As filed with the Securities and Exchange Commission on April 25, 2005
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FILE NO. 333-100068
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 3
TO
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:
RICHARD T. CHOI, ESQUIRE LISETTE WILLEMSEN, ESQUIRE
FOLEY & LARDNER, LLP ALLSTATE LIFE INSURANCE COMPANY
3000 K STREET, N.W. 3100 SANDERS ROAD
SUITE 500 SUITE J5B
WASHINGTON, D.C. 20007 NORTHBROOK, IL 60062
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
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.
THE ALLSTATE ADVISOR VARIABLE ANNUITIES
(ADVISOR, ADVISOR PLUS, ADVISOR PREFERRED)
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 PROSPECTUS DATED APRIL 30, 2005
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Allstate Life Insurance Company ("ALLSTATE LIFE") is offering the following
individual and group flexible premium deferred variable annuity contracts (each,
a "CONTRACT"):
.. ALLSTATE ADVISOR
.. ALLSTATE ADVISOR PLUS
.. ALLSTATE ADVISOR PREFERRED
This prospectus contains information about each Contract that you should know
before investing. Please keep it for future reference. Not all Contracts may be
available in all states or through your sales representative. Please check with
your sales representative for details.
Each Contract currently offers several investment alternatives ("INVESTMENT
ALTERNATIVES"). The investment alternatives include up to 3 fixed account
options ("FIXED ACCOUNT OPTIONS"), depending on the Contract, and include 45*
variable sub-accounts ("VARIABLE SUB-ACCOUNTS") of the Allstate Financial
Advisors Separate Account I ("VARIABLE ACCOUNT"). Each Variable Sub-Account
invests exclusively in shares of the following mutual funds ("FUNDS"):
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST (CLASS 2) PUTNAM VARIABLE TRUST (CLASS IB)
LORD ABBETT SERIES FUND, INC.(CLASS VC) VAN KAMPEN LIFE INVESTMENT TRUST (CLASS II)
OPPENHEIMER VARIABLE ACCOUNT FUNDS (SERVICE SHARES) THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
(CLASS I & II)
*Up to 51 Variable Sub-Accounts may be available depending on the date you
purchased your Contract. Please see page 41-42 for information about
Sub-Account and/or Portfolio liquidations, mergers, closures and name changes.
Each Fund has multiple investment Portfolios ("PORTFOLIOS"). Not all of the
Funds and/or Portfolios, however, may be available with your Contract. You
should check with your sales representative for further information on the
availability of the Funds and/or Portfolios. Your annuity application will list
all available Portfolios.
For ALLSTATE ADVISOR PLUS CONTRACTS, each time you make a purchase payment, we
will add to your Contract value ("CONTRACT VALUE") a credit enhancement ("CREDIT
ENHANCEMENT") of up to 5% (depending on the issue age and your total purchase
payments) of such purchase payment. Expenses for this Contract may be higher
than a Contract without the Credit Enhancement. Over time, the amount of the
Credit Enhancement may be more than offset by the fees associated with the
Credit Enhancement.
WE (Allstate Life) have filed a Statement of Additional Information, dated April
30, 2005, with the Securities and Exchange Commission ("SEC"). It contains more
information about each Contract and is incorporated herein by reference, which
means that it is legally a part of this prospectus. Its table of contents
appears on page 84 of this prospectus. For a free copy, please write or call us
at the address or telephone number above, or go to the SEC's Web site
(http://www.sec.gov). You can find other information and documents about us,
including documents that are legally part of this prospectus, at the SEC's Web
site.
THE SECURITIES AND EXCHANGE COMMISSION 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.
IMPORTANT THE CONTRACTS MAY BE DISTRIBUTED THROUGH BROKER-DEALERS THAT
HAVE RELATIONSHIPS WITH BANKS OR OTHER FINANCIAL INSTITUTIONS
NOTICES OR BY EMPLOYEES OF SUCH BANKS. HOWEVER, THE CONTRACTS ARE NOT
DEPOSITS IN, OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
SUCH INSTITUTIONS OR ANY FEDERAL REGULATORY AGENCY. INVESTMENT
IN THE CONTRACTS INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.
THE CONTRACTS ARE NOT FDIC INSURED.
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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Overview of Contracts 4
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The Contracts at a Glance 5
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How the Contracts Work 10
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Expense Table 11
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Financial Information 20
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CONTRACT FEATURES
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The Contracts 20
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Purchases 23
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Contract Value 24
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Investment Alternatives 38
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The Variable Sub-Accounts 38
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The Fixed Account Options 44
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Transfers 48
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Expenses 52
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Access to Your Money 57
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PAGE
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Income Payments 58
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Death Benefits 66
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OTHER INFORMATION
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More Information 74
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Taxes 77
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Annual Reports and Other Documents 83
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STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS 84
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APPENDIX A-ALLSTATE ADVISOR CONTRACT COMPARISON CHART 85
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APPENDIX B-MARKET VALUE ADJUSTMENT 87
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APPENDIX C-CALCULATION OF INCOME PROTECTION BENEFIT 89
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APPENDIX D-WITHDRAWAL ADJUSTMENT EXAMPLE-INCOME BENEFITS 90
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APPENDIX E-WITHDRAWAL ADJUSTMENT EXAMPLE-DEATH BENEFITS 91
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APPENDIX F-CALCULATION OF EARNINGS PROTECTION DEATH BENEFIT 92
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APPENDIX G-WITHDRAWAL ADJUSTMENT EXAMPLE-TRUERETURN ACCUMULATION BENEFIT 95
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APPENDIX H-SUREINCOME WITHDRAWAL BENEFIT OPTION CALCULATION EXAMPLES 96
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APPENDIX I-ACCUMULATION UNIT VALUES 98
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2 PROSPECTUS
IMPORTANT TERMS
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This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
PAGE
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AB Factor 25
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Accumulation Benefit 25
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Accumulation Phase 10
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Accumulation Unit 20
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Accumulation Unit Value 20
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Allstate Life ("We") 1
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Annuitant 21
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Automatic Additions Program 23
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Automatic Portfolio Rebalancing Program 50
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Beneficiary 21
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Benefit Base 6
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Benefit Payment 33
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Benefit Payment Remaining 33
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Benefit Year 33
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Co-Annuitant 21
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*Contract 1
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Contract Anniversary 6
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Contract Owner ("You") 10
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Contract Value 1
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Contract Year 7
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Credit Enhancement 1
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Dollar Cost Averaging Program 50
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Due Proof of Death 66
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Earnings Protection Death Benefit Option 6
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Enhanced Beneficiary Protection (Annual Increase) Option 6
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Excess of Earnings Withdrawal 69
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Fixed Account Options 1
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Free Withdrawal Amount 55
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Funds 1
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Guarantee Option 25
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Guarantee Period Accounts 45
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Income Base 6
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Income Plan 58
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Income Protection Benefit Option 6
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In-Force Earnings 68
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In-Force Premium 68
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Investment Alternatives 1
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IRA Contract 7
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PAGE
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Issue Date 10
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Market Value Adjustment 9
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Maximum Anniversary Value 6
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Maximum Anniversary Value (MAV) Death Benefit Option 6
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Payout Phase 10
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Payout Start Date 58
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Portfolios 1
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Qualified Contract 20
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Retirement Income Guarantee Options 6
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Return of Premium Death Benefit 67
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Rider Anniversary 25
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Rider Application Date 6
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Rider Date 25
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Rider Fee 6
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Rider Fee Percentage 32
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Rider Maturity Date 25
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Rider Period 25
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Rider Trade-In Option 32
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Right to Cancel 24
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SEC 1
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Settlement Value 67
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Spousal Protection Benefit Option 21
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Spousal Protection Benefit (Co-Annuitant) Option for Custodial Individual
Retirements Accounts 21
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Standard Fixed Account Option 45
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SureIncome Withdrawal Benefit Option 6
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Systematic Withdrawal Program 57
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Tax Qualified Contract 80
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Transfer Period Accounts 45
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Trial Examination Period 5
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TrueBalance/SM/ Asset Allocation Program 42
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TrueReturn/SM/ Accumulation Benefit Option 6
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Valuation Date 23
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Variable Account 1
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Variable Sub-Account 1
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Withdrawal Benefit Factor 33
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Withdrawal Benefit Payout Phase 33
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Withdrawal Benefit Payout Phase Start Date 35
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* In certain states a Contract may be available only as a group Contract. If you
purchase a group Contract, we will issue you a certificate that represents your
ownership and that summarizes the provisions of the group Contract. References
to "Contract" in this prospectus include certificates, unless the context
requires otherwise. References to "Contract" also include all three Contracts
listed on the cover page of this prospectus, unless otherwise noted. However, we
administer each Contract separately.
3 PROSPECTUS
OVERVIEW OF CONTRACTS
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The Contracts offer many of the same basic features and benefits. They differ
primarily with respect to the charges imposed, as follows:
.. The ALLSTATE ADVISOR CONTRACT has a mortality and expense risk charge of
1.10%, an administrative expense charge of 0.19%*, and a withdrawal charge of
up to 7% with a 7-year withdrawal charge period;
.. The ALLSTATE ADVISOR PLUS CONTRACT offers Credit Enhancement of up to 5% on
purchase payments, a mortality and expense risk charge of 1.40%, an
administrative expense charge of 0.19%*, and a withdrawal charge of up to 8.5%
with an 8-year withdrawal charge period;
.. The ALLSTATE ADVISOR PREFERRED CONTRACT WITH 5-YEAR WITHDRAWAL CHARGE OPTION
("Package III") has a mortality and expense risk charge of 1.40%, an
administrative expense charge of 0.19%*, and a withdrawal charge of up to 7%
with a 5-year withdrawal charge period;
.. The ALLSTATE ADVISOR PREFERRED CONTRACT WITH 3-YEAR WITHDRAWAL CHARGE OPTION
("Package II") has a mortality and expense risk charge of 1.50%, an
administrative expense charge of 0.19%*, and a withdrawal charge of up to 7%
with a 3-year withdrawal charge period; and
.. The ALLSTATE ADVISOR PREFERRED CONTRACT WITH NO WITHDRAWAL CHARGE OPTION
("Package I") has a mortality and expense risk charge of 1.60%, an
administrative expense charge of 0.19%*, and no withdrawal charges.
Other differences among the Contracts relate to available Fixed Account Options.
For a side-by-side comparison of these differences, please refer to Appendix A
of this prospectus.
* The administrative expense charge may be increased, but will never exceed
0.35%. Once your Contract is issued, we will not increase the administrative
expense charge for your Contract.
4 PROSPECTUS
THE CONTRACTS AT A GLANCE
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The following is a snapshot of the Contracts. Please read the remainder of this
prospectus for more information.
FLEXIBLE PAYMENTS You can purchase each Contract with as little as
$10,000 ($2,000 for Contracts issued with an IRA or
TSA). You can add to your Contract as often and as much
as you like, but each subsequent payment must be at
least $1,000 ($50 for automatic payments).
We reserve the right to accept a lesser initial
purchase payment amount for each Contract. We may limit
the cumulative amount of purchase payments to a maximum
of $1,000,000 in any Contract.
For ALLSTATE ADVISOR PLUS CONTRACTS, each time you make
a purchase payment, we will add to your Contract Value
a Credit Enhancement of up to 5% of such purchase
payment.
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TRIAL EXAMINATION PERIOD You may cancel your Contract within 20 days of receipt
or any longer period as your state may require ("TRIAL
EXAMINATION PERIOD"). Upon cancellation, we will return
your purchase payments adjusted, to the extent federal
or state law permits, to reflect the investment
experience of any amounts allocated to the Variable
Account, including the deduction of mortality and
expense risk charges and administrative expense
charges. If you cancel your Contract during the TRIAL
EXAMINATION PERIOD, the amount we refund to you will
not include any Credit Enhancement. See "Trial
Examination Period" for details.
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EXPENSES Each Portfolio pays expenses that you will bear
indirectly if you invest in a Variable Sub-Account. You
also will bear the following expenses:
ALLSTATE ADVISOR CONTRACTS
.Annual mortality and expense risk charge equal to
1.10% of average daily net assets.
.Withdrawal charges ranging from 0% to 7% of purchase
payments withdrawn.
ALLSTATE ADVISOR PLUS CONTRACTS
.Annual mortality and expense risk charge equal to
1.40% of average daily net assets.
.Withdrawal charges ranging from 0% to 8.5% of
purchase payments withdrawn.
ALLSTATE ADVISOR PREFERRED CONTRACTS (WITH 5-YEAR
WITHDRAWAL CHARGE OPTION)
.Annual mortality and expense risk charge equal to
1.40% of average daily net assets.
.Withdrawal charges ranging from 0% to 7% of purchase
payments withdrawn.
ALLSTATE ADVISOR PREFERRED CONTRACTS (WITH 3-YEAR
WITHDRAWAL CHARGE OPTION)
.Annual mortality and expense risk charge equal to
1.50% of average daily net assets.
.Withdrawal charges ranging from 0% to 7% of purchase
payments withdrawn.
5 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS (WITH NO
WITHDRAWAL CHARGE OPTION)
.Annual mortality and expense risk charge equal to
1.60% of average daily net assets.
. No withdrawal charge.
ALL CONTRACTS
.Annual administrative expense charge of 0.19% (up to
0.35% for future Contracts).
.Annual contract maintenance charge of $30 (waived in
certain cases).
.If you select the MAXIMUM ANNIVERSARY VALUE (MAV)
DEATH BENEFIT OPTION ("MAV DEATH BENEFIT OPTION") you
will pay an additional mortality and expense risk
charge of 0.20%* (up to 0.30% for Options added in
the future).
.If you select ENHANCED BENEFICIARY PROTECTION (ANNUAL
INCREASE) OPTION, you will pay an additional
mortality and expense risk charge of 0.30%*.
.If you select the EARNINGS PROTECTION DEATH BENEFIT
OPTION you will pay an additional mortality and
expense risk charge of 0.25% or 0.40% (up to 0.35% or
0.50% for Options added in the future) depending on
the age of the oldest Owner and oldest Annuitant on
the date we receive the completed application or
request to add the benefit, whichever is later
("RIDER APPLICATION DATE").
. If you select the TRUERETURN/SM/ ACCUMULATION BENEFIT
OPTION ("TRUERETURN OPTION") you would pay an
additional annual fee ("RIDER FEE") of 0.50% (up to
1.25% for Options added in the future) of the BENEFIT
BASE in effect on each Contract anniversary
("CONTRACT ANNIVERSARY") during the Rider Period. You
may not select the TrueReturn Option together with a
Retirement Income Guarantee Option or a SureIncome
Withdrawal Benefit Option.
.If you select the SUREINCOME WITHDRAWAL BENEFIT
OPTION ("SUREINCOME OPTION") you would pay an
additional annual fee ("SUREINCOME OPTION FEE" OR
"RIDER FEE") of 0.50% (up to 1.25% for Options added
in the future) of the BENEFIT BASE on each Contract
Anniversary (See the SureIncome Option Fee section).
You may not select the SureIncome Option together
with a Retirement Income Guarantee Option or a
TrueReturn Option.
.We discontinued offering RETIREMENT INCOME GUARANTEE
OPTION 1 ("RIG 1") as of January 1, 2004 (up to May
1, 2004 in certain states). If you elected RIG 1
prior to May 1, 2004, you will pay an additional
annual fee ("Rider Fee") of 0.40%* of the INCOME BASE
in effect on a Contract Anniversary.
.We discontinued offering RETIREMENT INCOME GUARANTEE
OPTION 2 ("RIG 2") as of January 1, 2004 (up to May
1, 2004 in certain states). If you elected RIG 2
prior to May 1, 2004, you will pay an additional
annual Rider Fee of 0.55%* of the INCOME BASE in
effect on a Contract Anniversary.
.If you select the INCOME PROTECTION BENEFIT OPTION
you will pay an additional mortality and expense risk
charge of 0.50% (up to 0.75% for Options added in the
future) during the Payout Phase of your Contract.
6 PROSPECTUS
.If you select the SPOUSAL PROTECTION BENEFIT
(CO-ANNUITANT) OPTION OR SPOUSAL PROTECTION BENEFIT
(CO-ANNUITANT OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS ("CSP") you would pay an
additional annual fee ("RIDER FEE") of 0.10%** (up to
0.15% for Options added in the future) of the
Contract Value ("CONTRACT VALUE") on each Contract
Anniversary. These Options are only available for
certain types of IRA Contracts, which are Contracts
issued with an Individual Retirement Annuity or
Account ("IRA") under Section 408 of the Internal
Revenue Code. The CSP is only available for certain
Custodial Individual Retirement Accounts established
under Section 408 of the Internal Revenue Code. For
Contracts purchased on or after January 1, 2005, we
may discontinue offering the Spousal Protection
Benefit (Co-Annuitant) Option at any time prior to
the time you elect to receive it.**
.Transfer fee equal to 1.00% (subject to increase to
up to 2.00%) of the amount transferred after the
12/th/ transfer in any Contract Year ("CONTRACT
YEAR"), which we measure from the date we issue your
Contract or a Contract Anniversary.
. State premium tax (if your state imposes one)
. NOT ALL OPTIONS ARE AVAILABLE IN ALL STATES.
.WE MAY DISCONTINUE ANY OF THESE OPTIONS AT ANY TIME
PRIOR TO THE TIME YOU ELECT TO RECEIVE IT.
*DIFFERENT RATES APPLY TO CONTRACT OWNERS WHO ADDED
THESE OPTIONS PRIOR TO MAY 1, 2003. SEE PAGE 12 FOR
DETAILS.
**NO RIDER FEE WAS CHARGED FOR THESE OPTIONS FOR
CONTRACT OWNERS WHO ADDED THESE OPTIONS PRIOR TO
JANUARY 1, 2005. SEE PAGE 13 FOR DETAILS.
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7 PROSPECTUS
INVESTMENT ALTERNATIVES Each Contract offers several investment alternatives
including:
.up to 3 Fixed Account Options that credit interest at
rates we guarantee, and
.45* Variable Sub-Accounts investing in Portfolios
offering professional money management by these
investment advisers:
. Franklin Advisers, Inc.
. Franklin Advisory Services, LLC
. Franklin Mutual Advisers, LLC
. Lord, Abbett & Co. LLC
. OppenheimerFunds, Inc.
. Putnam Investment Management, LLC
. Templeton Asset Management Ltd.
. Templeton Investment Counsel, LLC
. Van Kampen Asset Management
. Van Kampen**
*Up to 51 Variable Sub-Accounts may be available
depending on the date your purchased your Contract.
Please see page 41-42 for information about
Sub-Account and/or Portfolio liquidations, mergers,
closures and name changes.
**Morgan Stanley Investment Management, Inc., the
adviser to the UIF Portfolios, does business in
certain instances using the name Van Kampen.
NOT ALL FIXED ACCOUNT OPTIONS ARE AVAILABLE IN ALL
STATES OR WITH ALL CONTRACTS.
To find out current rates being paid on the Fixed
Account Option(s), or to find out how the Variable
Sub-Accounts have performed, please call us at
1-800-203-0068.
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SPECIAL SERVICES For your convenience, we offer these special services:
. AUTOMATIC PORTFOLIO REBALANCING PROGRAM
. AUTOMATIC ADDITIONS PROGRAM
. DOLLAR COST AVERAGING PROGRAM
. SYSTEMATIC WITHDRAWAL PROGRAM
. TRUEBALANCE/SM/ ASSET ALLOCATION PROGRAM
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8 PROSPECTUS
INCOME PAYMENTS You can choose fixed income payments, variable income
payments, or a combination of the two. You can receive
your income payments in one of the following ways (you
may select more than one income plan):
. life income with guaranteed number of payments
.
joint and survivor life income with guaranteed number
of payments
. guaranteed number of payments for a specified period
. life income with cash refund
. joint life income with cash refund
. life income with installment refund
. joint life income with installment refund
Prior to May 1, 2004, Allstate Life also offered two
Retirement Income Guarantee Options that guarantee a
minimum amount of fixed income payments you can receive
if you elect to receive income payments.
In addition, we offer an Income Protection Benefit
Option that guarantees that your variable income
payments will not fall below a certain level.
DEATH BENEFITS If you, the Annuitant, or Co-Annuitant die before the
Payout Start Date, we will pay a death benefit subject
to the conditions described in the Contract. In
addition to the death benefit included in your Contract
("Return of Premium Death Benefit" or "ROP Death
Benefit"), the death benefit options we currently offer
include:
. MAV DEATH BENEFIT OPTION;
.ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE)
OPTION; and
. EARNINGS PROTECTION DEATH BENEFIT OPTION
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TRANSFERS Before the Payout Start Date, you may transfer your
Contract Value among the investment alternatives, with
certain restrictions. The minimum amount you may
transfer is $100 or the amount remaining in the
investment alternative, if less. The minimum amount
that can be transferred into the Standard Fixed Account
or Market Value Adjusted Account Options is $500.
A charge may apply after the 12/th/ transfer in each
Contract Year.
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WITHDRAWALS You may withdraw some or all of your Contract Value at
any time during the Accumulation Phase and during the
Payout Phase in certain cases. In general, you must
withdraw at least $50 at a time. 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. A withdrawal charge and a
MARKET VALUE ADJUSTMENT may also apply.
If any withdrawal reduces your Contract Value to less
than $1,000, we will treat the request as a withdrawal
of the entire Contract Value, unless the SureIncome
Withdrawal Benefit Option is in effect under your
Contract. Your Contract will terminate if you withdraw
all of your Contract Value.
9 PROSPECTUS
HOW THE CONTRACTS WORK
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Each Contract basically works in two ways.
First, each Contract can help you (we assume you are the "CONTRACT OWNER") save
for retirement because you can invest in your Contract's investment alternatives
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 may allocate your purchase payments to any combination of the
Variable Sub-Accounts and/or Fixed Account Options. If you invest in a Fixed
Account Option, you will earn a fixed rate of interest that we declare
periodically. If you invest in any of the Variable Sub-Accounts, your investment
return will vary up or down depending on the performance of the corresponding
Portfolios.
Second, each 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 on page 58. 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 payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Portfolios. 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 or income payments income payments
receive a lump sum for a set period for life
payment
Other income payment options are also available. See "INCOME PAYMENTS."
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 there is none, the
BENEFICIARY will exercise the rights and privileges provided by the Contract.
See "The Contracts." In addition, if you die before the Payout Start Date, we
will pay a death benefit to any surviving Contract Owner or, if there is none,
to your Beneficiary. See "Death Benefits."
Please call us at 1-800-203-0068 if you have any question about how the
Contracts work.
10 PROSPECTUS
EXPENSE TABLE
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The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes that may be imposed by the state where you reside. For more
information about Variable Account expenses, see "Expenses," below. For more
information about Portfolio expenses, please refer to the prospectuses for the
Portfolios.
CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge (as a percentage of purchase payments withdrawn)/* /
Number of Complete Years Since We Received the Purchase Payment Being Withdrawn/Applicable Charge:
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Contract: 0 1 2 3 4 5 6 7 8+
Allstate Advisor 7% 7% 6% 5% 4% 3% 2% 0% 0%
Allstate Advisor Plus 8.5% 8.5% 8.5% 7.5% 6.5% 5.5% 4% 2.5% 0%
Allstate Advisor
Preferred with:
5-Year Withdrawal
Charge Option 7% 6% 5% 4% 3% 0%
3-Year Withdrawal
Charge Option 7% 6% 5% 0%
No Withdrawal Charge
Option None
All Contracts:
- -----------------------------------------------------------------------------------------------------------------------------------
Annual Contract
Maintenance Charge $30**
Transfer Fee up to 2.00% of the amount transferred***
* Each Contract Year, you may withdraw a portion of your purchase payments
(and/or your earnings, in the case of Charitable Remainder Trusts) without
incurring a withdrawal charge ("Free Withdrawal Amount"). See "Withdrawal
Charges" for more information.
** Waived in certain cases. See "Expenses."
*** Applies solely to the 13th and subsequent transfers within a Contract Year,
excluding transfers due to dollar cost averaging and automatic portfolio
rebalancing. We are currently assessing a transfer fee of 1.00% of the amount
transferred, however, we reserve the right to raise the transfer fee to up to
2.00% of the amount transferred.
11 PROSPECTUS
VARIABLE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSET VALUE DEDUCTED FROM EACH VARIABLE
SUB-ACCOUNT)
If you select the basic Contract without any optional benefits, your Variable
Account expenses would be as follows:
Mortality and Expense Risk Administrative
Basic Contract (without any optional benefit) Charge Expense Charge*
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor 1.10% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Plus 1.40% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge Option) 1.40% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge Option) 1.50% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 1.60% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Variable Account
Basic Contract (without any optional benefit) Annual Expense
- ------------------------------------------------------------------------------------------------------
Allstate Advisor 1.29%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Plus 1.59%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge Option) 1.59%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge Option) 1.69%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 1.79%
- ------------------------------------------------------------------------------------------------------
* We reserve the right to raise the administrative expense charge to 0.35%.
However, we will not increase the charge once we issue your Contract.
Each Contract also offers optional riders that may be added to the Contract. For
each optional rider you select, you would pay the following additional mortality
and expense risk charge associated with each rider.
0.20
%* (up to 0.30% for Options added in
MAV Death Benefit Option the future)
Enhanced Beneficiary Protection (Annual Increase)
Option 0.30 %*
0.25
Earnings Protection Death Benefit Option (issue % (up to 0.35% for Options added in
age 0-70) the future)
0.40
Earnings Protection Death Benefit Option (issue % (up to 0.50% for Options added in
age 71-79) the future)
*For Contract Owners who added the MAV Death Benefit Option or Enhanced
Beneficiary Protection (Annual Increase) Option prior to May 1, 2003, the
additional mortality and expense risk charge associated with each Option is
0.15%.
If you select the Options with the highest possible combination of mortality and
expense risk charges, your Variable Account expenses would be as follows,
assuming current expenses:
Contract with the MAV Death Benefit Option, Enhanced
Beneficiary Protection (Annual Increase) Option, and Earnings Mortality and Expense Administrative
Protection Death Benefit Option (issue age 71-79) Risk Charge* Expense Charge*
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor 2.00% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Plus 2.30% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge Option) 2.30% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge Option) 2.40% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 2.50% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Contract with the MAV Death Benefit Option, Enhanced
Beneficiary Protection (Annual Increase) Option, and Earnings Total Variable Account
Protection Death Benefit Option (issue age 71-79) Annual Expense
- ------------------------------------------------------------------------------------------------------
Allstate Advisor 2.19%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Plus 2.49%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge Option) 2.49%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge Option) 2.59%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 2.69%
- ------------------------------------------------------------------------------------------------------
*As described above the administrative expense charge and the mortality and
expense charge for certain Options may be higher for future Contracts.
However, we will not increase the administrative expense charge once we issue
your Contract, and we will not increase the charge for an Option once we add
the Option to your Contract.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION FEE
(ANNUAL RATE AS A PERCENTAGE OF BENEFIT BASE ON EACH CONTRACT ANNIVERSARY)
TrueReturn/SM/ Accumulation Benefit Option 0.50 %*
- -----------------------------------------------------------------------------------------------------------------
*Up to 1.25% for Options added in the future. See "TrueReturn/SM/ Accumulation
Benefit Option" for details.
SUREINCOME WITHDRAWAL BENEFIT OPTION FEE
(ANNUAL RATE AS A PERCENTAGE OF BENEFIT BASE ON EACH CONTRACT ANNIVERSARY)
SureIncome Withdrawal Benefit Option 0.50 %*
- ------------------------------------------------------------------------------------------------------------------
*Up to 1.25% for SureIncome Options added in the future. See "SureIncome
Withdrawal Benefit Option" for details.
12 PROSPECTUS
RETIREMENT INCOME GUARANTEE OPTION FEE*
If you selected RIG 1, you would pay a Rider Fee at the annual rate of 0.40%**
of the Income Base in effect on a Contract Anniversary. If you selected RIG 2,
you would pay an additional Rider Fee at the annual rate of 0.55%** of the
Income Base in effect on a Contract Anniversary. See "Retirement Income
Guarantee Options" for details.
*We discontinued offering the Retirement Income Guarantee Options as of January
1, 2004 (up to May 1, 2004 in certain states). Fees shown apply to Contract
Owners who selected an Option prior to January 1, 2004 (up to May 1, 2004 in
certain states).
**For Contract Owners who added RIG 1 prior to May 1, 2003, the annual rate is
0.25%. For Contract Owners who added RIG 2 prior to May 1, 2003, the annual rate
is 0.45%.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FEE
(AS A PERCENTAGE OF CONTRACT VALUE ON EACH CONTRACT ANNIVERSARY)
Spousal Protection Benefit (Co-Annuitant) Option 0.10 %*
- ----------------------------------------------------------------------------------------------------
*Applies to Contract Owners who select the Option on or after January 1, 2005.
Up to 0.15% for options added in the future.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS FEE
(AS A PERCENTAGE OF CONTRACT VALUE ON EACH CONTRACT ANNIVERSARY)
Spousal Protection Benefit (Co-Annuitant) Option 0.10 %*
- ----------------------------------------------------------------------------------------------------
*Applies to Contract Owners who select the Option on or after January 1, 2005.
Up to 0.15% for options added in the future.
If you select the Spousal Protection Benefit (Co-Annuitant) Option or Spousal
Protection Benefit (Co-Annuitant) Option for Custodial Individual Retirement
Accounts on or after January 1, 2005, you will pay a Rider Fee at the annual
rate of 0.10% of the Contract Value on each Contract Anniversary. We reserve the
right to increase the annual Rider Fee to up to 0.15% of the Contract Value. If
you selected either of these Options prior to January 1, 2005, there is no
charge associated with your Option. See "Spousal Protection Benefit
(Co-Annuitant) Option Fee and Spousal Protection Benefit (Co-Annuitant) Option
for Custodial Individual Retirement Accounts Fee" for details.
INCOME PROTECTION BENEFIT OPTION
The Contracts are also available with the Income Protection Benefit Option. See
"Income Payments - Income Protection Benefit Option," below, for a description
of the Option. The charge for the Income Protection Benefit Option is currently
0.50% of the average daily net Variable Account assets supporting the variable
income payments to which the Income Protection Benefit Option applies. The
charge for the Income Protection Benefit Option applies during the Payout Phase.
We reserve the right to raise the Income Protection Benefit Option charge to up
to 0.75%. Once your Income Protection Benefit Option is in effect, however, we
may not change the fee that applies to your Contract. See "Expenses - Mortality
and Expense Risk Charge," below, for details.
13 PROSPECTUS
PORTFOLIO ANNUAL EXPENSES - MINIMUM AND MAXIMUM
The next table shows the minimum and maximum total operating expenses charged by
the Portfolios that you may pay periodically during the time that you own the
Contract. Advisers and/or other service providers of certain Portfolios may
have agreed to waive their fees and/or reimburse Portfolio expenses in order to
keep the Portfolios' expenses below specified limits. The range of expenses
shown in this table does not show the effect of any such fee waiver or expense
reimbursement. More detail concerning each Portfolio's fees and expenses
appears in the second table below and in the prospectus for each Portfolio.
PORTFOLIO ANNUAL EXPENSES
- ----------------------------------------------------------------------------------
Minimum Maximum
- ----------------------------------------------------------------------------------
Total Annual Portfolio
Operating
Expenses/(1)/
(expenses that are
deducted from
Portfolio assets,
which may include
management fees,
distribution and/or
services (12b-1) fees, 0.74% 3.06%
and other expenses)
- ----------------------------------------------------------------------------------
(1) Expenses are shown as a percentage of Portfolio average daily net assets
(before waiver or reimbursement) as of December 31, 2004.
PORTFOLIO ANNUAL EXPENSES - (AS A PERCENTAGE OF PORTFOLIO AVERAGE DAILY NET
ASSETS)(1)
The next table shows the Portfolio operating expenses for each Portfolio
available under the Contract. These expenses may vary from year to year.
Advisers and/or other service providers of certain Portfolios have agreed to
waive their fees and/or other Portfolio expenses in order to keep the
Portfolio's expenses below specified limits. The expenses shown in the table
below do not show the effect of any such fee waiver or expense reimbursement.
All fee waiver and expense reimbursements are described in the footnotes to the
table. More detail concerning each Portfolio's fees and expenses appears in the
prospectus for each Portfolio.
Management Rule12b-1 Other Total Annual
PORTFOLIO Fees Fees Expenses Portfolio Expenses
- --------------------------------------------------------------------------------------------
FTVIP Franklin Growth and
Income Securities Fund - 0.49% 0.25% 0.03% 0.77%
Class 2 (2)(3)
- ---------------------------------------------------------------------------------------------
FTVIP Franklin Income
Securities Fund - Class 2 0.47% 0.25% 0.02% 0.74%
(2)(3)
- ---------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap
Growth Securities Fund - 0.75% 0.25% 0.04% 1.04%
Class 2 (2)(3)
- ---------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap
Value Securities Fund - 0.53% 0.25% 0.18% 0.96%
Class 2 (3)(4)
- ---------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap
Growth Securities Fund - 0.48% 0.25% 0.29% 1.02%
Class 2 (3)(4)(5)(6)
- ---------------------------------------------------------------------------------------------
FTVIP Franklin U.S.
Government Fund - Class 2 0.49% 0.25% 0.05% 0.79%
(2)(3)
- ---------------------------------------------------------------------------------------------
FTVIP Mutual Shares
Securities Fund - Class 2 0.80% 0.25% 0.21% 1.26%
(3)
- ---------------------------------------------------------------------------------------------
FTVIP Templeton Developing
Markets Securities Fund - 1.25% 0.25% 0.29% 1.79%
Class 2
- ---------------------------------------------------------------------------------------------
FTVIP Templeton Foreign
Securities Fund - Class 2 0.68% 0.25% 0.19% 1.12%
(4)
- ---------------------------------------------------------------------------------------------
FTVIP Templeton Global
Income Securities Fund - 0.62% 0.25% 0.16% 1.03%
Class 2 (2)(5)
- ---------------------------------------------------------------------------------------------
Lord Abbett Series Fund - 0.75% N/A 2.31% 3.06%
All Value Portfolio (7)
- ---------------------------------------------------------------------------------------------
Lord Abbett Series Fund - 0.50% N/A 0.48% 0.98%
Bond-Debenture Portfolio (7)
- ---------------------------------------------------------------------------------------------
Lord Abbett Series Fund - 0.50% N/A 0.39% 0.89%
Growth and Income Portfolio
- ---------------------------------------------------------------------------------------------
Lord Abbett Series Fund -
Growth Opportunities 0.80% N/A 1.06% 1.86%
Portfolio (7)
- ---------------------------------------------------------------------------------------------
Lord Abbett Series Fund - 0.75% N/A 0.42% 1.17%
Mid-Cap Value Portfolio
- ---------------------------------------------------------------------------------------------
Oppenheimer Aggressive
Growth Fund/VA - Service 0.67% 0.25% 0.07% 0.99%
Shares
- ---------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA 0.72% 0.25% 0.05% 1.02%
- - Service Shares
- ---------------------------------------------------------------------------------------------
Oppenheimer Capital
Appreciation Fund/VA - 0.64% 0.25% 0.02% 0.91%
Service Shares
- ---------------------------------------------------------------------------------------------
Oppenheimer Core Bond 0.72% 0.25% 0.02% 0.99%
Fund/VA - Service Shares (8)
- ---------------------------------------------------------------------------------------------
Oppenheimer Global
Securities Fund/VA - Service 0.63% 0.25% 0.03% 0.91%
Shares
- ---------------------------------------------------------------------------------------------
Oppenheimer High Income 0.72% 0.25% 0.04% 1.01%
Fund/VA - Service Shares
- ---------------------------------------------------------------------------------------------
Oppenheimer Main Street 0.66% 0.25% 0.01% 0.92%
Fund(R)/VA - Service Shares
- ---------------------------------------------------------------------------------------------
Oppenheimer Main Street
Small Cap Fund(R)/VA - 0.75% 0.25% 0.06% 1.06%
Service Shares
- ---------------------------------------------------------------------------------------------
14 PROSPECTUS
Oppenheimer Strategic Bond 0.71% 0.25% 0.03% 0.99%
Fund/VA - Service Shares
- ---------------------------------------------------------------------------------------------
Putnam VT The George Putnam 0.62% 0.25% 0.11% 0.98%
Fund of Boston - Class IB
- ---------------------------------------------------------------------------------------------
Putnam VT Global Asset 0.70% 0.25% 0.23% 1.18%
Allocation Fund - Class IB
- ---------------------------------------------------------------------------------------------
Putnam VT Growth and Income 0.48% 0.25% 0.06% 0.79%
Fund - Class IB
- ---------------------------------------------------------------------------------------------
Putnam VT Health Sciences 0.70% 0.25% 0.15% 1.10%
Fund - Class IB (9)
- ---------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - 0.67% 0.25% 0.12% 1.04%
Class IB
- ---------------------------------------------------------------------------------------------
Putnam VT Income Fund - 0.60% 0.25% 0.10% 0.95%
Class IB (10)
- ---------------------------------------------------------------------------------------------
Putnam VT International 0.75% 0.25% 0.19% 1.19%
Equity Fund - Class IB
- ---------------------------------------------------------------------------------------------
Putnam VT Investors Fund - 0.64% 0.25% 0.12% 1.01%
Class IB
- ---------------------------------------------------------------------------------------------
Putnam VT Money Market Fund 0.45% 0.25% 0.10% 0.80%
- - Class IB (10)
- ---------------------------------------------------------------------------------------------
Putnam VT New Opportunities 0.60% 0.25% 0.09% 0.94%
Fund - Class IB (9)
- ---------------------------------------------------------------------------------------------
Putnam VT New Value Fund - 0.69% 0.25% 0.10% 1.04%
Class IB
- ---------------------------------------------------------------------------------------------
Putnam VT Research Fund - 0.65% 0.25% 0.15% 1.05%
Class IB (9)
- ---------------------------------------------------------------------------------------------
Putnam VT Utilities Growth
and Income Fund - Class IB 0.70% 0.25% 0.15% 1.10%
(9)
- ---------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class 0.65% 0.25% 0.14% 1.04%
IB
- ---------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - 0.56% 0.25% 0.08% 0.89%
Class IB
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive
Growth Portfolio, Class II 0.75% 0.25% 0.63% 1.63%
(11)(13)
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Comstock 0.57% 0.25% 0.04% 0.86%
Portfolio, Class II
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Emerging 0.70% 0.25% 0.07% 1.02%
Growth Portfolio, Class II
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Growth and 0.58% 0.25% 0.04% 0.87%
Income Portfolio, Class II
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Money Market 0.49% 0.25% 0.22% 0.96%
Portfolio, Class II (12)(13)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Emerging
Markets Debt Portfolio, 0.75% 0.35% 0.35% 1.45%
Class II (14)(15)(16)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Equity and
Income Portfolio, Class II 0.49% 0.35% 0.36% 1.20%
(14)(15)(16)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth
Portfolio, Class I 0.50% N/A 0.34% 0.84%
(14)(15)(16)(17)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth
Portfolio, Class II 0.50% 0.35% 0.34% 1.19%
(14)(15)(16)(17)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Global
Franchise Portfolio, Class 0.80% 0.35% 0.50% 1.65%
II (14)(15)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Small Company
Growth Portfolio, Class II 0.92% 0.35% 0.61% 1.88%
(14)(15)(16)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap
Value Portfolio, Class I 0.72% N/A 0.30% 1.02%
(14)(15)(16)(17)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap
Value Portfolio, Class II 0.72% 0.30% 0.37% 1.37%
(14)(15)(16)(17)
- ---------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real
Estate Portfolio, Class II 0.76% 0.35% 0.26% 1.37%
(14)(15)
- ---------------------------------------------------------------------------------------------
1. Figures shown in the Table are for the year ended December 31, 2004 (except
as otherwise noted).
2. The Fund administration fee is paid indirectly through the management fee.
3. While the maximum amount payable under the Portfolio's Rule 12b-1 plan is
0.35% per year of the Portfolio's average annual net assets, the Portfolio's
Board of Trustees has set the current rate at 0.25% per year.
4. The Portfolio's manager has agreed in advance to reduce its fees from assets
invested by the Portfolio in a Franklin Templeton Money Market Fund (the Sweep
Money Fund). This reduction is required by the Portfolio's Board of Trustees and
an order by the Securities and Exchange Commission. With this reduction,
"Management Fees", "Rule 12b-1 Fees", "Other Expenses", and "Total Annual
Portfolio Expenses" were as follows:
Management Rule12b-1 Other Total Annual
PORTFOLIO Fees Fees Expenses Portfolio Expenses
- --------------------------------------------------------------------------------------
FTVIP Franklin
Small-Mid Cap Growth
Securities Fund - 0.49% 0.25% 0.18% 0.92%
Class 2
- ---------------------------------------------------------------------------------------
FTVIP Franklin Small
Cap Value Securities 0.45% 0.25% 0.29% 0.99%
Fund - Class 2
- ---------------------------------------------------------------------------------------
FTVIP Templeton
Foreign Securities 0.63% 0.25% 0.19% 1.07%
Fund - Class 2
- ---------------------------------------------------------------------------------------
5. Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 and the FTVIP Templeton Global Income Securities - Class 2 Sub-Accounts
are no longer available for new investments. If you are currently invested in
these Variable Sub-Accounts you may continue those investments. If, prior to
May 1, 2003, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing or dollar cost averaging,
15 PROSPECTUS
we will continue to effect automatic transactions to these Portfolios in
accordance with that program. Outside of these automatic transaction programs,
you may not allocate purchase payments or make transfers to these Variable
Sub-Accounts, additional allocations will not be allowed.
6. Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2 changed
its name to FTVIP Franklin Small-Mid Cap Growth Securities Fund - Class 2.
7. For the year ending December 31, 2005, Lord, Abbett & Co. LLC has
contractually agreed to reimburse a portion of each Portfolio's expenses to the
extent necessary to maintain its "Other Expenses" at an aggregate rate of 0.40%
of its average daily net assets. With this reimbursement, "Management Fees",
"Rule 12b-1 Fees", "Other Expenses" and "Total Annual Portfolio Expenses" are as
follows:
Management Rule12b-1 Other Total
PORTFOLIO Fees Fees Expenses Annual
- --------------------------------------------------------------------------------------------------------------------------Portfolio
Expenses
----------
Lord Abbett Series Fund - All Value Portfolio 0.75% N/A 0.39% 1.1
- ------------------------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio 0.50% N/A 0.40% 0.9
- ------------------------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio 0.80% N/A 0.40% 1.2
- ------------------------------------------------------------------------------------------------------------------------------------
8. Effective April 29, 2005, the Oppenheimer Bond Fund/VA - Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares.
9. Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Account Portfolios are no longer available for new investments. If
you are currently invested in these Variable Sub-Accounts you may continue your
investment. If, prior to October 1, 2004, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing, or
dollar cost averaging, we will continue to effect automatic transactions into
these Variable Sub-Accounts in accordance with that program. Outside of these
automatic transaction programs, additional allocations will not be allowed.
10. Reflects Putnam Management's agreement, effective January 28, 2004, to waive
fees and reimburse expenses of the Portfolio through December 31, 2005 to the
extent necessary to ensure that the Portfolio's expenses do not exceed the
average expenses of the portfolios viewed by Lipper Inc. as having the same
investment classification or objective as the Portfolio. The expense
reimbursement is based on a comparison of the Portfolio's expenses with the
average annualized operating expenses of the portfolios in its Lipper peer
group, as reported by Lipper, for each calendar quarter during the Portfolio's
last fiscal year, excluding "Rule 12b-1 Fees" and without giving effect to any
expense offset and brokerage service arrangements that may reduce fund expenses.
After such reductions, the "Management Fees", "Rule 12b-1 Fees", "Other
Expenses" and "Total Annual Portfolio Expenses", were as follows:
Management Rule12b-1 Other Total Annual
PORTFOLIO Fees Fees Expenses Portfolio Expenses
- -------------------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB 0.57% 0.25% 0.10% 0.92%
- -------------------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB 0.43% 0.25% 0.10% 0.78%
- --------------------------------------------------------------------------------------------------------------------------------
11. For the year ended December 31, 2004, the adviser volunatrily waived $99,706
of its investment advisory fees and assumed $1,234 of the Portfolio's other
expenses. This waiver is voluntary in nature and can be discontinued at the
adviser's discretion.
12. For the year ended December 31, 2004, the adviser waived approximately
$68,600 of its advisory fees. Under the terms of the advisory agreement, if the
total ordinary business expenses, exclusive of taxes, distribution fees and
intertest, exceed 0.95% of the average daily net assets of the Portfolio, the
adviser will reimburse the Portfolio for the amount of the excess. The adviser
has agreed to waive all expenses in excess of 0.85% of average net assets. This
waiver is voluntary and can be discontinued at any time.
