under the caption
"Legal Matters" in the prospectus constituting a part of the Registration
Statement.
Sincerely,
/S/MICHAEL J. VELOTTA
- ------------------------------
Michael J.Velotta
Senior Vice President, Secretary and General Counsel
Exhibit 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in this Registration Statement of
Allstate Life Insurance Company on Form S-3 of our report dated March 10, 2006,
(which report expresses an unqualified opinion and includes an explanatory
paragraph relating to a change in method of accounting for certain
nontraditional long-duration contracts and for separate accounts in 2004 and
changes in the methods of accounting for embedded derivatives in modified
coinsurance agreements and variable interest entities in 2003) relating to the
financial statements and financial statement schedules of Allstate Life
Insurance Company, appearing in the Annual Report on Form 10-K of Allstate Life
Insurance Company for the year ended December 31, 2005 and to the reference to
us under the heading "Experts" in Exhibit 99 in Part II of this Registration
Statement.
/s/ Deloitte & Touche LLP
Chicago, Illinois
April 3, 2006
Exhibit 99
EXPERTS
The financial statements and the related financial statement schedules,
incorporated in this prospectus by reference from the Allstate Life Insurance
Company's Annual Report on Form 10-K for the year ended December 31, 2005, have
been audited by Deloitte & Touche LLP, an independent registered public
accounting firm, as stated in their report (which report expresses an
unqualified opinion on the financial statements and related financial statement
schedules and includes an explanatory paragraph relating to a change in method
of accounting for certain nontraditional long-duration contracts and for
separate accounts in 2004 and changes in the methods of accounting for embedded
derivatives in modified coinsurance agreements and variable interest entities in
2003), which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
ALLSTATE LIFE INSURANCE COMPANY
Law & Regulation Department
3100 Sanders Road, Suite J5B
Northbrook, Illinois 60062
Direct Dial Number 847 402-1790
Facsimile 847 402-3781
E-Mail csmith5@allstate.com
CHARLES SMITH
ASSOCIATE COUNSEL
April 5, 2006
BY EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Allstate Life Insurance Company ("Registrant")
Form S-3 Registration Statement
Additional Interests under a Deferred Annuity Contract
CIK No. 0000352736
- -------------------------------------------------------------------------------
Commissioners:
On behalf of the above-named Registrant, we are filing herewith an
electronically formatted copy of a new Form S-3 registration statement
("Registration Statement") under the Securities Act of 1933 ("Act").
To facilitate the Commission staff's review of the Registration Statement,
Registrant has requested that I submit the information below.
1. Registration Statement
Registrant is filing the Registration Statement for the purpose of registering
additional interests under a deferred annuity contract previously described in
the prospectus contained in the Post-Effective Amendment No. 1 to Registrant's
Form S-3 registration statement filed on April 5, 2005 (File No. 333-119706)
("Prospectus"). These interests relate to the market value adjustment feature of
the deferred annuity contract described in the Prospectus.
Registrant is filing the Registration Statement in accordance with Rule 413
under the Act, which requires registrants to effect the registration of
additional securities of the same class through the filing of a new registration
statement. At this time, Registrant is also using this Registration Statement to
generally update the disclosure contained in the Registration Statement.
Please note that the unsold amount of securities previously registered under
File No. 333-119706 is being carried over pursuant to Rule 429(b) under the Act.
2. Timetable for Effectiveness
We would appreciate the Commission staff's efforts in processing the
Registration Statement so that it may be declared effective no later than May 1,
2006.
Accordingly, Registrant and the principal underwriter hereby request, pursuant
to Rule 461 under the 1933 Act, that the Commission declare the amended
Registration Statement effective no later than May 1, 2006. Registrant and the
principal underwriter represent that they are aware of their obligations under
the Act and that their request is consistent with the public interest and the
protection of investors.
3. Registrant's Acknowledgment
In making its request for acceleration of this Registration Statement,
Registrant hereby acknowledges that should the Commission or the staff, acting
pursuant to delegated authority, declare the filing effective, it does not
foreclose the Commission from taking any action with respect to the filing; the
action of the Commission or the staff, acting pursuant to delegated authority,
in declaring the filing effective, does not relieve Registrant from its full
responsibility for the adequacy and accuracy of the disclosure in the filing;
and Registrant may not assert this action as defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.
-----------------------
Please direct any question or comment to me at the number set forth above.
Very truly yours,
/s/ Charles Smith
Charles Smith Esq.
Associate Counsel
cc: Alison White
Securities and Exchange Commission