13. The fees disclosed in the Table reflect gross ratios prior to any voluntary
waivers/reimbursements of expenses by the adviser. When the effects of the
voluntary waivers discussed in footnotes 11 and 12 are taken into consideration,
the "Management Fees", "Rule 12b-1 Fees", "Other Expenses" and "Total Annual
Portfolio Expenses", were as follows:
Management Rule12b-1 Other Total Annual
PORTFOLIO Fees Fees Expenses Portfolio Expenses
- ---------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth 0.38% 0.25% 0.62% 1.25%
Portfolio, Class II
- ----------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market 0.38% 0.25% 0.22% 0.85%
Portfolio, Class II
- ----------------------------------------------------------------------------------------------------
16 PROSPECTUS
14. Morgan Stanley Investment Management, Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
15. The fees disclosed in the Table reflect gross ratios prior to any voluntary
waivers/reimbursements of expenses by the adviser. The adviser has voluntarily
agreed to waive a portion or all of its management fee and/or reimburse expenses
to the extent necessary so "Total Annual Portfolio Expenses", excluding certain
investment related expenses such a foreign country tax expense and interest
expense on borrowing, do not exceed the "Operating Expense Limitation" in the
table below. The adviser may terminate these voluntary waivers at any time at
its sole discretion. Additionally, the distributor has agreed to waive a
portion of the "Rule 12b-1 Fees" for Class II shares. The distributor may
terminate these voluntary waivers at any time at its sole discretion. After
such reductions, the "Management Fees", "Rule 12B-1 Fees", "Other Expenses", and
"Total Annual Portfolio Expenses" were as follows:
Operating
Expense Management Rule 12b-1 Other Total Annual
PORTFOLIO Limitation Fees Fees Expenses Portfolio Expenses
- ------------------------------------------------------------------------------------------
Van Kampen UIF
Emerging Markets Debt 1.15% 0.75% 0.05% 0.35% 1.15%
Portfolio, Class II
- ------------------------------------------------------------------------------------------
Van Kampen UIF Equity
and Income Portfolio, 1.00% 0.49% 0.05% 0.36% 0.90%
Class II
- ------------------------------------------------------------------------------------------
Van Kampen UIF Equity
Growth Portfolio, 0.85% 0.50% N/A 0.34% 0.84%
Class I
- ------------------------------------------------------------------------------------------
Van Kampen UIF Equity
Growth Portfolio, 1.10% 0.50% 0.25% 0.34% 1.09%
Class II
- ------------------------------------------------------------------------------------------
Van Kampen UIF Global
Franchise Portfolio, 1.20% 0.65% 0.05% 0.50% 1.20%
Class II
- ------------------------------------------------------------------------------------------
Van Kampen UIF Small
Company Growth 1.25% 0.59% 0.05% 0.61% 1.25%
Portfolio, Class II
- ------------------------------------------------------------------------------------------
Van Kampen UIF U.S.
Mid Cap Value 1.05% 0.72% N/A 0.37% 1.02%
Portfolio, Class I
- ------------------------------------------------------------------------------------------
Van Kampen UIF U.S.
Mid Cap Value 1.15% 0.72% 0.10% 0.30% 1.12%
Portfolio, Class II
- ------------------------------------------------------------------------------------------
Van Kampen UIF U.S.
Real Estate Portfolio, 1.35% 0.76% 0.25% 0.26% 1.27%
Class II
- ------------------------------------------------------------------------------------------
16. Expense information has been restated to reflect current fees in effect as
of November 1, 2004.
17. The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth
Portfolio, Class II and the Van Kampen UIF U.S. Mid Cap Value Portfolio, Class
II are offered with Contracts issued on or after May 1, 2004. Contract Owners of
Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Account that invest in the Van Kampen UIF Equity Growth Portfolio, Class I
and the Van Kampen UIF U.S. Mid Cap Value Portfolio, Class I.
17 PROSPECTUS
EXAMPLE 1
This Example is intended to help you compare the cost of investing in the
Contracts with the cost of investing in other variable annuity contracts. These
costs include Contract owner transaction expenses, Contract fees, Variable
Account annual expenses, and Portfolio fees and expenses.
The example shows the dollar amount of expenses that you would bear directly or
indirectly if you:
.. invested $10,000 in the Contract for the time periods indicated;
.. earned a 5% annual return on your investment;
.. surrendered your Contract, or you began receiving income payments for a
specified period of less than 120 months, at the end of each time period;
.. elected the MAV Death Benefit Option and the Enhanced Beneficiary Protection
(Annual Increase) Option;
.. elected the Earnings Protection Death Benefit Option (assuming issue age
71-79);
.. elected RIG 2 (assuming Income Base A); and
.. elected the Spousal Protection Benefit (Co-Annuitant) Option.
THE EXAMPLE DOES NOT INCLUDE ANY TAXES OR TAX PENALTIES YOU MAY BE REQUIRED TO
PAY IF YOU SURRENDER YOUR CONTRACT.
The first line of the example assumes that the maximum fees and expenses of any
of the Portfolios are charged. The second line of the example assumes that the
minimum fees and expenses of any of the Portfolios are charged. Your actual
expenses may be higher or lower than those shown below.
Allstate Advisor Allstate Advisor Plus
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------------------------------------------------------
Costs Based on Maximum Annual Portfolio Expenses $1,231 $2,318 $3,388 $6,155 $1,389 $2,616 $3,733 $6,367
- -------------------------------------------------------------------------------------------------------------------------------
Costs Based on Minimum Annual Portfolio Expenses $ 993 $1,638 $2,308 $4,268 $1,151 $1,940 $2,666 $4,538
- -------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred
(with 5 Year
Withdrawal Charge Option)
1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------------------
Costs Based on Maximum Annual Portfolio Expenses $1,176 $2,319 $3.265 $6,367
- -------------------------------------------------------------------------------------------
Costs Based on Minimum Annual Portfolio Expenses $ 939 $1,643 $2,198 $4,538
- -------------------------------------------------------------------------------------------
Allstate Advisor Preferred Allstate Advisor Preferred
(with 3-Year (with No
Withdrawal Charge Option) Withdrawal Charge Option)
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio $1,187 $2,007 $3,309 $6,436 $687 $2,036 $3,352 $6,504
Expenses
- ------------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio $ 949 $1,333 $2,347 $4,627 $449 $1,362 $2,295 $4,714
Expenses
- ------------------------------------------------------------------------------------------------
18 PROSPECTUS
EXAMPLE 2
This Example uses the same assumptions as Example 1 above, except that it
assumes you decided not to surrender your Contract, or you began receiving
income payments for a specified period of at least 120 months, at the end of
each time period.
Allstate Advisor Allstate Advisor Plus
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio $636 $1,893 $3,133 $6,155 $666 $1,979 $3,265 $6,367
Expenses
- ------------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio $398 $1,213 $2,053 $4,268 $429 $1,303 $2,198 $4,538
Expenses
- ------------------------------------------------------------------------------------------------
Allstate Advisor Preferred
(with 5 Year
Withdrawal Charge Option)
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------
Costs Based on Maximum $666 $1,979 $3,265 $6,367
Annual Portfolio
Expenses
- ------------------------------------------------------------
Costs Based on Minimum $429 $1,303 $2,198 $4,538
Annual Portfolio
Expenses
- ------------------------------------------------------------
Allstate Advisor Preferred Allstate Advisor Preferred
(with 3-Year (with No
Withdrawal Charge Option) Withdrawal Charge Option)
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio $677 $2,007 $3,309 $6,436 $687 $2,036 $3,352 $6,504
Expenses
- ------------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio $439 $1,333 $2,247 $4,627 $449 $1,362 $2,295 $4,714
Expenses
- ------------------------------------------------------------------------------------------------
PLEASE REMEMBER THAT YOU ARE LOOKING AT EXAMPLES AND NOT A REPRESENTATION OF
PAST OR FUTURE EXPENSES. YOUR RATE OF RETURN MAY BE HIGHER OR LOWER THAN 5%,
WHICH IS NOT GUARANTEED. THE EXAMPLES DO NOT ASSUME THAT ANY PORTFOLIO EXPENSE
WAIVERS OR REIMBURSEMENT ARRANGEMENTS ARE IN EFFECT FOR THE PERIODS PRESENTED.
THE EXAMPLES REFLECT THE FREE WITHDRAWAL AMOUNTS, IF APPLICABLE, AND THE
DEDUCTION OF THE ANNUAL CONTRACT MAINTENANCE CHARGE OF $30 EACH YEAR. THE ABOVE
EXAMPLES ASSUME YOU HAVE SELECTED THE MAV DEATH BENEFIT OPTION AND THE ENHANCED
BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION, THE EARNINGS PROTECTION DEATH
BENEFIT OPTION (ASSUMING THE OLDEST CONTRACT OWNER OR ANNUITANT IS AGE 71 OR
OLDER, AND ALL ARE AGE 79 OR YOUNGER ON THE RIDER APPLICATION DATE), RIG 2 AND
THAT INCOME BASE A IS APPLIED AND THE SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT)
OPTION. EXAMPLES FOR THE ALLSTATE ADVISOR PREFERRED CONTRACTS ASSUME THE
ELECTION OF THE 5-YEAR WITHDRAWAL CHARGE OPTION. IF ANY OR ALL OF THESE FEATURES
WERE NOT ELECTED, THE EXPENSE FIGURES SHOWN ABOVE WOULD BE SLIGHTLY LOWER.
19 PROSPECTUS
FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "ACCUMULATION UNIT."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call "ACCUMULATION UNIT VALUE." Accumulation Unit Value is analogous to, but not
the same as, the share price of a mutual fund.
Accumulation Unit Values for the Contracts appear in Appendix H and in the
Statement of Additional Information. Prior to May 1, 2004, the Contracts were
issued through Allstate Life Insurance Company Separate Account A. Effective May
1, 2004, Allstate Life Insurance Company Separate Account A combined with and
into the Variable Account. As a result of the merger, the Contracts are now
issued through the Variable Account. For more information, see the Statement of
Additional Information, which contains the financial statements of the Variable
Account, which are comprised of the underlying financial statements fo the
Sub-Accounts, that show the effect of the merger of Allstate Life Insurance
Company Separate Account A into the Variable Account.
THE CONTRACTS
- --------------------------------------------------------------------------------
CONTRACT OWNER
Each Contract is an agreement 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 investment alternatives during the Accumulation and Payout Phases,
.. the amount and timing of your purchase payments and withdrawals,
.. the programs you want to use to invest or withdraw money,
.. the income payment plan(s) 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 or the Annuitant
dies, and
.. any other rights that the Contract provides, including restricting income
payments to Beneficiaries.
If you die, any surviving joint 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 Primary
Beneficiary will receive any guaranteed income payments scheduled to continue.
If the Annuitant dies prior to the Payout Start Date and the Contract Owner is a
grantor trust not established by a business, the new Contract Owner will be the
Beneficiary(ies).
The Contract cannot be jointly owned by both a non-living person and a living
person unless the Contract Owner(s) assumed ownership of the Contract as a
Beneficiary(ies). The maximum age of any Contract Owner on the date we receive
the completed application for each Contract is 90.
If you select the Enhanced Beneficiary Protection (MAV) Option, the Enhanced
Beneficiary Protection (Annual Increase) Option, or the Earnings Protection
Death Benefit Option, the maximum age of any Contract Owner on the Rider
Application Date is currently age 79. If you select the Spousal Protection
Benefit (Co-Annuitant) Option or the Spousal Protection Benefit (Co-Annuitant)
Option for the Custodial Individual Retirement Accounts, the maximum age of any
Contract Owner or beneficial owner for CSP on the Rider Application Date is
currently age 90. If you select the SureIncome Withdrawal Benefit Option, the
maximum age of any Contract Owner on the Rider Application Date is currently 85.
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 retirement plans, 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 the change, the change will
take effect as of the date you signed the request. We will not be liable for any
payment or settlement made prior to accepting the change. Accordingly, if you
wish to change the Contract Owner, you should deliver your written notice 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
20 PROSPECTUS
advisor prior to making a request for a change of Contract Owner.
ANNUITANT
The Annuitant is the individual whose age determines the latest Payout Start
Date and whose life determines the amount and duration of income payments (other
than under Income Plan 3). You may not change the Annuitant at any time. You may
designate a joint Annuitant, who is a second person on whose life income
payments depend, at the time you select an Income Plan. The maximum age of the
Annuitant on the date we receive the completed application for each Contract is
90.
If you select the Enhanced Beneficiary Protection (MAV) Option, Enhanced
Beneficiary Protection (Annual Increase) Option or the Earnings Protection Death
Benefit Option, the maximum age of any Annuitant on the Rider Application Date
is 79.
If you select the Spousal Protection Benefit (Co-Annuitant) Option, the maximum
age of any Annuitant on the Rider Application date is age 90.
If you select the Spousal Protection Benefit (Co-Annuitant) Option for Custodial
Individual Retirement Accounts, the maximum age of any Annuitant on the Rider
Application date is age 90.
If you select the Income Protection Benefit Option, the oldest Annuitant and
joint Annuitant (if applicable) must be age 75 or younger on the Payout Start
Date. If you select the SureIncome Withdrawal Benefit Option, the maximum age of
any Annuitant on the Rider Application Date is currently 85.
If you select an Income Plan that depends on the Annuitant or a joint
Annuitant's life, we may require proof of age and sex before income payments
begin and proof that the Annuitant or joint Annuitant is still alive before we
make each payment.
CO-ANNUITANT
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION
Contract Owners of IRA Contracts that meet the following conditions and that
elect the Spousal Protection Benefit Option may name their spouse as a
Co-Annuitant:
.. the individually owned Contract must be either a traditional, Roth, or
Simplified Employee Pension IRA;
.. the Contract Owner must be age 90 or younger on the Rider Application Date;
.. and the Co-Annuitant must be age 79 or younger on the Rider Application Date;
and
.. the Co-Annuitant must be the sole Primary Beneficiary under the Contract.
Under the Spousal Protection Benefit (Co-Annuitant) Option, the Co-Annuitant
will be considered to be an Annuitant during the Accumulation Phase, except the
Co-Annuitant will not be considered to be an Annuitant for purposes of
determining the Payout Start Date or upon the death of the Co-Annuitant. You may
change the Co-Annuitant to a new spouse only if you provide proof of remarriage
in a form satisfactory to us. At any time, there may only be one Co-Annuitant
under your Contract. See "Spousal Protection Benefit Option and Death of
Co-Annuitant" for more information.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS.
Contracts that meet the following conditions and that elect the Spousal
Protection Benefit (Co-Annuitant) Option for Custodial Individual Retirement
Accounts may name the spouse of the Annuitant as a Co-Annuitant.
.. the beneficially owned Contract must be a Custodial traditional IRA, Custodial
Roth IRA, or a Custodial Simplified Employee Pension IRA;
.. the Annuitant must be the beneficial owner of the Custodial traditional IRA,
Custodial Roth IRA, or Custodial Simplified Employee Pension IRA;
.. the Co-Annuitant must be the legal spouse of the Annuitant and only one
Co-Annuitant may be named;
.. the Co-Annuitant must be the sole beneficiary of the Custodial traditional
IRA, Custodial Roth IRA, or the Custodial Simplified Employee Pension IRA;
.. the Annuitant must be age 90 or younger on the Rider Application Date; and
.. the Co-Annuitant must be age 79 or younger on the Rider Application Date.
Under the Spousal Protection Benefit (Co-Annuitant) Option for Custodial
Individual Retirement Accounts, the Co-Annuitant will be considered to be an
Annuitant during the Accumulation Phase, except the Co-Annuitant will not be
considered to be an Annuitant for purposes of determining the Payout Start Date
or upon the death of the Co-Annuitant. The Co-Annuitant is not considered the
beneficial owner of the Custodial Traditional IRA, Custodial Roth IRA, or the
Custodial Simplified Employee Pension IRA. See "Spousal Protection Benefit
(Co-Annuitant) Option for Custodial Individual Retirement Accounts and Death of
Co-Annuitant" for more information.
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 settlement ("DEATH
PROCEEDS") or become the new Contract Owner pursuant to the Contract if the sole
surviving Contract Owner dies before the Payout Start Date. 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
21 PROSPECTUS
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 form to be
signed by you and filed with us. After we accept the form, the change of
Beneficiary will be effective as of the date you signed the form. Until we
accept your written notice to change a Beneficiary, we are entitled to rely on
the most recent Beneficiary information in our files. We will not be liable for
any payment or settlement made prior to accepting the change. Accordingly, if
you wish to change your Beneficiary, you should deliver your written notice to
us promptly. Each Beneficiary change is subject to any payment made by us or
any other action we take before we accept the change.
You may restrict income payments to Beneficiaries by providing us with a written
request. Once we accept the written request, the restriction will take effect
as of the date you signed the request. Any restriction is subject to any
payment made by us or any other action we take before we accept the request.
If you did not name a Beneficiary or, unless otherwise provided in the
Beneficiary designation, if a named Beneficiary is no longer living and there
are no other surviving Primary or Contingent Beneficiaries 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.
If more than one Beneficiary survives you (or the Annuitant, if the Contract
Owner is a grantor trust), 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 Annuitant if
the Contract Owner is not a living person), 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 this 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.
Where there are multiple Beneficiaries, we will only value the Death Proceeds at
the time the first Beneficiary submits the necessary documentation in good
order. Any Death Proceeds amounts attributable to any Beneficiary which remain
in the Variable Sub-Accounts are subject to investment risk. If there is more
than one Beneficiary taking shares of the Death Proceeds, each Beneficiary will
be treated as a separate and independent owner of his or her respective share of
the Death Proceeds. Each Beneficiary will exercise all rights related to his or
her share of the Death Proceeds, including the sole right to select a death
settlement option, subject to any restrictions previously placed upon the
Beneficiary. Each Beneficiary may designate a Beneficiary(ies) for his or her
respective share, but that designated Beneficiary(ies) will be restricted to the
death settlement option chosen by the original Beneficiary.
If there is more than one Beneficiary and one of the Beneficiaries is a
corporation, trust or other non-living person, all Beneficiaries will be
considered to be non-living persons.
MODIFICATION OF THE CONTRACT
Only an Allstate Life officer 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. If a provision of the Contract
is inconsistent with state law, we will follow state law.
ASSIGNMENT
You may not assign an interest in this Contract as collateral or security for a
loan. However, you may assign periodic income payments under this 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 the
assignor signs it and files 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.
22 PROSPECTUS
PURCHASES
- --------------------------------------------------------------------------------
MINIMUM PURCHASE PAYMENTS
The minimum initial purchase payment for Non- Qualified Contracts is $10,000,
($2,000 for Contracts issued with an IRA or TSA). All subsequent purchase
payments under a Contract must be $1,000 or more ($50 for automatic payments).
For ALLSTATE ADVISOR PLUS CONTRACTS, purchase payments do not include any Credit
Enhancements. You may make purchase payments at any time prior to the Payout
Start Date; however, additional payments may be limited in some states. Please
consult with your representative for details. The total amount of purchase
payments we will accept for each Contract without our prior approval is
$1,000,000. We reserve the right to accept a lesser initial purchase payment
amount or lesser subsequent purchase payment amounts. We reserve the right to
limit the availability of the investment alternatives for additional
investments. We also reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of $50 or more per month by
automatically transferring money from your bank account. Please consult with
your sales representative for detailed information. The AUTOMATIC ADDITIONS
PROGRAM is not available for making purchase payments into the Dollar Cost
Averaging Fixed Account Option.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payment among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percents that total 100% or in whole dollars. You can change your
allocations by calling us at 1-800-203-0068.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us
otherwise, we will allocate subsequent purchase payments according to the
allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our home office. If your application is incomplete, we will ask you to
complete your application within 5 business days. If you do so, we will credit
your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract at
the close of the business day on which we receive the purchase payment at our
home office.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"Valuation Dates." Our business day closes when the New York Stock Exchange
closes for regular trading, usually 4:00 p.m. Eastern Time (3:00 p.m. Central
Time). If we receive your purchase payment after 3:00 p.m. Central Time on any
Valuation Date, we will credit your purchase payment using the Accumulation Unit
Values computed on the next Valuation Date.
CREDIT ENHANCEMENT
For ALLSTATE ADVISOR PLUS CONTRACTS, each time you make a purchase payment, we
will add to your Contract Value a Credit Enhancement equal to 4% of the purchase
payment if the oldest Contract Owner and oldest Annuitant are age 85 or younger
on the date we receive the completed application for the Contract ("Application
Date"). If the oldest Contract Owner or oldest Annuitant is age 86 or older and
both are 90 or younger on the Application Date, we will add to your Contract
Value a Credit Enhancement equal to 2% of the purchase payment. An additional
Credit Enhancement will be added to your Contract if the cumulative purchase
payments (including the purchase payment being made) less cumulative withdrawals
exceed a certain threshold. The thresholds apply individually to each Allstate
Advisor Plus Contract you own. The additional Credit Enhancements and their
corresponding thresholds are as follows:
ADDITIONAL CREDIT CUMULATIVE PURCHASE
ENHANCEMENT FOR LARGE PAYMENTS LESS CUMULATIVE
CONTRACTS WITHDRAWALS MUST EXCEED:
0.50% of the purchase payment $500,000
1.00% of the purchase payment $1,000,000
If you exercise your right to cancel the Contract during the Trial Examination
Period, the amount we refund to you will not include any Credit Enhancement. See
"TRIAL EXAMINATION PERIOD" below for details. The ALLSTATE ADVISOR PLUS CONTRACT
may not be available in all states.
We will allocate any Credit Enhancements to the investment alternatives
according to the allocation instructions you have on file with us at the time we
receive your purchase payment. We will allocate each Credit Enhancement among
the investment alternatives in the same proportions as the corresponding
purchase payment. We do not consider Credit Enhancements to be investments in
the Contract for income tax purposes.
23 PROSPECTUS
We use a portion of the withdrawal charge and mortality and expense risk charge
to help recover the cost of providing the Credit Enhancement under the Contract.
See "Expenses." Under certain circumstances (such as a period of poor market
performance) the cost associated with the Credit Enhancement may exceed the sum
of the Credit Enhancement and any related earnings. You should consider this
possibility before purchasing the Contract.
TRIAL EXAMINATION PERIOD
You may cancel your Contract by providing us with written notice within the
Trial Examination Period, which is the 20 day period after you receive the
Contract, or such longer period that your state may require. If you exercise
this "RIGHT TO CANCEL," the Contract terminates and we will pay you the full
amount of your purchase payments allocated to the Fixed Account. We also will
return your purchase payments allocated to the Variable Account adjusted, to the
extent federal or state law permits, to reflect investment gain or loss,
including the deduction of mortality and expense risk charges and administrative
expense charges, that occurred from the date of allocation through the date of
cancellation. If your Contract is qualified under Code Section 408(b), we will
refund the greater of any purchase payments or the Contract Value.
For ALLSTATE ADVISOR PLUS CONTRACTS, we have received regulatory relief to
enable us to recover the amount of any Credit Enhancement applied to Contracts
that are cancelled during the Trial Examination Period. The amount we return to
you upon exercise of this Right to Cancel will not include any Credit
Enhancement or the amount of charges deducted prior to cancellation, but will
reflect, except in states where we are required to return the amount of your
purchase payments, any investment gain or loss associated with your Variable
Account purchase payments and with the full amount of the Credit Enhancement,
including the deduction of mortality and expense risk charges and administrative
expense charges.
We reserve the right to allocate your purchase payments to the Putnam VT Money
Market Variable Sub-Account during the Trial Examination Period.
For Contracts purchased in California by persons age 60 and older, you may elect
to defer until the end of the Trial Examination Period allocation of your
purchase payment to the Variable Sub-Accounts. Unless you instruct otherwise,
upon making this election, your purchase payment will be allocated to the Putnam
VT Money Market Variable Sub-Account. On the next Valuation Date 40 days after
the Issue Date, your Contract Value will then be reallocated in accordance with
your most recent investment allocation instructions.
State laws vary and may require a different period, other variations or
adjustments. Please refer to your Contract for any state specific information.
CONTRACT VALUE
- --------------------------------------------------------------------------------
On the Issue Date, the Contract Value is equal to your initial purchase payment
(for ALLSTATE ADVISOR PLUS CONTRACTS, your initial purchase payment plus the
Credit Enhancement).
Thereafter, your Contract Value at any time during the Accumulation Phase is
equal to the sum of the value of your Accumulation Units in the Variable
Sub-Accounts you have selected, plus your value in the Fixed Account Option(s)
offered by your Contract.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation
Unit Value of that Variable Sub-Account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-Account when the Accumulation Unit Value for the
Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-Account to your Contract. For ALLSTATE ADVISOR PLUS CONTRACTS, we would
credit your Contract additional Accumulation Units of the Variable Sub-Account
to reflect the Credit Enhancement paid on your purchase payment. See "Credit
Enhancement." Withdrawals and transfers from a Variable Sub-Account would, of
course, reduce the number of Accumulation Units of that Sub-Account allocated to
your Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
for each Contract will rise or fall to reflect:
.. changes in the share price of the Portfolio in which the Variable Sub-Account
invests, and
.. the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense charge, and any provision for taxes that have accrued
since we last calculated the Accumulation Unit Value.
We determine any applicable withdrawal charges, Rider Fees (if applicable),
transfer fees, and contract maintenance charges separately for each Contract.
They do not affect the Accumulation Unit Value. Instead, we obtain payment of
those charges and fees by redeeming Accumulation Units. For details on how we
compute Accumulation Unit Values, please refer to the Statement of Additional
Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account
for each Contract on each Valuation Date. We also determine a separate set of
24 PROSPECTUS
Accumulation Unit Values that reflect the cost of each optional benefit, or
available combination thereof, offered under the Contract.
YOU SHOULD REFER TO THE PROSPECTUSES FOR THE FUNDS THAT ACCOMPANY THIS
PROSPECTUS FOR A DESCRIPTION OF HOW THE ASSETS OF EACH PORTFOLIO ARE VALUED,
SINCE THAT DETERMINATION DIRECTLY BEARS ON THE ACCUMULATION UNIT VALUE OF THE
CORRESPONDING VARIABLE SUB-ACCOUNT AND, THEREFORE, YOUR CONTRACT VALUE.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION
We offer the TrueReturn/SM/ Accumulation Benefit Option, which is available for
an additional fee. The TrueReturn Option guarantees a minimum Contract Value on
the "RIDER MATURITY DATE." The Rider Maturity Date is determined by the length
of the Rider Period which you select. The Option provides no minimum Contract
Value if the Option terminates before the Rider Maturity Date. See "Termination
of the TrueReturn Option" below for details on termination.
The TrueReturn Option is available at issue of the Contract, or may be added
later, subject to availability and issue requirements. You may not add the
TrueReturn Option to your Contract after Contract issue without our prior
approval if your Contract Value is greater than $1,000,000 at the time you
choose to add the TrueReturn Option. Currently, you may have only one
TrueReturn Option in effect on your Contract at one time. You may only have one
of the following in effect on your Contract at the same time: a TrueReturn
Option, a Retirement Income Guarantee Option or a SureIncome Option. The
TrueReturn Option has no maximum issue age, however the Rider Maturity Date must
occur before the latest Payout Start Date, which is the later of the Annuitant's
99th birthday or the 10th Contract Anniversary. Once added to your Contract,
the TrueReturn Option may be cancelled at any time on or after the 5th Rider
Anniversary by:
.. notifying us in writing in a form satisfactory to us.
The "RIDER ANNIVERSARY" is the anniversary of the Rider Date. We reserve the
right to extend the date on which the TrueReturn Option may be cancelled to up
to the 10th Rider Anniversary at any time in our sole discretion. Any change we
make will not apply to a TrueReturn Option that was added to your Contract prior
to the implementation date of the change.
When you add the TrueReturn Option to your Contract, you must select a Rider
Period and a Guarantee Option. The Rider Period and Guarantee Option you select
determine the AB Factor, which is used to determine the Accumulation Benefit,
described below. The "RIDER PERIOD" begins on the Rider Date and ends on the
Rider Maturity Date. The "RIDER DATE" is the date the TrueReturn Option was
made a part of your Contract. We currently offer Rider Periods ranging from 8
to 20 years depending on the Guarantee Option you select. You may select any
Rider Period from among those we currently offer, provided the Rider Maturity
Date occurs prior to the latest Payout Start Date. We reserve the right to
offer additional Rider Periods in the future, and to discontinue offering any of
the Rider Periods at any time. Each Model Portfolio Option available under a
Guarantee Option has specific investment requirements that are described in the
"Investment Restrictions" section below and may depend upon the Rider Date of
your TrueReturn Option. We reserve the right to offer additional Guarantee
Options in the future, and to discontinue offering any of the Guarantee Options
at any time. After the Rider Date, the Rider Period and Guarantee Option may
not be changed.
The TrueReturn Option may not be available in all states. We may discontinue
offering the TrueReturn Option at any time to new Contract Owners and to
existing Contract Owners who did not elect the Option prior to the date of
discontinuance.
ACCUMULATION BENEFIT.
On the Rider Maturity Date, if the Accumulation Benefit is greater than the
Contract Value, then the Contract Value will be increased to equal the
Accumulation Benefit. The excess amount of any such increase will be allocated
to the Putnam VT Money Market Variable Sub-Account. You may transfer the excess
amount out of the Putnam VT Money Market Variable Sub-Account and into another
investment alternative at any time thereafter. However, each transfer you make
will count against the 12 transfers you can make each Contract Year without
paying a transfer fee. Prior to the Rider Maturity Date, the Accumulation
Benefit will not be available as a Contract Value, Settlement Value, or Death
Proceeds. Additionally, we will not pay an Accumulation Benefit if the
TrueReturn Option is terminated for any reason prior to the Rider Maturity Date.
After the Rider Maturity Date, the TrueReturn Option provides no additional
benefit.
The "ACCUMULATION BENEFIT" is equal to the Benefit Base multiplied by the AB
Factor. The "AB Factor" is determined by the Rider Period and Guarantee Option
you selected as of the Rider Date. The following table shows the AB Factors
available for the Rider Periods and Guarantee Options we currently offer.
AB FACTORS
RIDER PERIOD GUARANTEE GUARANTEE
(NUMBER OF YEARS) OPTION 1 OPTION 2
- ---------------------------------------------
8 100.0% NA
- ---------------------------------------------
9 112.5% NA
- ---------------------------------------------
10 125.0% 100.0%
- ---------------------------------------------
11 137.5% 110.0%
- ---------------------------------------------
12 150.0% 120.0%
- ---------------------------------------------
13 162.5% 130.0%
- ---------------------------------------------
14 175.0% 140.0%
- ---------------------------------------------
15 187.5% 150.0%
- ---------------------------------------------
16 200.0% 160.0%
- ---------------------------------------------
17 212.5% 170.0%
- ---------------------------------------------
18 225.0% 180.0%
- ---------------------------------------------
19 237.5% 190.0%
- ---------------------------------------------
20 250.0% 200.0%
- ---------------------------------------------
25 PROSPECTUS
The following examples illustrate the Accumulation Benefit calculations under
Guarantee Options 1 and 2 on the Rider Maturity Date. For the purpose of
illustrating the Accumulation Benefit calculation, the examples assume the
Benefit Base is the same on the Rider Date and the Rider Maturity Date.
Example 1: Guarantee Option 1
Guarantee Option: 1
Rider Period: 15
AB Factor: 187.5%
Rider Date: 1/2/04
Rider Maturity Date: 1/2/19
Benefit Base on Rider Date: $50,000
Benefit Base on rider Maturity Date: $50,000
On the Rider Maturity Date (1/2/19):
Accumulation Benefit = Benefit Base on Rider Maturity
Date X AB Factor
= $50,000 X 187.5%
= $93,750
Example 2: Guarantee Option 2
Guarantee Option: 2
Rider Period: 15
AB Factor: 150.0%
Rider Date: 1/2/04
Rider Maturity Date: 1/2/19
Benefit Base on Rider Date: $50,000
Benefit Base on rider Maturity Date: $50,000
On the Rider Maturity Date (1/2/19):
Accumulation Benefit = Benefit Base on Rider Maturity
Date X AB Factor
= $50,000 X 150.0%
= $75,000
Guarantee Option 1 offers a higher AB Factor and more rider periods than
Guarantee Option 2. Guarantee Option 1 and Guarantee Option 2 have different
investment restrictions. See "Investment Requirements" below for more
information.
BENEFIT BASE.
The Benefit Base is used solely for purposes of determining the Rider Fee and
the Accumulation Benefit. The Benefit Base is not available as a Contract
Value, Settlement Value, or Death Proceeds. On the Rider Date, the "Benefit
Base" is equal to the Contract Value. After the Rider Date, the Benefit Base
will be recalculated for purchase payments and withdrawals as follows:
.. The Benefit Base will be increased by purchase payments (and Credit
Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) made prior to or on the
first Contract Anniversary following the Rider Date. Subject to the terms and
conditions of your Contract, you may add purchase payments after this date,
but they will not be included in the calculation of the Benefit Base.
THEREFORE, IF YOU PLAN TO MAKE PURCHASE PAYMENTS AFTER THE FIRST CONTRACT
ANNIVERSARY FOLLOWING THE RIDER DATE, YOU SHOULD CONSIDER CAREFULLY WHETHER
THIS OPTION IS APPROPRIATE FOR YOUR NEEDS.
.. The Benefit Base will be decreased by a Withdrawal Adjustment for each
withdrawal you make. The Withdrawal Adjustment is equal to (a) divided by
(b), with the result multiplied by (c), where:
(a) = the withdrawal amount;
(b) = the Contract Value immediately prior to the withdrawal; and
(c) = the Benefit Base immediately prior to the withdrawal.
Withdrawals 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 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. A withdrawal charge also may apply. See Appendix G for
numerical examples that illustrate how the Withdrawal Adjustment is applied.
The Benefit Base will never be less than zero.
INVESTMENT REQUIREMENTS.
If you add the TrueReturn Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest
during the Rider Period. The specific requirements will depend on the model
portfolio option ("Model Portfolio Option") you have selected and the effective
date of your TrueReturn Option. These requirements are described below in more
detail. These requirements may include, but are not limited to, maximum
investment limits on certain Variable Sub-Accounts or on certain Fixed Account
Options, exclusion of certain Variable Sub-Accounts or of certain Fixed Account
Options, required minimum allocations to certain Variable Sub-Accounts, and
restrictions on transfers to or from certain investment alternatives. We may
also require that you use the Automatic Portfolio Rebalancing Program. We may
change the specific requirements that are applicable to a Guarantee Option or a
Model Portfolio Option available under a Guarantee Option at any time in our
sole discretion. Any changes we make will not apply to a
26 PROSPECTUS
TrueReturn Option that was made a part of your Contract prior to the
implementation date of the change, except for changes made due to a change in
investment alternatives available under the Contract. Any changes we make will
apply to a new TrueReturn Option elected subsequent to the change pursuant to
the Rider Trade-In Option.
When you add the TrueReturn Option to your Contract, you must allocate your
entire Contract Value as follows:
1) to a Model Portfolio Option available with the Guarantee Option you selected,
as defined below; or
2) to the DCA Fixed Account Option and then transfer all purchase payments (and
Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) and interest
according to a Model Portfolio Option available with the Guarantee Option you
selected; or
3) to a combination of (1) and (2) above.
For (2) and (3) above, the requirements for the DCA Fixed Account Option must be
met. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information.
On the Rider Date, you must select only one of the Model Portfolio Options in
which to allocate your Contract Value. After the Rider Date, you may transfer
your entire Contract Value to any of the other Model Portfolio Options available
with your Guarantee Option. We currently offer several Model Portfolio Options
with each of the available Guarantee Options. The Model Portfolio Options that
are available under Guarantee Options may differ depending upon the effective
date of your TrueReturn Option. Please refer to the Model Portfolio Option 1,
Model Portfolio Option 2 and TrueBalance/SM/ Model Portfolio Options sections
below for more details. We may add other Model Portfolio Options in the future.
We also may remove Model Portfolio Options in the future anytime prior to the
date you select such Model Portfolio Option. In addition, if the investment
alternatives available under the Contract change, we may revise the Model
Portfolio Options. The following table summarizes the Model Portfolio Options
currently available for use with each Guarantee Option under the TrueReturn
Option:
GUARANTEE OPTION 1 GUARANTEE OPTION 2
- -------------------------------------------------------------------------------------------------------------
*Model Portfolio Option 1 *Model Portfolio Option 2
*TrueBalance Conservative Model Portfolio Option *TrueBalance Conservative Model
*TrueBalance Moderately Conservative Model Portfolio Option Portfolio Option
*TrueBalance Moderately
Conservative Model Portfolio
Option
*TrueBalance Moderate Model
Portfolio Option
*TrueBalance Moderately Aggressive
Model Portfolio Option
*TrueBalance Aggressive Model
Portfolio Option
- -------------------------------------------------------------------------------------------------------------
NOTE: THE TRUEBALANCE MODEL PORTFOLIO OPTIONS WERE ADDED TO THE TRUERETURN
OPTION ON MAY 1, 2005. TRUEBALANCE MODEL PORTFOLIOS SELECTED PRIOR TO MAY 1,
2005 MAY NOT BE USED WITH THE TRUERETURN OPTION.
You may not allocate any of your Contract Value to the Standard Fixed Account
Option or to the MVA Fixed Account Option. You must transfer any portion of
your Contract Value that is allocated to the Standard Fixed Account Option or to
the MVA Fixed Account Option to the Variable Sub-Accounts prior to adding the
TrueReturn Option to your Contract. Transfers from the MVA Fixed Account Option
may be subject to a Market Value Adjustment. You may allocate any portion of
your purchase payments (and Credit Enhancements for ALLSTATE ADVISOR PLUS
CONTRACTS) to the DCA Fixed Account Option on the Rider Date, provided the DCA
Fixed Account Option is available with your Contract and in your state. See the
"Dollar Cost Averaging Fixed Account Option" section of this prospectus for more
information. We use the term "Transfer Period Account" to refer to each
purchase payment allocation made to the DCA Fixed Account Option for a specified
term length. At the expiration of a Transfer Period Account any remaining
amounts in the Transfer Period Account will be transferred to the Variable
Sub-Accounts according to the percentage allocations for the Model Portfolio
Option you have selected.
Any subsequent purchase payments (and Credit Enhancements for ALLSTATE ADVISOR
PLUS CONTRACTS) made to your Contract will be allocated to the Variable
Sub-Accounts according to your most recent instructions on file with us. You
must comply with any required percentage allocations for the Model Portfolio
Option you have selected. You may also request that purchase payments be
allocated to the DCA Fixed Account Option. Purchase payments allocated to the
DCA Fixed Account Option must be $500 or more. Any withdrawals you request will
reduce your Contract Value invested in each of the investment alternatives on a
pro rata basis in the proportion that your Contract Value in each bears to your
total Contract Value in all Variable Sub-Accounts, unless you request otherwise.
MODEL PORTFOLIO OPTION 1
If you choose Model Portfolio Option 1 or transfer your entire Contract Value
into Model Portfolio Option 1 under Guarantee Option 1, you must allocate a
certain percentage of your Contract Value into each of three asset categories.
Please note that certain Investment Alternatives are not available under Model
Portfolio Option 1. You may choose the Variable Sub-Accounts in which you want
to invest, provided you maintain the percentage allocation requirements for each
category. You may also make transfers among the Variable Sub-Accounts within
each category at any time, provided you maintain the percentage allocation
requirements for each category. However, each transfer you make will count
27 PROSPECTUS
against the 12 transfers you can make each Contract Year without paying a
transfer fee.
Effective October 1, 2004, certain Variable Sub-Accounts under Model Portfolio 1
were reclassified into different asset categories. These changes apply to
TrueReturn Options effective prior to and on or after October 1, 2004. The
following table describes the percentage allocation requirements for Model
Portfolio Option 1 and Variable Sub-Accounts available under each category/(1)/:
MODEL PORTFOLIO OPTION 1
- --------------------------------------------------------------------
20% Category A
50% Category B
30% Category C
0% Category D
- --------------------------------------------------------------------
CATEGORY A
Putnam VT Money Market - Class IB Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
- --------------------------------------------------------------------
CATEGORY B
FTVIP Franklin U.S. Government - Class 2 Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account (2)
Oppenheimer Core Bond/VA - Service Shares Sub-Account (2)(6)
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT Income - Class IB Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account (3)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account (3)
CATEGORY C
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
(2)
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account (2)
Lord Abbett Series - Growth and Income Sub-Account (2)
Lord Abbett Series - Growth Opportunities Sub-Account (2)
Lord Abbett Series - Mid-Cap Value Sub-Account (2)
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares
Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Research - Class IB Sub-Account (4)
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Utilities Growth and Income - Class IB Sub-Account (4)
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Equity and Income, Class II Sub-Account (3)
Van Kampen UIF Global Franchise, Class II Sub-Account (3)
Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account & Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account (3)(5)
- --------------------------------------------------------------------
CATEGORY D (VARIABLE SUB-ACCOUNTS NOT AVAILABLE UNDER MODEL
PORTFOLIO OPTION 1)
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Health Sciences - Class IB Sub-Account (4)
Putnam VT New Opportunities - Class IB Sub-Account (4)
Putnam VT Vista - Class IB Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class I Sub-Account & Van Kampen UIF
Equity Growth, Class II Sub-Account (3)(5)
Van Kampen UIF Small Company Growth, Class II Sub-Account (3)
- --------------------------------------------------------------------
Each calendar quarter, we will use the Automatic Portfolio Rebalancing Program
to automatically rebalance your Contract Value in each Variable Sub-Account and
return it to the percentage allocations for Model Portfolio Option 1. We will
use the percentage allocations as of your most recent instructions.
(1) The FTVIP Franklin Small Cap Variable Sub-Account changed its name to the
FTVIP Franklin Small-Mid Cap Growth Securities - Class 2 Sub-Account. The FTVIP
Franklin Small Cap Variable Sub-Account, now known as FTVIP Franklin Small-Mid
Cap Growth Securities - Class 2 Sub-Account, and the FTVIP Templeton Global
Income Securities - Class 2 Sub-Account, which were closed to new investments
effective May 1, 2003, are not available with the TrueReturn Option. You must
transfer any portion of your Contract Value that is allocated to these Variable
Sub-Accounts to any of the remaining Variable Sub-Accounts offered with the
TrueReturn Option prior to adding the TrueReturn Option to your Contract.
(2) Variable Sub-Account was first offered under the Contracts on October 1,
2004. See the Investment Alternatives: Variable Sub-Accounts section for
additional information.
(3) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(4) The Putnam VT Health Sciences - Class IB Sub-Account (Category D under
TrueReturn), the Putnam VT New Opportunities - Class IB Sub-Account (Category D
under TrueReturn), the Putnam VT Research - Class IB Sub-Account (Category C
under TrueReturn), and the Putnam VT Utilities Growth and Income - Class IB
Sub-Account (Category C under TrueReturn) were offered only with Contracts
issued
28 PROSPECTUS
prior to October 1, 2004, and closed to new investments effective October 1,
2004. If, prior to October 1, 2004, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing, or
dollar cost averaging, we will continue to effect automatic transactions into
these Variable Sub-Accounts in accordance with that program. Outside of these
automatic transaction programs, additional allocations will not be allowed. If
you add the TrueReturn Option to your Contract on or after October 1, 2004, you
must transfer any portion of your Contract Value that is allocated to these
Variable Sub-Accounts to any of the remaining Variable Sub-Accounts available
with the TrueReturn Option prior to adding the TrueReturn Option to your
Contract.
(5)The Van Kampen UIF Equity Growth, Class II Sub-Account and the Van Kampen UIF
U.S. Mid Cap Value, Class II Sub-Account are offered with Contracts issued on or
after May 1, 2004. Contract Owners of Contracts issued prior to May 1, 2004, may
invest only in the Van Kampen UIF Equity Growth, Class I Sub-Account and the Van
Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
(6)Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares
Sub-Account changed its name to Oppenheimer Core Bond/VA - Service Shares
Sub-Account.
MODEL PORTFOLIO OPTION 2
The investment requirements under Model Portfolio Option 2 depend on the Rider
Date of your TrueReturn Option.
Model Portfolio Option 2 (Rider Date prior to October 1, 2004)
If your TrueReturn Option Rider Date is prior to October 1, 2004 and you choose
Model Portfolio Option 2 or transfer your entire Contract Value into Model
Portfolio Option 2, you may allocate your Contract Value among any of a selected
group of available Variable Sub-Accounts listed below. You may choose the
Variable Sub-Accounts in which you want to invest, provided you maintain the
percentage allocation requirements for each category. You may also make
transfers among the Variable Sub-Accounts within each category at any time,
provided you maintain the percentage allocation requirements for each category.
However, each transfer you make will count against the 12 transfers you can make
each Contract Year without paying a transfer fee.
The following table describes the percentage allocation requirements for Model
Portfolio Option 2 (Rider Date prior to October 1, 2004) and the Variable
Sub-Accounts available under each category/(1)/:
MODEL PORTFOLIO OPTION 2
(RIDER DATE PRIOR TO OCTOBER 1, 2004)
- --------------------------------------------------------------------
10% Category A
20% Category B
50% Category C
20% Category D
- --------------------------------------------------------------------
CATEGORY A
Putnam VT Money Market - Class IB Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
- --------------------------------------------------------------------
CATEGORY B
FTVIP Franklin U.S. Government - Class 2 Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account (2)
Oppenheimer Core Bond/VA - Service Shares Sub-Account (2)(6)
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT Income - Class IB Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account (3)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account (3)
- --------------------------------------------------------------------
29 PROSPECTUS
CATEGORY C
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
(2)
FTVIP Mutual Shares Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account (2)
Lord Abbett Series - Growth and Income Sub-Account (2)
Lord Abbett Series - Growth Opportunities Sub-Account (2)
Lord Abbett Series - Mid-Cap Value Sub-Account (2)
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Research - Class IB Sub-Account (4)
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Utilities Growth and Income - Class IB Sub-Account (4)
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Equity and Income, Class II Sub-Account (3)
Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account & Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account (3)(5)
- --------------------------------------------------------------------
CATEGORY D
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares
Sub-Account
Putnam VT Health Sciences - Class IB Sub-Account (4)
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT New Opportunities - Class IB Sub-Account (4)
Putnam VT Vista - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class I Sub-Account &
Van Kampen UIF Equity Growth, Class II Sub-Account (3)(5)
Van Kampen UIF Global Franchise, Class II Sub-Account (3)
Van Kampen UIF Small Company Growth, Class II Sub-Account (3)
- --------------------------------------------------------------------
EACH CALENDAR QUARTER, WE WILL USE THE AUTOMATIC PORTFOLIO REBALANCING PROGRAM
TO AUTOMATICALLY REBALANCE YOUR CONTRACT VALUE IN EACH VARIABLE SUB-ACCOUNT AND
RETURN IT TO THE PERCENTAGE ALLOCATION REQUIREMENTS FOR MODEL PORTFOLIO OPTION 2
(RIDER DATE PRIOR TO OCTOBER 1, 2004). WE WILL USE THE PERCENTAGE ALLOCATIONS AS
OF YOUR MOST RECENT INSTRUCTIONS.
(1) The FTVIP Franklin Small-Mid Cap Growth Securities - Class 2 Sub-Account and
the FTVIP Templeton Global Income Securities - Class 2 Sub-Account, which were
closed to new investments effective May 1, 2003, are not available with the
TrueReturn Option. You must transfer any portion of your Contract Value that is
allocated to these Variable Sub-Accounts to any of the remaining Variable
Sub-Accounts available with the TrueReturn Option prior to adding the TrueReturn
Option to your Contract.
(2) Variable Sub-Account was first offered under the Contracts on October 1,
2004. See the Investment Alternatives: Variable Sub-Accounts section for
additional information.
(3) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(4) The Putnam VT Health Sciences - Class IB Sub-Account (Category D under
TrueReturn), the Putnam VT New Opportunities - Class IB Sub-Account (Category D
under TrueReturn), the Putnam VT Research - Class IB Sub-Account (Category C
under TrueReturn), and the Putnam VT Utilities Growth and Income - Class IB
Sub-Account (Category C under TrueReturn) were offered only with Contracts
issued prior to October 1, 2004, and closed to new investments effective October
1, 2004. If, prior to October 1, 2004, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing, or
dollar cost averaging, we will continue to effect automatic transactions into
these Variable Sub-Accounts in accordance with that program. Outside of these
automatic transaction programs, additional allocations will not be allowed.
(5)The Van Kampen UIF Equity Growth, Class II Sub-Account and the Van Kampen UIF
U.S. Mid Cap Value, Class II Sub-Account are offered with Contracts issued on or
after May 1, 2004. Contract Owners of Contracts issued prior to May 1, 2004 may
invest only in the Van Kampen UIF Equity Growth, Class I Sub-Account and the Van
Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
(6)Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares
Sub-Account changed its name to Oppenheimer Core Bond/VA - Service Shares
Sub-Account.
Rider Date on or after October 1, 2004
If your TrueReturn Option Rider Date is on or after October 1, 2004, and you
choose Model Portfolio Option 2 or transfer your entire Contract Value into
Model Portfolio Option 2, you may allocate your Contract Value among any of a
selected group of available Variable Sub-Accounts listed below. However, you may
not allocate your Contract Value among any of the excluded Variable Sub-Accounts
listed below. You may choose to invest in or transfer among any of the available
Variable Sub-Accounts. However, each transfer you make will count against the 12
transfers you can make each Contract Year without paying a transfer fee.
30 PROSPECTUS
The following table lists the available and excluded Variable Sub-Accounts under
Model Portfolio Option 2 (Rider Date on or after October 1, 2004)(1,2):
MODEL PORTFOLIO OPTION 2
(RIDER DATE ON OR AFTER OCTOBER 1, 2004)
- --------------------------------------------------------------------
Available
- --------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
(3)
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Franklin U.S. Government - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account (3)
Lord Abbett Series - Bond-Debenture Sub-Account (3)
Lord Abbett Series - Growth and Income Sub-Account (3)
Lord Abbett Series - Growth Opportunities Sub-Account (3)
Lord Abbett Series - Mid-Cap Value Sub-Account (3)
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account (3)(6)
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares
Sub-Account
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT Income - Class IB Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT Money Market - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account (4)
Van Kampen UIF Equity and Income, Class II Sub-Account (4)
Van Kampen UIF Global Franchise, Class II Sub-Account (4)
Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account & Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account (4)(5)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account (4)
- --------------------------------------------------------------------
Excluded
- --------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Vista - Class IB Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class I Sub-Account &
Van Kampen UIF Equity Growth, Class II Sub-Account (4)(5)
Van Kampen UIF Small Company Growth, Class II Sub-Account (4)
- --------------------------------------------------------------------
(1) The FTVIP Franklin Small-Mid Cap Growth Securities - Class 2 Sub-Account and
the FTVIP Templeton Global Income Securities - Class 2 Sub-Account, which were
closed to new investments effective May 1, 2003, are not available with the
TrueReturn Option. You must transfer any portion of your Contract Value that is
allocated to these Variable Sub-Accounts to any of the remaining Variable
Sub-Accounts offered with the TrueReturn Option prior to adding the TrueReturn
Option to your Contract.
(2) The Putnam VT Health Sciences - Class IB Sub-Account (Category D under
TrueReturn), the Putnam VT New Opportunities - Class IB Sub-Account (Category D
under TrueReturn), the Putnam VT Research - Class IB Sub-Account (Category C
under TrueReturn), and the Putnam VT Utilities Growth and Income - Class IB
Sub-Account (Category C under TrueReturn) were offered only with Contracts
issued prior to October 1, 2004, and closed to new investments effective October
1, 2004. If, prior to October 1, 2004, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing, or
dollar cost averaging, we will continue to effect automatic transactions into
these Variable Sub-Accounts in accordance with that program. Outside of these
automatic transaction programs, additional allocations will not be allowed. If
you add the TrueReturn Option to your Contract on or after October 1, 2004, you
must transfer any portion of your Contract Value that is allocated to these
Variable Sub-Accounts to any of the remaining Variable Sub-Accounts available
with the TrueReturn Option prior to adding the TrueReturn Option to your
Contract.
(3) Variable Sub-Account was first offered under the Cotnract on October 1,
2004. See the first part of this two part supplement (Variable Sub-Account
Additions and Closures) for additional information.
(4) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)The Van Kampen UIF Equity Growth, Class II Sub-Account and the Van Kampen UIF
U.S. Mid Cap Value, Class II Sub-Account are offered with Contracts issued on or
after May 1, 2004. Contract Owners of Contracts issued prior to May 1, 2004 may
invest only in the Van Kampen UIF Equity Growth, Class I Sub-Account and the Van
Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
(6)Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares
Sub-Account changed its name to Oppenheimer Core Bond/VA - Service Shares
Sub-Account.
TRUEBALANCE/SM/ MODEL PORTFOLIO OPTIONS.
If you choose one of the TrueBalance/SM/ Model Portfolio Options or transfer
your entire Contract Value into one of the TrueBalance/SM/ Model Portfolio
Options, you may not choose the Variable Sub-Accounts or make transfers among
the Variable Sub-Accounts in the TrueBalance Model Portfolio Option. Each
TrueBalance Model
31 PROSPECTUS
Portfolio involves an allocation of assets among a group of pre-selected
Variable Sub-Accounts. You cannot make transfers among the Variable
Sub-Accounts nor vary the Variable Sub-Accounts that comprise a TrueBalance
Model Portfolio Option. If you choose a TrueBalance Model Portfolio Option, we
will invest and periodically reallocate your Contract Value according to the
allocation percentages and requirements for the TrueBalance Model Portfolio
Option you have selected currently. For more information regarding the
TrueBalance program, see the "TrueBalance/SM/ Asset Allocation Program" section
of this prospectus. However, note that the restrictions described in this
section, specifically the restrictions on transfers and the requirement that all
of your Contract Value be allocated to a TrueBalance Model Portfolio Option,
apply to the TrueBalance program only if you have added the TrueReturn Option to
your Contract.
PLEASE NOTE ONLY CERTAIN TRUEBALANCE MODEL PORTFOLIO OPTIONS ARE AVAILABLE WITH
YOUR TRUERETURN OPTION AS SUMMARIZED IN THE TABLE UNDER INVESTMENT REQUIREMENTS
ABOVE.
CANCELLATION OF THE TRUERETURN OPTION.
You may not cancel the TrueReturn Option or make transfers, changes to your
investment allocations, or changes to the Automatic Portfolio Rebalancing
Program that are inconsistent with the investment restrictions applicable to
your Guarantee Option and/or Model Portfolio Option prior to the 5th Rider
Anniversary. On or after the 5th Rider Anniversary, we will cancel the
TrueReturn Option if you make transfers, changes to your investment allocations,
or changes to the Automatic Portfolio Rebalancing Program that are inconsistent
with the investment restrictions applicable to your Guarantee Option and/or
Model Portfolio Option. We will not cancel the TrueReturn Option or make any
changes to your investment allocations or to the Automatic Portfolio Rebalancing
Program that are inconsistent with the investment restrictions applicable to
your Guarantee Option until we receive notice from you that you wish to cancel
the TrueReturn Option. No Accumulation Benefit will be paid if you cancel the
Option prior to the Rider Maturity Date.
DEATH OF OWNER OR ANNUITANT.
If the Contract Owner or Annuitant dies before the Rider Maturity Date and the
Contract is continued under Option D of the Death of Owner or Death of Annuitant
provision of your Contract, then the TrueReturn Option will continue, unless the
new Contract Owner elects to cancel this Option. If the TrueReturn Option is
continued, it will remain in effect until terminated. If the Contract is not
continued under Option D, then the TrueReturn Option will terminate on the date
we receive a Complete Request for Settlement of the Death Proceeds.
RIDER TRADE-IN OPTION.
We offer a "RIDER TRADE-IN OPTION" that allows you to cancel your TrueReturn
Option and immediately add a new TrueReturn Option ("NEW OPTION"), provided all
of the following conditions are met:
.. The trade-in must occur on or after the 5th Rider Anniversary and prior to the
Rider Maturity Date. We reserve the right to extend the date at which time
the trade-in may occur to up to the 10th anniversary of the Rider Date at any
time in our sole discretion. Any change we make will not apply to a
TrueReturn Option that was added to your Contract prior to the implementation
date of the change.
.. The New Option will be made a part of your Contract on the date the existing
TrueReturn Option is cancelled, provided it is cancelled for reasons other
than the termination of your Contract.
.. The New Option must be a TrueReturn Option that we make available for use with
the Rider Trade-In Option.
.. The issue requirements and terms and conditions of the New Option must be met
as of the date the New Option is made a part of your Contract.
For example, if you trade-in your TrueReturn Option:
.. the new Rider Fee will be based on the Rider Fee percentage applicable to a
new TrueReturn Option at the time of trade-in;
.. the Benefit Base for the New Option will be based on the Contract Value as of
the new Rider Date;
.. the AB Factor will be determined by the Rider Periods and Guarantee Options
available with the New Option;
.. the Model Portfolio Options will be determined by the Model Portfolio Options
offered with the Guarantee Options available with the New Option;
.. any waiting period for canceling the New Option will start again on the new
Rider Date;
.. any waiting period for exercising the Rider Trade-In Option will start again
on the new Rider Date; and
.. the terms and conditions of the Rider Trade-In Option will be according to the
requirements of the New Option.
Currently, we are also making the SureIncome Option available at the time of
your first utilization of this TrueReturn Rider Trade-In Option. We may
discontineu offering the SureIncome Option under the Rider Trade-In Option for
new TrueReturn Options added in the future at anytime at our discretion. You may
cancel your TrueReturn Option and immediately add a new SureIncome Option,
provided all of the following conditions are met:
.. The trade-in must occur on or after the 5th Rider Anniversary and prior to the
Rider Maturity Date. We reserve the right to extend the date at which time
32 PROSPECTUS
the trade-in may occur to up to the 10th anniversary of the Rider Date at any
time in our sole discretion. Any change we make will not apply to a
TrueReturn Option that was added to your Contract prior to the implementation
date of the change.
.. The new SureIncome Option will be made a part of your Contract on the date the
existing TrueReturn Option is cancelled, provided it is cancelled for reasons
other than the termination of your Contract.
.. The new SureIncome Option must be a SureIncome Option that we make available
for use with the Rider Trade-In Option.
.. The issue requirements and terms and conditions of the new SureIncome Option
must be met as of the date the new SureIncome Option is made a part of your
Contract.
You should consult with your sales representative before trading in your
TrueReturn Option.
TERMINATION OF THE TRUERETURN OPTION.
The TrueReturn Option will terminate on the earliest of the following to occur:
.. on the Rider Maturity Date;
.. on the Payout Start Date;
.. on the date your Contract is terminated;
.. on the date the Option is cancelled;
.. on the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. on the date the Option is replaced with a New Option under the Rider Trade-In
Option.
We will not pay an Accumulation Benefit if the TrueReturn Option is terminated
for any reason prior to the Rider Maturity Date.
SUREINCOME WITHDRAWAL BENEFIT OPTION
We offer the SureIncome Withdrawal Benefit Option which is available for an
additional fee. The SureIncome Option provides a guaranteed withdrawal benefit
that gives you the right to take limited partial withdrawals that total an
amount equal to your purchase payments plus any applicable credit enhancements
(subject to certain restrictions). Therefore, regardless of the subsequent
fluctuations in the value of your Contract Value, you are entitled to a Benefit
Payment each Benefit Year until your Benefit Base is exhausted (terms defined
below).
The SureIncome Option guarantees an amount up to the "BENEFIT PAYMENT REMAINING"
which will be available for withdrawal from the Contract each "BENEFIT YEAR"
until the "BENEFIT BASE" (defined below) is reduced to zero. If the Contract
Value is reduced to zero and the Benefit Base is still greater than zero, we
will distribute an amount equal to the Benefit Base to the Contract Owner as
described below under the "WITHDRAWAL BENEFIT PAYOUT PHASE".
For purposes of the SureIncome Option, "withdrawal" means the gross amount of a
withdrawal before any applicable charges such as withdrawal charges, fees, taxes
or adjustments including any applicable Market Value Adjustments and surrender
charges. Under the SureIncome Option, we do not treat a withdrawal that reduces
the Contract Value to less than $1,000 as a withdrawal of the entire Contract
Value.
The "RIDER DATE" is the date the SureIncome Option was made a part of your
Contract. The initial Benefit Year is the period between the Rider Date and the
first Contract Anniversary after the Rider Date. Each subsequent Benefit Year
will coincide with (the same as) the Contract Year.
The SureIncome Option is available at issue of the Contract, or may be added
later, subject to availability and issue requirements. You may not add the
SureIncome Option to your Contract after Contract issue without our prior
approval if your Contract Value is greater than $1,000,000 at the time you
choose to add the SureIncome Option. Currently, you may have only one SureIncome
Option in effect on your Contract at one time. You may only have one of the
following in effect on your Contract at the same time: a SureIncome Option, a
TrueReturn Option, or a Retirement Income Guarantee Option. The SureIncome
Option is only available if the oldest Contract Owner and oldest Annuitant are
age 85 or younger on the effective date of the Rider (the "Rider Application
Date")(The maximum age may depend on your state). The SureIncome Option is not
available to be added to a Contract categorized as a Tax Sheltered Annuity as
defined under Internal Revenue Code Section 403(b) at this time. We reserve the
right to make the SureIncome Option available to such Contracts on a
nondiscriminatory basis in the future at our discretion. Once added to your
Contract, the SureIncome Option may be cancelled at any time on or after the 5th
calendar year anniversary of the Rider Date by notifying us in writing in a form
satisfactory to us.
The SureIncome Option may not be available in all states. We may discontinue
offering the SureIncome Option at any time to new Contract Owners and to
existing Contract Owners who did not elect the SureIncome Option prior to the
date of discontinuance.
WITHDRAWAL BENEFIT FACTOR
The "WITHDRAWAL BENEFIT FACTOR" is used to determine the "BENEFIT PAYMENT" and
Benefit Payment Remaining. We currently offer a Withdrawal Benefit Factor equal
to 8%. We reserve the right to make other Withdrawal Benefit Factors available
in the future for new SureIncome Options and/or to eliminate the current
Withdrawal Benefit Factor. Once a Withdrawal Benefit Factor has been
established for a SureIncome Option, it cannot be changed after the Rider Date
unless that SureIncome Option is terminated.
BENEFIT PAYMENT AND BENEFIT PAYMENT REMAINING
The Benefit Payment is the amount available at the beginning of each Benefit
Year that you may withdraw
33 PROSPECTUS
during that Benefit Year. The Withdrawal Benefit Factor and the Benefit Base are
used to determine your Benefit Payment. The Benefit Payment Remaining is the
amount remaining after any previous withdrawals in a Benefit Year that you may
withdraw without reducing your Benefit Base by more than the amount of the
withdrawal and without reducing your Benefit Payment available in future Benefit
Years. Please note that any premiums or withdrawals made on a Contract
Anniversary would be applied to the Benefit Year that just ended on that
Contract Anniversary.
The Benefit Payment Remaining is equal to the Benefit Payment at the beginning
of each Benefit Year.
During each Benefit Year the Benefit Payment Remaining will be increased by
purchase payments (and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS)
multiplied by the Withdrawal Benefit Factor (currently 8% for new SureIncome
Options) and reduced by the amount of each withdrawal. The Benefit Payment
Remaining will never be less than zero.
On the Rider Date, the Benefit Payment is equal to the greater of:
.. The Contract Value multiplied by the Withdrawal Benefit Factor (currently 8%
for new SureIncome Options); or
.. The value of the Benefit Payment of the previous Withdrawal Benefit Option
(attached to your Contract) which is being terminated under a rider trade-in
option (see "Rider Trade-In Option" below for more information), if
applicable.
After the Rider Date, the Benefit Payment will be increased by purchase payments
(and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) multiplied by the
Withdrawal Benefit Factor and affected by withdrawals as follows:
.. If the withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Payment is unchanged.
If the withdrawal is greater than the Benefit Payment Remaining in effect
immediately prior to the withdrawal, the Benefit Payment will be the lesser of:
.. The Benefit Payment immediately prior to the withdrawal; or
.. The net of the Contract Value immediately prior to withdrawal less the amount
of the withdrawal, multiplied by the Withdrawal Benefit Factor.
At our discretion, the Benefit Payment available during a Benefit Year may be
increased on a nondiscriminatory basis and without prior notice in order to
satisfy IRS minimum distribution requirements on the Contract under which this
Option has been elected. We are currently not increasing the Benefit Payment
available to satisfy IRS minimum distribution requirements.
BENEFIT BASE
The Benefit Base is not available as a Contract Value or Settlement Value. The
Benefit Base is used solely to help calculate the Rider Fee, the amount that may
be withdrawn and payments that may be received under the SureIncome Option. On
the Rider Date, the Benefit Base is equal to the Contract Value. After the
Rider Date, the Benefit Base will be increased by purchase payments (and Credit
Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) and decreased by withdrawals
as follows:
.. If the withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Base will be reduced
by the amount of the withdrawal.
If the withdrawal is greater than the Benefit Payment Remaining in effect
immediately prior to the withdrawal, the Benefit Base will be the lesser of:
.. The Contract Value immediately prior to withdrawal less the amount of the
withdrawal; or
.. The Benefit Base immediately prior to withdrawal less the amount of the
withdrawal.
The Benefit Base may also be reduced in other situations as detailed in the
"Owner and Assignment of Payments or Interest" section below.
IF THE BENEFIT BASE IS REDUCED TO ZERO, THIS SUREINCOME OPTION WILL TERMINATE.
For numerical examples that illustrate how the values defined under the
SureIncome Option are calculated, see Appendix H.
CONTRACT OWNER AND ASSIGNMENT OF PAYMENTS OR INTEREST
If you change the Contract Owner or assign any payments or interest under this
Contract, as allowed, to any living or non-living person other than your spouse
on or after the first calendar year anniversary of the Rider Date, the Benefit
Base will be recalculated to be the lesser of the Contract Value and the Benefit
Base at the time of assignment.
CONTRACT VALUE
If your Contract Value is reduced to zero due to fees or withdrawals and your
Benefit Base is still greater than zero, your Contract will immediately enter
the Withdrawal Benefit Payout Phase. Under the SureIncome Option, we currently
do not treat a withdrawal that reduces the Contract Value to less than $1,000 as
a withdrawal of the entire Contract Value. We reserve the right to change this
at any time.
WITHDRAWAL BENEFIT PAYOUT PHASE
Under the Withdrawal Benefit Payout Phase, the Accumulation Phase of the
Contract ends and the Contract enters the Payout Phase subject to the following:
34 PROSPECTUS
The "WITHDRAWAL BENEFIT PAYOUT START DATE" is the date the Withdrawal Benefit
Payout Phase is entered and the Accumulation Phase of the Contract ends.
No further withdrawals, purchase payments or any other actions associated with
the Accumulation Phase can be made after the Withdrawal Benefit Payout Start
Date.
The Payout Start Date is the first day of the next Benefit Year after the
Withdrawal Benefit Payout Start Date. We reserve the right to allow other
Payout Start Dates to be requested on a nondiscriminatory basis without prior
notice.
During the Withdrawal Benefit Payout Phase, we will make scheduled fixed income
payments to the Owner (or new Contract Owner) at the end of each month starting
one month after the Payout Start Date. The amount of each payment will be equal
to the Benefit Payment divided by 12, unless a payment frequency other than
monthly is requested in a form acceptable to us and received by us before the
first payment is made (the amount of each payment will be adjusted accordingly;
i.e. if the payment frequency requested is quarterly, the amount of each payment
will be equal to the Benefit Payment divided by 4). Payments will be made over
a period certain such that total payments made will equal the Benefit Base on
the Payout Start Date; therefore, the final payment may be reduced. If your
Contract is a qualified contract, meaning an individual retirement annuity
qualified as defined under Internal Revenue Code Section 408(b) or a Tax
Sheltered Annuity as defined under Internal Revenue Code Section 403(b), the
period certain cannot exceed that which is required by Internal Revenue Code
Section 401(a)(9) and regulations promulgated thereunder. Therefore, the amount
of each payment under this Option may be larger so that the sum of the payments
made over this period equals the Benefit Base on the Payout Start Date.
Additionally, if your Contract is a qualified contract, we will not permit a
change in the payment frequency or level.
If your Contract is a non-qualified contract, we reserve the right to allow
other payment frequencies or levels to be requested on a nondiscriminatory basis
without prior notice. In no event will we allow more than one change in the
payment frequency or level during a Contract Year.
If the Owner dies before all payments have been made, the remaining payments
will continue to be made to the new Contract Owner as scheduled.
Once all scheduled payments have been paid, the Contract will terminate.
Generally, you may not make withdrawals, purchase payments or any other actions
associated with the Accumulation Phase after the Withdrawal Benefit Payout Start
Date.
EXAMPLE
BEGINNING OF BENEFIT YEAR 1*
Contract Value = $100,000
Benefit Base = $100,000
Benefit Payment = $8,000
Benefit Payment Remaining = $8,000
In this example, you can take a benefit payment of up to $8,000 in benefit year
one. If a withdrawal of $6,000 is taken then the following values would apply:
Contract Value = $94,000 (Assuming that your Contract Value has not been
affected by any other factors)
Benefit Base = $94,000
Benefit Payment = $8,000
Benefit Payment Remaining = $2,000
BEGINNING OF BENEFIT YEAR 2
Contract Value = $70,000 (Assuming that your contract value has declined due to
poor performance)
Benefit Base = $94,000
Benefit Payment = $8,000
Benefit Payment Remaining = $8,000 (resets at the beginning of each benefit
year)
In benefit year two you have the right to a Benefit Payment of $8,000 and since
you have not taken any withdrawals yet in benefit year two, the Benefit Payment
Remaining would also be $8,000 at the beginning of benefit year two.
* This example assumes an initial Contract Value of $100,000, no additional
purchase payments, a withdrawal benefit factor of 8% and does not take into
account fees or charges.
INVESTMENT REQUIREMENTS
If you add the SureIncome Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest.
The specific requirements are described below in more detail and will depend on
your current Model Portfolio Option and your Withdrawal Benefit Factor. These
requirements may include, but are not limited to, maximum investment limits on
certain Variable Sub-Accounts or on certain Fixed Account Options, exclusion of
certain Variable Sub-Accounts or of certain Fixed Account Options, required
minimum allocations to certain Variable Sub-Accounts, and restrictions on
transfers to or from certain investment alternatives. We may also require that
you use the Automatic Portfolio Rebalancing Program. We may change the specific
requirements that are applicable at any time in our sole discretion. Any
changes we make will not apply to a SureIncome Option that was made a part of
your Contract prior to the implementation date of the change, except for changes
made due to a change in investment
35 PROSPECTUS
alternatives available under the Contract. This restriction does not apply to a
new Option elected pursuant to the Rider Trade-In Option. We reserve the right
to have requirements unique to specific Withdrawal Benefit Factors if we make
other Withdrawal Benefit Factors available in the future including specific
model portfolio options (" Model Portfolio Options") as described below
available only to certain Withdrawal Benefit Factors.
When you add the SureIncome Option to your Contract, you must allocate your
entire Contract Value as follows:
1) to a MODEL PORTFOLIO OPTION available as described below;
2) to the DCA Fixed Account Option and then transfer all purchase payments (and
Credit Enhancements for Allstate Advisor Plus Contracts) and interest to an
available Model Portfolio Option; or
3) to a combination of (1) and (2) above.
For (2) and (3) above, the requirements for the DCA Fixed Account Option must be
met. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information.
On the Rider Date, you must select only one of the Model Portfolio Options in
which to allocate your Contract Value. After the Rider Date, you may transfer
your entire Contract Value to any of the other available Model Portfolio
Options. We currently offer several Model Portfolio Options. The Model
Portfolio Options that are available may differ depending upon the effective
date of your Withdrawal Benefit Option and your Withdrawal Benefit Factor.
Please refer to the Model Portfolio Option and TrueBalance/SM/ Model Portfolio
Options sections for more details. We may add other Model Portfolio Options in
the future. We also may remove Model Portfolio Options in the future anytime
prior to the date you select such Model Portfolio Option. In addition, if the
investment alternatives available under the Contract change, we may revise the
Model Portfolio Options. The following table summarizes the Model Portfolio
Options currently available for use:
*Model Portfolio Option 1
*TrueBalance Conservative Model Portfolio Option
*TrueBalance Moderately Conservative Model Portfolio Option
*TrueBalance Moderate Model Portfolio Option
*TrueBalance Moderately Aggressive Model Portfolio Option
*TrueBalance Aggressive Model Portfolio Option
- -------------------------------------------------------------
NOTE: THE TRUEBALANCE MODEL PORTFOLIO OPTIONS WERE ADDED TO THE SUREINCOME
OPTION ON MAY 1, 2005. TRUEBALANCE MODEL PORTFOLIOS SELECTED PRIOR TO MAY 1,
2005, MAY NOT BE USED WITH THE SUREINCOME OPTION.
You may not allocate any of your Contract Value to the Standard Fixed Account
Option or to the Market Value Adjusted Fixed Account Option. You must transfer
any portion of your Contract Value that is allocated to the Standard Fixed
Account Option or to the Market Value Adjusted Fixed Account Option to the
Variable Sub-Accounts prior to adding the SureIncome Option to your Contract.
Transfers from the Market Value Adjusted Fixed Account Option may be subject to
a Market Value Adjustment. You may allocate any portion of your purchase
payments (and Credit Enhancements for Allstate Advisor Plus Contracts) to the
DCA Fixed Account Option on the Rider Date, provided the DCA Fixed Account
Option is available with your Contract and in your state. See the "Dollar Cost
Averaging Fixed Account Option" section of this prospectus for more information.
We use the term "Transfer Period Account" to refer to each purchase payment
allocation made to the DCA Fixed Account Option for a specified term length. At
the expiration of a Transfer Period Account any remaining amounts in the
Transfer Period Account will be transferred to the Variable Sub-Accounts
according to your most recent percentage allocation selections for your Model
Portfolio Option.
Any subsequent purchase payments (and Credit Enhancements for ALLSTATE ADVISOR
PLUS CONTRACTS) made to your Contract will be allocated to the Variable
Sub-Accounts according to your most recent instructions on file with us. You
must comply with any required percentage allocations for the Model Portfolio
Option you have selected. You may also request that purchase payments be
allocated to the DCA Fixed Account Option. Purchase payments allocated to the
DCA Fixed Account Option must be $500 or more. Any withdrawals you request will
reduce your Contract Value invested in each of the investment alternatives on a
pro rata basis in the proportion that your Contract Value in each bears to your
total Contract Value in all Variable Sub-Accounts, unless you request otherwise.
MODEL PORTFOLIO OPTION 1.
If you choose Model Portfolio Option 1 or transfer your entire Contract Value
into Model Portfolio Option 1, we have divided the Variable Sub-Accounts into
two separate categories: "Available" and "Excluded." Currently, you may
allocate up to 100% of your Contract Value to the Available Variable
Sub-Accounts in any manner you choose. You may not allocate ANY PORTION of your
Contract Value to the Excluded Variable Sub-Accounts. You may make transfers
among any of the Available Variable Sub-Accounts. However, each transfer you
make will count against the 12 transfers you can make each Contract Year without
paying a transfer fee.
Currently the Available Variable Sub-Accounts and the Excluded Variable
Sub-Accounts are as follows(1,2):
Available
- --------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Franklin U.S. Government - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
36 PROSPECTUS
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account
Lord Abbett Series - Growth and Income Sub-Account
Lord Abbett Series - Growth Opportunities Sub-Account
Lord Abbett Series - Mid-Cap Value Sub-Account
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account (5)
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares
Sub-Account
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT Income - Class IB Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT Money Market - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(4)
Van Kampen UIF Equity and Income, Class II Sub-Account(4)
Van Kampen UIF Global Franchise, Class II Sub-Account(4)
Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account &
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(3)(4)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(4)
- --------------------------------------------------------------------
Excluded
- --------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Vista - Class IB Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class I Sub-Account &
Van Kampen UIF Equity Growth, Class II Sub-Account(3)(4)
Van Kampen UIF Small Company Growth, Class II Sub-Account(4)
- --------------------------------------------------------------------
(1)The FTVIP Franklin Small-Mid Cap Growth Securities - Class 2 Sub-Account and
the FTVIP Templeton Global Income Securities - Class 2 Sub-Account, which were
closed to new investments effective May 1, 2003, are not available with the
SureIncome Option. You must transfer any portion of your Contract Value that is
allocated to these Variable Sub-Accounts to any of the remaining Variable
Sub-Accounts offered with the SureIncome Option prior to adding the SureIncome
Option to your Contract.
(2)The Putnam VT Health Sciences - Class IB Sub-Account, the Putnam VT New
Opportunities - Class IB Sub-Account, the Putnam VT Research - Class IB
Sub-Account, and the Putnam VT Utilities Growth and Income - Class IB
Sub-Account were offered only with Contracts issued prior to October 1, 2004,
and closed to new investments effective October 1, 2004. Before adding this
rider to your Contract, you must transfer any portion of your Contract Value
that is allocated to these Variable Sub-Accounts to any of the remaining
Variable Sub-Accounts available with the SureIncome Option prior to adding the
SureIncome Option to your Contract.
(3)The Van Kampen UIF Equity Growth, Class II Sub-Account and the Van Kampen UIF
U.S. Mid Cap Value, Class II Sub-Account are offered with Contracts issued on or
after May 1, 2004. Contract Owners of Contracts issued prior to May 1, 2004 may
invest only in the Van Kampen UIF Equity Growth, Class I Sub-Account and the Van
Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
(5)Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares
Sub-Account changed its name to Oppenheimer Core Bond/VA - Service Shares
Sub-Account.
TRUEBALANCE/SM/ MODEL PORTFOLIO OPTIONS.
If you choose one of the TrueBalance/SM/ Model Portfolio Options or transfer
your entire Contract Value into one of the TrueBalance/SM/ Model Portfolio
Options, you may not choose the Variable Sub-Accounts or make transfers among
the Variable Sub-Accounts in the TrueBalance Model Portfolio Option. Each
TrueBalance Model Portfolio involves an allocation of assets among a group of
pre-selected Variable Sub-Accounts. You cannot make transfers among the
Variable Sub-Accounts nor vary the Variable Sub-Accounts that comprise a
TrueBalance Model Portfolio Option. If you choose a TrueBalance Model Portfolio
Option, we will invest and periodically reallocate your Contract Value according
to the allocation percentages and requirements for the TrueBalance Model
Portfolio Option you have selected currently. For more information regarding
the TrueBalance program, see the "TrueBalance/SM/ Asset Allocation Program"
section of this prospectus. However, note that the restrictions described in
this section, specifically the restrictions on transfers and the requirement
that all of your Contract Value be allocated to a TrueBalance Model Portfolio
Option, apply to the TrueBalance program only if you have added the SureIncome
Option to your Contract.
CANCELLATION OF THE SUREINCOME OPTION
You may not cancel the SureIncome Option prior to the 5th calendar year
anniversary of the Rider Date. On or after the 5th calendar year anniversary of
the Rider Date you may cancel the rider by notifying us in writing in a form
satisfactory to us. We reserve the right to extend the date at which time the
cancellation may occur to up to the 10th calendar year anniversary of the Rider
Date at any time in our sole discretion. Any change we make will not apply to a
SureIncome Option that was added to your Contract prior to the implementation
date of the change.
37 PROSPECTUS
RIDER TRADE-IN OPTION
We offer a "RIDER TRADE-IN OPTION" that allows you to cancel your SureIncome
Option and immediately add a new Withdrawal Benefit Option ("New SureIncome
Option"). We may also offer other Options ("Other New Options") under the Rider
Trade-In Option. However, you may only select one Option under this Rider
Trade-In Option at the time you cancel your SureIncome Option. Currently, we
are also making the TrueReturn Accumulation Benefit Option available at the time
of your first utilization of this Rider Trade-In Option so that you have the
ability to switch from the SureIncome Option to the TrueReturn Accumulation
Benefit Option. We may discontinue offering the TrueReturn Option under the
Rider Trade-In Option for New SureIncome Options added in the future at anytime
at our discretion.
This Rider Trade-in Option is available provided all of the following conditions
are met:
.. The trade-in must occur on or after the 5th calendar year anniversary of the
Rider Date. We reserve the right to extend the date at which time the
trade-in may occur to up to the 10th calendar year anniversary of the Rider
Date at any time in our sole discretion. Any change we make will not apply to
a SureIncome Option that was added to your Contract prior to the
implementation date of the change.
.. The New Option will be made a part of your Contract on the date the existing
Option is cancelled, provided it is cancelled for reasons other than the
termination of your Contract.
.. The New Option must be an Option that we make available for use with this
Rider Trade-In Option.
.. The issue requirements and terms and conditions of the New Option must be met
as of the date the New Option is made a part of your Contract.
If the New Option is a SureIncome Option, the New Option must provide that the
new Benefit Payment be greater than or equal to your current Benefit Payment as
of the date the Rider Trade-In Option is exercised, if applicable.
You should consult with your sales representative before trading in your
SureIncome Option.
DEATH OF OWNER OR ANNUITANT
If the Owner or Annuitant dies and the Contract is continued under Option D of
the Death of Owner or Death of Annuitant provisions of your Contract, then the
SureIncome Option will continue unless the Contract Owner(or new Contract Owner)
elects to cancel the SureIncome Option. If the SureIncome Option is continued,
it will remain in effect until terminated. If the Contract is not continued
under Option D above, then the SureIncome Option will terminate on the date we
receive a Complete Request for Settlement of the Death Proceeds.
TERMINATION OF THE SUREINCOME OPTION
This SureIncome Option will terminate on the earliest of the following to occur:
.. The Benefit Base is reduced to zero;
.. On the Payout Start Date (except if the Contract enters the Withdrawal Benefit
Payout Phase as defined under the Withdrawal Benefit Payout Phase section);
.. On the date the Contract is terminated;
.. On the date the SureIncome Option is cancelled;
.. On the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. On the date the SureIncome Option is replaced with a New Option under the
Rider Trade-In Option.
INVESTMENT ALTERNATIVES: THE VARIABLE SUB-ACCOUNTS
- --------------------------------------------------------------------------------
You may allocate your purchase payments to up to 45* Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.
For more complete information about each Portfolio, including expenses and risks
associated with each Portfolio, please refer to the accompanying prospectuses
for the Funds. You should carefully review the Fund prospectuses before
allocating amounts to the Variable Sub-Accounts.
*Up to 51 Variable Sub-Accounts may be available depending on the date you
purchased your Contract. Please see page 41-42 for information about Sub-Account
and/or Portfolio liquidations, mergers and name changes.
38 PROSPECTUS
PORTFOLIO: EACH PORTFOLIO SEEKS: INVESTMENT ADVISER:
FTVIP Franklin Growth Capital appreciation with
and Income Securities current income as a
Fund - Class 2 secondary goal.
- -------------------------------------------------------
FTVIP Franklin Income To maximize income while
Securities Fund - maintaining prospects for
Class 2 capital appreciation.
- -------------------------------------------------------
FTVIP Franklin Large Capital appreciation
Cap Growth Securities
Fund - Class 2 Franklin Advisers, Inc.
FTVIP Franklin Long-term capital growth.
Small-Mid Cap Growth
Securities Fund -
Class 2 (1)(*)
FTVIP Franklin U.S. Income
Government Fund -
Class 2
FTVIP Templeton Global High current income,
Income Securities Fund consistent with
- Class 2 (1) preservation of capital,
with capital appreciation
as a secondary
consideration.
FTVIP Franklin Small Long-term total return. Franklin Advisory
Cap Value Securities Services, LLC
Fund - Class 2
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Capital appreciation with Franklin Mutual
Securities Fund - income as a secondary goal Advisers, LLC
Class 2
FTVIP Templeton Long-term capital
Developing Markets appreciation. Templeton Asset
Securities Fund - Management Ltd.
Class 2
FTVIP Templeton Foreign Long-term capital growth. Templeton Investment
Securities Fund - Counsel, LLC
Class 2
- -------------------------------------------------------------------------------
Lord Abbett Series Fund Long-term growth of capital
- All Value Portfolio and income without
excessive fluctuations in
market value
- -------------------------------------------------------
Lord Abbett Series Fund High current income and the
- Bond-Debenture opportunity for capital
Portfolio appreciation to produce a
high total return
- -------------------------------------------------------
Lord Abbett Series Fund Long-term growth of capital
- Growth and Income and income without Lord, Abbett & Co. LLC
Portfolio excessive fluctuations in
market value
- -------------------------------------------------------
Lord Abbett Series Fund Capital appreciation
- Growth Opportunities
Portfolio
- -------------------------------------------------------
Lord Abbett Series Fund Capital appreciation through
- Mid-Cap Value investments, primarily in
Portfolio equity securities, which
are believed to be
undervalued in the
marketplace
- -------------------------------------------------------------------------------
39 PROSPECTUS
Oppenheimer Aggressive Capital appreciation by
Growth Fund/VA - investing in ''growth
Service Shares type'' companies.
- -------------------------------------------------------
Oppenheimer Balanced A high total investment
Fund/VA - Service return, which includes
Shares current income and capital
appreciation in the value
of its shares.
Oppenheimer Core Bond High level of current
Fund/VA - Service income. As a secondary
Shares (2) objective, the Portfolio
seeks capital appreciation
when consistent with its
primary objective.
- -------------------------------------------------------
Oppenheimer Capital Capital appreciation by
Appreciation Fund/VA - investing in securities of
Service Shares well-known, established
companies.
- -------------------------------------------------------
Oppenheimer Global Long-term capital OppenheimerFunds, Inc.
Securities Fund/VA - appreciation by investing a
Service Shares substantial portion of
assets in securities of
foreign issuers,
growth-type companies,
cyclical industries and
special situations that are
considered to have
appreciation possibilities.
Oppenheimer High Income A high level of current
Fund/VA - Service income from investment in
Shares high-yield fixed-income
securities.
- -------------------------------------------------------
Oppenheimer Main Street High total return (which
Fund(R)/VA - Service includes growth in the
Shares value of its shares as well
as current income) from
equity and debt securities.
Oppenheimer Main Street Capital appreciation.
Small Cap Fund(R)/VA -
Service Shares
- -------------------------------------------------------------------------------
Oppenheimer Strategic A high level of current
Bond Fund/VA - Service income principally derived
Shares from interest on debt
securities.
- -------------------------------------------------------
Putnam VT The George To provide a balanced
Putnam Fund of Boston investment composed of a
- Class IB well diversified portfolio
of value stocks and bonds,
which produce both capital
growth and current income.
Putnam VT Global Asset A high level of long-term
Allocation Fund - total return consistent
Class IB with preservation of
capital.
- -------------------------------------------------------
Putnam VT Growth and Capital growth and current
Income Fund - Class IB income.
- -------------------------------------------------------
Putnam VT Health Capital appreciation.
Sciences Fund - Class
IB (5)
- -------------------------------------------------------
Putnam VT High Yield High current income. Capital
Fund - Class IB growth is a secondary goal
when consistent with
achieving high current
income. Putnam Investment
- -------------------------------------------------------Management, LLC
Putnam VT Income Fund - High current income ("PUTNAM MANAGEMENT")
Class IB consistent with what Putnam
Management believes to be
prudent risk.
- -------------------------------------------------------
Putnam VT International Capital appreciation.
Equity Fund - Class IB
- -------------------------------------------------------
Putnam VT Investors Long-term growth of capital
Fund - Class IB and any increased income
that results from this
growth.
- -------------------------------------------------------
Putnam VT Money Market As high a rate of current
Fund - Class IB income as Putnam Management
believes is consistent with
preservation of capital and
maintenance of liquidity.
- -------------------------------------------------------
Putnam VT New Long-term capital
Opportunities Fund - appreciation.
Class IB (5)
- -------------------------------------------------------
Putnam VT New Value Long-term capital
Fund - Class IB appreciation.
- -------------------------------------------------------------------------------
Putnam VT Research Fund Capital appreciation.
- Class IB (5)
- -------------------------------------------------------
Putnam VT Utilities Capital growth and current
Growth and Income Fund income.
- Class IB (5)
- -------------------------------------------------------
Putnam VT Vista Fund - Capital appreciation.
Class IB
- -------------------------------------------------------
Putnam VT Voyager Fund Capital appreciation.
- Class IB
- -------------------------------------------------------
40 PROSPECTUS
Van Kampen LIT Capital growth
Aggressive Growth
Portfolio, Class II
- -------------------------------------------------------
Van Kampen LIT Comstock Capital growth and income
Portfolio, Class II through investments in
equity securities,
including common stocks,
preferred stocks and
securities convertible into Van Kampen Asset
common and preferred Management
stocks.
Van Kampen LIT Emerging Capital appreciation.
Growth Portfolio,
Class II
Van Kampen LIT Growth Long-term growth of capital
and Income Portfolio, and income.
Class II
Van Kampen LIT Money Protection of capital and
Market Portfolio, high current income through
Class II investments in money market
instruments. ------------------------
- -------------------------------------------------------
Van Kampen UIF Emerging High total return by
Markets Debt investing primarily in
Portfolio, Class II fixed income securities of
government and
government-related issuers
and, to a lesser extent, of
corporate issuers in
emerging market countries.
Van Kampen UIF Equity Long-term capital
Growth Portfolio, appreciation by investing
Class I & Van Kampen primarily in
UIF Equity Growth growth-oriented equity
Portfolio, Class II securities of large
(3) capitalization companies
- -------------------------------------------------------
Van Kampen UIF Equity Capital appreciation and
and Income Portfolio, current income
Class II
- -------------------------------------------------------
Van Kampen UIF Global Long-term capital VAN KAMPEN (4)
Franchise Portfolio, appreciation
Class II
- -------------------------------------------------------
Van Kampen UIF Small Long-term capital
Company Growth appreciation by investing
Portfolio, Class II primarily in
growth-oriented equity
securities of small
companies.
- -------------------------------------------------------
Van Kampen UIF U.S. Mid Above-average total return
Cap Value Portfolio, over a market cycle of
Class I & Van Kampen three to five years by
UIF U.S. Mid Cap Value investing in common stocks
Portfolio, Class II and other equity securities
(3)
- -------------------------------------------------------
Van Kampen UIF U.S. Above average current income
Real Estate Portfolio, and long-term capital
Class II appreciation by investing
primarily in equity ------------------------
securities of companies in
the U.S. real estate
industry, including real
estate investment trusts
- -------------------------------------------------------
*Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2 changed
its name to FTVIP Franklin Small-Mid Cap Growth Securities Fund - Class 2.
(1) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 and the FTVIP Templeton Global Income Securities - Class 2 Sub-Accounts
are no longer available for new investments. If you are currently invested in
these Variable Sub-Accounts you may continue those investments. If, prior to
May 1, 2003, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction programs,
you may not allocate purchase payments or make transfers to these Variable
Sub-Accounts, additional allocations will not be allowed.
(2) Effective April 29, 2005, the Oppenheimer Bond Fund/VA - Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares.
(3) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth
Portfolio, Class II and the Van Kampen UIF U.S. Mid Cap Value Portfolio, Class
II are offered with Contracts issued on or after May 1, 2004. Contract Owners
of contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth Portfolio, Class I
and the Van Kampen UIF U.S. Mid Cap Value Portfolio, Class I.
(4) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
41 PROSPECTUS
(5) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Account Portfolios are no longer available for new investments. If
you are currently invested in these Variable Sub-Accounts, you may continue your
investment. If, prior to October 1, 2004, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing, or
dollar cost averaging, we will continue to effect automatic transactions into
these Variable Sub-Accounts in accordance with that program. Outside of these
automatic transaction programs, you may not allocate purchase payments or make
transfers to these Variable Sub-Accounts, additional allocations will not be
allowed.
AMOUNTS YOU ALLOCATE TO VARIABLE SUB-ACCOUNTS MAY GROW IN VALUE, DECLINE IN
VALUE, OR GROW LESS THAN YOU EXPECT, DEPENDING ON THE INVESTMENT PERFORMANCE OF
THE PORTFOLIOS IN WHICH THOSE VARIABLE SUB-ACCOUNTS INVEST. YOU BEAR THE
INVESTMENT RISK THAT THE PORTFOLIOS MIGHT NOT MEET THEIR INVESTMENT OBJECTIVES.
SHARES OF THE PORTFOLIOS ARE NOT DEPOSITS IN, OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
VARIABLE INSURANCE PORTFOLIOS MIGHT NOT BE MANAGED BY THE SAME PORTFOLIO
MANAGERS WHO MANAGE RETAIL MUTUAL FUNDS WITH SIMILAR NAMES. THESE PORTFOLIOS
ARE LIKELY TO DIFFER FROM SIMILARLY NAMED RETAIL MUTUAL FUNDS IN ASSETS, CASH
FLOW, AND TAX MATTERS. ACCORDINGLY, THE HOLDINGS AND INVESTMENT RESULTS OF A
VARIABLE INSURANCE PORTFOLIO CAN BE EXPECTED TO BE HIGHER OR LOWER THAN THE
INVESTMENT RESULTS OF A SIMILARLY NAMED RETAIL MUTUAL FUND.
TRUEBALANCE/SM/ ASSET ALLOCATION PROGRAM
As a Contract Owner, you may elect to participate in the TrueBalance asset
allocation program ("TrueBalance program") for no additional charge.
Participation in the TrueBalance program may be limited if you have elected
certain Contract Options impose restrictions on the investment alternatives
which you may invest, such as the Income Protection Benefit Option, the
TrueReturn Accumulation Benefit Option or the SureIncome Withdrawal Benefit
Option. See the sections of this prospectus discussing these Options for more
information.
Asset allocation is the process by which your Contract Value is invested in
different asset classes in a way that matches your risk tolerance, time horizon,
and investment goals. Theoretically, different asset classes tend to behave
differently under various economic and market conditions. By spreading your
Contract Value across a range of asset classes, you may, over time, be able to
reduce the risk of investment volatility and potentially enhance returns. Asset
allocation does not guarantee a profit or protect against loss in a declining
market.
Your sales representative will help you determine whether participating in an
asset allocation program is appropriate for you. If you decide to participate
in the TrueBalance program, your sales representative may ask you to complete an
investment style questionnaire to help you and your sales representative
identify your investment style. Once you and your sales representative have
identified your investment style, you may select one of five currently available
asset allocation model portfolios, each with different levels of risk. The model
portfolios, which have been prepared by Standard & Poor's Investment Advisory
Services LLC ("SPIAS"), represent five different investment styles:
conservative, moderately conservative, moderate, moderately aggressive and
aggressive. Once you select a model portfolio, your Contract Value will be
allocated among the Variable Sub-Accounts exactly according to that model
portfolio. If you wish to allocate any of your Contract Value to any Variable
Sub-Accounts not included in that model portfolio, or if you do not wish to
allocate any of your Contract Value to any Variable Sub-Accounts included in
that model portfolio, you should not elect the TrueBalance program. We recommend
that you consult with your sales representative before selecting a TrueBalance
model portfolio.
Allstate Life and the principal underwriter of the Contracts, Allstate
Distributors, L.L.C. ("Allstate Distributors"), do not intend to provide any
personalized investment advice in connection with the TrueBalance program and
you should not rely on this program as providing individualized investment
recommendations to you.
The TrueBalance model portfolios described in this prospectus were prepared by
SPIAS, a registered investment adviser and a wholly-owned subsidiary of The
McGraw-Hill Companies, Inc. "S&P" and "Standard & Poor's" are trademarks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Allstate Life.
SPIAS is not affiliated with Allstate Life and its affiliates. SPIAS does not
provide advice to Allstate Life's Contract Owners. SPIAS does not act as
"fiduciary" or as an "investment manager", as defined under ERISA, to any
investor.
The TrueBalance program is not endorsed, sold or promoted by SPIAS or its
affiliates, and SPIAS and its affiliates make no representation regarding the
advisability of investing in the TrueBalance program. The TrueBalance model
portfolios described in this document, are only a general guideline. SPIAS does
not have any discretionary authority or control with respect to purchasing or
selling securities or making other investments for Contract Owners/investors.
There is no agreement or understanding that SPIAS will provide
42 PROSPECTUS
advice to any Contract Owner/investor. SPIAS does not take into account any
information about any Contract Owner/investor or any Contract Owner's/investor's
assets when creating, providing or maintaining any TrueBalance model portfolio.
Individual Contract Owners/investors should ultimately rely on their own
judgment and/or the judgment of a financial advisor in making their investment
decisions. SPIAS makes no warranties, expressed or implied, as to results to be
obtained from use of information provided by SPIAS and used in this service, and
SPIAS expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect thereto. While SPIAS has obtained
information believed to be reliable, SPIAS shall not be liable for any Contract
Owner claims or losses of any nature in connection with information contained in
this prospectus, including but not limited to, lost profits or punitive or
consequential damages, even if it is advised of the possibility of same.
Analytic services and products provided by Standard & Poor's are the result of
separate activities designed to preserve the independence and objectivity of
each analytic process. Standard & Poor's has established policies and procedures
to maintain the confidentiality of non-public information received during each
analytic process.
Any investment based upon any of these TrueBalance model portfolios should only
be made with an understanding of the associated risks. SPIAS is not responsible
for suitability with respect to Contract Owners' use of the TrueBalance model
portfolios.
Each of the five model portfolios specifies an allocation among a mix of
Variable Sub-Accounts that is designed to meet the investment goals of the
applicable investment style. On the business day we approve your participation
in the TrueBalance program, we will automatically reallocate any existing
Contract Value in the Variable Sub-Accounts according to the model portfolio you
selected. If any portion of your existing Contract Value is allocated to the
Standard Fixed Account or MVA Fixed Account Options and you wish to allocate any
portion of it to the model portfolio, you must transfer that portion to the
Variable Sub-Accounts. In addition, as long as you participate in the
TrueBalance program, you must allocate all of your purchase payments (and Credit
Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) to the Fixed Account Options
and/or the Variable Sub-Accounts currently offered in your model portfolio. Any
purchase payments (and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS)
you allocate to the DCA Fixed Account Option will be automatically transferred,
along with interest, in equal monthly installments to the Variable Sub-Accounts
according to the model portfolio you selected.
We use the term "Transfer Period Account" to refer to each purchase payment
allocation made to the DCA Fixed Account Option for a specified term length. For
TrueBalance model portfolios selected on or after May 1, 2005, at the expiration
of a Transfer Period Account any remaining amounts in the Transfer Period
Account will be transferred to the Variable Sub-Account according to the
percentage allocation for the model portfolio you selected.
SPIAS may review and analyze the model portfolio periodically and may create new
or revised TrueBalance model portfolios at any time. Effective May 1, 2005,
Allstate Life will not automatically reallocate your Contract Value allocated to
the Variable Sub-Accounts to match any new or revised model portfolios prepared
by SPIAS or any other firm chosen by Allstate Life. If you are invested in a
TrueBalance model portfolio, your registered representative, or the selling
broker-dealer for your Contract will notify you of any new or revised
TrueBalance model portfolios prepared by SPIAS or any other firm chosen by
Allstate Life. If you wish to invest in accordance with a new or revised
TrueBalance model portfolio, you must submit a transfer request to transfer your
Contract Value in your existing TrueBalance model portfolio in accordance with
the new TrueBalance model portfolio. If you do not request a transfer to a new
TrueBalance model portfolio, we will continue to rebalance your Contract Value
in accordance with your existing TrueBalance model portfolio. At any given time,
you may only elect a TrueBalance model portfolio that is available at the time
of election.
You may select only one model portfolio at a time. However, you may change your
selection of model portfolio at any time, provided you select a currently
available model portfolio. Each change you make in your model portfolio
selection will count against the 12 transfers you can make each Contract Year
without paying a transfer fee. You should consult with your sales representative
before making a change to your model portfolio selection to determine whether
the new model portfolio is appropriate for your needs.
Since the performance of each Variable Sub-Account may cause a shift in the
percentage allocated to each Variable Sub-Account, at least once every calendar
quarter we will automatically rebalance all of your Contract Value in the
Variable Sub-Accounts according to your currently selected model portfolio.
Unless you notify us otherwise, any purchase payments you make after electing
the TrueBalance program will be allocated to your model portfolio and/or to the
Fixed Account Options according to your most recent instructions on file with
us. Once you elect to participate in the TrueBalance program, you may allocate
subsequent purchase payments to any of the Fixed Account Options available with
your Contract and/or to any of the Variable Sub-Accounts included in your model
portfolio, but only according to the allocation specifications of that model
portfolio. You may not allocate subsequent purchase payments
43 PROSPECTUS
to a Variable Sub-Account that is not included in your model portfolio.
Subsequent purchase payments allocated to the Variable Sub-Accounts will be
automatically rebalanced at the end of the next calendar quarter according to
the allocation percentages for your currently selected model portfolio.
THE FOLLOWING APPLIES TO TRUEBALANCE MODEL PORTFOLIOS SELECTED PRIOR TO MAY 1,
2005. TRUEBALANCE MODEL PORTFOLIOS SELECTED PRIOR TO MAY 1, 2005, ARE NOT
AVAILABLE WITH THE TRUERETURN OPTION OR THE SUREINCOME OPTION:
For TrueBalance model portfolios selected prior to May 1, 2005, you may make
transfers to any of the available investment alternatives, except the DCA Fixed
Account Option. However, all of your Contract Value in the Variable Sub-Accounts
will be automatically rebalanced at the end of the next calendar quarter
according to the percentage allocations for your currently selected model
portfolio. Transfers to investment alternatives that are not included in the
model portfolio you selected may be inconsistent with the investment style you
selected and with the purpose of the TrueBalance program. You should consult
with your sales representative before making transfers outside the model
portfolio allocations.
THE FOLLOWING APPLIES TO TRUEBALANCE MODEL PORTFOLIOS SELECTED ON OR AFTER MAY
1, 2005, WITH THE TRUERETURN OPTION OR THE SUREINCOME OPTION:
For TrueBalance model portfolios selected on or after May 1, 2005, with the
TrueReturn Option or SureIncome Option, you must allocate all of your Contract
Value to a TrueBalance Model Portfolio Option, and you may not choose the
Variable Sub-Accounts or make transfers among the Variable Sub-Accounts in the
TrueBalance Model Portfolio Option. If you choose a TrueBalance Model Portfolio
Option, we will invest and periodically reallocate your Contract Value according
to the allocation percentages and requirements for the TrueBalance Model
Portfolio Option you selected. You may, however, elect to reallocate your entire
Contract Value from one Model Portfolio Option to another Model Portfolio Option
available with your Option.
If you own the TrueReturn Accumulation Benefit Option, on the Rider Maturity
Date the Contract Value may be increased due to the Option. Any increase will be
allocated to the Putnam VT Money Market. You may make transfers from this
Variable Sub-Account to the Fixed Account Options (as allowed) or the Variable
Sub-Accounts included in your model portfolio, but only according to the
allocation specification of that model portfolio. All of your Contract Value in
the Variable Sub-Accounts will be automatically rebalanced at the next calendar
quarter according to the allocation percentages for your currently selected
model portfolio.
THE FOLLOWING APPLIES TO TRUEBALANCE MODEL PORTFOLIOS SELECTED ON OR AFTER MAY
1, 2005, WITHOUT THE TRUERETURN OPTION OR THE SUREINCOME OPTION:
For TrueBalance model portfolios selected on or after May 1, 2005, without the
TrueReturn or SureIncome Option, you may not make transfers from the Variable
Sub-Accounts to any of the other Variable Sub-Accounts. You may make transfers,
as allowed under the contract, from the Fixed Account Options to other Fixed
Account Options or to the Variable Sub-Accounts included in your model
portfolio, but only according to the allocation specifications of that model
portfolio. You may make transfers from the Variable Sub-Accounts to any of the
Fixed Account Options, except the DCA Fixed Account Option. Transfers to Fixed
Account Options may be inconsistent with the investment style you selected and
with the purpose of the TrueBalance program. However, all of your Contract Value
in the Variable Sub-Accounts will be automatically rebalanced at the next
calendar quarter according to the percentage allocations for your currently
selected model portfolio. You should consult with your sales representative
before making transfers.
If you make a partial withdrawal from any of the Variable Sub-Accounts, your
remaining Contract Value in the Variable Sub-Accounts will be automatically
rebalanced at the end of the next calendar quarter according to the percentage
allocations for your currently selected model portfolio allocations. If you are
participating in the Systematic Withdrawal Program when you add the TrueBalance
program or change your selection of model portfolios, you may need to update
your withdrawal instructions. If you have any questions, please consult your
sales representative.
Your participation in the TrueBalance program is subject to the program's terms
and conditions, and you may change model portfolios or terminate your
participation in the TrueBalance program at any time by notifying us in a form
satisfactory to us. We reserve the right to modify or terminate the TrueBalance
program at any time.
INVESTMENT ALTERNATIVES: THE FIXED ACCOUNT OPTIONS
- --------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments (and Credit
Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) to the Fixed Account Options.
The Fixed Account Options we offer include the DOLLAR COST AVERAGING FIXED
ACCOUNT OPTION, the STANDARD FIXED ACCOUNT OPTION, and the MARKET VALUE ADJUSTED
FIXED ACCOUNT OPTION. We may offer additional Fixed Account Options in the
future. Some Options are not available in all states. In addition, Allstate
Life may limit the availability of some Fixed Account Options. Please consult
with your representative for current information. The Fixed Account supports our
insurance and annuity obligations. The Fixed Account consists of our general
assets other than those in segregated asset accounts. We have sole discretion to
invest the assets of the Fixed Account, subject to applicable law. Any money you
44 PROSPECTUS
allocate to the Fixed Account does not entitle you to share in the investment
experience of the Fixed Account.
DOLLAR COST AVERAGING FIXED ACCOUNT OPTION
The Dollar Cost Averaging Fixed Account Option ("DCA Fixed Account Option") is
one of the investment alternatives that you can use to establish a Dollar Cost
Averaging Program, as described on page 50.
This option allows you to allocate purchase payments (and Credit Enhancements
for ALLSTATE ADVISOR PLUS CONTRACTS) to the Fixed Account that will then
automatically be transferred, along with interest, in equal monthly installments
to the investment alternatives that you have selected. In the future, we may
offer other installment frequencies in our discretion. Each purchase payment
allocated to the DCA Fixed Account Option must be at least $500.
At the time you allocate a purchase payment to the DCA Fixed Account Option, you
must specify the term length over which the transfers are to take place. We use
the term "Transfer Period Account" to refer to each purchase payment allocation
made to the DCA Fixed Account Option for a specified term length. You establish
a new Transfer Period Account each time you allocate a purchase payment to the
DCA Fixed Account Option. We currently offer term lengths from which you may
select for your Transfer Period Account(s), ranging from 3 to 12 months. We may
modify or eliminate the term lengths we offer in the future. Refer to Appendix A
for more information.
Your purchase payments (and Credit Enhancements for ALLSTATE ADVISOR PLUS
CONTRACTS) will earn interest while in the DCA Fixed Account Option at the
interest rate in effect at the time of the allocation, depending on the term
length chosen for the Transfer Period Account and the type of Contract you have.
The interest rates may also differ from those available for other Fixed Account
Options. The minimum interest rate associated with the DCA Fixed Account Option
is based upon state requirements and the date an application to purchase a
Contract is signed. The minimum interest rate associated with the DCA Fixed
Account Option is based upon state requirements and the date an application to
purchase a Contract is signed. This minimum interest rate will not change after
Contract issue.
You must transfer all of your money, plus accumulated interest, out of a
Transfer Period Account to other investment alternatives in equal monthly
installments during the term of the Transfer Period Account. We reserve the
right to restrict the investment alternatives available for transfers from any
Transfer Period Account. You may not transfer money from the Transfer Period
Accounts to any of the fixed Account Options available under your Cotnract. The
first transfer will occur on the next Valuation Date after you establish a
Transfer Period Account. If we do not receive an allocation instruction from
you when we receive the purchase payment, we will transfer each installment to
the Putnam VT Money Market Variable Sub-Account until we receive a different
allocation instruction. At the expiration of a Transfer Period Account any
remaining amounts in the Transfer Period Account will be transferred to the
Putnam VT Money Market Variable Sub-Account unless you request a different
investment alternative. Transferring Contract Value to the Putnam VT Money
Market Variable Sub-Account in this manner may not be consistent with the theory
of dollar cost averaging described on page 50.
If you discontinue the DCA Fixed Account Option before the expiration of a
Transfer Period Account, we will transfer any remaining amount in the Transfer
Period Account to the Putnam VT Money Market Variable Sub-Account unless you
request a different investment alternative.
You may not transfer money into the DCA Fixed Account Option or add to an
existing Transfer Period Account. You may not use the Automatic Additions
Program to allocate purchase payments to the DCA Fixed Account Option.
The DCA Fixed Account Option currently is not available if you have selected the
ALLSTATE ADVISOR PREFERRED CONTRACT WITH NO WITHDRAWAL CHARGE OPTION.
The DCA Fixed Account Option may not be available in your state. Please check
with your representative for availability.
STANDARD FIXED ACCOUNT OPTION
You may allocate purchase payments or transfer amounts into the Standard Fixed
Account Option. Each such allocation establishes a "GUARANTEE PERIOD ACCOUNT"
within the Standard Fixed Account Option ("Standard Fixed Guarantee Period
Account"), which is defined by the date of the allocation and the length of the
initial interest rate guarantee period ("STANDARD FIXED GUARANTEE PERIOD"). You
may not allocate a purchase payment or transfer to any existing Guarantee Period
Account. Each purchase payment or transfer allocated to a Standard Fixed
Guarantee Period Account must be at least $500.
At the time you allocate a purchase payment or transfer amount to the Standard
Fixed Account Option, you must select the Guarantee Period for that allocation
from among the available Standard Fixed Guarantee Periods. For ALLSTATE ADVISOR
CONTRACTS, we currently offer Standard Fixed Guarantee Periods of 1, 3, 5 and 7
years in length. FOR ALLSTATE ADVISOR PLUS AND ALLSTATE ADVISOR PREFERRED
CONTRACTS, WE CURRENTLY ARE NOT OFFERING THE STANDARD FIXED ACCOUNT OPTION.
Refer to Appendix A for more information. We may offer other Guarantee Periods
in the future. If you allocate a purchase payment to the Standard Fixed Account
Option, but do not select a Standard Fixed Guarantee Period for the new Standard
Fixed Guarantee Period Account, we will allocate the
45 PROSPECTUS
purchase payment or transfer to a new Standard Fixed Guarantee Period Account
with the same Standard Fixed Guarantee Period as the Standard Fixed Guarantee
Period Account of your most recent purchase payment or transfer. If we no longer
offer that Standard Fixed Guarantee Period, then we will allocate the purchase
payment or transfer to a new Standard Fixed Guarantee Period Account with the
next shortest term currently offered. If you have not made a prior allocation to
a Guarantee Period Account, then we will allocate the purchase payment or
transfer to a new Standard Fixed Guarantee Period Account of the shortest
Standard Fixed Guarantee Period we are offering at that time.
Some Standard Fixed Guarantee Periods are not available in all states. Please
check with your representative for availability.
The amount you allocate to a Standard Fixed Guarantee Period Account will earn
interest at the interest rate in effect for that Standard Fixed Guarantee Period
at the time of the allocation. Interest rates may differ depending on the type
of Contract you have and may also differ from those available for other Fixed
Account Options. The minimum interest rate associated with the Standard Fixed
Account Option is based upon state requirements and the date an application to
purchase a Contract is signed. This minimum interest rate will not change after
Contract issue.
In any Contract Year, the combined amount of withdrawals and transfers from a
Standard Fixed Guarantee Period Account may not exceed 30% of the amount used to
establish that Standard Fixed Guarantee Period Account. This limitation is
waived if you withdraw your entire Contract Value. It is also waived for
amounts in a Standard Fixed Guarantee Period Account during the 30 days
following its renewal date ("30-DAY WINDOW"), described below, and for a single
withdrawal made by your surviving spouse within one year of continuing the
Contract after your death.
Amounts under the 30% limit that are not withdrawn in a Contract Year do not
carry over to subsequent Contract Years.
At the end of a Standard Fixed Guarantee Period and each year thereafter, we
will declare a renewal interest rate that will be guaranteed for 1 year.
Subsequent renewal dates will be on the anniversaries of the first renewal
date. Prior to a renewal date, we will send you a notice that will outline the
options available to you. During the 30-Day Window following the expiration of
a Standard Fixed Guarantee Period Account, the 30% limit for transfers and
withdrawals from that Guarantee Period Account is waived and you may elect to:
.. transfer all or part of the money from the Standard Fixed Guarantee Period
Account to establish a new Guarantee Period Account within the Standard Fixed
Account Option or the Market Value Adjusted Fixed Account Option, if
available; or
.. transfer all or part of the money from the Standard Fixed Guarantee Period
Account to other investment alternatives available at the time; or
.. withdraw all or part of the money from the Standard Fixed Guarantee Period
Account. Withdrawal charges and taxes may apply.
Withdrawals taken to satisfy IRS minimum distribution rules will count against
the 30% limit. The 30% limit will be waived for a Contract Year to the extent
that:
.. you have already exceeded the 30% limit and you must still make a withdrawal
during that Contract Year to satisfy IRS minimum distribution rules; or
.. you have not yet exceeded the 30% limit but you must make a withdrawal during
that Contract Year to satisfy IRS minimum distribution rules, and such
withdrawal will put you over the 30% limit.
The money in the Standard Fixed Guarantee Period Account will earn interest at
the declared renewal rate from the renewal date until the date we receive
notification of your election. If we receive notification of your election to
make a transfer or withdrawal from a renewing Standard Fixed Guarantee Period
Account on or before the renewal date, the transfer or withdrawal will be deemed
to have occurred on the renewal date. If we receive notification of your
election to make a transfer or withdrawal from the renewing Standard Fixed
Guarantee Period Account after the renewal date, but before the expiration of
the 30-Day Window, the transfer or withdrawal will be deemed to have occurred on
the day we receive such notice. Any remaining balance not withdrawn or
transferred from the renewing Standard Fixed Guarantee Period Account will
continue to earn interest until the next renewal date at the declared renewal
rate. If we do not receive notification from you within the 30-Day Window, we
will assume that you have elected to renew the Standard Fixed Guarantee Period
Account and the amount in the renewing Standard Fixed Guarantee Period Account
will continue to earn interest at the declared renewal rate until the next
renewal date, and will be subject to all restrictions of the Standard Fixed
Account Option.
The Standard Fixed Account Option currently is not available with ALLSTATE
ADVISOR PLUS and ALLSTATE ADVISOR PREFERRED CONTRACTS.
MARKET VALUE ADJUSTED FIXED ACCOUNT OPTION
You may allocate purchase payments or transfer amounts into the Market Value
Adjusted Fixed Account Option. Each such allocation establishes a Guarantee
Period Account within the Market Value Adjusted Fixed Account Option ("Market
Value Adjusted Fixed Guarantee Period Account"), which is defined by the date of
the allocation and the length of the initial interest rate guarantee period
("MARKET VALUE ADJUSTED FIXED GUARANTEE PERIOD"). You may not allocate a
purchase payment or transfer to any existing Guarantee Period Account. Each
purchase
46 PROSPECTUS
payment or transfer allocated to a Market Value Adjusted Fixed Guarantee Period
Account must be at least $500.
At the time you allocate a purchase payment or transfer amount to the Market
Value Adjusted Fixed Account Option, you must select the Guarantee Period for
that allocation from among the Guarantee Periods available for the Market Value
Adjusted Fixed Account Option ("Market Value Adjusted Fixed Guarantee Periods").
We currently offer Market Value Adjusted Fixed Guarantee Periods of 3, 5, 7, and
10 years. Refer to Appendix A for more information. We may offer other Guarantee
Periods in the future. If you allocate a purchase payment to the Market Value
Adjusted Fixed Account Option, but do not select a Market Value Adjusted Fixed
Guarantee Period for the new Market Value Adjusted Fixed Guarantee Period
Account, we will allocate the purchase payment or transfer to a new Market Value
Adjusted Fixed Guarantee Period Account with the same Market Value Adjusted
Fixed Guarantee Period as the Market Value Adjusted Fixed Guarantee Period
Account of your most recent purchase payment or transfer. If we no longer offer
that Market Value Adjusted Fixed Guarantee Period, then we will allocate the
purchase payment or transfer to a new Market Value Adjusted Fixed Guarantee
Period Account with the next shortest term currently offered. If you have not
made a prior allocation to a Market Value Adjusted Fixed Guarantee Period
Account, then we will allocate the purchase payment or transfer to a new Market
Value Adjusted Fixed Guarantee Period Account of the shortest Market Value
Adjusted Fixed Guarantee Period we are offering at that time. The Market Value
Adjusted Fixed Account Option is not available in all states. Please check with
your representative for availability.
The amount you allocate to a Market Value Adjusted Fixed Guarantee Period
Account will earn interest at the interest rate in effect for that Market Value
Adjusted Fixed Guarantee Period at the time of the allocation. Interest rates
may differ depending on the type of Contract you have and may also differ from
those available for other Fixed Account Options.
Withdrawals and transfers from a Market Value Adjusted Fixed Guarantee Period
Account may be subject to a Market Value Adjustment. A Market Value Adjustment
may also apply to amounts in the Market Value Adjusted Fixed Account Option if
we pay Death Proceeds or if the Payout Start Date begins on a day other than
during the 30-day period after such Market Value Adjusted Fixed Guarantee Period
Account expires ("30-Day MVA Window"). We will not make a Market Value
Adjustment if you make a transfer or withdrawal during the 30-Day MVA Window.
We apply a Market Value Adjustment to reflect changes in interest rates from the
time you first allocate money to a Market Value Adjusted Fixed Guarantee Period
Account to the time the money is taken out of that Market Value Adjusted Fixed
Guarantee Period Account under the circumstances described above. We use the
U.S. Treasury Note Constant Maturity Yield as reported in Federal Reserve Board
Statistical Release H.15 ("TREASURY RATE") to calculate the Market Value
Adjustment. We do so by comparing the Treasury Rate for a maturity equal to the
Market Value Adjusted Fixed Guarantee Period at the time the Market Value
Adjusted Fixed Guarantee Period Account is established with the Treasury Rate
for the same maturity at the time the money is taken from the Market Value
Adjusted Fixed Guarantee Period Account.
The Market Value Adjustment may be positive or negative, depending on changes in
interest rates. As such, you bear the investment risk associated with changes
in interest rates. If interest rates have increased since the establishment of
a Market Value Adjusted Fixed Guarantee Period Account, the Market Value
Adjustment, together with any applicable withdrawal charges, premium taxes, and
income tax withholdings could reduce the amount you receive upon full withdrawal
from a Market Value Adjusted Fixed Guarantee Period Account to an amount less
than the purchase payment used to establish that Market Value Adjusted Fixed
Guarantee Period Account.
Generally, if at the time you establish a Market Value Adjusted Fixed Guarantee
Period Account, the Treasury Rate for a maturity equal to that Market Value
Adjusted Fixed Guarantee Period is higher than the applicable Treasury Rate at
the time money is to be taken from the Market Value Adjusted Fixed Guarantee
Period Account, the Market Value Adjustment will be positive. Conversely, if at
the time you establish a Market Value Adjusted Fixed Guarantee Period Account,
the applicable Treasury Rate is lower than the applicable Treasury Rate at the
time the money is to be taken from the Market Value Adjusted Fixed Guarantee
Period Account, the Market Value Adjustment will be negative.
For example, assume that you purchase a Contract and allocate part of the
initial purchase payment (and Credit Enhancements for ALLSTATE ADVISOR PLUS
CONTRACTS) to the Market Value Adjusted Fixed Account Option to establish a
5-year Market Value Adjusted Fixed Guarantee Period Account. Assume that the
5-year Treasury Rate at that time is 4.50%. Next, assume that at the end of the
3rd year, you withdraw money from the Market Value Adjusted Fixed Guarantee
Period Account. If, at that time, the 5-year Treasury Rate is 4.20%, then the
Market Value Adjustment will be positive. Conversely, if the 5-year Treasury
Rate at that time is 4.80%, then the Market Value Adjustment will be negative.
The formula used to calculate the Market Value Adjustment and numerical examples
illustrating its application are shown in Appendix B of this prospectus.
At the end of a Market Value Adjusted Fixed Guarantee Period, the Market Value
Adjusted Fixed Guarantee Period Account expires and we will automatically
transfer
47 PROSPECTUS
the money from such Guarantee Period Account to establish a new Market
Value Adjusted Fixed Guarantee Period Account with the same Market Value
Adjusted Fixed Guarantee Period, unless you notify us otherwise. The new Market
Value Adjusted Fixed Guarantee Period Account will be established as of the day
immediately following the expiration date of the expiring Market Value Adjusted
Guarantee Period Account ("New Account Start Date.") If the Market Value
Adjusted Fixed Guarantee Period is no longer being offered, we will establish a
new Market Value Adjusted Fixed Guarantee Period Account with the next shortest
Market Value Adjusted Fixed Guarantee Period available. Prior to the expiration
date, we will send you a notice, which will outline the options available to
you. During the 30-Day MVA Window a Market Value Adjustment will not be applied
to transfers and withdrawals from the expiring Market Value Adjusted Fixed
Guarantee Period Account and you may elect to:
.. transfer all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account to establish a new Guarantee Period Account within
the Standard Fixed Account Option or the Market Value Adjusted Fixed Account
Option, if available; or
.. transfer all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account to other investment alternatives available at the
time; or
.. withdraw all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account. Withdrawal charges and taxes may apply.
The money in the Market Value Adjusted Fixed Guarantee Period Account will earn
interest at the interest rate declared for the new Market Value Adjusted Fixed
Guarantee Period Account from the New Account Start Date until the date we
receive notification of your election. If we receive notification of your
election to make a transfer or withdrawal from an expiring Market Value Adjusted
Fixed Guarantee Period Account on or before the New Account Start Date, the
transfer or withdrawal will be deemed to have occurred on the New Account Start
Date. If we receive notification of your election to make a transfer or
withdrawal from the expiring Market Value Adjusted Fixed Guarantee Period
Account after the New Account Start Date, but before the expiration of the
30-Day MVA Window, the transfer or withdrawal will be deemed to have occurred on
the day we receive such notice. Any remaining balance not withdrawn or
transferred will earn interest for the term of the new Market Value Adjusted
Fixed Guarantee Period Account, at the interest rate declared for such Account.
If we do not receive notification from you within the 30-Day Window, we will
assume that you have elected to transfer the amount in the expiring Market Value
Adjusted Fixed Guarantee Period Account to establish a new Market Value Adjusted
Fixed Guarantee Period Account with the same Market Value Adjusted Fixed
Guarantee Period, and the amount in the new Market Value Adjusted Fixed
Guarantee Period Account will continue to earn interest at the interest rate
declared for the new Market Value Adjusted Fixed Guarantee Period Account, and
will be subject to all restrictions of the Market Value Adjusted Fixed Account
Option. If we no longer offer that Market Value Adjusted Fixed Guarantee
Period, the Market Value Adjusted Fixed Guarantee Period for the new Market
Value Adjusted Fixed Guarantee Period Account will be the next shortest term
length we offer for the Market Value Adjusted Fixed Account Option at that time,
and the interest rate will be the rate declared by us at that time for such
term.
INVESTMENT ALTERNATIVES: TRANSFERS
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TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. You may not transfer Contract Value to the DCA Fixed
Account Option or add to an existing Transfer Period Account. You may request
transfers in writing on a form that we provided or by telephone according to the
procedure described below.
You may make up to 12 transfers per Contract Year without charge. A transfer fee
equal to 1.00% of the amount transferred applies to each transfer after the 12th
transfer in any Contract Year. This fee may be changed, but in no event will it
exceed 2.00% of the amount transferred. Multiple transfers on a single Valuation
Date are considered a single transfer for purposes of assessing the transfer
fee. If you added the TrueReturn Option or SureIncome Option to your Contract,
certain restrictions on transfers apply. See the "TrueReturn/SM/ Accumulation
Benefit Option" and "SureIncome Withdrawal Benefit Option" sections of this
prospectus for more information.
The minimum amount that you may transfer from the Standard Fixed Account Option,
Market Value Adjusted Fixed Account Option or a Variable Sub-Account is $100 or
the total remaining balance in the Standard Fixed Account Option, Market Value
Adjusted Fixed Account Option or the Variable Sub-Account, if less. These
limitations do not apply to the DCA Fixed Account Option. The total amount that
you may transfer or withdraw from a Standard Fixed Guarantee Period Account in a
Contract Year is 30% of the amount used to establish that Guarantee Period
Account. See "Standard Fixed Account Option". The minimum amount that can be
transferred to the Standard Fixed Account Option and the Market Value Adjusted
Fixed Account Option is $500. We will process transfer requests that we receive
before 3:00 p.m. Central Time on any Valuation Date using the Accumulation Unit
Values for that Date. We will process
48 PROSPECTUS
requests completed after 3:00 p.m. on any Valuation Date using the Accumulation
Unit Values for the next Valuation Date. The Contract permits us to defer
transfers from the Fixed Account Options for up to 6 months from the date we
receive your request. If we decide to postpone transfers from any Fixed Account
Option for 30 days or more, we will pay interest as required by applicable law.
Any interest would be payable from the date we receive the transfer request to
the date we make the transfer.
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. You may make up to 12 transfers per
Contract Year within each Income Plan. You may not convert any portion of your
fixed income payments into variable income payments. You may not make transfers
among Income Plans. You may make transfers from the variable income payments to
the fixed income payments to increase the proportion of your income payments
consisting of fixed income payments, unless you have selected the Income
Protection Benefit Option.
TELEPHONE OR ELECTRONIC TRANSFERS
You may make transfers by telephone by calling 1-800-203-0068. The cut-off time
for telephone transfer requests is 3:00 p.m. Central time. In the event that the
New York Stock Exchange closes early, i.e., before 3:00 p.m. Central Time, or in
the event that the Exchange closes early for a period of time but then reopens
for trading on the same day, we will process telephone transfer requests as of
the close of the Exchange on that particular day. We will not accept telephone
requests received from you at any telephone number other than the number that
appears in this paragraph or received after the close of trading on the
Exchange. If you own the Contract with a joint Contract Owner, unless we receive
contrary instructions, we will accept instructions from either you or the other
Contract Owner.
We may suspend, modify or terminate the telephone transfer privilege, as well as
any other electronic or automated means we previously approved, at any time
without notice.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
MARKET TIMING & EXCESSIVE TRADING
The Contracts are intended for long-term investment. Market timing and
excessive trading can potentially dilute the value of Variable Sub-Accounts and
can disrupt management of a Portfolio and raise its expenses, which can impair
Portfolio performance and adversely affect your Contract Value. Our policy is
not to accept knowingly any money intended for the purpose of market timing or
excessive trading. Accordingly, you should not invest in the Contract if your
purpose is to engage in market timing or excessive trading, and you should
refrain from such practices if you currently own a Contract.
We seek to detect market timing or excessive trading activity by reviewing
trading activities. Portfolios also may report suspected market-timing or
excessive trading activity to us. If, in our judgment, we determine that the
transfers are part of a market timing strategy or are otherwise harmful to the
underlying Portfolio, we will impose the trading limitations as described below
under "Trading Limitations." Because there is no universally accepted
definition of what constitutes market timing or excessive trading, we will use
our reasonable judgment based on all of the circumstances.
While we seek to deter market timing and excessive trading in Variable
Sub-Accounts, because our procedures involve the exercise of reasonable
judgment, we may not identify or prevent some market timing or excessive
trading. Moreover, imposition of trading limitations is triggered by the
detection of market timing or excessive trading activity, and the trading
limitations are not applied prior to detection of such trading activity.
Therefore, our policies and procedures do not prevent such trading activity
before it is detected. As a result, some investors may be able to engage in
market timing and excessive trading, while others are prohibited, and the
portfolio may experience the adverse effects of market timing and excessive
trading described above.
TRADING LIMITATIONS
We reserve the right to limit transfers among the investment alternatives in any
Contract year, or to refuse any transfer request, if:
.. we believe, in our sole discretion, that certain trading practices, such as
excessive trading, by, or on behalf of, one or more Contract Owners, or a
specific transfer request or group of transfer requests, may have a
detrimental effect on the Accumulation Unit Values of any Variable Sub-Account
or on the share prices of the corresponding Portfolio or otherwise would be to
the disadvantage of other Contract Owners; or
.. we are informed by one or more of the Portfolios that they intend to restrict
the purchase, exchange, or redemption of Portfolio shares because of excessive
trading or because they believe that a specific transfer or group of transfers
would have a detrimental effect on the prices of Portfolio shares.
49 PROSPECTUS
In making the determination that trading activity constitutes market timing or
excessive trading, we will consider, among other things:
.. the total dollar amount being transferred, both in the aggregate and in the
transfer request;
.. the number of transfers you make over a period of time and/or the period of
time between transfers (note: one set of transfers to and from a Variable
Sub-Account in a short period of time can constitute market timing);
.. whether your transfers follow a pattern that appears designed to take
advantage of short term market fluctuations, particularly within certain
Variable Sub-Account underlying Portfolios that we have identified as being
susceptible to market timing activities;
.. whether the manager of the underlying Portfolio has indicated that the
transfers interfere with Portfolio management or otherwise adversely impact
the Portfolio; and
.. the investment objectives and/or size of the Variable Sub-Account underlying
Portfolio.
We seek to apply these trading limitations uniformly. However, because these
determinations involve the exercise of discretion, it is possible that we may
not detect some market timing or excessive trading activity. As a result, it is
possible that some investors may be able to engage in market timing or excessive
trading activity, while others are prohibited, and the Portfolio may experience
the adverse effects of market timing and excessive trading described above.
If we determine that a Contract Owner has engaged in market timing or excessive
trading activity, we will restrict that Contract Owner from making future
additions or transfers into the impacted Variable Sub-Account(s). If we
determine that a Contract Owner has engaged in a pattern of market timing or
excessive trading activity involving multiple Variable Sub-Accounts, we will
also require that all future transfer requests be submitted through regular U.S.
mail thereby refusing to accept transfer requests via telephone, facsimile,
Internet, or overnight delivery.
In our sole discretion, we may revise our Trading Limitations at any time as
necessary to better deter or minimize market timing and excessive trading or to
comply with regulatory requirements.
SHORT TERM TRADING FEES
We reserve the right to assess short-term trading fees in connection with
transfers from Variable Sub-Accounts that occur within a certain number of days
following the date of allocation to the Variable Sub-Accounts. Such fees may
vary by Variable Sub-Account, but will only apply to those Variable Sub-Accounts
corresponding to underlying mutual funds that assess such fees.
DOLLAR COST AVERAGING PROGRAM
Through our Dollar Cost Averaging Program, you may automatically transfer a
fixed dollar amount on a regular basis from any Variable Sub-Account or any
Fixed Account Option to any of the other Variable Sub-Accounts. You may not use
the Dollar Cost Averaging Program to transfer amounts to the Fixed Account
Options. This program is available only during the Accumulation Phase.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market. Call or write us for instructions on how to enroll.
AUTOMATIC PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. Money you
allocate to the Fixed Account will not be included in the rebalancing.
We will rebalance your account quarterly, semi-annually, or annually. We will
measure these periods according to your instructions. We will transfer amounts
among the Variable Sub-Accounts to achieve the percentage allocations you
specify. You can change your allocations at any time by contacting us in writing
or by telephone. The new allocation will be effective with the first rebalancing
that occurs after we receive your written or telephone request. We are not
responsible for rebalancing that occurs prior to receipt of proper notice of
your request.
Example:
Assume that you want your initial purchase payment split among 2 Variable
Sub-Accounts. You want 40% to be in the Putnam VT Income - Class IB
Sub-Account and 60% to be in the Oppenheimer Aggressive Growth/VA - Service
Shares Sub-Account. Over the next 2 months the bond market does very well
while the stock market performs poorly. At the end of the first quarter,
the Putnam VT Income - Class IB Sub-Account now represents 50% of your
holdings because of its increase in value. If you choose to have your
holdings in a Contract or Contracts rebalanced quarterly, on the first day
of the
50 PROSPECTUS
next quarter we would sell some of your units in the Putnam VT Income -
Class IB Sub-Account for the appropriate Contract(s) and use the money to
buy more units in the Oppenheimer Aggressive Growth/ VA - Service Shares
Sub-Account so that the percentage allocations would again be 40% and 60%,
respectively.
The transfers made under the program do not count towards the 12 transfers you
can make without paying a transfer fee, and are not subject to a transfer fee.
Portfolio rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Contract Value allocated to the Variable Sub-Accounts that performed better
during the previous time period.
51 PROSPECTUS
EXPENSES
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As a Contract Owner, you will bear, directly or indirectly, the charges and
expenses described below.
CONTRACT MAINTENANCE CHARGE
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$30 contract maintenance charge from your assets invested in the Putnam VT Money
Market Variable Sub-Account. If there are insufficient assets in that Variable
Sub-Account, we will deduct the balance of the charge proportionally from the
other Variable Sub-Accounts. We also will deduct this charge if you withdraw
your entire Contract Value, unless your Contract qualifies for a waiver. During
the Payout Phase, we will deduct the charge proportionately from each income
payment.
The charge is to compensate us for the cost of administering the Contracts and
the Variable Account. Maintenance costs include expenses we incur in billing and
collecting purchase payments; keeping records; processing death claims, cash
withdrawals, and policy changes; proxy statements; calculating Accumulation Unit
Values and income payments; and issuing reports to Contract Owners and
regulatory agencies. We cannot increase the charge. We will waive this charge:
.. for the remaining term of the Contract once your total purchase payments to
the Contract equal $50,000 or more; or
.. for a Contract Anniversary if, on that date, your entire Contract Value is
allocated to the Fixed Account Options, or after the Payout Start Date, if all
income payments are fixed income payments.
We also reserve the right to waive this charge if you own more than one Contract
and the Contracts meet certain minimum dollar amount requirements. In addition,
we reserve the right to waive this charge for all Contracts.
ADMINISTRATIVE EXPENSE CHARGE
We deduct an administrative expense charge daily at an annual rate of 0.19% of
the average daily net assets you have invested in the Variable Sub-Accounts. We
intend this charge to cover actual administrative expenses that exceed the
revenues from the contract maintenance charge. There is no necessary
relationship between the amount of administrative charge imposed on a given
Contract and the amount of expenses that may be attributed to that Contract. We
assess this charge each day during the Accumulation Phase and the Payout Phase.
We may increase this charge for Contracts issued in the future, but in no event
will it exceed 0.35%. We guarantee that after your Contract is issued we will
not increase this charge for your Contract.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily from the net assets you have
invested in the Variable Sub-Accounts. We assess mortality and expense risk
charges during the Accumulation and Payout Phases of the Contract, except as
noted below. The annual mortality and expense risk charge for the Contracts
without any optional benefit are as follows:
ALLSTATE ADVISOR 1.10%
- ---------------------------------------------------
ALLSTATE ADVISOR PLUS 1.40%
- ---------------------------------------------------
ALLSTATE ADVISOR PREFERRED
(5-YEAR WITHDRAWAL CHARGE OPTION) 1.40%
- ---------------------------------------------------
ALLSTATE ADVISOR PREFERRED
(3-YEAR WITHDRAWAL CHARGE OPTION) 1.50%
- ---------------------------------------------------
ALLSTATE ADVISOR PREFERRED 1.60%
(NO WITHDRAWAL CHARGE OPTION)
- ---------------------------------------------------
The mortality and expense risk charge is for all the insurance benefits
available with your Contract (including our guarantee of annuity rates and the
death benefits), for certain expenses of the Contract, and for assuming the risk
(expense risk) that the current charges will not be sufficient in the future to
cover the cost of administering the Contract. The mortality and expense risk
charge also helps pay for the cost of the Credit Enhancement under the ALLSTATE
ADVISOR PLUS CONTRACT. If the charges under the Contract are not sufficient,
then we will bear the loss. We charge an additional amount for the optional
benefits to compensate us for the additional risk that we accept by providing
these options.
You will pay additional mortality and expense risk charges if you add any
optional benefits to your Contract. The additional mortality and expense risk
charge you pay will depend upon which of the options you select:
.. MAV Death Benefit Option: The current mortality and expense risk charge for
this option is 0.20%. For Contract Owners who added the MAV Death Benefit
Option prior to May 1, 2003, the mortality and expense risk charge is 0.15%.
This charge may be increased, but will never exceed 0.30%. We guarantee that
we will not increase the mortality and expense risk charge for this option
after you have added it to your Contract. We deduct the charge for this
option only during the Accumulation Phase.
.. Enhanced Beneficiary Protection (Annual Increase) Option: The current
mortality and expense risk charge for this option is 0.30%. For Contract
Owners who added the Enhanced Beneficiary Protection (Annual Increase) Option
prior to May 1, 2003, the mortality and expense risk charge is 0.15%. This
charge will never exceed 0.30%. We guarantee that we will not increase the
mortality and expense risk charge for this option after you have added it to
your Contract. We deduct the charge for this option only during the
Accumulation Phase.
52 PROSPECTUS
.. Earnings Protection Death Benefit Option: The current mortality and expense
risk charge for this option is:
. 0.25% (maximum of 0.35%) if the oldest Contract Owner and oldest Annuitant
are age 70 or younger on the Rider Application Date;
. 0.40% (maximum of 0.50%) if the oldest Contract Owner or oldest Annuitant
is age 71 or older and both are age 79 or younger on the Rider Application
Date.
The charges may be increased but they will never exceed the maximum charges
shown above. We guarantee that we will not increase the mortality and expense
risk charge for this option after you have added it to your Contract. However,
if your spouse elects to continue the Contract in the event of your death and
if he or she elects to continue the Earnings Protection Death Benefit Option,
the charge will be based on the ages of the oldest new Contract Owner and the
oldest Annuitant at the time the Contract is continued. Refer to the Death
Benefit Payments provision in this prospectus for more information. We
deduct the charge for this option only during the Accumulation Phase.
.. Income Protection Benefit Option: The current mortality and expense risk
charge for this option is 0.50%. This charge may be increased, but will never
exceed 0.75%. We guarantee that we will not increase the mortality and expense
risk charge for this option after you have added it to your Contract. The
charge will be deducted only during the Payout Phase.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION FEE
We charge a separate annual Rider Fee for the TrueReturn Option. The current
annual Rider Fee is 0.50% of the Benefit Base. We deduct the Rider Fee on each
Contract Anniversary during the Rider Period or until you terminate the Option,
if earlier. We reserve the right to increase the Rider Fee to up to 1.25%. We
currently charge the same Rider Fee regardless of the Rider Period and Guarantee
Option you select; however, we reserve the right to charge different fees for
different Rider Periods and Guarantee Options in the future. However, once we
issue your Option, we cannot change the Rider Fee that applies to your Contract.
If you elect to exercise the Rider Trade-In Option, the new Rider Fee will be
based on the Rider Fee percentage applicable to a new TrueReturn Option at the
time of trade-in.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro rata
basis in the proportion that your value in each Variable Sub-Account bears to
your total value in all Variable Sub-Accounts. Rider Fees will decrease the
number of Accumulation Units in each Variable Sub-Account. If you terminate this
Option prior to the Rider Maturity Date on a date other than a Contract
Anniversary, we will deduct an entire Rider Fee from your Contract Value on the
date the Option is terminated. However, if the Option is terminated due to death
of the Contract Owner or Annuitant, we will not charge a Rider Fee unless the
date we receive a Complete Request for Settlement of the Death Proceeds is also
a Contract Anniversary. If the Option is terminated on the Payout Start Date, we
will not charge a Rider Fee unless the Payout Start Date is also a Contract
Anniversary. Additionally, if you elect to exercise the Rider Trade-In Option
and cancel the Option on a date other than a Contract Anniversary, we will not
deduct a Rider Fee on the date the Option is terminated. Refer to the
"TrueReturn/SM/ Accumulation Benefit Option" section of this prospectus for more
information.
SPOUSAL PROTECTION BENEFIT(CO-ANNUITANT) OPTION FEE AND SPOUSAL PROTECTION
BENEFIT(CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL RETIREMENT ACCOUNTS FEE
We charge a separate annual Rider Fee for both the Spousal Protection
Benefit(Co-Annuitant) Option and Spousal Protection Benefit(Co-Annuitant) Option
for Custodial Individual Retirement Accounts. The current annual Rider Fee is
0.10% of the Contract Value for either Option. This applies to all new Options
added on or after January 1, 2005. For Options added prior to January 1, 2005,
there is no charge associated with the Options. We deduct the Rider Fee on each
Contract Anniversary up to and including the date you terminate the Option. We
reserve the right to increase the annual Rider Fee to up to 0.15% of the
Contract Value. We reserve the right to charge different Rider Fees for new
Spousal Protection Benefit(Co-Annuitant) Options and/ or new Spousal Protection
Benefit(Co-Annuitant) Options for Custodial Individual Retirement Accounts we
offer in the future. Once we issue your Option, we cannot change the Rider Fee
that applies to your Contract.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro-rata
basis in the proportion that your value in each Variable Sub-Account bears to
your total value in all Variable Sub-Accounts. Rider Fees will decrease the
number of Accumulation Units in each Variable Sub-Account. If, at the time the
Rider Fee is deducted, the Rider Fee exceeds the total value in all Variable
Sub-Accounts, the excess of the Rider Fee over the total value in all Variable
Sub-Accounts will be waived.
The first Rider Fee will be deducted on the first Contract Anniversary following
the Rider Date. A Rider Fee will be deducted on each subsequent Contract
Anniversary up to and including the date the Option is terminated. We will not
charge a Rider Fee on the date the Option is terminated, on a date other than
the Contract Anniversary, if the Option is terminated on the Payout Start Date
or due to death of the Contract Owner or Annuitant.
53 PROSPECTUS
For the first Contract Anniversary following the Rider Date, the Rider Fee is
equal to the number of months from the Rider Date to the first Contract
Anniversary, divided by twelve, multiplied by 0.10%, with the result multiplied
by the Contract Value as of the first Contract Anniversary. For subsequent
Contract Anniversaries, the Rider Fee is equal to 0.10% multiplied by the
Contract Value as of that Contract Anniversary. If you terminate this Option on
a date other than a Contract Anniversary, we will deduct a Rider Fee. The Rider
Fee will be pro-rated to cover the period from the last Contract Anniversary to
the date of termination, or if you terminate this Option during the first
Benefit Year, from the Rider Date to the date of termination. The pro-rated
Rider Fee will be equal to the number of full months from the Contract
Anniversary to the date of termination, or if you terminate this Option during
the first Contract Year after adding the Option, the number of full months from
the Rider Date to the date of termination, divided by twelve, multiplied by
0.10%, with the result multiplied by the Contract Value immediately prior to the
termination.
RETIREMENT INCOME GUARANTEE OPTION FEE
We discontinued offering the Retirement Income Guarantee Options as of January
1, 2004 (up to May 1, 2004 in certain states). Fees described below apply to
Contract Owners who selected an Option prior to January 1, 2004 (up to May 1,
2004 in certain states). We impose a separate annual Rider Fee for RIG 1 and RIG
2. The current annual Rider Fee for RIG 1 is 0.40% of the Income Base on each
Contract Anniversary. For Contract Owners who added RIG 1 prior to May 1, 2003,
the annual Rider Fee is 0.25%. The current annual Rider Fee for RIG 2 is 0.55%
of the Income Base on each Contract Anniversary. For Contract Owners who added
RIG 2 prior to May 1, 2003, the annual Rider Fee is 0.45%. See "Retirement
Income Guarantee Options" for details.
We deduct the Rider Fees only from the Variable Sub-Account(s) on a pro-rata
basis. For the initial Contract Anniversary after the Rider Date, we will deduct
a fee pro rated to cover the period from the Rider Date to the Contract
Anniversary. In the case of a full withdrawal of the Contract Value on any date
other than the Contract Anniversary, we will deduct from the amount paid upon
withdrawal the Rider Fee multiplied by the appropriate Income Base immediately
prior to the withdrawal pro rated to cover the period the Option was in effect
during the current Contract Year. We will not deduct the Rider Fee during the
Payout Phase.
SUREINCOME WITHDRAWAL BENEFIT OPTION FEE
We charge a separate annual Rider Fee for the SureIncome Option ("SureIncome
Option Fee" or "Rider Fee"). The current annual Rider Fee is 0.50% of the
Benefit Base. We deduct the Rider Fee on each Contract Anniversary up to and
including the date you terminate the Option. We reserve the right to increase
the Rider Fee to up to 1.25% of the Benefit Base. We reserve the right to
charge different Rider Fees for different Withdrawal Benefit Factors we may
offer in the future. Once we issue your SureIncome Option, we cannot change the
Rider Fee that applies to your Contract. If you elect to exercise the Rider
Trade-In Option, the new Rider Fee will be based on the Rider Fee percentage
applicable to a new SureIncome Option at the time of trade-in.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro-rata
basis in the proportion that your Contract Value in each Variable Sub-Account
bears to your total Contract Value in all Variable Sub-Accounts. Rider Fees
will decrease the number of Accumulation Units in each Variable Sub-Account.
If, at the time the Rider Fee is deducted, the Rider Fee exceeds the total
Contract Value in all Variable Sub-Accounts, the excess of the Rider Fee over
the total Contract Value in all Variable Sub-Accounts will be waived.
The first Rider Fee will be deducted on the first Contract Anniversary following
the Rider Date. A Rider Fee will be deducted on each subsequent Contract
Anniversary up to and including the date the SureIncome Option is terminated.
For the first Contract Anniversary following the Rider Date, the Rider Fee is
equal to the number of months from the Rider Date to the first Contract
Anniversary, divided by twelve, multiplied by 0.50%, with the result multiplied
by the Benefit Base as of the first Contract Anniversary. For subsequent
Contract Anniversaries, the Rider Fee is equal to the 0.50% multiplied by the
Benefit Base as of that Contract Anniversary.
If you terminate this SureIncome Option on a date other than a Contract
Anniversary, we will deduct a Rider Fee unless the termination is on the Payout
Start Date or is due to the death of the Contract Owner or Annuitant. The Rider
Fee will be pro-rated to cover the period from the last Contract Anniversary to
the date of termination or, if you terminate the SureIncome Option during the
first Benefit Year, from the Rider Date to the date of termination. The
pro-rated Rider Fee will be equal to the number of full months from the Contract
Anniversary to the date of termination or, if you terminate this Option during
the first Benefit Year, the number of full months from the Rider Date to the
date of termination, divided by twelve, multiplied by 0.50%, with the result
multiplied by the Benefit Base immediately prior to the withdrawal or
termination. The Rider Fee will be waived during the Withdrawal Benefit Payout
Phase.
TRANSFER FEE
We impose a fee upon transfers in excess of 12 during any Contract Year. The
current fee is equal to 1.00% of the dollar amount transferred. This fee may be
increased, but in no event will it exceed 2.00% of the dollar amount
transferred. We will not charge a transfer fee on transfers
54 PROSPECTUS
that are part of a Dollar Cost Averaging Program or Automatic Portfolio
Rebalancing Program.
WITHDRAWAL CHARGE
We may assess a withdrawal charge from the purchase payment(s) you withdraw.
The amount of the charge will depend on the number of years that have elapsed
since we received the purchase payment being withdrawn. A schedule showing the
withdrawal charges applicable to each Contract appears on page 11. If you make a
withdrawal before the Payout Start Date, we will apply the withdrawal charge
percentage in effect on the date of the withdrawal, or the withdrawal charge
percentage in effect on the following day, whichever is lower.
Withdrawals also may be subject to tax penalties or income tax. You should
consult with your tax counsel or other tax advisor regarding any withdrawals.
Withdrawals from the Market Value Adjusted Fixed Account Option may be subject
to a market value adjustment. Refer to page 87 for more information on market
value adjustments.
FREE WITHDRAWAL AMOUNT
You can withdraw up to the Free Withdrawal Amount each Contract Year without
paying the withdrawal charge. The Free Withdrawal Amount for a Contract Year is
equal to 15% of all purchase payments (excluding Credit Enhancements for
ALLSTATE ADVISOR PLUS CONTRACTS) that are subject to a withdrawal charge as of
the beginning of that Contract Year, plus 15% of the purchase payments added to
the Contract during the Contract Year. The withdrawal charge applicable to
Contracts owned by Charitable Remainder Trusts is described below.
Purchase payments no longer subject to a withdrawal charge will not be used to
determine the Free Withdrawal Amount for a Contract Year, nor will they be
assessed a withdrawal charge, if withdrawn. The Free Withdrawal Amount is not
available in the Payout Phase.
You may withdraw up to the Free Withdrawal Amount in each Contract Year it is
available without paying a withdrawal charge; however, the amount withdrawn may
be subject to a Market Value Adjustment or applicable taxes. If you do not
withdraw the entire Free Withdrawal Amount in a Contract Year, any remaining
portion may not be carried forward to increase the Free Withdrawal Amount in a
later Contract Year.
For purposes of assessing the withdrawal charge, we will treat withdrawals as
coming from the oldest purchase payments first as follows:
1) Purchase payments that no longer are subject to withdrawal charges;
2) Free Withdrawal Amount (if available);
3) Remaining purchase payments subject to withdrawal charges, beginning with the
oldest purchase payment;
4) Any earnings not previously withdrawn.
However, for federal income tax purposes, earnings are considered to come out
first, which means that you will pay taxes on the earnings portion of your
withdrawal.
If the Contract Owner is a Charitable Remainder Trust, the Free Withdrawal
Amount in a Contract Year is equal to the greater of:
.. The Free Withdrawal Amount described above; or
.. Earnings as of the beginning of the Contract Year that have not been
previously withdrawn.
For purposes of assessing the withdrawal charge for a Charitable Remainder
Trust-Owned Contract, we will treat withdrawals as coming from the earnings
first and then the oldest purchase payments as follows:
1) Earnings not previously withdrawn;
2) Purchase payments that are no longer subject to withdrawal charges;
3) Free Withdrawal Amount in excess of earnings;
4) Purchase payments subject to withdrawal charges, beginning with the oldest
purchase payment.
If you have selected the ALLSTATE ADVISOR PREFERRED CONTRACT WITH NO WITHDRAWAL
CHARGE OPTION, there are no withdrawal charges applicable and, therefore, no
Free Withdrawal Amount. Amounts withdrawn may be subject to a Market Value
Adjustment or applicable taxes.
ALL CONTRACTS
We do not apply a withdrawal charge in the following situations:
.. the death of the Contract Owner or Annuitant (unless the Settlement Value is
used);
.. withdrawals taken to satisfy IRS minimum distribution rules for the Contract;
or
.. withdrawals that qualify for one of the waivers described below.
We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts, and to help defray the cost of the Credit Enhancement for the
ALLSTATE ADVISOR PLUS CONTRACTS. To the extent that the withdrawal charge does
not cover all sales commissions and other promotional or distribution expenses,
or the cost of the Credit Enhancement, we may use any of our corporate assets,
including potential profit which may arise from the mortality and expense risk
charge or any other charges or fee described above, to make up any difference.
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 591/2, may
be subject to an
55 PROSPECTUS
additional 10% federal tax penalty. 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 written proof of the stay no later
than 90 days following the end of your or the Annuitant's stay at the long term
care facility or hospital, and
3. a physician must have prescribed the stay and the stay must be medically
necessary (as defined in the Contract).
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 adequate proof of diagnosis to us before or at the time you
request the withdrawal.
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,
2. you or the Annuitant receive Unemployment Compensation for at least 30 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.
These waivers do not apply under the ALLSTATE ADVISOR PREFERRED CONTRACT WITH NO
WITHDRAWAL CHARGE OPTION.
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 some time 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 each
investment alternative in the proportion that the Contract Value in the
investment alternative bears to the total Contract Value.
DEDUCTION FOR SEPARATE ACCOUNT INCOME TAXES
We are not currently maintaining a provision for taxes. In the future, however,
we may establish a provision for taxes if we determine, in our sole discretion,
that we will incur a tax as a result of the operation of the Variable Account.
We will deduct for any taxes we incur as a result of the operation of the
Variable Account, whether or not we previously made a provision for taxes and
whether or not it was sufficient. Our status under the Internal Revenue Code is
briefly described in the "Taxes" section of this prospectus.
OTHER EXPENSES
Each Portfolio deducts management fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are held
by the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectuses for the
56 PROSPECTUS
Portfolios. For a summary of Portfolio annual expenses see page 14. Allstate
Life or the principal underwriter of the Contracts, Allstate Distributors, may
receive compensation from the investment advisers, administrators or
distributors, or their affiliates, of the Portfolios in connection with the
administrative, distribution (12b-1), or other services Allstate Distributors or
we provide to the Portfolios.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals also are available under limited circumstances on
or after the Payout Start Date. See "Income Plans" on page 58.
The amount payable upon withdrawal is the Contract Value (or portion thereof)
next computed after we receive the request for a withdrawal at our home office,
adjusted by any applicable Market Value Adjustment, less any applicable
withdrawal charges, income tax withholding, penalty tax, contract maintenance
charge, Rider Fee, and any premium taxes. We will pay withdrawals from the
Variable Account within 7 days of receipt of the request, subject to
postponement in certain circumstances. You can withdraw money from the Variable
Account or the Fixed Account Option(s) available under your Contract. To
complete a partial withdrawal from the Variable Account, we will cancel
Accumulation Units in an amount equal to the withdrawal and any applicable
charges, fees and taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored.
In general, you must withdraw at least $50 at a time.
Withdrawals from the Standard Fixed Account Option may be subject to a
restriction. See "Standard Fixed Account Options" on page 45.
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 591/2, may
be subject to an additional 10% federal penalty tax. If any withdrawal reduces
your Contract Value to less than $1,000, we will treat the request as a
withdrawal of the entire Contract Value, unless the SureIncome Withdrawal
Benefit Option is currently attached to your Contract. If you request a total
withdrawal, we may require that you return your Contract to us. Your Contract
will terminate if you withdraw all of your Contract Value, subject to certain
exceptions if the SureIncome Withdrawal Benefit Option is currently attached to
your Contract. See "SureIncome Withdrawal Benefit Option" for more details. We
will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, less withdrawal and other charges and taxes.
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1. The New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted,
2. An emergency exists as defined by the SEC, or
3. The SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Option(s)
available under your Contract for up to 6 months or shorter period if required
by law. If we delay payment or transfer for 30 days or more, we will pay
interest as required by law.
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. Please consult your sales representative or call us at 1-800-203-0068 for
more information.
Depending on fluctuations in the value of the Variable Sub-Accounts and the
value of the Fixed Account Options, systematic withdrawals may reduce or even
exhaust the Contract Value. Income taxes may apply to systematic withdrawals.
Please consult your tax advisor before taking any withdrawal.
We will make systematic withdrawal payments to you or your designated payee. At
our discretion, 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.
MINIMUM CONTRACT VALUE
If your request for a partial withdrawal would reduce your Contract Value to
less than $1,000, we may treat it as a request to withdraw your entire Contract
Value, unless the SureIncome Withdrawal Benefit Option is currently attached to
your Contract. 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. If we terminate your Contract, we will distribute to
you its Contract Value, adjusted by any applicable Market Value Adjustment, less
withdrawal and other charges and applicable taxes.
57 PROSPECTUS
INCOME PAYMENTS
- --------------------------------------------------------------------------------
PAYOUT START DATE
The Payout Start Date is the day that we apply your Contract Value adjusted by
any applicable Market Value Adjustment and less applicable taxes to an Income
Plan. The first income payment must occur at least 30 days after the Issue Date.
The Payout Start Date may be no later than:
.. the Annuitant's 99th 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 payments made on a scheduled basis to you or to
another person designated by you. You may select more than one Income Plan. If
you choose more than one Income Plan, you must specify what proportions of your
Contract Value, adjusted by any Market Value Adjustment and less any applicable
taxes, should be allocated to each such Income Plan. For tax reporting
purposes, your cost basis and any gain on the Contract will be allocated
proportionally to each Income Plan you select based on the proportion of your
Contract Value applied to each such Income Plan. We reserve the right to limit
the number of Income Plans that you may select. If you choose to add the Income
Protection Benefit Option, certain restrictions may apply as described under
"Income Protection Benefit Option," below. If you do not select an Income Plan,
we will make income payments in accordance with Income Plan 1 with a Guaranteed
Payment Period of 10 years. If any Contract Owner dies during the Payout Phase,
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" section of this prospectus. Any remaining income
payments will be paid to the new Contract Owner as scheduled. Income payments to
Beneficiaries may be subject to restrictions established by the Contract Owner.
After the Payout Start Date, you may not make withdrawals (except as described
below) or change your choice of Income Plan.
Currently seven Income Plans are available. Depending on the Income Plan(s) you
choose, you may receive:
.. fixed income payments;
.. variable income payments; or
.. a combination of the two.
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 basis 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 591/2, may
be subject to an additional 10% federal tax penalty.
The seven Income Plans are:
INCOME PLAN 1 - LIFE INCOME WITH 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 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 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 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. You may elect a reduced survivor plan of 50%, 66% or 75%
of the payment amount. If you do not elect a reduced survivor amount, the
payments will remain at 100%. If you elect a reduced survivor payment plan, the
amount of each income payment initially will be higher but a reduction will take
place at the later of 1) the death of an Annuitant; or 2) at the end of the
guaranteed payment period.
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 prior to 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. We will
deduct the mortality and expense risk charge from the assets of the Variable
Sub-Account supporting this Income Plan even though we may not bear any
mortality risk. You may make withdrawals, change the length of the guaranteed
payment period, or change the frequency of income payments under Income Plan 3.
See "Modifying Payments" and "Payout Withdrawals" below for more details.
58 PROSPECTUS
INCOME PLAN 4 - LIFE INCOME WITH CASH REFUND. Under this plan, we make periodic
income payments until the death of the Annuitant. If the death of the Annuitant
occurs before the total amount applied to an Income Plan is paid out, we will
pay a lump sum payment of the remaining amount. Payments under this plan are
available only as fixed income payments.
INCOME PLAN 5 - JOINT LIFE INCOME WITH CASH REFUND. Under this plan, we make
periodic income payments until the deaths of both the Annuitant and joint
Annuitant. If the deaths of both the Annuitant and joint Annuitant occur before
the total amount applied to an Income Plan is paid out, we will pay a lump sum
payment of the remaining amount. Currently, a reduced survivor plan is not
available. Payments under this plan are available only as fixed income payments.
INCOME PLAN 6 - LIFE INCOME WITH INSTALLMENT REFUND. Under this plan, we make
periodic income payments until the later of: (1) the death of the Annuitant; or
(2) the total amount paid out under the annuity is equal to the total amount
applied to the Income Plan. If the death of the Annuitant occurs before the
total amount applied to an Income Plan is paid out, we will continue to make
payments in the same manner until any remaining payments are paid out. Payments
under this plan are available only as fixed income payments.
INCOME PLAN 7 - JOINT LIFE INCOME WITH INSTALLMENT REFUND. Under this plan, we
make periodic income payments until the later of: (1) the deaths of both the
Annuitant and joint Annuitant; or (2) the total amount paid out under the
annuity is equal to the total amount applied to the Income Plan. If the deaths
of both the Annuitant and joint Annuitant occur before the total amount applied
to an Income Plan is paid out, we will continue to make payments in the same
manner until any remaining payments are paid out. Currently, a reduced survivor
plan is not available. Payments under this plan are available only as fixed
income payments.
If you choose an Income Plan with payments that continue for the life of the
Annuitant or joint Annuitant, we may require proof of age and sex of the
Annuitant or joint Annuitant before starting income payments, and proof that the
Annuitant or joint Annuitant is alive before we make each payment. Please note
that under Income Plans 1 and 2, if you do not select a Guaranteed Payment
Period, it is possible that the payee could receive only one income payment if
the Annuitant and any joint Annuitant both die before the second income payment,
or only two income payments if they die before the third income payment, and so
on.
The length of any Guaranteed Payment Period under your selected Income Plan
generally will affect the dollar amounts of each income payment. As a general
rule, longer Guarantee Payment 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 guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a specified Guaranteed Payment Period.
MODIFYING PAYMENTS
After the Payout Start Date, you may make the following changes under Income
Plan 3:
.. You may request to modify the length of the Guaranteed Payment Period.
Currently, we allow you to make this change once each Contract Year. We
reserve the right to change this practice at any time without prior notice.
If you elect to change the length of the Guaranteed Payment Period, the new
Guaranteed Payment Period must be within the original minimum and maximum
period you would have been permitted to select on the Payout Start Date.
However, the maximum payment period permitted will be shortened by the period
elapsed since the original Guaranteed Payment Period began. If you change the
length of your Guaranteed Payment Period, we will compute the present value of
your remaining payments, using the same assumptions we would use if you were
terminating the income payments, as described in Payout Withdrawal. We will
then adjust the remaining payments to equal what that value would support
based on those same assumptions and based on the revised Guaranteed Payment
Period.
.. You may request to change the frequency of your payments. We currently allow
you to make this change once each Contract Year. We reserve the right to
change this practice at any time without prior notice.
Changes to either the frequency of payments or length of the Guaranteed Payment
Period will result in a change to the payment amount and may change the amount
of each payment that is taxable to you.
Modifying payments of this Contract may not be allowed under qualified plans. In
order to satisfy required minimum distributions ("RMD") under current Treasury
regulations, once income payments have begun over a Guaranteed Payment Period,
the Guaranteed Payment Period may not be changed even if the new period is
shorter than the maximum permitted. Please consult with a competent tax advisor
prior to making a request to modify payments if your Contract is subject to RMD
requirements.
Any change to either the frequency of payments or length of a Guaranteed Payment
Period will take effect on the next payment date after we accept the requested
change.
PAYOUT WITHDRAWAL
You may terminate all or a portion of the income payments being made under
Income Plan 3 at any time and withdraw their present value ("withdrawal value"),
subject to a Payout Withdrawal Charge, by writing to us
59 PROSPECTUS
("Payout Withdrawal"). For variable income payments, the withdrawal value is
equal to the present value of the variable income payments being terminated,
calculated using a discount rate equal to the assumed investment rate that was
used in determining the initial variable payment. For fixed income payments, the
withdrawal value is equal to the present value of the fixed income payments
being terminated, calculated using a discount rate equal to the applicable
current interest rate (this may be the initial interest rate in some states.)
The applicable current interest rate is the rate we are using on the date we
receive your Payout Withdrawal request to determine income payments for a new
annuitization with a payment period equal to the remaining payment period of the
income payments being terminated.
A Payout Withdrawal must be at least $50. If any Payout Withdrawal reduces the
value of the remaining income payments to an amount not sufficient to provide an
initial payment of at least $20, we reserve the right to terminate the Contract
and pay you the present value of the remaining income payments in a lump sum. If
you withdraw the entire value of the remaining income payments, the Contract
will terminate.
You must specify the investment alternative(s) from which you wish to make a
Payout Withdrawal. If you withdraw a portion of the value of your remaining
income payments, the payment period will remain unchanged and your remaining
payment amounts will be reduced proportionately.
PAYOUT WITHDRAWAL CHARGE
To determine the Payout Withdrawal Charge, we assume that purchase payments are
withdrawn first, beginning with the oldest payment. When an amount equal to all
purchase payments has been withdrawn, additional withdrawals will not be
assessed a Payout Withdrawal Charge.
Payout Withdrawals will be subject to a Payout Withdrawal Charge for each
Contract as follows:
Number of Complete Years Since We Received the Purchase Payment Being Withdrawn/Applicable Charge:
Contract: 0 1 2 3 4 5 6 7 8+
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor 7% 7% 6% 5% 4% 3% 2% 0% 0%
Allstate Advisor Plus 8.5% 8.5% 8.5% 7.5% 6.5% 5.5% 4% 2.5% 0%
Allstate Advisor
Preferred with:
5-Year Withdrawal
Charge Option 7% 6% 5% 4% 3% 0%
3-Year Withdrawal
Charge Option 7% 6% 5% 0%
No Withdrawal Charge
Option None
ADDITIONAL INFORMATION. We may make other Income Plans available. You may
obtain information about them by writing or calling us. On the Payout Start
Date, you must specify the portion of the Contract Value to be applied to
variable income payments and the portion to be applied to fixed income payments.
For the portion of your Contract Value to be applied to variable income
payments, you must also specify the Variable Sub-Accounts on which to base the
variable income payments as well as the allocation among those Variable
Sub-Accounts. If you do not choose how the Contract Value is to be applied, then
the portion of the Contract Value in the Variable Account on the Payout Start
Date will be applied to variable income payments, according to the Variable
Sub-Account allocations as of the Payout Start Date, and the remainder of the
Contract Value will be applied to fixed income payments.
We will apply your Contract Value, adjusted by any applicable Market Value
Adjustment, less applicable taxes, to your Income Plan(s) on the Payout Start
Date. We can make income payments in monthly, quarterly, semi-annual or annual
installments, as you select. If the Contract Value is less than $2,000 when it
is applied to the Income Plan(s) you choose, or not enough to provide an initial
payment of at least $20 when it is applied to the Income Plan(s) you choose, and
state law permits, we may:
.. terminate the Contract and pay you the Contract Value, adjusted by any
applicable Market Value Adjustment and less any applicable taxes, in a lump
sum instead of the periodic payments you have chosen, or
.. reduce the frequency of your payments so that each payment will be at least
$20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by: (a) company mortality experience; or (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments, which may
be more or less than your total purchase payments because (a) variable income
payments vary with the investment results of the underlying Portfolios; and (b)
under some of the Income Plans, we make income payments only so long as an
60 PROSPECTUS
Annuitant is alive or any applicable Guaranteed Payment Period has not yet
expired.
In calculating the amount of the periodic payments in the annuity tables in the
Contracts, we used an assumed investment rate ("AIR", also known as benchmark
rate) of 3%. Currently, you may choose either a 6%, 5%, or 3% AIR per year. If
you select the Income Protection Benefit Option, however, the 3% AIR must apply.
The 6% and 5% AIR may not be available in all states (check with your
representative for availability). Currently, if you do not choose one, the 5%
AIR will automatically apply (except in states in which the 5% AIR is not
available; in those states, the 3% AIR will automatically apply). You may not
change the AIR after you have selected an Income Plan.
We reserve the right to offer other assumed investment rates. If the actual net
investment return of the Variable Sub-Accounts you choose is less than the AIR,
then the dollar amount of your variable income payments will decrease. The
dollar amount of your variable income payments will increase, however, if the
actual net investment return exceeds the AIR. The dollar amount of the variable
income payments stays level if the net investment return equals the AIR. With a
higher AIR, your initial income payment will be larger than with a lower AIR.
While income payments continue to be made, however, this disparity will become
smaller and, if the payments have continued long enough, each payment will be
smaller than if you had initially chosen a lower AIR.
Please refer to the Statement of Additional Information for more detailed
information as to how we determine variable income payments.
You may also elect a variable income payment stream consisting of level monthly,
quarterly or semi-annual payments. If you elect to receive level monthly,
quarterly or semi-annual payments, the payments must be recalculated annually.
You may only elect to receive level payments at or before the Payout Start Date.
If you have elected level payments for an Income Plan(s), you may not make any
variable to fixed payment transfers within such Income Plan(s). We will
determine the amount of each annual payment as described above, place this
amount in our general account, and then distribute it in level monthly,
quarterly or semi-annual payments. The sum of the level payments will exceed the
annual calculated amount because of an interest rate factor we use, which may
vary from year to year, but will not be less than 2% per year. We do not allow
withdrawals of the annual amount unless you make a full or partial withdrawal
request of the value of the remaining payments under Income Plan 3. Withdrawals
will be assessed a Payout Withdrawal Charge, if applicable. If the Annuitant
dies while you are receiving level payments, you will not be entitled to receive
any remaining level payments for that year (unless the Annuitant dies before the
end of the Guaranteed Payment Period). For example, if you have selected Income
Plan 1 with no Guaranteed Payment Period and the Annuitant dies during the year,
the Beneficiary will not be entitled to receive the remaining level payments for
that year.
INCOME PROTECTION BENEFIT OPTION
We offer an Income Protection Benefit Option, which may be added to your
Contract on the Payout Start Date for an additional mortality and expense risk
charge if you have selected variable income payments subject to the following
conditions:
.. The Annuitant and joint Annuitant, if applicable, must be age 75 or younger on
the Payout Start Date.
.. You must choose Income Plan 1 or 2, and the Guaranteed Payment Period must be
for at least 120 months, unless the Internal Revenue Service requires a
different payment period.
.. You may apply the Income Protection Benefit Option to more than one Income
Plan.
.. The AIR must be 3% for the Income Plan(s) to which you wish to apply this
benefit.
.. You may only add the Income Protection Benefit Option on the Payout Start Date
and, once added, the option cannot be cancelled.
.. You may not add the Income Protection Benefit Option without our prior
approval if your Contract Value is greater than $1,000,000 at the time you
choose to add the Income Protection Benefit Option.
.. You may not convert variable income payments to fixed income payments.
If you select the Income Protection Benefit Option, we guarantee that your
variable income payments under each of the Income Plans to which the option is
applied will never be less that 85% of the initial variable amount income value
("Income Protection Benefit"), as calculated on the Payout Start Date under such
Income Plans, unless you have elected a reduced survivor payment plan under
Income Plan 2. If you have elected a reduced survivor payment plan, we
guarantee that your variable income payments to which the option is applied will
never be less than 85% of the initial variable amount income value prior to the
later of 1) the death of an Annuitant; or 2) the end of the guaranteed payment
period. On or after the later of these events, we guarantee that your variable
income payments will never be less than 85% of the initial variable amount
income value multiplied by the percentage you elected for your reduced survivor
plan. See Appendix C for numerical examples that illustrate how the Income
Protection Benefit is calculated.
If you add the Income Protection Benefit Option to your Contract, the mortality
and expense risk charge during the Payout Phase will be increased. The charge
for the Income Protection Benefit Option will apply only to the Income Plan(s)
to which the option has been applied. Currently, the charge for this option is
0.50%. We may change the amount we charge, but it will not exceed
61 PROSPECTUS
0.75%. Once the option is issued, we will not increase what we charge you for
the benefit.
In order to ensure that we achieve adequate investment diversification ("INCOME
PROTECTION DIVERSIFICATION REQUIREMENT"), we reserve the right, in our sole
discretion, to impose limitations on the investment alternatives in which you
may invest during the Payout Phase with respect to the assets supporting the
variable income payments to which the Income Protection Benefit Option applies.
These limitations may include, but are not limited to, maximum investment limits
on certain Variable Sub-Accounts, exclusion of certain Variable Sub-Accounts,
required minimum allocations to certain Variable Sub-Accounts, and/or the
required use of Automatic Portfolio Rebalancing.
To achieve our Income Protection Diversification Requirement, we have divided
the Variable Sub-Accounts into three separate categories: "unrestricted,"
"restricted" and "excluded." Currently, we require that you allocate between 30%
to 100% of the assets supporting your variable income payments to the
unrestricted Variable Sub-Accounts in any manner you choose. You may allocate up
to 70% of the assets supporting your variable income payments to the restricted
Variable Sub-Accounts. You may not, however, allocate more than 20% of the
assets supporting your variable income payments to any one of the restricted
Variable Sub-Accounts. You may not allocate ANY PORTION of the assets
supporting your variable income payments to the excluded Variable Sub-Accounts.
In the following three tables, we list our current Income Protection
Diversification Requirement:
UNRESTRICTED VARIABLE SUB-ACCOUNTS. There is no limit to the amount of assets
supporting your variable income payments that you may allocate to any one or
more of the following Variable Sub-Accounts. Currently, we require that you
allocate AT LEAST 30% of the assets supporting your variable income payments to
this category.
FTVIP Franklin U.S. Government - Class 2 Sub-Account
FTVIP Templeton Global Income Securities - Class 2 Sub-Account*
Oppenheimer Core Bond/VA - Service Shares Sub-Account****
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT Income - Class IB Sub-Account
Putnam VT Money Market - Class IB Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
RESTRICTED VARIABLE SUB-ACCOUNTS. You may allocate up to 70% of the amount of
assets supporting your variable income payments to the following Variable
Sub-Accounts. Currently, you may not allocate more than 20% of the amount of
assets supporting your variable income payments to any one of the restricted
Variable Sub-Accounts.
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin Small-Mid Cap Growth Securities - Class 2 Sub-Account*
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account
Lord Abbett Series - Growth and Income Sub-Account
Lord Abbett Series - Growth Opportunities Sub-Account
Lord Abbett Series - Mid-Cap Value Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Oppenheimer High Income/VA Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Research - Class IB Sub-Account***
62 PROSPECTUS
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Utilities Growth and Income - Class IB Sub-Account ***
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Equity and Income, Class II Sub-Account
Van Kampen UIF Equity Growth, Class II Sub-Account (Class I & II)**
Van Kampen UIF Global Franchise, Class II Sub-Account
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account (Class I & II)**
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
EXCLUDED VARIABLE SUB-ACCOUNTS. Currently, none of the following Variable
Sub-Accounts are available to support variable income payments.
FTVIP Templeton Developing Markets Securities - Class 2 Sub-Account
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Putnam VT Health Sciences - Class IB Sub-Account ***
Putnam VT New Opportunities - Class IB Sub-Account ***
Putnam VT Vista - Class IB Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
Van Kampen UIF Small Company Growth, Class II Sub-Account
* Effective May 1, 2003, the FTVIP Franklin Small Cap Fund (Class 2) , now known
as FTVIP Franklin Small-Mid Cap Growth Securities - Class 2 Sub-Account, and
FTVIP Templeton Global Income Securities - Class 2 Sub-Account are no longer
available for new investments. If you are currently invested in the Variable
Sub-Accounts that invest in these Portfolios you may continue your investment.
If you are currently enrolled in one of our automatic transaction programs,
such as automatic additions, portfolio rebalancing or dollar cost averaging, we
will continue to effect automatic transactions to the Portfolios in accordance
with that program.
**The Van Kampen UIF Equity Growth, Class II Sub-Account and the Van Kampen UIF
U.S. Mid Cap Value, Class II Sub-Account are offered with Contracts issued on or
after May 1, 2004. Contract Owners of Contracts issued prior to May 1, 2004 may
only invest in the Van Kampen UIF Equity Growth, Class I Sub-Account and the Van
Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
***Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, the Putnam VT New Opportunities - Class IB Sub-Account , the Putnam
VT Research - Class IB Sub-Account, and the Putnam VT Utilities Growth and
Income - Class IB Sub-Account closed to new investments.
****Effective April 29, 2005, the Oppenheimer Bond Fund/VA - Service Shares
changed its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account.
You must use quarterly Automatic Portfolio Rebalancing to meet our Income
Protection Diversification Requirement. On the date of each rebalancing, we will
reallocate the amount of the assets supporting your variable income payments
according to the rebalancing percentages you have selected, subject to the then
current restrictions and exclusions in effect. We expect that the restrictions
and exclusions for each category will change from time to time. Any change in
these restrictions and exclusions will become effective no later than the next
regularly scheduled rebalancing of your Variable Sub-Account choices on or
immediately after the date of change.
The Income Protection Diversification Requirement is based on a model. We may
use a model developed and maintained by us or we may elect to use a model
developed or provided by an independent third party. We will notify you at least
30 days before we make any change to our Income Protection Diversification
Requirement.
We may determine which Variable Sub-Accounts are eligible for each category or
we may elect to follow the recommendations of an independent third party. We may
at any time make new determinations as to which Variable Sub-Accounts are
unrestricted, restricted or excluded. We may do so for a variety of reasons
including, but not limited to, a change in the investment objectives or policies
of a Portfolio, or the failure, in our sole determination, of such Portfolio to
invest in accordance with its stated investment objective or policies.
Transfers made for purposes of meeting the Income Protection Diversification
Requirement will not count towards the number of free transfers you may make
each Contract Year. See "Investment Alternatives: Transfers," on page 48, for
additional information.
63 PROSPECTUS
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. The guaranteed income payment amounts will
change if the frequency of payments or the length of the payment period changes.
We calculate the fixed income payments by:
.. adjusting the portion of the Contract Value in any Fixed Account Option on the
Payout Start Date by any applicable Market Value Adjustment;
.. deducting any applicable taxes; and
.. applying the resulting amount to the greater of: (a) the appropriate income
payment factor for the selected Income Plan from the Income Payment Table in
your Contract; or (b) such other income payment factor as we are offering on
the Payout Start Date.
We may defer your request to make a withdrawal from fixed income payments for a
period of up to 6 months or whatever shorter time state law may require. If we
defer 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.
RETIREMENT INCOME GUARANTEE OPTIONS Effective January 1, 2004, we ceased
offering the Retirement Income Guarantee Options ("RIG 1" and "RIG 2"), except
in a limited number of states. Effective May 1, 2004, the RIG 1 and RIG 2
Options are no longer available in any state. If you added a Retirement Income
Guarantee Option to your Contract prior to January 1, 2004 (up to May 1, 2004 in
certain states), your Option will continue to apply to your Contract. Also,
effective January 1, 2004, we discontinued the Trade-In Program, except for
Contract Owners who added RIG 1 or RIG 2 prior to May 1, 2003. For Contract
Owners who added RIG 1 or RIG 2 on or after May 1, 2003, you may cancel your RIG
1 or RIG 2 Option during the 60-day period following your next 3rd Contract
Anniversary after January 1, 2004. If you do not cancel the Option during this
60-day period, you will not be permitted to cancel it later. Please check with
your sales representative for details. The following describes the Retirement
Income Guarantee Options for Contract Owners who elected the Option prior to
January 1, 2004 (up to May 1, 2004 in certain states).
We refer to the issue date of the option as the "RIDER DATE." You may add only
one Retirement Income Guarantee Option to your Contract. The oldest Contract
Owner and oldest Annuitant must be age 75 or younger on the Rider Application
Date. Once you add a rider to your Contract, it may not be cancelled except
during the 60-day period following the next 3/RD/ Contract Anniversary after
January 1, 2004, as described above.
WE RESERVE THE RIGHT TO IMPOSE LIMITATIONS ON THE INVESTMENT ALTERNATIVES IN
WHICH YOU MAY INVEST AS A CONDITION OF THESE OPTIONS. THESE RESTRICTIONS MAY
INCLUDE, BUT ARE NOT LIMITED TO, MAXIMUM INVESTMENT LIMITS ON CERTAIN INVESTMENT
ALTERNATIVES, EXCLUSION OF CERTAIN INVESTMENT ALTERNATIVES, REQUIRED MINIMUM
ALLOCATIONS TO CERTAIN VARIABLE SUB-ACCOUNTS AND/OR THE AUTOMATIC PORTFOLIO
REBALANCING. CURRENTLY, NO SUCH RESTRICTIONS ARE BEING IMPOSED.
For each option, an "INCOME BASE" is calculated, which is used only for the
purpose of calculating the "GUARANTEED RETIREMENT INCOME BENEFIT" and the
appropriate "RIDER FEE," all defined below. The Income Base does not provide a
Contract Value or guarantee performance of any investment option. The Income
Base for RIG 1 and RIG 2 are described in more detail below.
You may apply the Income Base less applicable taxes to an Income Plan on the
Payout Start Date and receive the Guaranteed Retirement Income Benefit if all of
the following conditions are satisfied:
.. The Payout Start Date must be on or after the 10/th/ Contract Anniversary of
the Rider Date.
.. The Payout Start Date must occur during the 30-day period following a Contract
Anniversary.
.. The oldest Annuitant must be age 99 or younger as of the Payout Start Date.
.. You must select Fixed Amount Income Payments only.
.. You must select Income Plan 1 or 2, with a Guaranteed Payment Period of at
least:
. 120 months, if the youngest Annuitant is age 80 or younger as of the Payout
Start Date; or
. 60 months, if the youngest Annuitant is older than age 80 as of the Payout
Start Date.
The "GUARANTEED RETIREMENT INCOME BENEFIT" is determined by applying the Income
Base, less any applicable taxes, to the appropriate monthly income payment
factor shown in the Income Payment Tables in your Contract for the selected
Income Plan.
If a different payment frequency (quarterly, semi-annual, or annual) or
different Income Plan is selected, an income payment factor for the selected
payment frequency and Income Plan is determined on the same mortality and
interest rate basis as the Income Payment Tables shown in your Contract.
On the Payout Start Date, the income payments for the selected Income Plan will
be the greater of:
.. The Guaranteed Retirement Income Benefit; or
.. For fixed income payments, the Contract Value, adjusted by any applicable
Market Value Adjustment, less any applicable taxes is applied to the greater
of: the appropriate income payment factor for the selected Income Plan from
the income payment tables in your Contract, or an income payment factor for
the selected Income Plan that we are offering on the Payout Start Date.
64 PROSPECTUS
We assess an annual Rider Fee if you selected one of the Retirement Income
Guarantee Options. The Rider Fee is deducted on each Contract Anniversary on a
pro rata basis from each of the Variable Sub-Accounts in which your Contract
Value is invested on that date. The Rider Fee will decrease the number of
Accumulation Units in each Variable Sub-Account. The Rider Fee is deducted only
during the Accumulation Phase of the Contract. For the first Contract
Anniversary following the Rider Date, the Rider Fee will be prorated to cover
the period between the Rider Date and the first Contract Anniversary after the
Rider Date. In the case of a full withdrawal of the Contract Value, the Rider
Fee is prorated to cover the period between the Contract Anniversary immediately
prior to the withdrawal and the date of the withdrawal.
The current Rider Fee for RIG 1 is 0.40% of the Income Base on each Contract
Anniversary (0.25% for Contract Owners who added RIG 1 prior to May 1, 2003).
The current Rider Fee for the RIG 2 is 0.55% of the Income Base on each Contract
Anniversary (0.45% for Contract Owners who added RIG 2 prior to May 1, 2003).
These options will terminate and the corresponding Rider Fee will cease on the
earliest of the following to occur:
.. The date the Contract is terminated;
.. If the Contract is not continued in the Accumulation Phase under either the
Death of Owner or Death of Annuitant provisions of the Contract. The option
will terminate on the date we determine the Death Proceeds;
.. The Payout Start Date; or
.. For Contract Owners who added a RIG 1 or RIG 2 Option on or after May 1, 2003,
if you elect to cancel your RIG 1 or RIG 2 Option during the 60-day period
following the next 3/RD /Contract Anniversary after January 1, 2004 (since we
discontinued offering the Trade-In Program as of that date).
Otherwise, the options may not be terminated or cancelled.
CALCULATION OF INCOME BASE.
On the Rider Date, the "RIG 1 INCOME BASE" is equal to the Contract Value. The
RIG 1 Income Base, plus purchase payments (and Credit Enhancements for ALLSTATE
ADVISOR PLUS CONTRACTS) made after the Rider Date and less RIG 1 withdrawal
adjustments for withdrawals made after the Rider Date, will accumulate interest
on a daily basis at a rate equivalent to 5% per year (3% in certain states),
subject to the "CAP" defined below. This accumulation will continue until the
first Contract Anniversary following the 85/th/ birthday of the oldest Contract
Owner or oldest Annuitant, whichever occurs first. After the 5% interest
accumulation ends (3% in certain states), the RIG 1 Income Base will continue to
be increased by purchase payments (and Credit Enhancements for ALLSTATE ADVISOR
PLUS CONTRACTS) and reduced by RIG 1 withdrawal adjustments for withdrawals
until the option terminates. The "RIG 1 WITHDRAWAL ADJUSTMENT" is defined below.
The RIG 1 Income Base will not exceed a CAP equal to:
.. 200% of the Contract Value as of the Rider Date; plus
.. 200% of purchase payments (and Credit Enhancements for ALLSTATE ADVISOR PLUS
CONTRACTS) made after the Rider Date, but excluding any purchase payments (and
Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) made in the 12-month
period immediately prior to the Payout Start Date; minus
.. RIG 1 Withdrawal Adjustments for any withdrawals made after the Rider Date.
RIG 1 WITHDRAWAL ADJUSTMENT. Prior to the first Contract Anniversary following
the 85/th/ birthday of the oldest Contract Owner or oldest Annuitant, whichever
is earlier, the withdrawal adjustment is as follows:
.. In each Contract Year, for the portion of withdrawals that do not cumulatively
exceed 5% (3% in certain states) of the RIG 1 Income Base as of the beginning
of the Contract Year (or as of the Rider Date for the first Contract Year in
which RIG 1 is added), the withdrawal adjustment is equal to the amount
withdrawn (or portion thereof) multiplied by a discount factor. The discount
factor is calculated using a 5% annual interest rate (3% in certain states)
and the portion of the Contract Year between the withdrawal date and the end
of the Contract Year. This withdrawal adjustment has the effect of reducing
the RIG 1 Income Base at the end of the Contract Year by the actual amount of
the withdrawal. In other words, for purposes of calculating the RIG 1 Income
Base, the withdrawal is treated as if it occurred at the end of the Contract
Year.
.. In each Contract Year, for the portion of withdrawals that cumulatively exceed
5% (3% in certain states) of the RIG 1 Income Base as of the beginning of the
Contract Year (or as of the Rider Date for the first Contract Year in which
RIG 1 is added), the withdrawal adjustment is equal to the withdrawal amount
(or portion thereof), divided by the Contract Value immediately prior to the
withdrawal and reduced for the portion of withdrawals that do not cumulatively
exceed 5% (3% in certain states), and the result multiplied by the most
recently calculated RIG 1 Income Base, reduced for the portion of withdrawals
that do not cummulatively exceed 5% (3% in certain states).
On or after the first Contract Anniversary following the 85/th/ birthday of the
oldest Contract Owner or the Annuitant, all withdrawal adjustments are equal to
the withdrawal amount, divided by the Contract Value immediately prior to the
withdrawal, and the result
65 PROSPECTUS
multiplied by the most recently calculated RIG 1 Income Base.
See Appendix D for numerical examples that illustrate how the RIG 1 Withdrawal
Adjustment is applied.
The "RIG 2 INCOME BASE" is defined as the greater of "INCOME BASE A" or "INCOME
BASE B."
"INCOME BASE A" and its corresponding Withdrawal Adjustment are calculated in
the same manner as the RIG 1 Income Base and RIG 1 Withdrawal Adjustment.
On the Rider Date, "INCOME BASE B" is equal to the Contract Value. After the
Rider Date and prior to the Payout Start Date, Income Base B is recalculated
each time a purchase payment or withdrawal is made as well as on each Contract
Anniversary as follows:
.. Each time a purchase payment is made, Income Base B is increased by the amount
of the purchase payment (and Credit Enhancement for ALLSTATE ADVISOR PLUS
CONTRACTS).
.. Each time a withdrawal is made, Income Base B is reduced by a proportional
withdrawal adjustment, defined as the withdrawal amount divided by the
Contract Value immediately prior to the withdrawal, and the result multiplied
by the most recently calculated Income Base B.
.. On each Contract Anniversary until the first Contract Anniversary following
the 85/th/ birthday of the oldest Contract Owner or oldest Annuitant,
whichever occurs first, Income Base B is equal to the greater of the Contract
Value on that date or the most recently calculated Income Base B.
If no purchase payments or withdrawals are made after the Rider Date, Income
Base B will be equal to the greatest of the Contract Value on the Rider Date and
the Contract Values on each subsequent Contract Anniversary until the earlier of
the Payout Start Date or the Contract Anniversary following the 85/th/ birthday
of the oldest Contact Owner or oldest Annuitant, whichever occurs first.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain 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
applicable 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 BENEFITS
- --------------------------------------------------------------------------------
DEATH PROCEEDS
Under certain conditions, described below, we will pay Death Proceeds for this
Contract on the death of the Contract Owner, Annuitant, or Co-Annuitant if the
death occurs prior to the Payout Start Date. If the Owner or Annuitant 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" for more
information.
We will determine the value of the Death Proceeds as of the end of the Valuation
Date during which we receive the first Complete Request for Settlement (the next
Valuation Date, if we receive the request after 3:00 p.m. Central Time). In
order to be considered a "COMPLETE REQUEST FOR SETTLEMENT," a claim for
distribution of the Death Proceeds must include "DUE PROOF OF DEATH" in any of
the following forms of documentation:
.. A certified copy of the 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.
"DEATH PROCEEDS" are determined based on when we receive a Complete Request for
Settlement:
.. If we receive a Complete Request for Settlement within 180 days of the death
of the Contract Owner, Annuitant, or Co-Annuitant, as applicable, the Death
Proceeds is equal to the "DEATH BENEFIT."
.. If we receive a Complete Request for Settlement more than 180 days after the
death of the Contract Owner, Annuitant, or Co-Annuitant, as applicable, the
Death Proceeds are equal to the greater of the Contract Value or Settlement
Value. We reserve the right to waive or extend, in a nondiscriminatory
manner, the 180-day period in which the Death Proceeds will equal the Death
Benefit.
Where there are multiple Beneficiaries, we will only value the Death Proceeds at
the time the first Beneficiary submits the necessary documentation in good
order. Any Death Proceeds amounts attributable to any Beneficiary which remain
in the Variable Sub-Accounts are subject to investment risk.
DEATH BENEFIT OPTIONS
In addition to the ROP Death Benefit included in your Contract, we offer the
following death benefit options which may be added to your Contract:
.. MAV Death Benefit Option
.. Enhanced Beneficiary Protection (Annual Increase) Option
.. Earnings Protection Death Benefit Option
66 PROSPECTUS
The amount of the Death Benefit depends on which death benefit option(s) you
select. Not all death benefit options are available in all states.
You may select any combination of death benefit options on the Issue Date of
your Contract or at a later date, subject to state availability and issue age
restrictions. You may not add any of the death benefit option(s) to your
Contract after Contract issue without our prior approval if your Contract Value
is greater than $1,000,000 at the time you choose to add an option(s).
The "DEATH BENEFIT" is equal to the Earnings Protection Death Benefit (if
selected) plus the greatest of:
.. The Contract Value;
.. The Settlement Value;
.. The ROP Death Benefit;
.. The MAV Death Benefit Option (if selected); or
.. The Enhanced Beneficiary Protection (Annual Increase) Option (if selected).
The "Settlement Value" is the amount that would be paid in the event of a full
withdrawal of the Contract Value.
The "ROP DEATH BENEFIT" is equal to the sum of all purchase payments (and Credit
Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS), reduced by a proportional
withdrawal adjustment for each withdrawal. The withdrawal adjustment is equal
to the withdrawal amount divided by the Contract Value immediately prior to the
withdrawal, and the result is multiplied by:
The sum of all purchase payments (and Credit Enhancements for ALLSTATE ADVISOR
PLUS CONTRACTS) made prior to the withdrawal, less any prior withdrawal
adjustments.
MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT OPTION.
The "MAV DEATH BENEFIT OPTION" is only available if the oldest Contract Owner
and oldest Annuitant are age 79 or younger on the Rider Application Date. There
is an additional mortality and expense risk charge for this death benefit
option, currently equal to 0.20% (0.15% for Contract Owners who added this
option prior to May 1, 2003). We may change what we charge for this death
benefit option, but it will never exceed 0.30%. Once added to your Contract, we
guarantee that we will not increase the mortality and expense risk charge you
pay for this death benefit option.
On the date we issue the rider for this benefit ("Rider Date"), the MAV DEATH
BENEFIT is equal to the Contract Value. After the Rider Date and prior to the
date we determine the Death Proceeds (see "Death Proceeds" on page 66), the MAV
Death Benefit is recalculated each time a purchase payment or withdrawal is made
as well as on each Contract Anniversary as follows:
.. Each time a purchase payment is made, the MAV Death Benefit is increased by
the amount of the purchase payment (and Credit Enhancement for ALLSTATE
ADVISOR PLUS CONTRACTS).
.. Each time a withdrawal is made, the MAV Death Benefit is reduced by a
proportional withdrawal adjustment, defined as the withdrawal amount divided
by the Contract Value immediately prior to the withdrawal, and the result
multiplied by the most recently calculated MAV Death Benefit.
.. On each Contract Anniversary until the first Contract Anniversary following
the 80/TH/ birthday of the oldest Contract Owner or oldest Annuitant,
whichever occurs first, the MAV Death Benefit is recalculated as the greater
of the Contract Value on that date or the most recently calculated MAV Death
Benefit.
If no purchase payments or withdrawals are made after the Rider Date, the MAV
Death Benefit will be equal to the greatest of the Contract Value on the Rider
Date and the Contract Values on each subsequent Contract Anniversary after the
Rider Date, but before the date we determine the Death Proceeds. If, upon death
of the Contract Owner, the Contract is continued under Option D as described on
page 70, and if the oldest New Contract Owner and the oldest Annuitant are age
80 or younger on the date we determine the Death Proceeds, then the MAV Death
Benefit Option will continue. The MAV Death Benefit will continue to be
recalculated for purchase payments (and Credit Enhancements for ALLSTATE ADVISOR
PLUS CONTRACTS), withdrawals, and on each Contract Anniversary after the date we
determine the Death Proceeds until the earlier of:
.. The first Contract Anniversary following the 80/th/ birthday of either the
oldest New Contract Owner or the oldest Annuitant, whichever is earlier.
(After the 80/th/ birthday of either the oldest New Contract Owner or the
oldest Annuitant, whichever is earlier, the MAV Death Benefit will be
recalculated only for purchase payments (and Credit Enhancements for ALLSTATE
ADVISOR PLUS CONTRACTS) and withdrawals); or
.. The date we next determine the Death Proceeds.
ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION.
The Enhanced Beneficiary Protection (Annual Increase) Option is only available
if the oldest Contract Owner and oldest Annuitant are age 79 or younger on the
Rider Application Date. There is an additional mortality and expense risk
charge for this death benefit option, currently equal to 0.30% (0.15% for
Contract Owners who added this option prior to May 1, 2003). We may change what
we charge for this death benefit option, but it will never exceed 0.30%. Once
added to your Contract, we guarantee that we will not increase the
mortality and expense risk charge you pay for this death benefit option.
On the date we issue the rider for this benefit ("Rider Date"), the Enhanced
Beneficiary Protection (Annual
67 PROSPECTUS
Increase) Benefit is equal to the Contract Value. The Enhanced Beneficiary
Protection (Annual Increase) Benefit, plus purchase payments (and Credit
Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) made after the Rider Date and
less withdrawal adjustments for withdrawals made after the Rider Date, will
accumulate interest on a daily basis at a rate equivalent to 5% per year (3% in
certain states), subject to the "CAP" defined below. This accumulation will
continue until the earlier of:
(a) the first Contract Anniversary following the 80/th/ birthday of the oldest
Contract Owner or oldest Annuitant, whichever occurs first; or
(b) the date we determine the Death Proceeds.
After the 5% interest accumulation ends (3% in certain states), the Enhanced
Beneficiary Protection (Annual Increase) Benefit will continue to be increased
by purchase payments (and Credit Enhancements for ALLSTATE ADVISOR PLUS
CONTRACTS) and reduced by withdrawal adjustments for withdrawals until the death
benefit option terminates. The withdrawal adjustment is a proportional
adjustment, defined as the withdrawal amount divided by the Contract Value
immediately prior to the withdrawal, and the result multiplied by the amount of
the Enhanced Beneficiary Protection (Annual Increase) Benefit immediately prior
to the withdrawal.
The Enhanced Beneficiary Protection (Annual Increase) Benefit CAP is equal to:
.. 200% of the Contract Value as of the Rider Date; plus
.. 200% of purchase payments (and Credit Enhancements for ALLSTATE ADVISOR PLUS
CONTRACTS) made after the Rider Date, but excluding any purchase payments (and
Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) made in the 12-month
period immediately prior to the death of the Contract Owner or the Annuitant;
minus
.. Withdrawal adjustments for any withdrawals made after the Rider Date. Refer to
Appendix E for withdrawal adjustment examples.
If, upon death of the Contract Owner, the Contract is continued under Option D
as described on page 70, and if the oldest New Contract Owner and the oldest
Annuitant are age 80 or younger on the date we determine the Death Proceeds,
then the Enhanced Beneficiary Protection (Annual Increase) Option will continue.
The amount of the Enhanced Beneficiary Protection (Annual Increase) Benefit as
of the date we determine the Death Proceeds, plus subsequent purchase payments
(and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS), less withdrawal
adjustments for any subsequent withdrawals, will accumulate daily at a rate
equivalent to 5% per year (3% in certain states) from the date we determine the
Death Proceeds, until the earlier of:
.. The first Contract Anniversary following the 80/th/ birthday of either the
oldest New Contract Owner or the oldest Annuitant, whichever is earlier.
(After the 80/th/ birthday of either the oldest New Owner or the oldest
Annuitant, whichever is earlier, the Enhanced Beneficiary Protection (Annual
Increase) Benefit will be recalculated only for purchase payments and
withdrawals (and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS); or
.. The date we next determine the Death Proceeds.
EARNINGS PROTECTION DEATH BENEFIT OPTION.
The "EARNINGS PROTECTION DEATH BENEFIT OPTION" is only available if the oldest
Contract Owner and oldest Annuitant are age 79 or younger on the Rider
Application Date. There is an additional mortality and expense risk charge for
this death benefit option, currently equal to:
.. 0.25%, if the oldest Contract Owner and oldest Annuitant are age 70 or younger
on the Rider Application Date; and
.. 0.40%, if the oldest Contract Owner or oldest Annuitant is over age 70 and all
are age 79 or younger on the Rider Application Date.
We may change what we charge for this death benefit option, but it will never
exceed 0.35% for issue ages 0-70 and 0.50% for issue ages 71-79. Once added to
your Contract, we guarantee that we will not increase the mortality and expense
risk charge you pay for this death benefit option. However, if your spouse
elects to continue the Contract in the event of your death and if he or she
elects to continue the Earnings Protection Death Benefit Option, the mortality
and expense risk charge for the death benefit option will be based on the ages
of the oldest new Contract Owner and the oldest Annuitant at the time the
Contract is continued.
If the oldest Contract Owner and oldest Annuitant are age 70 or younger on the
Rider Application Date, the EARNINGS PROTECTION DEATH BENEFIT is equal to the
lesser of:
.. 100% of "IN-FORCE PREMIUM" (excluding purchase payments (and Credit
Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) made after the date we issue
the rider for this benefit ("Rider Date") and during the twelve-month period
immediately prior to the death of the Contract Owner or Annuitant); or
.. 40% of "IN-FORCE EARNINGS"
calculated as of the date we determine the Death Proceeds.
If the oldest Contract Owner or oldest Annuitant is over age 70 and all are age
79 or younger on the Rider Application Date, the EARNINGS PROTECTION DEATH
BENEFIT is equal to the lesser of:
.. 50% of "IN-FORCE PREMIUM" (excluding purchase payments (and Credit
Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS) made after the Rider Date
and during the twelve-month period immediately prior to the death of the
Contract Owner or Annuitant); or
68 PROSPECTUS
.. 25% of "IN-FORCE EARNINGS"
calculated as of the date we determine the Death Proceeds.
IN-FORCE EARNINGS are equal to the current Contract Value less In-Force Premium.
If this quantity is negative, then In-Force Earnings are equal to zero.
IN-FORCE PREMIUM is equal to the Contract Value on the Rider Date, plus the sum
of all purchase payments made after the Rider Date, less the sum of all
"EXCESS-OF-EARNINGS WITHDRAWALS" made after the Rider Date.
An EXCESS-OF-EARNINGS WITHDRAWAL is equal to the excess, if any, of the amount
of the withdrawal over the amount of the In-Force Earnings immediately prior to
the withdrawal.
Refer to Appendix F for numerical examples that illustrate how the Earnings
Protection Death Benefit Option is calculated.
If, upon death of the Contract Owner, the Contract is continued under Option D
as described on page 70 below, and if the oldest new Owner and the oldest
Annuitant are younger than age 80 on the date we determine the Death Proceeds,
then this death benefit option will continue unless the New Contract Owner
elects to terminate the death benefit option. If the death benefit option is
continued, the following will apply as of the date we determine the Death
Proceeds upon continuation:
.. The Rider Date will be changed to the date we determine the Death Proceeds;
.. The In-Force Premium is equal to the Contract Value as of the new Rider Date
plus all purchase payments made after the Rider Date, less the sum of all the
Excess-of-Earnings Withdrawals made after the Rider Date;
.. The Earnings Protection Death Benefit after the new Rider Date will be
determined as described above, but using the ages of the oldest new Contract
Owner and the oldest Annuitant as of the new Rider Date.
.. The mortality and expense risk charge, for this rider, will be determined as
described above, but using the ages of the oldest new Contract Owner and the
oldest Annuitant as of the new Rider Date.
If either the Contract Owner's or the Annuitant's age is misstated, the Earnings
Protection Death Benefit and the mortality and expense risk charge for this
death benefit option will be calculated according to the corrected age as of the
Rider Date. Your Contract Value will be adjusted to reflect the mortality and
expense risk charge for this death benefit option that should have been assessed
based on the corrected age.
ALL OPTIONS.
WE RESERVE THE RIGHT TO IMPOSE LIMITATIONS ON THE INVESTMENT ALTERNATIVES IN
WHICH YOU MAY INVEST AS A CONDITION OF THESE OPTIONS. THESE RESTRICTIONS MAY
INCLUDE, BUT ARE NOT LIMITED TO, MAXIMUM INVESTMENT LIMITS ON CERTAIN INVESTMENT
ALTERNATIVES, EXCLUSION OF CERTAIN INVESTMENT ALTERNATIVES, REQUIRED MINIMUM
ALLOCATIONS TO CERTAIN VARIABLE SUB-ACCOUNTS AND/OR THE REQUIRED USE OF
AUTOMATIC PORTFOLIO REBALANCING. CURRENTLY, NO SUCH RESTRICTIONS ARE BEING
IMPOSED.
These death benefit options will terminate and the corresponding Rider Fee will
cease on the earliest of the following to occur:
.. the date the Contract is terminated;
.. if, upon the death of the Contract Owner, the Contract is continued under
Option D as described in the Death of Owner section on page 31, and either the
oldest New Owner or the oldest Annuitant is older than age 80 (age 80 or older
for the Earnings Protection Death Benefit Option) on the date we determine the
Death Proceeds. The death benefit option will terminate on the date we
determine the Death Proceeds;
.. if the Contract is not continued in the Accumulation Phase under either the
Death of Owner or Death of Annuitant provisions of the Contract. The death
benefit option will terminate on the date we determine the Death Proceeds;
.. on the date the Contract Owner (if the current Contract Owner is a living
person) is changed for any reason other than death unless the New Contract
Owner is a trust and the Annuitant is the current Contract Owner;
.. on the date the Contract Owner (if the current Contract Owner is a non-living
person) is changed for any reason unless the New Contract Owner is a
non-living person or is the current Annuitant; or
.. the Payout Start Date.
Notwithstanding the preceding, in the event of the Contract Owner's death, if
the Contract Owner's spouse elects to continue the Contract (as permitted in the
Death of Owner provision below) he or she may terminate the Earnings Protection
Death Benefit at that time.
DEATH BENEFIT PAYMENTS
DEATH OF CONTRACT OWNER
If a Contract Owner dies prior to the Payout Start Date, then the surviving
Contract Owners will be "NEW CONTRACT OWNERS". If there are no surviving
Contract Owners, then subject to any restrictions previously placed upon them,
the Beneficiaries will be the New Contract Owners.
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)
69 PROSPECTUS
below, subject to any restrictions previously placed upon the New Contract
Owner. 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 following Category 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.
NEW CONTRACT OWNER CATEGORIES
CATEGORY 1. If your spouse (or Annuitant's spouse in the case of a grantor
trust-owned Contract) is the sole New Contract Owner of the entire Contract,
your spouse must choose from among the death settlement Options A, B, C, D, or E
described below. If he or she does not choose one of these Options, then Option
D will apply.
CATEGORY 2. If the New Contract Owner is a living person who is not your spouse
(or Annuitant's spouse in the case of a grantor trust-owned Contract), or there
is more than one New Contract Owner, all of whom are living persons, each New
Contract Owner must choose from among the death settlement Options A, B, C, or E
described below. If a New Contract Owner does not choose one of these Options,
then Option C will apply for that New Contract Owner.
CATEGORY 3. If there are one or more New Contract Owner(s) and at least one of
the New Contract Owners is a non-living person such as a corporation or a trust,
all New Contract Owners are considered to be non-living persons for purposes of
the death settlement options. Each New Contract Owner must choose death
settlement Option A or C described below. If a New Contract Owner does not
choose one of these Options, then Option C will apply for that New Contract
Owner.
The death settlement options we currently offer are:
OPTION A. The New Contract Owner may elect to receive the Death Proceeds in a
lump sum.
OPTION B. The New Contract Owner may elect to apply the Death Proceeds to one
of the Income Plans described above. Such income payments must begin within one
year of the date of death and must be payable:
.. Over the life of the New Contract Owner; or
.. For a guaranteed payment period of at least 5 years (60 months), but not to
exceed the life expectancy of the New Contract Owner; or
.. Over the life of the New Contract Owner with a guaranteed payment period of at
least 5 years (60 months), but not to exceed the life expectancy of the New
Contract Owner.
OPTION C. The New Contract Owner may elect to receive the Contract Value
payable within 5 years of the date of death. The Contract Value, as of the date
we receive the first Complete Request for Settlement, will be reset to equal the
Death Proceeds as of that date. Any excess amount of the Death Proceeds over
the Contract Value on that date will be allocated to the Putnam VT Money Market
Variable Sub-Account unless the New Contract Owner provides other allocation
instructions.
The New Contract Owner may not make any additional purchase payments under this
option. Withdrawal charges will be waived for any withdrawals made during the
5-year period after the date of death; however, amounts withdrawn may be subject
to Market Value Adjustments. The New Contract Owner may exercise all rights set
forth in the Transfers provision.
If the New Contract Owner dies before the Contract Value is completely
withdrawn, the New Contract Owner's Beneficiary(ies) will receive the greater of
the remaining Settlement Value or the remaining Contract Value within 5 years of
the date of the original Contract Owner's death.
OPTION D. The New Contract Owner may elect to continue the Contract in the
Accumulation Phase. If the Contract Owner was also the Annuitant, then the New
Contract Owner will be the new Annuitant. This Option may only be exercised once
per Contract. The Contract Value, as of the date we receive the first Complete
Request for Settlement, will be reset to equal the Death Proceeds as of that
date.
Unless otherwise instructed by the continuing spouse, the excess, if any, of the
Death Proceeds over the Contract Value will be allocated to the Sub-Accounts of
the Variable Account. This excess will be allocated in proportion to your
Contract Value in those Sub-Accounts as of the end of the Valuation Date that we
receive the complete request for settlement except that any portion of this
excess attributable to the Fixed Account Options will be allocated to the Putnam
VT Money Market Variable Sub-Account.
Within 30 days after the date we determine the Death Proceeds, the New Contract
Owner may make a one-time transfer of all or a portion of the excess of the
Death Proceeds, if any, into any combination of Variable Sub-Accounts, the
Standard Fixed Account and the Market Value Adjusted Fixed Account without
incurring a transfer fee, provided the investment alternative is available with
the Contract at that time. Any such transfer does not count as one of the free
transfers allowed each Contract Year and is subject to any minimum allocation
amount specified in this Contract.
The New Contract Owner 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 and a 10% tax
penalty if the New Contract Owner is under age 59 1/2.
OPTION E. EFFECTIVE JULY 1, 2005, for Nonqualified Contracts, the New Contract
Owner may elect to make
70 PROSPECTUS
withdrawals at least annually of amounts equal to the
"ANNUAL REQUIRED DISTRIBUTION" calculated for each calendar year. The first
such withdrawal must occur within:
.. One year of the date of death;
.. The same calendar year as the date we receive the first Complete Request for
Settlement; and
.. One withdrawal frequency.
The New Contract Owner must select the withdrawal frequency (monthly, quarterly,
semi-annual, or annual). Once this option is elected and frequency of
withdrawals is chosen, they cannot be changed by the New Contract Owner and
become irrevocable.
In the calendar year in which the Death Proceeds are determined, the ANNUAL
REQUIRED DISTRIBUTION is equal to the Contract Value on the date of the first
distribution divided by the "Life Expectancy" of the New Contract Owner and the
result multiplied by a fraction that represents the portion of the calendar year
remaining after the date of the first distribution. (The Contract Value, as of
the date we receive the Complete Request for Settlement, will be reset to equal
the Death Proceeds as of that date. The Contract Value on the date of the first
distribution may be more or less than the Contract Value as of the date we
receive the Complete Request for Settlement.) The Life Expectancy in that
calendar year is equal to the life expectancy value from IRS Tables based on the
age of the New Contract Owner as of his or her birthday in the same calendar
year.
In any subsequent calendar year, the Annual Required Distribution is equal to
the Contract Value as of December 31 of the prior year divided by the remaining
Life Expectancy of the New Contract Owner. In each calendar year after the
calendar year in which the first distribution occured, the Life Expectancy of
the New Contract Owner is the Life Expectancy calculated in the previous
calendar year minus one (1) year. If the Life Expectancy is less than one (1),
the Annual Required Distribution is equal to the Contract Value.
If the New Contract Owner dies before the Contract Value is completely
withdrawn, the scheduled withdrawals will continue to be paid to the New
Contract Owner's Beneficiary(ies). The Contract Value invested in the Variable
Sub-Accounts will be subject to investment risk until it is withdrawn.
We reserve the right to offer additional death settlement options.
DEATH OF ANNUITANT
If the Annuitant dies prior to the Payout Start Date, then the surviving
Contract Owners will have the Options available to the New Contract Owner,
determined by the applicable following category in which the New Contract Owner
is defined, unless:
.. The Annuitant was also the Contract Owner, in which case the Death of Owner
provisions above apply; or
.. The Contract Owner is a grantor trust not established by a business, in which
case the Beneficiary(ies) will be deemed the New Contract Owners and the Death
of Contract Owner provisions above will apply.
SURVIVING CONTRACT OWNER CATEGORIES
CATEGORY 1. If the Contract Owner is a living person, prior to the Annuitant's
death, the Contract Owner must choose from among the death settlement Options A,
B, or D described below. If the Contract Owner does not choose one of these
Options, then Option D will apply.
CATEGORY 2. If the Contract Owner is a non-living person such as a corporation
or a trust, the Contract Owner must choose from death settlement Options A or C
described below. If the Contract Owner does not choose one of these Options,
then Option C will apply.
The death settlement options we currently offer are:
OPTION A. The Contract Owner may elect to receive the Death Proceeds in a lump
sum.
OPTION B. The Contract Owner may elect to apply the Death Proceeds to one of
the Income Plans described above. Such income payments must begin within one
year of the date of death.
OPTION C. The Contract Owner may elect to receive the Contract Value payable
within 5 years of the date of death. The Contract Value, as of the date we
receive the first Complete Request for Settlement, will be reset to equal the
Death Proceeds as of that date. Any excess amount of the Death Proceeds over
the Contract Value on that date will be allocated to the Putnam VT Money Market
Variable Sub-Account unless the Contract Owner provides other allocation
instructions.
The Contract Owner may not make any additional purchase payments under this
option. Withdrawal charges will be waived for any withdrawals made during the
5-year period after the date of death; however, amounts withdrawn may be subject
to Market Value Adjustments. The Contract Owner may exercise all rights set
forth in the Transfers provision.
OPTION D. The Contract Owner may elect to continue the Contract and the
youngest Contract Owner will become the new Annuitant. The Contract Value of
the continued Contract will not be adjusted to equal the Death Proceeds.
We reserve the right to offer additional death settlement options.
QUALIFIED CONTRACTS
The death settlement options for qualified plans, including IRAs, may be
different to conform with the individual tax requirements of each type of
qualified plan. Please refer to your Endorsement for IRAs or 403(b) plans,
71 PROSPECTUS
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.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION AND DEATH OF CO-ANNUITANT
We offer a Spousal Protection Benefit (Co-Annuitant) Option that may be added to
your Contract subject to the following conditions:
.. The individually owned Contract must be either a traditional, Roth, or
Simplified Employee Pension IRA.
.. The Contract Owner's spouse must be the sole Primary Beneficiary of the
Contract and will be the named Co-Annuitant.
.. The Contract Owner must be age 90 or younger on the Rider Application Date;
and the Co-Annuitant must be age 79 or younger on the Rider Application Date.
.. The option may be added at Contract issue or anytime after Contract issue
through April 30, 2005. On or after May 1, 2005, the option may only be added
when we issue the Contract or within 6 months of the Contract Owner's
marriage. You may not add the Option to your Contract without our prior
approval if you Contract Value is greater than $1,000,000 at the time you
choose to add the option. We may require proof of marriage in a form
satisfactory to us.
Under the Spousal Protection Benefit Option, the Co-Annuitant will be considered
to be an Annuitant under the Contract during the Accumulation Phase except that
the "Death of Annuitant" provision does not apply on the death of the
Co-Annuitant, and the latest Payout Start Date will be based solely on the
Contact Owner's age.
You may change the Co-Annuitant to a new spouse only if you provide proof of
remarriage in a form satisfactory to us. Once we accept a change, the change
will take effect on the date you signed the request. Each change is subject to
any payment we make or other action we take before we accept it. At any time,
there may only be one Co-Annuitant under your Contract.
There is an annual Rider Fee of 0.10% of the Contract Value for new Options
added on or after January 1, 2005. For Options added prior to this date, there
is no charge for this option. We reserve the right to assess an annual Rider Fee
not to exceed 0.15% for Options added in the future. Once this option is added
to your Contract, we guarantee that we will not increase what we charge you for
this option. For Contracts purchased on or after January 1, 2005, we may
discontinue offering the Spousal Protection Benefit (Co-Annuitant) Option at any
time prior to the time you elect to receive it.
The option will terminate upon the date termination is accepted by us or will
terminate on the earliest of the following occurrences:
.. upon the death of the Co-Annuitant (as of the date we determine the Death
Proceeds);
.. upon the death of the Contract Owner (as of the date we determine the Death
Proceeds);
.. on the date the Contract is terminated;
.. on the Payout Start Date; or
.. on the date you change the beneficiary of the Contract and the change is
accepted by us;
.. for options added on or after January 1, 2005, the Owner may terminate the
option upon the divorce of the Owner and the Co-Annuitant by providing written
notice and proof of divorce in a form satisfactory to us;
.. for options added prior to January 1, 2005, the Owner may terminate this
option at anytime by written notice in a form satisfactory to us.
Once terminated, a new Spousal Protection Benefit (Co-Annuitant) Option cannot
be added to the Contract unless the last option attached to the Contract was
terminated due to divorce or a change of beneficiary.
DEATH OF CO-ANNUITANT. If the Co-Annuitant dies prior to the Payout Start Date,
subject to the following conditions, the Contract will be continued according to
Option D under the "Death of Owner" provision of your Contract:
.. The Co-Annuitant must have been your legal spouse on the date of his or her
death; and
.. Option D of the "Death of Owner" provision of your Contract has not previously
been exercised.
The Contract may only be continued once under Option D under the "Death of
Owner" provision. For a description of Option D, see the "Death of Owner"
section of this prospectus.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS AND DEATH OF CO-ANNUITANT
We offer a Spousal Protection Benefit (Co-Annuitant) Option for certain
Custodial Individual Retirement Accounts established under Code Section 408(a)
that may be added to your Contract. CSP may not be available in all states.
CSP is subject to the following conditions ("CSP Conditions"):
.. The beneficially owned Contract must be a Custodial traditional IRA, Custodial
Roth IRA, or a Custodial Simplified Employee Pension IRA.
.. The Annuitant must be the beneficial owner of the Custodial traditional IRA,
Custodial Roth IRA, or Custodial Simplified Employee Pension IRA.
.. The Co-Annuitant must be the legal spouse of the Annuitant. Only one
Co-Annuitant may be named.
72 PROSPECTUS
.. The Co-Annuitant must be the sole beneficiary of the Custodial traditional
IRA, Custodial Roth IRA, or the Custodial Simplified Employee Pension IRA.
.. The Annuitant must be age 90 or younger on the CSP Application Date.
.. The Co-Annuitant must be age 79 or younger on the CSP Application Date.
.. The CSP may be added at Contract issue or anytime after Contract issue through
April 30, 2005. On or after May 1, 2005, the CSP may only be added when we
issue the Contract or within 6 months of the beneficial owner's marriage. You
may not add the CSP to your Contract without our prior approval if your
Contract Value is greater than $1,000,000 at the time you choose to add the
CSP. We may require proof of marriage in a form satisfactory to us.
.. We have made no payments under any Income Plan.
.. There is an annual Rider Fee of 0.10% of the Contract Value for new Options
added on or after January 1, 2005. For Options added prior to this date,
there is no charge for this Option. We reserve the right to increase the
annual Rider Fee to up to 0.15% of the Contract Value.
Under CSP, the Co-Annuitant will be considered to be an Annuitant under the
Contract during the Accumulation Phase except that:
.. The Co-Annuitant will not be considered to be an Annuitant for purposes of
determining the Payout Start Date.
.. The "Death of Annuitant" provision of the Contract does not apply on the death
of the Co-Annuitant.
.. The Co-Annuitant is not considered the beneficial owner of the Custodial
traditional IRA, Custodial Roth IRA, or the Custodial Simplified Employee
Pension IRA.
You may change the Co-Annuitant to a new spouse only if you provide proof of
remarriage in a form satisfactory to us. Once we accept a change, the change
will take effect on the date you signed the request. Each change is subject to
any payment we make or other action we take before we accept it. At any time,
there may only be one Co-Annuitant under your Contract.
For Spousal Protection Benefit (Co-Annuitant) Options for Custodial Individual
Retirement Accounts added on or after January 1, 2005, there is an annual Rider
Fee of 0.10% of the Contract Value for this Option. For Options added prior to
this date, there is no charge for this Option. We reserve the right to assess
an annual Rider Fee not to exceed 0.15% for Options added in the future. Once
this Option is added to your Contract, we guarantee that we will not increase
what we charge you for this Option. For Contracts issued on or after January 1,
2005, we may discontinue offering the Spousal Protection Benefit (Co-Annuitant)
Option for Custodial Individual Retirement Accounts at any time to new Contract
Owners and to existing Contract Owners who did not elect the Option prior to the
date of discontinuance.
The Owner may terminate CSP upon the divorce of the Annuitant and the
Co-Annuitant by providing written notice and proof of divorce in a form
satisfactory to us. The Owner may also terminate CSP upon a change in the
beneficiary of the IRA by providing written notice and proof of the change in a
form satisfactory to us. CSP will terminate upon the date termination is
accepted by us or on the earliest of the following occurrences:
.. On the date CSP is terminated as described above; or
.. Upon the death of the Annuitant; or
.. Upon the death of the Co-Annuitant; or
.. On the date the Contract is terminated; or
.. On the Payout Start Date.
Once terminated, a new CSP cannot be added to the Contract unless the last
option attached to the Contract was terminated due to divorce or change of
beneficiary of the IRA.
DEATH OF CO-ANNUITANT. This section applies if:
.. The CSP Conditions are met.
. The Annuitant was, at the time of the Co-Annuitant's death, the beneficial
owner of the Custodial traditional IRA, Custodial Roth IRA, or Custodial
Simplified Employee Pension IRA.
. We have received proof satisfactory to us that the Co-Annuitant has died.
. The Co-Annuitant was, at the time of the Co-Annuitant's death, the sole
beneficiary of the Custodial traditional IRA, Custodial Roth IRA, or
Custodial Simplified Employee Pension IRA, and
. the Co-Annuitant was, at the time of the Co-Annuitant's death, the legal
spouse of the Annuitant.
If this section applies and if the Co-Annuitant dies prior to the Payout Start
Date, then, subject to the following conditions, the Contract may be continued
according to Option D under the "Death of Owner" provisions under the same terms
and conditions that would apply if the Co-Annuitant were the Owner of the
Contract before death and the sole new Owner of the Contract were the Annuitant
provided that:
.. The Co-Annuitant was the legal spouse of the Annuitant on the date of
Annuitant's death.
.. The Owner does not thereafter name a new Co-Annuitant; and
.. The Owner of the Custodial traditional IRA, Custodial Roth IRA, or Custodial
Simplified Employee Pension IRA remains the Custodian; and
.. The Contract may only be continued once.
73 PROSPECTUS
MORE INFORMATION
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ALLSTATE
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.
VARIABLE ACCOUNT
Allstate Life established the Allstate Financial Advisors Separate Account I
("Variable Account") in 1999. The Contracts were previously issued through
Allstate Life Insurance Company Separate Account A. Effective May 1, 2004, the
Variable Account combined with Allstate Life Insurance Company Separate Account
A and consolidated duplicative Variable Sub-Accounts that invest in the same
Portfolio (the "Consolidation"). The Accumulation Unit Values for the Variable
Sub-Accounts in which you invest did not change as a result of the
Consolidation, and your Contract Value immediately after the Consolidation was
the same as the value immediately before the Consolidation. We have registered
the Variable Account with the SEC as a unit investment trust. The SEC does not
supervise the management of the Variable Account or Allstate Life.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under Illinois law. That means we account for the Variable
Account's income, gains and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Allstate Life.
The Variable Account consists of multiple Variable Sub-Accounts, each of which
invests in a corresponding Portfolio. We may add new Variable Sub-Accounts or
eliminate one or more of them, if we believe marketing, tax, or investment
conditions so warrant. We do not guarantee the investment performance of the
Variable Account, its Sub-Accounts or the Portfolios. We may use the Variable
Account to fund our other annuity contracts. We will account separately for each
type of annuity contract funded by the Variable Account.
THE PORTFOLIOS
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolios at their net asset value.
VOTING PRIVILEGES. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Portfolios that we
hold directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract Owners entitled to give such
instructions.
As a general rule, before the Payout Start Date, the Contract Owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Portfolio as of the record
date of the meeting. After the Payout Start Date the person receiving income
payments has the voting interest. The payee's number of votes will be determined
by dividing the reserve for such Contract allocated to the applicable
Sub-Account by the net asset value per share of the corresponding Portfolio. The
votes decrease as income payments are made and as the reserves for the Contract
decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion. We will apply voting instructions to
abstain on any item to be voted upon on a pro-rata basis to reduce the votes
eligible to be cast.
We reserve the right to vote Portfolio shares as we see fit without regard to
voting instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report we send to you.
CHANGES IN PORTFOLIOS. If the shares of any of the Portfolios are no longer
available for investment by the Variable Account or if, in our judgment, further
investment in such shares is no longer desirable in view of the purposes of the
Contract, we may eliminate that
74 PROSPECTUS
Portfolio and substitute shares of another eligible investment fund. Any
substitution of securities will comply with the requirements of the Investment
Company Act of 1940. We also may add new Variable Sub-Accounts that invest in
additional underlying funds. We will notify you in advance of any change.
CONFLICTS OF INTEREST. Certain of the Portfolios sell their shares to separate
accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the same Portfolio. The board of directors/trustees of these Portfolios monitors
for possible conflicts among separate accounts buying shares of the Portfolios.
Conflicts could develop for a variety of reasons. For example, differences in
treatment under tax and other laws or the failure by a separate account to
comply with such laws could cause a conflict. To eliminate a conflict, the
Portfolio's board of directors/trustees may require a separate account to
withdraw its participation in a Portfolio. A Portfolio's net asset value could
decrease if it had to sell investment securities to pay redemption proceeds to a
separate account withdrawing because of a conflict.
THE CONTRACT
DISTRIBUTION. Allstate Distributors, L.L.C., 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 and the Variable Account.
We provide the following administrative services, among others:
.. issuance of the Contracts;
.. maintenance of Contract Owner records;
.. Contract Owner services;
.. calculation of unit values;
.. maintenance of the Variable Account; and
.. preparation of Contract Owner reports.
We will send you Contract statements and transaction confirmations at least
annually. 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 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 will
75 PROSPECTUS
make the adjustment as of the date that we receive notice of the potential
error.
We will also 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
Foley & Lardner, LLP, Washington, D.C., has advised Allstate Life on certain
federal securities law matters. All matters of Illinois law pertaining to the
Contracts, including the validity of the Contracts and Allstate Life's right to
issue such Contracts under Illinois insurance law, have been passed upon by
Michael J. Velotta, General Counsel of Allstate Life.
76 PROSPECTUS
TAXES
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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. Since the Variable Account is not an entity separate from Allstate
Life, and its operations form a part of Allstate Life, it will not be taxed
separately. Investment income and realized capital gains of the Variable Account
are automatically applied to increase reserves under the Contract. Under
existing federal income tax law, Allstate Life believes that the Variable
Account investment income and capital gains will not be taxed to the extent that
such income and gains are applied to increase the reserves under the Contract.
Accordingly, Allstate Life does not anticipate that it will incur any federal
income tax liability attributable to the Variable Account, and therefore
Allstate Life does not intend to make provisions for any such taxes. If Allstate
Life is taxed on investment income or capital gains of the Variable Account,
then Allstate Life may impose a charge against the Variable Account in order to
make provision for such taxes.
TAXATION OF VARIABLE 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,
.. the investments of the Variable Account are "adequately diversified" according
to Treasury Department regulations, and
.. Allstate Life is considered the owner of the Variable Account assets for
federal income tax purposes.
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
beneficiary. A trust named beneficiary, 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.
DIVERSIFICATION REQUIREMENTS. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the Contract owner during the taxable
year. Although Allstate Life does not have control over the Portfolios or their
investments, we expect the Portfolios to meet the diversification requirements.
OWNERSHIP TREATMENT. The IRS has stated that a contract owner will be
considered the owner of separate account assets if he possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. At the time the diversification regulations were issued, the
Treasury Department announced that the regulations do not provide guidance
concerning circumstances in which investor control of the separate account
investments may cause a Contract owner to be treated as the owner of the
separate account. The Treasury Department also stated that future
77 PROSPECTUS
guidance would be issued regarding the extent that owners could direct
sub-account investments without being treated as owners of the underlying assets
of the separate account.
Your rights under the Contract are different than those described by the IRS in
private and published rulings in which it found that Contract owners were not
owners of separate account assets. For example, if your contract offers more
than twenty (20) investment alternatives you have the choice to allocate
premiums and contract values among a broader selection of investment
alternatives than described in such rulings. You may be able to transfer among
investment alternatives more frequently than in such rulings. These differences
could result in you being treated as the owner of the Variable Account. If this
occurs, income and gain from the Variable Account assets would be includible in
your gross income. Allstate Life does not know what standards will be set forth
in any regulations or rulings which the Treasury Department may issue. It is
possible that future standards announced by the Treasury Department could
adversely affect the tax treatment of your Contract. We reserve the right to
modify the Contract as necessary to attempt to prevent you from being considered
the federal tax owner of the assets of the Variable Account. However, we make no
guarantee that such modification to the Contract will be successful.
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 full withdrawal
under a Non-Qualified Contract, the amount received will be taxable only to the
extent it exceeds the investment in the Contract.
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. If you elect variable annuity payments, the amount
excluded from taxable income is determined by dividing the investment in the
Contract by the total number of expected payments. The annuity payments will be
fully taxable after the total amount of the investment in the Contract is
excluded using these ratios. If any variable payment is less than the excludable
amount you should contact a competent tax advisor to determine how to report any
unrecovered investment. 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.
TAXATION OF LEVEL MONTHLY VARIABLE ANNUITY PAYMENTS. You may have an option to
elect a variable income payment stream consisting of level monthly payments that
are recalculated annually. Although we will report your levelized payments to
the IRS in the year distributed, it is possible the IRS could determine that
receipt of the first monthly payout of each annual amount is constructive
receipt of the entire annual amount. If the IRS were to take this position, the
taxable amount of your levelized payments would be accelerated to the time of
the first monthly payout and reported in the tax year in which the first monthly
payout is received.
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.
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:
78 PROSPECTUS
.. 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 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
79 PROSPECTUS
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 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
80 PROSPECTUS
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 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
81 PROSPECTUS
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.
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).
82 PROSPECTUS
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).
ANNUAL REPORTS AND OTHER DOCUMENTS
- --------------------------------------------------------------------------------
Allstate Life's Annual Report on Form 10-K for the year ended December 31,
2004, 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 450 Fifth Street, N.W., Washington, D.C.
20549. For more information on the operations of 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).
83 PROSPECTUS
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Additions, Deletions, or Substitutions of Investments
- --------------------------------------------------------------------------------
The Contracts
- --------------------------------------------------------------------------------
Calculation of Accumulation Unit Values
- --------------------------------------------------------------------------------
Calculation of Variable Income Payments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
General Matters
- --------------------------------------------------------------------------------
Experts
- --------------------------------------------------------------------------------
Financial Statements
- --------------------------------------------------------------------------------
Appendix A
- --------------------------------------------------------------------------------
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.
84 PROSPECTUS
APPENDIX A
ALLSTATE ADVISOR CONTRACT COMPARISON CHART
FEATURE ADVISOR ADVISOR PLUS ADVISOR PREFERRED
- ------------------------------------------------------------------------------------------------------------------------------------
5-YEAR WITHDRAWAL 3-YEAR WITHDRAWAL
CHARGE OPTION CHARGE OPTION
- ------------------------------------------------------------------------------------------------------------------------------------
up to 5% depending on
issue age and amount
Credit Enhancement None of None None
purchase payments
- ------------------------------------------------------------------------------------------------------------------------------------
Mortality and Expense
Risk Charge 1.10% 1.40% 1.40% 1.50%
(Base Contract)
- ------------------------------------------------------------------------------------------------------------------------------------
Withdrawal Charge 7/ 7/ 6/ 5/ 4/ 3/ 2 8.5/ 8.5/ 8.5/ 7.5/
(% of purchase payment) 6.5/ 5.5/ 4/2.5 7/ 6/ 5/ 4/ 3 7/ 6/ 5
- ------------------------------------------------------------------------------------------------------------------------------------
Confinement,
Withdrawal Charge Confinement, Terminal Confinement, Terminal Confinement, Terminal Terminal
Waivers Illness, Unemployment Illness, Unemployment Illness, Unemployment Illness,
Unemployment
- ------------------------------------------------------------------------------------------------------------------------------------
FEATURE
- ---------------------------------------------------------
NO WITHDRAWAL
CHARGE OPTION
- ---------------------------------------------------------
Credit Enhancement None
- ---------------------------------------------------------
Mortality and Expense 1.60%
Risk Charge
(Base Contract)
- ---------------------------------------------------------
Withdrawal Charge None
(% of purchase payment)
- ---------------------------------------------------------
Withdrawal Charge N/A
Waivers
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
The Fixed Account Options available depend on the type of Contract you have
purchased and the state in which your Contract was issued. The following tables
summarize the availability of the Fixed Account Options in general. Please
check with your representative for specific details for your state.
DCA FIXED ACCOUNT OPTION
- -----------------------------------------------------------------------------------------------------
Advisor Advisor Plus Advisor Preferred
-----------------------------------------------------
5-YEAR 3-YEAR NO WITHDRAWAL
WITHDRAWAL CHARGE WITHDRAWAL CHARGE CHARGE OPTION
- ------------------------------------------------ OPTION OPTION
-----------------------------------------------------
TRANSFER PERIODS 3 to 6-month 3 to 6-month 3 to 6-month 3 to 6-month N/A
- -----------------------------------------------------------------------------------------------------
7 to 12-month 7 to 12-month 7 to 12-month 7 to 12-month N/A
-----------------------------------------------------------------------------------
STANDARD FIXED ACCOUNT OPTION (SOME OPTIONS NOT AVAILABLE IN ALL STATES)
- --------------------------------------------------------------------------------------------------------
Advisor AdvisorPlus Advisor Preferred
---------------------------------------------------------
5-YEAR 3-YEAR NO
WITHDRAWAL CHARGE WITHDRAWAL CHARGE WITHDRAWAL CHARGE
---------------------------- OPTION OPTION OPTION
---------------------------------------------------------
GUARANTEE PERIODS 1-year N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------
3-year* N/A N/A N/A N/A
-------------------------------------------------------------------------------------
5-year* N/A N/A N/A N/A
-------------------------------------------------------------------------------------
7-year* N/A N/A N/A N/A
-------------------------------------------------------------------------------------
* Available only in states in which the MVA Fixed Account Option is not offered.
85 PROSPECTUS
MVA FIXED ACCOUNT OPTION (NOT AVAILABLE IN ALL STATES)**
- --------------------------------------------------------------------------------------------------------
Advisor Advisor Plus Advisor Preferred
---------------------------------------------------------
5-YEAR 3-YEAR NO
WITHDRAWAL CHARGE WITHDRAWAL CHARGE WITHDRAWAL CHARGE
---------------------------- OPTION OPTION OPTION
---------------------------------------------------------
GUARANTEE PERIODS 3-year 3-year 3-year 3-year 3-year
- --------------------------------------------------------------------------------------------------------
5-year 5-year 5-year 5-year 5-year
-------------------------------------------------------------------------------------
7-year 7-year 7-year 7-year 7-year
-------------------------------------------------------------------------------------
10-year 10-year 10-year 10-year 10-year
-------------------------------------------------------------------------------------
** Not available in states in which the 3-, 5-, or 7-year Standard Fixed Account
Options are offered.
86 PROSPECTUS
APPENDIX B - MARKET VALUE ADJUSTMENT
- --------------------------------------------------------------------------------
The Market Value Adjustment is based on the following:
I = the Treasury Rate for a maturity equal to the term length of the
Guarantee Period Account for the week preceding the establishment of
the Market Value Adjusted Fixed Guarantee Period Account;
J = the Treasury Rate for a maturity equal to the term length of the
Market Value Adjusted Fixed Guarantee Period Account for the week
preceding the date amounts are transferred or withdrawn from the
Market Value Adjusted Fixed Guarantee Period Account, the date we
determine the Death Proceeds, or the Payout Start Date, as the case
may be ("Market Value Adjustment Date").
N = the number of whole and partial years from the Market Value
Adjustment Date to the expiration of the term length of the Market
Value Adjusted Fixed Guarantee Period Account.
Treasury Rate means the U.S. Treasury Note Constant Maturity yield as reported
in Federal Reserve Bulletin Release H.15. If such yields cease 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
To determine the Market Value Adjustment, we will multiply the Market Value
Adjustment factor by the amount transferred, withdrawn, paid as Death Proceeds,
or applied to an Income Plan from a Market Value Adjusted Fixed Guarantee Period
Account at any time other than during the 30 day period after such Guarantee
Period Account expires. NOTE: These examples assume that premium taxes are not
applicable.
EXAMPLES OF MARKET VALUE ADJUSTMENT
$10,000 allocated to a Market Value Adjusted Fixed Guarantee
Purchase Payment: Period Account
Guarantee Period: 5 years
Interest Rate: 4.50%
Full Withdrawal: End of Contract Year 3
Contract: Allstate Advisor*
EXAMPLE 1: (ASSUMES DECLINING INTEREST RATES)
Step 1: Calculate Contract Value at = $10,000.00 X (1.045) /3/ = $11,411.66
End of Contract Year 3:
Step 2: Calculate the Free = .15 X $10,000 = $1500
Withdrawal Amount:
Step 3: Calculate the Withdrawal = .06 X ($10,000 - $1,500) = $510
Charge:
Step 4: Calculate the Market Value I = 4.50%
Adjustment: J = 4.20%
730 DAYS
N = -------- = 2
365 DAYS
Market Value Adjustment Factor: .9 X [I -
(J + .0025)] X N
= .9 X [.045 - (.042 + .0025)] X 2 = .0009
Market Value Adjustment = Market Value
Adjustment Factor X Amount
Subject To Market Value Adjustment:
= .0009 X $11,411.66 = $10.27
Step 5: Calculate the amount = $11,411.66 - $510 + $10.27 = $10,911.93
received by Contract owner as a
result of full withdrawal at the
end of Contract Year 3:
87 PROSPECTUS
EXAMPLE 2: (ASSUMES RISING INTEREST RATES)
Step 1: Calculate Contract Value at End of Contract Year 3: = $10,000.00 X (1.045) /3/ = $11,411.66
Step 2: Calculate The Free Withdrawal Amount: = .15 X $10,000 = $1,500
Step 3: Calculate the Withdrawal Charge: = 0.6 X ($10,000 - $1,500) = $510
Step 4: Calculate the Market Value Adjustment: I = 4.50%
J = 4.80%
730 DAYS
N = ----------- = 2
365 DAYS
Market Value Adjustment Factor: .9 X [I - (J + .0025)] X N
= .9 X [(.045 - (.048 + .0025)] X (2) = -.0099
Market Value Adjustment = Market Value Adjustment Factor X
Amount Subject To Market Value Adjustment:
= -.0099 X $11,411.66 = -($112.98)
Step 5: Calculate the amount received by Contract owner as a = $11,411.66 - $510 - $112.98 = $10,788.68
result of full withdrawal at the end of Contract Year 3:
*These examples assume the election of the ALLSTATE ADVISOR CONTRACT for the
purpose of illustrating the Market Value Adjustment calculation. The amounts
would be different under ALLSTATE ADVISOR PLUS and ALLSTATE ADVISOR PREFERRED
CONTRACTS, which have different expenses and withdrawal charges.
88 PROSPECTUS
APPENDIX C
EXAMPLE OF CALCULATION OF INCOME PROTECTION BENEFIT
- --------------------------------------------------------------------------------
Appendix C illustrates how we calculate the amount guaranteed under the Income
Protection Benefit Option. Please remember that you are looking at an example
only. Please also remember that the Income Protection Benefit Option may only be
added to Income Plans 1 and/or 2, and only to those Income Plans for which you
have selected variable income payments.
To illustrate the calculation of the amount guaranteed under the Income
Protection Benefit Option, we assume the following:
Adjusted age of Annuitant on the Payout Start 65
Date:
- -------------------------------------------------------------------------------
Sex of Annuitant: male
- -------------------------------------------------------------------------------
Income Plan selected: 1
- -------------------------------------------------------------------------------
Payment frequency: monthly
- -------------------------------------------------------------------------------
Amount applied to variable income payments under $100,000.00
the Income Plan:
- -------------------------------------------------------------------------------
The example assumes that the withdrawal charge period has expired for all
purchase payments. In accordance with the terms of the Contract, the following
additional assumptions apply:
Assumed investment rate: 3%
- -------------------------------------------------------------------------------
Guaranteed minimum variable income 85% of the initial variable amount income
payment: value
- -------------------------------------------------------------------------------
STEP 1 - CALCULATION OF THE INITIAL VARIABLE AMOUNT INCOME VALUE:
Using the assumptions stated above, the initial monthly income payment is $5.49
per $1,000 applied to variable income payments under Income Plan 1. Therefore,
the initial variable amount income value = $100,000 X $5.49/1000 = $549.00.
STEP 2 - CALCULATION OF THE AMOUNT GUARANTEED UNDER THE INCOME PROTECTION
BENEFIT OPTION:
guaranteed minimum variable income payment = 85% X initial variable amount
income value = 85% X $549.00 = $466.65.
STEP 3 - ILLUSTRATION OF THE EFFECT OF THE MINIMUM PAYMENT GUARANTEE UNDER THE
INCOME PROTECTION BENEFIT OPTION:
If in any month your variable income payments would fall below the amount
guaranteed under the Income Protection Benefit Option, your payment for that
month will equal the guaranteed minimum variable income payment. For example,
you would receive $466.65 even if the amount of your monthly income payment
would have been less than that as a result of declining investment experience.
On the other hand, if your monthly income payment is greater than the minimum
guaranteed $466.65, you would receive the greater amount.
89 PROSPECTUS
APPENDIX D
WITHDRAWAL ADJUSTMENT EXAMPLE - INCOME BENEFITS*
- --------------------------------------------------------------------------------
Issue Date: January 1, 2003
Initial Purchase Payment: $50,000 (For Allstate Advisor Plus Contracts, assume a
$2,000 Credit Enhancement would apply assuming issue age 85 or younger (a $1,000
Credit Enhancement would apply assuming issue age 86-90))
Income Benefit Amount
5%
Roll-Up Value**
----------------------
Beginning Contract Maximum
Type of Contract Transaction Value After Anniversary Advisor and
Date Occurrence Value Amount Occurrence Value Preferred Plus
- ---------------------------------------------------------------------------------------------------------------
1/1/04 Contract Anniversary $55,000 _ $55,000 $55,000 $52,500 $54,600
- ---------------------------------------------------------------------------------------------------------------
7/1/04 Partial Withdrawal $60,000 $15,000 $45,000 $41,250 $40,176 $41,859
- ---------------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted income benefits in the example
above. Please note that the withdrawal adjustment reduces the Maximum
Anniversary Value by the same proportion as the withdrawal reduces the Contract
Value. The withdrawal adjustment reduces the 5% Roll-Up Value part
dollar-for-dollar and part proportionally.
Advisor and Preferred Plus
- -------------------------------------------------------------------------------------------------
MAXIMUM ANNIVERSARY VALUE INCOME BENEFIT
- -------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000 $15,000
- -------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to (b) $60,000 $60,000
Partial Withdrawal
- -------------------------------------------------------------------------------------------------
Value of Income Benefit Amount (c) $55,000 $55,000
Immediately Prior to Partial Withdrawal
- -------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,750 $13,750
- -------------------------------------------------------------------------------------------------
Adjusted Income Benefit $41,250 $41,250
- -------------------------------------------------------------------------------------------------
5 % ROLL-UP VALUE INCOME BENEFIT**
- -------------------------------------------------------------------------------------------------
Total Partial Withdrawal Amount (a) $15,000 $15,000
- -------------------------------------------------------------------------------------------------
STEP I - DOLLAR FOR DOLLAR PORTION
- -------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to (b) $60,000 $60,000
Partial Withdrawal
- -------------------------------------------------------------------------------------------------
Value of Income Benefit Amount
Immediately Prior to Partial Withdrawal
(assumes 181 days worth of interest on (c) $53,786 $55,937
$52,500 and $54,600, respectively)
- -------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (Corridor = 5% (d) $ 2,625 $ 2,730
of Roll-Up Value on 1/1/04)
- -------------------------------------------------------------------------------------------------
Dollar for Dollar Withdrawal Adjustment
(discounted for a half year's worth of (e)=(d) * 1.05^ -0.5 $ 2,562 $ 2,664
interest)
- -------------------------------------------------------------------------------------------------
Contract Value After Step 1 (b')=(b) - (d) $57,375 $57,270
- -------------------------------------------------------------------------------------------------
Adjusted Income Benefit After Step 1 (c')=(c) - (e) $51,224 $53,273
- -------------------------------------------------------------------------------------------------
STEP 2 - PROPORTIONAL PORTION
- -------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a')=(a) - (d) $12,375 $12,270
- -------------------------------------------------------------------------------------------------
Proportional Adjustment (a')/(b')*(c') $11,048 $11,414
- -------------------------------------------------------------------------------------------------
Contract Value After Step 2 (b') - (a') $45,000 $45,000
- -------------------------------------------------------------------------------------------------
Adjusted Income Benefit After Step 2 $40,176 $41,859
- -------------------------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values and Maximum Anniversary
Value for all Contracts, net of applicable fees and charges. Actual income
benefit amounts will differ due to the different fees and charges under each
Contract and the Credit Enhancement available under the ALLSTATE ADVISOR PLUS
CONTRACT. Please remember that you are looking at an example and that your
investment performance may be greater or lower than the figures shown.
**In certain states, the Roll-Up Value Income Benefit accumulates interest on a
daily basis at a rate equivalent to 3% per year rather than 5%. If calculations
assumed an interest rate of 3% per year, the adjusted income benefit would be
lower.
90 PROSPECTUS
APPENDIX E
WITHDRAWAL ADJUSTMENT EXAMPLE - DEATH BENEFITS*
- --------------------------------------------------------------------------------
Issue Date: January 1, 2005
Initial Purchase Payment: $50,000 (For ALLSTATE ADVISOR PLUS CONTRACTS, assume a
$2,000 Credit Enhancement would apply assuming issue age 85 or younger (a $1,000
Credit Enhancement would apply assuming issue age 86-90))
Death Benefit Amount
-------Purchase----------------------------Enhanced--------
Payment Value Beneficiary Value**
Beginning Contract ------------------------ Maximum ----------------------
Type of Contract Transaction Value After Advisor and Anniversary Advisor and
Date Occurrence Value Amount Occurrence Preferred Plus Value Preferred Plus
- -------------------------------------------------------------------------------------------------------------------------------
1/1/06 Contract Anniversary $55,000 _ $55,000 $50,000 $52,000 $55,000 $52,500 $54,600
- -------------------------------------------------------------------------------------------------------------------------------
7/1/06 Partial Withdrawal $60,000 $15,000 $45,000 $37,500 $39,000 $41,250 $40,339 $41,953
- -------------------------------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted death benefits in the example
above. Please note that the withdrawal reduces the Purchase Payment Value, the
Maximum Anniversary Value, and the Enhanced Beneficiary Value by the same
proportion as the withdrawal reduces the Contract Value.
Advisor and
Preferred Plus
- ------------------------------------------------------------------------------------------------
PURCHASE PAYMENT VALUE DEATH BENEFIT
- ------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000 $15,000
- ------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
- ------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to (c) $50,000 $52,000
Partial Withdrawal
- ------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $12,500 $13,000
- ------------------------------------------------------------------------------------------------
Adjusted Death Benefit $37,500 $39,000
- ------------------------------------------------------------------------------------------------
MAV DEATH BENEFIT
- ------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000 $15,000
- ------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
- ------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to (c) $55,000 $55,000
Partial Withdrawal
- ------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,750 $13,750
- ------------------------------------------------------------------------------------------------
Adjusted Death Benefit $41,250 $41,250
- ------------------------------------------------------------------------------------------------
ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE)
BENEFIT**
- ------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000 $15,000
- ------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
- ------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to
Partial Withdrawal (assumes 181 days worth of interest (c) $53,786 $55,937
on $52,500 and $54,600, respectively)
- ------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,446 $13,984
- ------------------------------------------------------------------------------------------------
Adjusted Death Benefit $40,339 $41,953
- ------------------------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values and Maximum Anniversary
Value for all Contracts, net of applicable fees and charges. Actual death
benefit amounts will differ due to the different fees and charges under each
Contract and the Credit Enhancement available under the ALLSTATE ADVISOR PLUS
CONTRACT. Please remember that you are looking at an example and that your
investment performance may be greater or lower than the figures shown.
**Calculations for the Enhanced Beneficiary Protection (Annual Increase) Benefit
assume that interest accumulates on a daily basis at a rate equivalent to 5% per
year. In certain states, the Benefit provides for interest that accumulates at a
rate of 3% per year. If calculations assumed an interest rate of 3% per year,
the adjusted death benefit would be lower.
91 PROSPECTUS
APPENDIX F
CALCULATION OF EARNINGS PROTECTION DEATH BENEFIT*
- --------------------------------------------------------------------------------
The following are examples of the Earnings Protection Death Benefit Option. For
illustrative purposes, the examples assume Earnings in each case. Please
remember that you are looking at examples and that your investment performance
may be greater or lower than the figures shown.
EXAMPLE 1: ELECTED WHEN CONTRACT WAS ISSUED WITHOUT ANY SUBSEQUENT ADDITIONS OR
WITHDRAWALS
In this example, assume that the oldest Contract Owner is age 55 on the Rider
Application Date and elects the Earnings Protection Death Benefit Option when
the Contract is issued. The Contract Owner makes an initial purchase payment of
$100,000. After four years, the Contract Owner dies. On the date Allstate Life
receives a Complete Request for Settlement, the Contract Value is $125,000.
Prior to his death, the Contract Owner did not make any additional purchase
payments or take any withdrawals.
Excess of Earnings Withdrawals = $0
Purchase Payments in the 12 months prior to = $0
death
In-Force Premium = $100,000
($100,000 + $0 - $0)
In-Force Earnings = $25,000
($125,000 - $100,000)
EARNINGS PROTECTION DEATH BENEFIT** = 40 % * $25,000 = $10,000
Since In-Force Earnings are less than 100% of the In-Force Premium (excluding
purchase payments and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS in
the 12 months prior to death), the In-Force Earnings are used to compute the
Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
will differ due to the different fees and charges under each Contract and the
Credit Enhancement available under the ALLSTATE ADVISOR PLUS CONTRACT.
**If the oldest Contract Owner or Annuitant had been over age 70, and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($6,250.00).
EXAMPLE 2: ELECTED WHEN CONTRACT WAS ISSUED WITH SUBSEQUENT WITHDRAWALS
In this example, assume the same facts as above, except that the Contract Owner
has taken a withdrawal of $10,000 during the second year of the Contract.
Immediately prior to the withdrawal, the Contract Value is $105,000. Here,
$5,000 of the withdrawal is in excess of the In-Force Earnings at the time of
the withdrawal. The Contract Value on the date Allstate Life receives a Complete
Request for Settlement will be assumed to be $114,000.
Excess of Earnings Withdrawals = $5,000
($10,000-$5,000)
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $95,000
($100,000+$0-$5,000)
In-Force Earnings = $19,000
($114,000-$95,000)
EARNINGS PROTECTION DEATH BENEFIT** = 40%*$19,000=$7,600
Since In-Force Earnings are less than 100% of the In-Force Premium (excluding
purchase payments and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS in
the 12 months prior to death), the In-Force Earnings are used to compute the
Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
92 PROSPECTUS
will differ due to the different fees and charges under each Contract and the
Credit Enhancement available under the ALLSTATE ADVISOR PLUS CONTRACT.
**If the oldest Contract Owner or Annuitant had been over age 70, and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($4,750.00).
EXAMPLE 3: ELECTED AFTER CONTRACT WAS ISSUED WITH SUBSEQUENT ADDITIONS AND
WITHDRAWALS
This example is intended to illustrate the effect of adding the Earnings
Protection Death Benefit Option after the Contract has been issued and the
effect of later purchase payments. In this example, assume that the oldest
Contract Owner is age 72 on the Rider Application Date. At the time the Contract
is issued, the Contract Owner makes a purchase payment of $100,000. After two
years pass, the Contract Owner elects to add the Earnings Protection Death
Benefit Option. On the date this Rider is added, the Contract Value is
$110,000. Two years later, the Contract Owner withdraws $50,000. Immediately
prior to the withdrawal, the Contract Value is $130,000. Another two years
later, the Contract Owner makes an additional purchase payment of $40,000.
Immediately after the additional purchase payment, the Contract Value is
$130,000. Two years later, the Contract Owner dies with a Contract Value of
$140,000 on the date Allstate Life receives a Complete Request for Settlement.
Excess of Earnings Withdrawals = $30,000
($50,000-$20,000)
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $120,000
($110,000+$40,000-$30,000)
In-Force Earnings = $20,000
($140,000-$120,000)
EARNINGS PROTECTION DEATH BENEFIT** = 25%*$20,000=$5,000
In this example, In-Force Premium is equal to the Contract Value on Rider
Application Date plus the additional purchase payment and minus the
Excess-of-Earnings Withdrawal.
Since In-Force Earnings are less than 50% of the In-Force Premium (excluding
purchase payments and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS in
the 12 months prior to death ), the In-Force Earnings are used to compute the
Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
will differ due to the different fees and charges under each Contract and the
Credit Enhancement available under the ALLSTATE ADVISOR PLUS CONTRACT.
**If the oldest Contract Owner or Annuitant had been age 70 or younger on the
Rider Application Date, the Earnings Protection Death Benefit would be 40% of
the In-Force Earnings ($8,000.00) and Credit Enhancement for ALLSTATE ADVISOR
PLUS CONTRACT.
93 PROSPECTUS
EXAMPLE 4: SPOUSAL CONTINUATION
This example is intended to illustrate the effect of a surviving spouse electing
to continue the Contract upon the death of the Contract Owner on a Contract with
the Earnings Protection Death Benefit Option. In this example, assume that the
oldest Contract Owner is age 60 at the time the Contract is purchased (with the
Earnings Protection Death Benefit Option and MAV Death Benefit Option) with a
$100,000 purchase payment. Five years later the Contract Owner dies and the
surviving spouse elects to continue the Contract. The Contract Value and Maximum
Anniversary Value at this time are $150,000 and $160,000, respectively.
Excess of Earnings Withdrawals = $0
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $100,000
($100,000+$0-$0)
In-Force Earnings = $50,000
($150,000-$100,000)
EARNINGS PROTECTION DEATH BENEFIT** = 40%*$50,000=$20,000
Contract Value = $150,000
Death Benefit = $160,000
Earnings Protection Death Benefit = $20,000
Continuing Contract Value = $180,000
($160,000+$20,000)
Since In-Force Earnings are less than 100% of the In-Force Premium (excluding
purchase payments and Credit Enhancements for ALLSTATE ADVISOR PLUS CONTRACTS in
the 12 months prior to death), the In-Force Earnings are used to compute the
Earnings Protection Death Benefit amount.
Assume the surviving spouse is age 72 when the Contract is continued. At this
time, the surviving spouse has the option to continue the Earnings Protection
Death Benefit Option at an additional mortality and expense risk charge of 0.40%
and with an In-Force Premium amount equal to the Contract Value and the Rider
Date reset to the date the Contract is continued. If this selection is made, the
Earnings Protection Death Benefit will be equal to the lesser of 25% of the
In-Force Earnings and 50% of In-Force Premium. Otherwise, the surviving spouse
may elect to terminate the Earnings Protection Death Benefit Option at the time
of continuation.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values and
Maximum Anniversary Values for all Contracts, net of applicable fees and
charges. Actual death benefit amounts will differ due to the different fees and
charges under each Contract and the Credit Enhancement available under the
ALLSTATE ADVISOR PLUS CONTRACT.
**If the oldest Contract Owner or Annuitant had been over age 70 , and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($12,500.00).
94 PROSPECTUS
APPENDIX G - WITHDRAWAL ADJUSTMENT EXAMPLE - TRUERETURN ACCUMULATION BENEFIT*
- --------------------------------------------------------------------------------
Issue Date: January 2, 2005
Initial Purchase Payment: $50,000 (For ALLSTATE ADVISOR PLUS CONTRACTS, assume a
$2,000 Credit Enhancement would apply assuming issue age 85 or younger (a $1,000
Credit Enhancement would apply assuming issue age 86-90))
Initial Benefit Base: $50,000 for ALLSTATE ADVISOR AND ALLSTATE ADVISOR
PREFERRED CONTRACTS, $52,000 for ALLSTATE ADVISOR PLUS CONTRACTS (assuming issue
age 85 or younger)
Benefit Base
------Purchase--------
Payment Value
Beginning Contract ----------------------
Type of Contract Transaction Value After Advisor and
Date Occurrence Value Amount Occurrence Preferred Plus
- --------------------------------------------------------------------------------------------
1/2/06 Contract Anniversary $55,000 _ $55,000 $50,000 $52,000
- --------------------------------------------------------------------------------------------
7/2/06 Partial Withdrawal $60,000 $15,000 $45,000 $37,500 $39,000
- --------------------------------------------------------------------------------------------
The following shows how we compute the adjusted Benefit Bases in the example
above. Please note that the withdrawal reduces the Benefit Base by the same
proportion as the withdrawal reduces the Contract Value.
Advisor and
Preferred Plus
- ------------------------------------------------------------------------------------------------
BENEFIT BASE
- ------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000 $15,000
- ------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
- ------------------------------------------------------------------------------------------------
Value of Benefit Base Immediately Prior to Partial (c) $50,000 $52,000
Withdrawal
- ------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $12,500 $13,000
- ------------------------------------------------------------------------------------------------
Adjusted Benefit Base $37,500 $39,000
- ------------------------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values, net of applicable fees
and charges for all Contracts. Actual Contract Values will differ due to the
different fees and charges under each Contract and the Credit Enhancement
available under the ALLSTATE ADVISOR PLUS CONTRACT. Please remember that you are
looking at an example and that your investment performance may be greater or
lower than the figures shown.
95 PROSPECTUS
APPENDIX H-SUREINCOME WITHDRAWAL BENEFIT OPTION CALCULATION EXAMPLES
- --------------------------------------------------------------------------------
Example 1: Assume you purchase an Allstate Advisor contract with a $100,000
initial purchase payment and add the SureIncome Option at issue.
Your Benefit Base is $100,000, which is your initial purchase payment of
$100,000.
Your Benefit Payment is $8,000, which is 8% of your initial purchase payment.
Your Benefit Payment Remaining for this Benefit Year is $8,000, which is equal
to your Benefit Payment at the beginning of this Benefit Year.
Example 2: Assume Example 1 is continued and an additional purchase payment of
- ---------
40,000 is made in the first Benefit Year.
The Benefit Base is increased to $140,000, which is your prior Benefit Base
($100,000) plus your additional purchase payment ($40,000).
The Benefit Payment is increased to $11,200, which is your prior Benefit Payment
($8,000) plus 8% of your additional purchase payment ($40,000).
The Benefit Payment Remaining is increased to $11,200, which is your Benefit
Payment Remaining prior to your additional purchase payment ($8,000) plus 8% of
your additional purchase payment ($40,000).
Example 3: Assume Example 1 is continued and a withdrawal of $8,000 is made
- ---------
during the first Benefit Year.
The Benefit Base is reduced to $92,000, which is your prior Benefit Base
($100,000) less your withdrawal ($8,000).
The Benefit Payment is unchanged and remains $8,000.
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($8,000) less your withdrawal
($8,000).
Example 4: Assume example 1 is continued and a withdrawal of $25,000 is made
- ---------
during the first Benefit Year. Assume the Contract Value prior to the withdrawal
was $130,000. Because the $25,000 withdrawal is larger than the Benefit Payment
Remaining, the Benefit Base and Benefit Payment will be recalculated according
to applicable formulas.
The Benefit Base is reduced to $75,000, determined by the following calculation:
the lesser of ($130,000 - $25,000) and ($100,000 - $25,000)=$75,000.
The Benefit Payment remains $8,000, determined by the following calculation: the
lesser of ($8,000) and (8% x ($130,000-$25,000))=$8,000
There is no Benefit Payment Remaining because the withdrawal has reduced it to
$0.
Example 5: Assume example 3 is continued and an additional withdrawal of $5,000
- ---------
is taken in the same year (the first Benefit Year). Assume the Contract Value
prior to the additional withdrawal was $60,000. Because the $5,000 withdrawal is
larger than the Benefit Payment Remaining ($0), the Benefit Base and Benefit
Payment will be recalculated according to applicable formulas.
The Benefit Base is reduced to $55,000, determined by the following calculation:
the lesser of ($60,000 - $5,000) and ($92,000 - $5,000)=$55,000.
The Benefit Payment is reduced to $4,400, determined by the following formula:
the lesser of ($8,000) and ((8% x ($60,000-$5,000))=$4,400.
The Benefit Payment Remaining is unchanged at $0.
Example 6: Assume example 5 is continued and an additional Purchase Payment of
- ---------
40,000 is made in the same year (the first Benefit Year).
The Benefit Base is increased to $95,000, which is your prior Benefit Base
($55,000) plus your additional purchase payment ($40,000).
The Benefit Payment is increased to $7,600, which is your prior Benefit Payment
($4,400) plus 8% of your additional purchase payment ($40,000).
The Benefit Payment Remaining is increased to $3,200, which is your Benefit
Payment Remaining prior to your additional purchase payment ($0) plus 8% of your
additional purchase payment ($40,000).
96 PROSPECTUS
Example 7: Assume example 6 is continued and an additional withdrawal of $3,200
- ---------
is taken in the same year (the first Benefit Year).
The Benefit Base is reduced to $91,800, which is your prior Benefit Base
($95,000) less your withdrawal ($3,200).
The Benefit Payment is unchanged and remains $7,600.
The Benefit Payment Remaining is reduced to $0, which is your Benefit Payment
Remaining prior to your withdrawal ($3,200) less your withdrawal ($3,200).
97 PROSPECTUS
APPENDIX I - ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
Appendix H presents the Accumulation Unit Values and number of Accumulation
Units outstanding for each Variable Sub-Account since the Variable Sub-Accounts
were first offered under the Contracts. This Appendix includes Accumulation Unit
Values representing the highest and lowest available combinations of Contract
charges that affect Accumulation Unit Values for each Contract. The Statement of
Additional Information, which is available upon request without charge, contains
the Accumulation Unit Values for all other available combinations for each
Contract. Please contract us at 1-800-203-0068 to obtain a copy of the Statement
of Additional Information.
ALLSTATE ADVISOR CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION
UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST
OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
- -------------------------------------------------------------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.860 $ 13.475
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.860 $ 13.475 $ 14.713
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,339 576,019 1,237,251
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.263
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 550,454
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.533
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 43,535
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities
- - Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.545 $ 15.641
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.545 $ 15.641 $ 17.211
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 882 21,349 21,824
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.235 $ 14.653
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.235 $ 14.653 $ 17.899
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,864 211,298 454,938
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.274
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 268,158
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.333 $ 12.765
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.333 $ 12.765 $ 14.191
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,303 442,689 1,161,162
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities
- - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.243 $ 16.979
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.243 $ 16.979 $ 20.902
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 112 43,987 127,960
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.484 $ 13.683
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.484 $ 13.683 $ 16.009
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,995 141,338 352,761
- -------------------------------------------------------------------------------
98 PROSPECTUS
FTVIP Templeton Global Income Securities -
Class 2 Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.730 $ 12.969
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.730 $ 12.969 $ 14.688
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,065 27,419 28,702
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.920
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 15,276
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.370
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 81,198
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.904
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 142,509
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.153
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 16,581
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.136
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 136,025
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.069 $ 12.468
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.069 $ 12.468 $ 14.698
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,697 147,767 230,665
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.706 $ 13.176
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.706 $ 13.176 $ 14.280
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,115 259,159 562,275
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares
Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.118
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 16,015
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 12.323
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 12.323 $ 12.968
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 250,178 723,531
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.157 $ 14.323
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.157 $ 14.323 $ 16.808
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 45 200,904 384,682
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.670 $ 13.039
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.670 $ 13.039 $ 13.995
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,293 199,763 512,385
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.186 $ 12.713
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.186 $ 12.713 $ 13.696
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,827 432,829 752,941
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA -
Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.363 $ 14.755
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.363 $ 14.755 $ 17.358
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 944 156,683 294,993
- -------------------------------------------------------------------------------
99 PROSPECTUS
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.560 $ 12.213
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.560 $ 12.213 $ 13.072
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,218 432,449 1,265,037
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.397 $ 12.510
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.397 $ 12.510 $ 13.473
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 46 27,406 100,508
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.807 $ 13.589
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.807 $ 13.589 $ 14.904
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,128 581,918 872,350
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.732 $ 11.373
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.732 $ 11.373 $ 12.026
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,020 87,288 143,322
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.750 $ 13.428
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.750 $ 13.428 $ 14.652
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,077 238,535 421,723
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.194 $ 10.507
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.194 $ 10.507 $ 10.832
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,364 486,154 887,522
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.613 $ 13.465
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.613 $ 13.465 $ 15.444
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,753 172,681 250,483
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.416 $ 13.072
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.416 $ 13.072 $ 14.535
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,968 94,549 111,067
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.993 $ 9.914
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.993 $ 9.914 $ 9.851
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,773 239,378 611,958
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.388 $ 13.580
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.388 $ 13.580 $ 14.787
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,917 115,558 110,548
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.214 $ 14.664
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.214 $ 14.664 $ 16.708
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 114 77,578 251,024
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.651 $ 13.177
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.651 $ 13.177 $ 13.990
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5 56,293 84,821
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston -
Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.524 $ 12.158
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.524 $ 12.158 $ 12.986
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,824 384,959 698,080
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class
IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.480 $ 14.145
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.480 $ 14.145 $ 16.978
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 377 50,148 84,872
- -------------------------------------------------------------------------------
100 PROSPECTUS
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.381 $ 13.646
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.381 $ 13.646 $ 15.976
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,612 97,780 138,680
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.118 $ 12.475
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.118 $ 12.475 $ 12.934
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 8,458 496,984 797,854
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.153
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 148,068
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.366
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 214,722
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.418 $ 11.811
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.418 $ 11.811 $ 12.448
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 62 128,295 253,189
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.662 $ 13.437
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.662 $ 13.437 $ 15.137
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,897 400,708 755,669
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.000 $ 9.925
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 437,391
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.069 $ 13.960
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.069 $ 13.960 $ 15.169
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 33 23,912 159,393
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.989
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 202,603
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.785
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 242,720
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.760
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 76,401
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.000 $ 11.131
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 130,721
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 13.621
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 13.621 $ 15.993
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 49,008 76,697
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.330
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 226,309
- -------------------------------------------------------------------------------
101 PROSPECTUS
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.323
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 123,762
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.710 $ 14.601
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.710 $ 14.601 $ 19.601
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,083 143,509 7,395
- -------------------------------------------------------------------------------
* The Allstate Advisor Contracts were first offered on October 14, 2002. All of
the Variable Sub-Accounts shown above were first offered under the Contracts on
October 14, 2002, except for the Oppenheimer Capital Appreciation/VA - Service
Shares Sub-Account and Van Kampen UIF Small Company Growth, Class II
Sub-Accounts which were first offered under the Contracts on May 1, 2003, the
Van Kampen LIT Money Market, Class II Sub-Account and Van Kampen UIF Global
Franchise, Class II Sub-Accounts, which were first offered under the Contracts
on December 31, 2003, and the FTVIP Franklin Income Securities - Class 2
Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account, Van Kampen
LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT Comstock, Class II
Sub-Account, Van Kampen UIF Equity and Income, Class II Sub-Account, Van Kampen
UIF Equity Growth, Class I Sub-Account and Van Kampen UIF Equity Growth, Class
II Sub-Account, and Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account and
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Accounts, which were first
offered under the Contracts on May 1, 2004 and the FTVIP Franklin Large Cap
Growth Securities - Class 2 Sub-Account, Lord Abbett Series Fund - All Value
Portfolio, Lord Abbett Series Fund - Bond-Debenture Portfolio, Lord Abbett
Series Fund - Growth and Income Portfolio, Lord Abbett Series Fund - Growth
Opportunities Portfolio, Lord Abbett Series Fund - Mid-Cap Value Portfolio and
Oppenheimer Core Bond/VA - Service Shares Sub-Account which were first offered
with the Contracts on October 1, 2004. The Accumulation Unit Values in this
table reflect a mortality and expense risk charge of 1.10% and an administrative
expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
102 PROSPECTUS
ALLSTATE ADVISOR CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION
UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST
OFFERED* (WITH THE MAV DEATH BENEFIT OPTION, THE ENHANCED BENEFICIARY PROTECTION
(ANNUAL INCREASE) OPTION, BOTH ADDED ON OR AFTER MAY 1, 2003, AND THE EARNINGS
PROTECTION DEATH BENEFIT OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.698 $13.341
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.341 $14.434
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 3,763 5,784
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.194
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 119
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.509
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 60
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.821 $15.485
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $15.485 $16.884
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.039 $14.507
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.507 $17.559
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 7,052 4,525
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.211
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 518
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.599 $12.638
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.638 $13.923
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 12,747 12,480
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class
2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.674 $16.810
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $16.810 $20.505
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.377 $13.547
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.547 $15.705
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 285 580
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class 2
Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.583 $12.839
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.839 $14.409
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
103 PROSPECTUS
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.895
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 58
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.347
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.880
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,259
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.127
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.110
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,275
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.337 $12.344
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.344 $14.419
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 678 677
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.104 $13.045
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.045 $14.009
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 973 3,172
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.095
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $12.248
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.248 $12.772
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 33 1,597
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.079 $14.181
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.181 $16.489
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 237 227
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.727 $12.909
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.909 $13.729
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,353 4,420
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.460 $12.586
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.586 $13.437
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 2,396 4,635
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.710 $14.608
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.608 $17.029
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 2,493 1,308
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.243 $12.091
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.091 $12.824
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 4,270 8,589
- -------------------------------------------------------------------------------
104 PROSPECTUS
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.748 $12.385
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.385 $13.218
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 116
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.989 $13.454
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.454 $14.621
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,648 1,792
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.230 $11.260
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.260 $11.798
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.861 $13.294
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.294 $14.374
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,125 4,411
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.352 $10.403
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.403 $10.626
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 2,859 10,273
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.571 $13.331
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.331 $15.151
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 3,933 1,561
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.688 $12.942
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.942 $14.259
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 417 3,302
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.933 $ 9.815
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 9.815 $ 9.664
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 158 7,242
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.975 $13.445
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.445 $14.506
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 196 489
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.317 $14.518
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.518 $16.391
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 107 948
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.837 $13.046
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.046 $13.725
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 124 580
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.678 $12.037
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.037 $12.740
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 4,283 5,947
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.642 $14.004
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.004 $16.656
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 118 265
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.794 $13.510
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.510 $15.673
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 434 969
- -------------------------------------------------------------------------------
105 PROSPECTUS
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.574 $12.351
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.351 $12.688
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 5,778 2,080
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.084
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,694
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.297
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.925 $11.693
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.693 $12.212
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,278 0
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.775 $13.304
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.304 $14.850
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,395 1,131
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $ 9.835
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 4,172
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $12.285 $13.821
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.821 $14.881
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 1,477
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.922
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I Sub-Account
(Class I) (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.719
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 388
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
(Class II) (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.694
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,255
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $11.030
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $13.538
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.538 $15.751
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,345 1,461
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (Class I) (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.260
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,108
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (Class II) (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.254
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,042
- -------------------------------------------------------------------------------
106 PROSPECTUS
Van Kampen UIF U.S. Real Estate, Class II
Sub-Account(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.376 $14.455
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.455 $19.239
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,499 2,484
- -------------------------------------------------------------------------------
* The Allstate Advisor Contracts were first offered on October 14, 2002. All of
the Variable Sub-Accounts shown above were first offered under the Allstate
Advisor Contracts with the Earnings Protection Death Benefit Option, the MAV
Death Benefit Option at 0.20%, and the Enhanced Beneficiary Protection (Annual
Increase) Option at 0.30% on May 1, 2003, except for the FTVIP Franklin Income
Securities - Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2
Sub-Account, Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen
LIT Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account, and Van Kampen
UIF U.S. Mid Cap Value, Class II Sub-Account, which were first offered under the
Contracts on May 1, 2004 and the FTVIP Franklin Large Cap Growth Securities -
Class 2 Sub-Account, Lord Abbett Series Fund - All Value Portfolio, Lord Abbett
Series Fund - Bond-Debenture Portfolio, Lord Abbett Series Fund - Growth and
Income Portfolio, Lord Abbett Series Fund - Growth Opportunities Portfolio, Lord
Abbett Series Fund - Mid-Cap Value Portfolio and Oppenheimer Core Bond/VA -
Service Shares Sub-Account which were first offered with the Contracts on
October 1, 2004. The Accumulation Unit Values in this table reflect a mortality
and expense risk charge of 2.00% and an administrative expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
107 PROSPECTUS
ALLSTATE ADVISOR PLUS CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER OF
ACCUMULATION UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS
WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
-----------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.853 $ 13.425
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.853 $ 13.425 $ 14.614
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 903 204,532 239,720
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.240
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 20,529
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.525
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 5,010
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.538 $ 15.583
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.538 $ 15.583 $ 17.095
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 290 12.,058 23,996
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.228 $ 14.599
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.228 $ 14.599 $ 17.778
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,221 109,873 78,714
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.253
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 9,294
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.327 $ 12.718
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.327 $ 12.718 $ 14.097
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,512 203,839 154,189
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.236 $ 16.917
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.236 $ 16.917 $ 20.762
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 101 58,107 14,136
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.477 $ 13.633
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.477 $ 13.633 $ 15.902
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,484 79,873 59,175
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class
2 Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.723 $ 12.921
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.723 $ 12.921 $ 14.589
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,305 8,097
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.912
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 5,559
- -------------------------------------------------------------------------------
108 PROSPECTUS
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.363
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 5,743
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.896
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,993
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.144
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 268
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.127
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,679
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.063 $ 12.422
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.063 $ 12.422 $ 14.600
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6 43,239 24,359
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.699 $ 13.128
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.699 $ 13.128 $ 14.184
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 381 118,638 99,388
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares
Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.110
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 18
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 12.298
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 12.298 $ 12.903
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 127,891 60,080
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.150 $ 14.270
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.150 $ 14.270 $ 16.695
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,468 71,158 79,066
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.663 $ 12.991
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.663 $ 12.991 $ 13.901
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,578 158,346 108,252
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.179 $ 12.666
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.179 $ 12.666 $ 13.604
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 776 331,015 209,165
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA -
Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.356 $ 14.701
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.356 $ 14.701 $ 17.242
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,102 95,842 57,383
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.553 $ 12.168
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.553 $ 12.168 $ 12.984
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,732 218,046 182,539
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.390 $ 12.464
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.390 $ 12.464 $ 13.383
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4 31,401 29,830
- -------------------------------------------------------------------------------
109 PROSPECTUS
Putnam VT Growth and Income - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.800 $ 13.539
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.800 $ 13.539 $ 14.804
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,560 241,997 172,124
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.726 $ 11.331
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.726 $ 11.331 $ 11.945
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,736 43,250 54,726
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.743 $ 13.378
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.743 $ 13.378 $ 14.554
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 475 120,256 48,270
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.187 $ 10.469
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.187 $ 10.469 $ 10.759
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,609 263,037 201,668
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.606 $ 13.416
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.606 $ 13.416 $ 15.341
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 683 57,398 79,696
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.409 $ 13.024
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.409 $ 13.024 $ 14.437
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 302 46,132 19,447
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.987 $ 9.878
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.987 $ 9.878 $ 9.785
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,174 199,617 78,052
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.381 $ 13.530
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.381 $ 13.530 $ 14.687
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 57,917 29,678
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.206 $ 14.610
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.206 $ 14.610 $ 16.596
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,048 58,917 47,472
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.644 $ 13.128
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.644 $ 13.128 $ 13.896
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 66 38,525 25,803
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston -
Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.517 $ 12.113
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.517 $ 12.113 $ 12.899
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,392 147,503 131,257
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.472 $ 14.093
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.472 $ 14.093 $ 16.864
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 14.092 7,591
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.374 $ 13.596
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.374 $ 13.596 $ 15.869
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 66 32,814 37,929
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.111 $ 12.429
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.111 $ 12.429 $ 12.847
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,714 204,603 232,660
- -------------------------------------------------------------------------------
110 PROSPECTUS
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.130
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 46,225
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.343
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 14,269
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.412 $ 11.767
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.412 $ 11.767 $ 12.365
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 226 49,664 54,076
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.655 $ 13.388
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.655 $ 13.388 $ 15.035
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,194 152,359 119,515
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.000 $ 9.895
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 66,137
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.062 $ 13.908
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.062 $ 13.908 $ 15.067
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 21,280 16,192
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.967
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 16,162
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.763
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 24,252
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.738
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 9,011
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.000 $ 11.098
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 14,221
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 13.593
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 13.593 $ 15.912
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 20,071 19,130
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.306
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 58,610
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.300
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 14,404
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.703 $ 14.547
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.703 $ 14.547 $ 19.479
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,077 58,906 58,603
- -------------------------------------------------------------------------------
* The Allstate Advisor Plus Contracts were first offered on October 14, 2002.
All of the Variable Sub-Accounts shown above were first offered under the
Contracts on October 14, 2002, except for the except for the Oppenheimer Capital
Appreciation/VA - Service Shares Sub-Account and Van Kampen UIF Small Company
Growth, Class II Sub-Accounts which were first offered under the Contracts on
May 1, 2003, the Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Accounts, which were first offered
under the Contracts on December 31, 2003, and the FTVIP Franklin Income
Securities - Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2
Sub-Account, Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen
LIT Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account, and Van Kampen
UIF U.S. Mid Cap Value, Class II Sub-Account, which were first offered under the
Contracts on May 1, 2004 and the FTVIP Franklin Large Cap Growth Securities -
Class 2 Sub-Account, Lord Abbett Series Fund - All Value Portfolio, Lord Abbett
Series Fund - Bond-Debenture Portfolio, Lord Abbett Series Fund - Growth and
Income Portfolio, Lord Abbett Series Fund - Growth Opportunities Portfolio, Lord
Abbett Series Fund - Mid-Cap Value Portfolio and Oppenheimer Core Bond/VA -
Service Shares Sub-Account which were first offered with the Contracts on
October 1, 2004. The Accumulation Unit Values in this table reflect a mortality
and expense risk charge of 1.40% and an administrative expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
112 PROSPECTUS
ALLSTATE ADVISOR PLUS CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER OF
ACCUMULATION UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS
WERE FIRST OFFERED* (WITH THE MAV DEATH BENEFIT OPTION, THE ENHANCED BENEFICIARY
PROTECTION (ANNUAL INCREASE) OPTION, BOTH ADDED ON OR AFTER MAY 1, 2003, AND THE
EARNINGS PROTECTION DEATH BENEFIT OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
- -------------------------------------------------------------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.680 $13.292
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.292 $14.336
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 794 1,584
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.171
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.501
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.801 $15.428
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $15.428 $16.770
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.021 $14.453
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.453 $17.440
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 5,633 5,461
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.190
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.581 $12.591
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.591 $13.829
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 404
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class
2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.655 $16.748
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $16.748 $20.367
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 274
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.359 $13.497
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.497 $15.599
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 785 785
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class 2
Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.563 $12.792
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.792 $14.312
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.887
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
113 PROSPECTUS
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.339
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.871
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.119
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.102
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.319 $12.298
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.298 $14.322
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 4,939 4,736
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.085 $12.997
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.997 $13.914
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 468
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.087
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $12.222
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.222 $12.707
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 1,319
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.062 $14.128
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.128 $16.377
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.708 $12.861
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.861 $13.636
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 3,096 3,274
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.442 $12.540
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.540 $13.346
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 2,031 1,958
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.692 $14.554
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.554 $16.914
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 715 1,046
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.224 $12.046
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.046 $12.737
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 4,565 6,173
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.730 $12.339
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.339 $13.128
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
114 PROSPECTUS
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.971 $13.404
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.404 $14.522
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 263 212
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.213 $11.218
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.218 $11.718
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 116 96
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.841 $13.245
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.245 $14.277
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 391
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.335 $10.364
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.364 $10.554
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,290 2,104
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.554 $13.282
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.282 $15.049
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 15,292 8,870
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.670 $12,894
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12,894 $14.163
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.917 $ 9.779
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 9.779 $ 9.598
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,411 3,015
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 9.779
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 9.598
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 3,015
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.957 $13.395
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.395 $14.408
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.298 $14.464
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.464 $16.280
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 12,046 13,910
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.819 $12.997
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.997 $13.632
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.660 $11.992
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.992 $12.654
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,563 1,561
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.455 $13.971
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.971 $16.543
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.776 $13.460
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.460 $15.567
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
115 PROSPECTUS
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.557 $12.305
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.305 $12.603
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 813 915
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.062
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,030
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.274
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.909 $11.650
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.650 $12.129
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 14,005 16,837
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.757 $13.254
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.254 $14.749
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 2,676 2,467
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $ 9.805
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $12.265 $13.770
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.770 $14.780
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.900
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.697
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 3,557
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.672
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $10.996
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $13.510
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.510 $15.670
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.237
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,038
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.231
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
116 PROSPECTUS
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.357 $14.402
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.402 $19.109
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 2,467 2,258
- -------------------------------------------------------------------------------
* The Allstate Advisor Plus Contracts were first offered on October 14, 2002.
All of the Variable Sub-Accounts shown above were first offered under the
Allstate Advisor Plus Contracts with the Earnings Protection Death Benefit
Option, the MAV Death Benefit Option at 0.20%, and the Enhanced Beneficiary
Protection (Annual Increase) Option at 0.30% on May 1, 2003, except for the Van
Kampen LIT Money Market, Class II Sub-Account and Van Kampen UIF Global
Franchise, Class II Sub-Accounts, which were first offered under the Contracts
on December 31, 2003, and the FTVIP Franklin Income Securities - Class 2
Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account, Van Kampen
LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT Comstock, Class II
Sub-Account, Van Kampen UIF Equity and Income, Class II Sub-Account, Van Kampen
UIF Equity Growth, Class II Sub-Account, and Van Kampen UIF U.S. Mid Cap Value,
Class II Sub-Account, which were first offered under the Contracts on May 1,
2004 and the FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account,
Lord Abbett Series Fund - All Value Portfolio, Lord Abbett Series Fund -
Bond-Debenture Portfolio, Lord Abbett Series Fund - Growth and Income Portfolio,
Lord Abbett Series Fund - Growth Opportunities Portfolio, Lord Abbett Series
Fund - Mid-Cap Value Portfolio and Oppenheimer Core Bond/VA - Service Shares
Sub-Account which were first offered with the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a mortality and expense risk
charge of 2.30% and an administrative expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
117 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH 5 YEAR WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
---------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.853 $13.425
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.853 $13.425 $14.614
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,895 31,028 68,823
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.240
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 22,636
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class
2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.525
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,153
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.538 $15.583
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.538 $15.583 $17.095
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,120 1,457
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class
2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.228 $14.599
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.228 $14.599 $17.778
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 17,710 32,091
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.253
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 4,788
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.327 $12.718
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.327 $12.718 $14.097
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 51,247 89,468
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.236 $16.917
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.236 $16.917 $20.762
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 4,338 10,936
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.477 $13.633
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.477 $13.633 $15.902
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 10,738 24,545
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class 2
Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.723 $12.920
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.723 $12.920 $14.589
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,921 1,995 2,561
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.912
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 2,680
- -------------------------------------------------------------------------------
118 PROSPECTUS
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.363
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,954
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.896
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 7,786
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.144
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 86
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.127
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 2,907
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.063 $12.422
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.063 $12.422 $14.600
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 8,483 22,403
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.699 $13.128
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.699 $13.128 $14.184
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 14,806 25,039
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares
Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.110
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,900
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $12.298
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.298 $12.903
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 16,293 62,821
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.150 $14.270
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.150 $14.270 $16.695
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 4,146 18,071
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.663 $12.991
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.663 $12.991 $13.901
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 11.846 41,186
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.179 $12.666
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.179 $12.666 $13.604
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,945 26,782 59,125
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.356 $14.701
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.356 $14.701 $17.242
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 14,941 25,485
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.553 $12.168
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.553 $12.168 $12.984
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,928 41,097 77,772
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.390 $12.464
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.390 $12.464 $13.383
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 8,988 14,779
- -------------------------------------------------------------------------------
119 PROSPECTUS
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.800 $14.093
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.800 $14.093 $14.804
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,112 49,986
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.726 $11.331
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.726 $11.331 $11.945
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 978 1,958
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.743 $13.378
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.743 $13.378 $14.554
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 20,709 39,241
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.187 $10.469
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.187 $10.469 $10.759
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 33,742 65,425
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.606 $13.416
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.606 $13.416 $15.341
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 16,560 23,536
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.409 $13.024
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.409 $13.024 $14.437
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 4,222 5,134
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.987 $ 9.878
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.987 $ 9.878 $ 9.785
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,503 25,745
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.381 $13.530
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.381 $13.530 $14.687
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 4,646 4,607
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.206 $14.610
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.206 $14.610 $16.596
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,413 9,332
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.644 $13.128
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.644 $13.128 $13.896
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,239 4,387
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class
IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.517 $12.113
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.517 $12.113 $12.899
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 24,540 64,309
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.472 $14.093
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.472 $14.093 $16.864
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,112 5,170
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.374 $13.596
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.374 $13.596 $15.869
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 9,417 15,619
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.111 $12.429
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.111 $12.429 $12.847
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 44,440 54,946
- -------------------------------------------------------------------------------
120 PROSPECTUS
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.130
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 5,000
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.343
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 29,089
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.412 $11.767
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.412 $11.767 $12.365
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 4,800 16,427
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.655 $13.388
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.655 $13.388 $15.035
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 16,041 55,062
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $ 9.895
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 23,867
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.062 $13.908
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.062 $13.908 $15.067
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,511 7,583
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.967
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 40,892
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.763
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 7,291
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.738
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 4,141
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $11.098
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 20,294
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $13.593
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.593 $15.912
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,742 8,905
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.306
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 17,454
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.300
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 18,683
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.703 $14.547
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.703 $14.547 $19.479
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 10,341 25,715
- -------------------------------------------------------------------------------
* The Allstate Advisor Preferred Contracts with 5 Year Withdrawal Charge Option
were first offered on October 14, 2002. All of the Variable Sub-Accounts shown
above were first offered under the Contracts on October 14, 2002, except for the
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account and Van Kampen
UIF Small Company Growth, Class II Sub-Accounts which were first offered under
the Contracts on May 1, 2003, the Van Kampen LIT Money Market, Class II
Sub-Account and Van Kampen UIF Global Franchise, Class II Sub-Accounts, which
were first offered under the Contracts on December 31, 2003, and the FTVIP
Franklin Income Securities - Class 2 Sub-Account, FTVIP Franklin U.S. Government
- - Class 2 Sub-Account, Van Kampen LIT Aggressive Growth, Class II Sub-Account,
Van Kampen LIT Comstock, Class II Sub-Account,Van Kampen UIF Equity and Income,
Class II Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account, and
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account, which were first
offered under the Contracts on May 1, 2004 and the FTVIP Franklin Large Cap
Growth Securities - Class 2 Sub-Account, Lord Abbett Series Fund - All Value
Portfolio, Lord Abbett Series Fund - Bond-Debenture Portfolio, Lord Abbett
Series Fund - Growth and Income Portfolio, Lord Abbett Series Fund - Growth
Opportunities Portfolio, Lord Abbett Series Fund - Mid-Cap Value Portfolio and
Oppenheimer Core Bond/VA - Service Shares Sub-Account which were first offered
with the Contracts on October 1, 2004. The Accumulation Unit Values in this
table reflect a mortality and expense risk charge of 1.40% and an administrative
expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
122 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH 5 YEAR WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (WITH THE MAV DEATH
BENEFIT OPTION, THE ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION,
BOTH ADDED ON OR AFTER MAY 1, 2003, AND THE EARNINGS PROTECTION DEATH BENEFIT
OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.680 $13.292
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.292 $14.336
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.171
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.501
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.801 $15.428
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $15.428 $16.770
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.021 $14.453
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.453 $17.440
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.190
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.581 $12.591
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.591 $13.829
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class
2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.655 $16.748
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $16.748 $20.367
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.359 $13.497
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.497 $15.599
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class 2
Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.563 $12.792
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.792 $14.312
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
123 PROSPECTUS
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.887
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.339
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.871
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.119
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.102
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.319 $12.298
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.298 $14.322
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.085 $12.997
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.997 $13.914
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.087
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $12.222
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.222 $12.707
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.062 $14.128
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.128 $16.377
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.708 $12.861
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.861 $13.636
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.442 $12.540
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.540 $13.346
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 370 498
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.692 $14.554
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.554 $16.914
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 321 428
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.224 $12.046
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.046 $12.737
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
124 PROSPECTUS
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.730 $12.339
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.339 $13.128
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.971 $13.404
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.404 $14.522
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.213 $11.218
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.218 $11.718
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.841 $13.245
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.245 $14.277
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.335 $10.364
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.364 $10.554
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.554 $13.282
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.282 $15.049
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.670 $12.894
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.894 $14.163
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.917 $ 9.779
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 9.779 $ 9.598
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.957 $13.395
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.395 $14.408
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.298 $14.464
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.464 $16.280
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.819 $12.997
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.997 $13.632
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 356 481
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.660 $11.992
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.992 $12.654
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.623 $13.975
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.975 $16.543
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.776 $13.460
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.460 $15.567
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
125 PROSPECTUS
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.557 $12.305
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.305 $12.603
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.062
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.274
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.909 $11.650
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.650 $12.129
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.757 $13.254
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.254 $14.749
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 354 476
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $ 9.805
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $12.265 $13.770
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.770 $14.780
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.900
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.697
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.672
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $10.996
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $13.510
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.510 $15.670
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.237
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 629
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.231
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
126 PROSPECTUS
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.357 $14.402
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.402 $19.109
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
* The Allstate Advisor Preferred Contracts with 5 Year Withdrawal Charge Option
were first offered on October 14, 2002. All of the Variable Sub-Accounts shown
above were first offered under the Allstate Advisor Preferred Contracts with 5
Year Withdrawal Charge Option and with the Earnings Protection Death Benefit
Option, the MAV Death Benefit Option at 0.20%, and the Enhanced Beneficiary
Protection (Annual Increase) Option at 0.30% on May 1, 2003, except for the Van
Kampen LIT Money Market, Class II Sub-Account and Van Kampen UIF Global
Franchise, Class II Sub-Accounts, which were first offered under the Contracts
on December 31, 2003, and the FTVIP Franklin Income Securities - Class 2
Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account, Van Kampen
LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT Comstock, Class II
Sub-Account,Van Kampen UIF Equity and Income, Class II Sub-Account, Van Kampen
UIF Equity Growth, Class II Sub-Account, and Van Kampen UIF U.S. Mid Cap Value,
Class II Sub-Account, which were first offered under the Contracts on May 1,
2004 and the FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account,
Lord Abbett Series Fund - All Value Portfolio, Lord Abbett Series Fund -
Bond-Debenture Portfolio, Lord Abbett Series Fund - Growth and Income Portfolio,
Lord Abbett Series Fund - Growth Opportunities Portfolio, Lord Abbett Series
Fund - Mid-Cap Value Portfolio and Oppenheimer Core Bond/VA - Service Shares
Sub-Account which were first offered with the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a mortality and expense risk
charge of 2.30% and an administrative expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
127 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH 3 YEAR WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
- -------------------------------------------------------------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.851 $ 13.409
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.851 $ 13.409 $ 14.582
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 347 117,457 236,098
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.233
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 66,922
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.523
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 2,116
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.535 $ 15.564
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.535 $ 15.564 $ 17.057
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 434 4,327 3,941
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.225 $ 14.581
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.225 $ 14.581 $ 17.739
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 860 101,030 168,475
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.246
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 42,893
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.324 $ 12.703
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.324 $ 12.703 $ 14.065
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,174 148,918 358,905
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.233 $ 16.896
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.233 $ 16.896 $ 20.715
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 54,196 85,691
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.475 $ 13.616
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.475 $ 13.616 $ 15.866
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 640 53,801 104,501
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class
2 Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.721 $ 12.905
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.721 $ 12.905 $ 14.556
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 135 12,812 4,209
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.909
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,724
- -------------------------------------------------------------------------------
128 PROSPECTUS
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.360
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 3,670
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.893
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 11,058
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.141
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 2,150
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.124
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 16.166
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.060 $ 12.406
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.060 $ 12.406 $ 14.567
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 22,549 68,809
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.696 $ 13.112
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.696 $ 13.112 $ 14.152
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 73,942 124,555
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares
Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.108
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 274
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 12.289
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 12.289 $ 12.881
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 45,608 124,466
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.148 $ 14.253
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.148 $ 14.253 $ 16.657
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 38,933 62,907
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.661 $ 12.975
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.661 $ 12.975 $ 13.869
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 508 81,371 165,436
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.177 $ 12.650
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.177 $ 12.650 $ 13.574
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,007 83,324 196,103
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA -
Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.354 $ 14.682
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.354 $ 14.682 $ 17.203
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 745 58,798 106,502
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.551 $ 12.153
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.551 $ 12.153 $ 12.955
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 261,984 475,970
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.388 $ 12.448
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.388 $ 12.448 $ 13.353
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 12,054 35,146
- -------------------------------------------------------------------------------
129 PROSPECTUS
Putnam VT Growth and Income - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.798 $ 14.075
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.798 $ 14.075 $ 14.771
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,666 15,549 186,092
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.724 $ 11.317
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.724 $ 11.317 $ 11.919
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 24,389 34,838
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.741 $ 13.362
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.741 $ 13.362 $ 14.521
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,550 114,140 182,596
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.185 $ 10.456
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.185 $ 10.456 $ 10.735
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,811 155,621 329,460
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.604 $ 13.399
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.604 $ 13.399 $ 15.306
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 319 50,972 72,525
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.407 $ 13.008
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.407 $ 13.008 $ 14.405
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 150 41,343 41,743
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.985 $ 9.865
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.985 $ 9.865 $ 9.763
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 652,592 641,522
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.379 $ 13.513
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.379 $ 13.513 $ 14.654
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,640 20,679 33,167
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.204 $ 14.592
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.204 $ 14.592 $ 16.559
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 424 48,650 96,870
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.642 $ 13.112
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.642 $ 13.112 $ 13.865
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 7,152 14,354
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston -
Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.515 $ 12.098
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.515 $ 12.098 $ 12.870
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,030 79,093 157,776
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.470 $ 14.075
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.470 $ 14.075 $ 16.826
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 15,549 25,933
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.372 $ 13.579
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.372 $ 13.579 $ 15.833
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,547 50,687 82,701
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.109 $ 12.414
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.109 $ 12.414 $ 12.818
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 617 153,342 248,311
- -------------------------------------------------------------------------------
130 PROSPECTUS
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.122
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 49,268
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.336
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 53,964
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.410 $ 11.753
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.410 $ 11.753 $ 12.337
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 31,986 49,070
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.653 $ 13.371
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.653 $ 13.371 $ 15.002
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 74,198 146,747
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.000 $ 9.885
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 95,428
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.059 $ 13.891
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.059 $ 13.891 $ 15.033
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 12,459 61,335
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.959
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 70,540
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.756
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 63,467
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.731
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 41,130
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.000 $ 11.086
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 36,213
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 13.584
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 13.584 $ 15.885
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 13,341 33,746
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.299
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 104,318
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.292
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 33,745
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.701 $ 14.529
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.701 $ 14.529 $ 19.436
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 19,376 121,865
- -------------------------------------------------------------------------------
131 PROSPECTUS
* The Allstate Advisor Preferred Contracts with 3 Year Withdrawal Charge Option
were first offered on October 14, 2002. All of the Variable Sub-Accounts shown
above were first offered under the Contracts on October 14, 2002, except for the
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account and Van Kampen
UIF Small Company Growth, Class II Sub-Accounts which were first offered under
the Contracts on May 1, 2003, the Van Kampen LIT Money Market, Class II
Sub-Account and Van Kampen UIF Global Franchise, Class II Sub-Accounts, which
were first offered under the Contracts on December 31, 2003, and the FTVIP
Franklin Income Securities - Class 2 Sub-Account, FTVIP Franklin U.S. Government
- - Class 2 Sub-Account, Van Kampen LIT Aggressive Growth, Class II Sub-Account,
Van Kampen LIT Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income,
Class II Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account, and
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account, which were first
offered under the Contracts on May 1, 2004 and the FTVIP Franklin Large Cap
Growth Securities - Class 2 Sub-Account, Lord Abbett Series Fund - All Value
Portfolio, Lord Abbett Series Fund - Bond-Debenture Portfolio, Lord Abbett
Series Fund - Growth and Income Portfolio, Lord Abbett Series Fund - Growth
Opportunities Portfolio, Lord Abbett Series Fund - Mid-Cap Value Portfolio and
Oppenheimer Core Bond/VA - Service Shares Sub-Account which were first offered
with the Contracts on October 1, 2004. The Accumulation Unit Values in this
table reflect a mortality and expense risk charge of 1.50% and an administrative
expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
132 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH 3 YEAR WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (WITH THE MAV DEATH
BENEFIT OPTION, THE ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION,
BOTH ADDED ON OR AFTER MAY 1, 2003, AND THE EARNINGS PROTECTION DEATH BENEFIT
OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.675 $13.275
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.275 $14.304
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 544 1,424
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.164
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.499
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.794 $15.409
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $15.409 $16.732
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.014 $14.435
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.435 $17.401
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 4,865 5,390
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.183
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.575 $12.576
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.576 $13.797
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 3,040 4,637
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class
2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.648 $16.727
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $16.727 $20.321
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,444 1,931
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.354 $13.480
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.480 $15.564
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class 2
Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.557 $12.776
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.776 $14.279
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
133 PROSPECTUS
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.884
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.336
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.868
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.116
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.099
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.314 $12.283
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.283 $14.289
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.079 $12.981
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.981 $13.883
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 212
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.084
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $12.214
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.214 $12.685
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 995 2,545
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.056 $14.111
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.111 $16.340
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.702 $12.845
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.845 $13.605
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 612
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.436 $12.524
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.524 $13.315
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,474 7,620
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.686 $14.536
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.536 $16.878
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 487 802
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.218 $11.218
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.031 $12.708
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 1,731
- -------------------------------------------------------------------------------
134 PROSPECTUS
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.724 $12.324
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.324 $13.098
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 6,221 9,245
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.965 $13.387
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.387 $14.490
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 7,904 8,998
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.207 $11.204
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.204 $11.691
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.835 $13.228
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.228 $14.244
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 686
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.329 $10.351
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.351 $10.530
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 1,298
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.548 $13.265
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.265 $15.015
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 3,566 4,094
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.664 $12.878
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.878 $14.131
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.911 $ 9.767
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 9.767 $ 9.576
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 1,427
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.951 $13.378
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.378 $14.375
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,010 937
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.292 $14.446
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.446 $16.244
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 421
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.813 $12.981
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.981 $13.601
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.654 $11.977
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.977 $12.625
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 427 712
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.616 $13.935
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.935 $16.506
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.770 $13.443
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.443 $15.532
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 3,822 4,339
- -------------------------------------------------------------------------------
135 PROSPECTUS
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.551 $12.290
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.290 $12.574
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 8,426 10.138
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.054
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 4,384
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.266
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.903 $11.635
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.635 $12.012
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,920 2,937
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.751 $13.238
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.238 $14.716
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 938 804
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $ 9.794
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 1,001
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $12.258 $13.752
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.752 $14.746
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 166
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.892
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.690
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 478
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.665
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,922
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $10.985
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $13.501
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.501 $15.644
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.229
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,052
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account) (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.223
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
136 PROSPECTUS
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.351 $14.384
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.384 $19.066
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 129
- -------------------------------------------------------------------------------
* The Allstate Advisor Preferred Contracts with the 3 Year Withdrawal Charge
Option were first offered on October 14, 2002. All of the Variable Sub-Accounts
shown above were first offered under the Allstate Advisor Preferred Contracts
with the Earnings Protection Death Benefit Option, the MAV Death Benefit Option
at 0.20%, and the Enhanced Beneficiary Protection (Annual Increase) Option at
0.30% on May 1, 2003, except for the Oppenheimer Capital Appreciation/VA -
Service Shares Sub-Account and Van Kampen UIF Small Company Growth, Class II
Sub-Accounts which were first offered under the Contracts on May 1, 2003, the
Van Kampen LIT Money Market, Class II Sub-Account and Van Kampen UIF Global
Franchise, Class II Sub-Accounts, which were first offered under the Contracts
on December 31, 2003, and the FTVIP Franklin Income Securities - Class 2
Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account, Van Kampen
LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT Comstock, Class II
Sub-Account, Van Kampen UIF Equity and Income, Class II Sub-Account, Van Kampen
UIF Equity Growth, Class II Sub-Account, and Van Kampen UIF U.S. Mid Cap Value,
Class II Sub-Account, which were first offered under the Contracts on May 1,
2004 and the FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account,
Lord Abbett Series Fund - All Value Portfolio, Lord Abbett Series Fund -
Bond-Debenture Portfolio, Lord Abbett Series Fund - Growth and Income Portfolio,
Lord Abbett Series Fund - Growth Opportunities Portfolio, Lord Abbett Series
Fund - Mid-Cap Value Portfolio and Oppenheimer Core Bond/VA - Service Shares
Sub-Account which were first offered with the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a mortality and expense risk
charge of 2.40% and an administrative expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
137 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH NO WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
-----------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.849 $ 13.392
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.849 $ 13.392 $ 14.549
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 23,469 42,275
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.225
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 33,355
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.050
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,205
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.533 $ 15.545
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.533 $ 15.545 $ 17.018
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.223 $ 14.563
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.223 $ 14.563 $ 17.699
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 7,677 14,403
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.239
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 7,924
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.322 $ 12.687
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.322 $ 12.687 $ 14.034
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 13,840 35,124
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities -
Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.231 $ 16.875
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.231 $ 16.875 $ 20.668
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,012 8,722
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.473 $ 13.599
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.473 $ 13.599 $ 15.830
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 7,819 25,595
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class
2 Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.719 $ 12.889
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.719 $ 12.889 $ 14.524
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0 0
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.906
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 2,629
- -------------------------------------------------------------------------------
138 PROSPECTUS
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.357
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 494
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.891
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 4,338
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.139
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.122
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 4,630
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.058 $ 12.391
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.058 $ 12.391 $ 14.534
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 5,954 15,708
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.694 $ 13.095
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.694 $ 13.095 $ 14.121
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 7,233 19,314
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares
Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.105
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,761
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 12.281
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 12.281 $ 12.859
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 19,650 139,232
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.146 $ 14.235
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.146 $ 14.235 $ 16.620
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,483 69,433
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.659 $ 12.959
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.659 $ 12.959 $ 13.838
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 14,596 24,084
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.175 $ 12.635
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.175 $ 12.635 $ 13.543
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,180 20,820 44,796
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA -
Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.351 $ 14.664
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.351 $ 14.664 $ 17.164
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 7,755 16,016
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.549 $ 12.138
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.549 $ 12.138 $ 12.926
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 36,470 76,890
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.386 $ 12.433
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.386 $ 12.433 $ 13.323
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0 373
- -------------------------------------------------------------------------------
139 PROSPECTUS
Putnam VT Growth and Income - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.796 $ 13.506
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.796 $ 13.506 $ 14.738
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 13,936 20,681
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.722 $ 11.303
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.722 $ 11.303 $ 11.892
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 1,277 1,832
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.738 $ 13.345
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.738 $ 13.345 $ 14.488
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 363,012 53,015
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.183 $ 10.443
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.183 $ 10.443 $ 10.711
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 163,346 94,571
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.602 $ 13.383
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.602 $ 13.383 $ 15.272
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 228,069 171,334
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.405 $ 12.992
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.405 $ 12.992 $ 14.373
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 5,187 4,353
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.983 $ 9.853
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.983 $ 9.853 $ 9.741
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,006 776,190 571,779
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.377 $ 13.497
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.377 $ 13.497 $ 14.621
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,291 3,402
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.202 $ 14.574
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.202 $ 14.574 $ 16.522
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 6,517 18,620
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.640 $ 13.096
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.640 $ 13.096 $ 13.834
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 5,620 6,279
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston -
Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.512 $ 12.083
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.512 $ 12.083 $ 12.841
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,141 17,937 19,997
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.467 $ 14.058
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.467 $ 14.058 $ 16.789
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,216 3,706
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.370 $ 13.562
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.370 $ 13.562 $ 15.798
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,975 2,606
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.107 $ 12.398
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.107 $ 12.398 $ 12.789
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 27,311 27,234
- -------------------------------------------------------------------------------
140 PROSPECTUS
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.115
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 6,523
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.328
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 35,103
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.408 $ 13.874
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.408 $ 13.874 $ 12.309
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0 22,487
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.650 $ 13.355
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.650 $ 13.355 $ 14.968
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 36,801 81,112
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.000 $ 9.875
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 113,071
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.057 $ 13.874
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.057 $ 13.874 $ 14.999
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0 6,120
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.952
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 12,560
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.749
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 18,791
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 10.723
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 10,867
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.000 $ 11.075
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 24,900
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000 $ 13.575
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 13.575 $ 15.858
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 504 1,901
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.291
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 9,030
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $ 11.284
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 3,401
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.698 $ 14.511
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.698 $ 14.511 $ 19.392
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 6,427 23,013
- -------------------------------------------------------------------------------
141 PROSPECTUS
* The Allstate Advisor Preferred Contracts with No Withdrawal Charge Option were
first offered on October 14, 2002. All of the Variable Sub-Accounts shown above
were first offered under the Contracts on October 14, 2002, except for the
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account and Van Kampen
UIF Small Company Growth, Class II Sub-Accounts which were first offered under
the Contracts on May 1, 2003, the Van Kampen LIT Money Market, Class II
Sub-Account and Van Kampen UIF Global Franchise, Class II Sub-Accounts, which
were first offered under the Contracts on December 31, 2003, and the FTVIP
Franklin Income Securities - Class 2 Sub-Account, FTVIP Franklin U.S. Government
- - Class 2 Sub-Account, Van Kampen LIT Aggressive Growth, Class II Sub-Account,
Van Kampen LIT Comstock, Class II Sub-Account,Van Kampen UIF Equity and Income,
Class II Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account, and
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account, which were first
offered under the Contracts on May 1, 2004 and the FTVIP Franklin Large Cap
Growth Securities - Class 2 Sub-Account, Lord Abbett Series Fund - All Value
Portfolio, Lord Abbett Series Fund - Bond-Debenture Portfolio, Lord Abbett
Series Fund - Growth and Income Portfolio, Lord Abbett Series Fund - Growth
Opportunities Portfolio, Lord Abbett Series Fund - Mid-Cap Value Portfolio and
Oppenheimer Core Bond/VA - Service Shares Sub-Account which were first offered
with the Contracts on October 1, 2004. The Accumulation Unit Values in this
table reflect a mortality and expense risk charge of 1.60% and an administrative
expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
142 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH NO WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (WITH THE MAV DEATH
BENEFIT OPTION, THE ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION,
BOTH ADDED ON OR AFTER MAY 1, 2003, AND THE EARNINGS PROTECTION DEATH BENEFIT
OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending
December 31,
------------------------
SUB-ACCOUNTS 2002 2003 2004
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.669 $13.259
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.259 $14.271
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 576 539
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.156
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.496
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account (1)(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.788 $15.390
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $15.390 $16.694
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.008 $14.417
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.417 $17.361
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 722 641
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.176
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,084
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.569 $12.560
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.560 $13.766
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,429 1,378
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class
2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.642 $16.706
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $16.706 $20.275
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.348 $13.463
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.463 $15.528
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 608
- -------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities - Class 2
Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.550 $12.760
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.760 $14.247
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
143 PROSPECTUS
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.881
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.334
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.866
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.113
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.096
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.308 $12.267
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.267 $14.257
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.073 $12.964
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.964 $13.851
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.082
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $12.206
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.206 $12.663
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,456 1,465
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.051 $14.093
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.093 $16.303
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.695 $12.829
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.829 $13.574
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street(R)/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.431 $12.508
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.508 $13.285
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,423 2,527
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap(R)/VA - Service
Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.680 $14.518
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.518 $16.837
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.212 $12.016
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.016 $12.679
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 57 56
- -------------------------------------------------------------------------------
144 PROSPECTUS
Putnam VT Global Asset Allocation - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.717 $12.309
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.309 $13.069
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.958 $13.370
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.370 $14.457
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,360 2,340
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.201 $11.190
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.190 $11.665
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.828 $13.212
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.212 $14.212
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.324 $10.338
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.338 $10.506
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.542 $13.249
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.249 $14.981
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.658 $12.862
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.862 $14.098
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.906 $ 9.755
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 9.755 $ 9.555
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account
(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.944 $13.362
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.362 $14.343
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,492 1,502
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.285 $14.429
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.429 $16.207
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.807 $12.965
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.965 $13.570
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.649 $11.963
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.963 $12.596
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 911
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account (4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.450 $13.937
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.937 $16.469
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 44
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.764 $13.427
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.427 $15.497
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 736 728
- -------------------------------------------------------------------------------
145 PROSPECTUS
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.545 $12.274
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $12.274 $12.545
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,630 1,697
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.047
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.258
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 9.898 $11.621
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.621 $12.075
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.754 $13.221
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.221 $14.683
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,365 1,280
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $ 9.784
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $12.251 $13.735
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.735 $14.713
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.885
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class I Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.683
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,685
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
(5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $10.657
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.000 $10.974
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II
Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000 $13.492
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $13.492 $15.617
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class I
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.222
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 1,693
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account (5)(6)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- -- $11.215
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- -- 0
- -------------------------------------------------------------------------------
146 PROSPECTUS
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
(5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $11.344 $14.366
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $14.366 $19.022
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0 510
- -------------------------------------------------------------------------------
* The Allstate Advisor Preferred Contracts with No Withdrawal Charge Option were
first offered on October 14, 2002. All of the Variable Sub-Accounts shown above
were first offered under the Allstate Advisor Preferred Contracts with No
Withdrawal Charge Option and with the Earnings Protection Death Benefit Option,
the MAV Death Benefit Option at 0.20%, and the Enhanced Beneficiary Protection
(Annual Increase) Option at 0.30% on May 1, 2003, except for the Van Kampen LIT
Money Market, Class II Sub-Account and Van Kampen UIF Global Franchise, Class II
Sub-Accounts, which were first offered under the Contracts on December 31, 2003,
and the FTVIP Franklin Income Securities - Class 2 Sub-Account, FTVIP Franklin
U.S. Government - Class 2 Sub-Account, Van Kampen LIT Aggressive Growth, Class
II Sub-Account, Van Kampen LIT Comstock, Class II Sub-Account, Van Kampen UIF
Equity and Income, Class II Sub-Account, Van Kampen UIF Equity Growth, Class II
Sub-Account, and Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Accounts, which
were first offered under the Contracts on May 1, 2004 and the FTVIP Franklin
Large Cap Growth Securities - Class 2 Sub-Account, Lord Abbett Series Fund - All
Value Portfolio, Lord Abbett Series Fund - Bond-Debenture Portfolio, Lord Abbett
Series Fund - Growth and Income Portfolio, Lord Abbett Series Fund - Growth
Opportunities Portfolio, Lord Abbett Series Fund - Mid-Cap Value Portfolio and
Oppenheimer Core Bond/VA - Service Shares Sub-Account which were first offered
with the Contracts on October 1, 2004. The Accumulation Unit Values in this
table reflect a mortality and expense risk charge of 2.50% and an administrative
expense charge of 0.19%.
(1) Effective April 29, 2005, the FTVIP Franklin Small Cap Fund - Class 2
changed its name to FTVIP Franklin Small-Mid Cap Growth Securities - Class 2
Sub-Account. We have made a corresponding change in the name of the Variable
Sub-Account that invests in that Portfolio.
(2) Effective May 1, 2003, the FTVIP Franklin Small-Mid Cap Growth Securities -
Class 2 Sub-Account and the FTVIP Templeton Global Income Securities - Class 2
Sub-Accounts are no longer available for new investments. If you are currently
invested in the Variable Sub-Accounts that invest in these Portfolios you may
continue your investment. If, prior to May 1, 2003, you enrolled in one of our
automatic transaction programs, such as automatic additions, portfolio
rebalancing, or dollar cost averaging, we will continue to effect automatic
transactions into these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Effective April 29, 2005, the Oppenheimer Bond/VA - Service Shares changed
its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account. We have made
a corresponding change in the name of the Variable Sub-Account that invests in
that Portfolio.
(4) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Accounts are no longer available for new investments. If you are
currently invested in the Variable Sub-Accounts that invest in these Portfolios
you may continue your investment. If, prior to October 1, 2004, you enrolled in
one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing, or dollar cost averaging, we will continue to effect
automatic transactions into these Variable Sub-Accounts in accordance with that
program. Outside of these automatic transaction programs, additional allocations
will not be allowed.
(5) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(6) The Variable Sub-Accounts that invest in the Van Kampen UIF Equity Growth,
Class II Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class II
Sub-Account are offered with Contracts issued on or after May 1, 2004. Contract
Owners of Contracts issued prior to May 1, 2004 may only invest in the Variable
Sub-Accounts that invest in the Van Kampen UIF Equity Growth, Class I
Sub-Account and the Van Kampen UIF U.S. Mid Cap Value, Class I Sub-Account.
147 PROSPECTUS
THE ALLSTATE VARIABLE ANNUITIES
(ALLSTATE VARIABLE ANNUITY,
ALLSTATE VARIABLE ANNUITY - L SHARE)
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: 1-800-654-2397 PROSPECTUS DATED APRIL 30, 2005
-------------------------------------------------------------------------------
Allstate Life Insurance Company ("Allstate Life") is offering the following
individual and group flexible premium deferred variable annuity contracts (each,
a "CONTRACT"):
.. ALLSTATE VARIABLE ANNUITY
(FORMERLY REFERRED TO AS THE "MORGAN STANLEY VARIABLE ANNUITY")
.. ALLSTATE VARIABLE ANNUITY - L SHARE
(FORMERLY REFERRED TO AS THE "MORGAN STANLEY VARIABLE ANNUITY - L SHARE")
This prospectus contains information about each Contract that you should know
before investing. Please keep it for future reference. Both Contracts may not be
available in all states or through your sales representative. Please check with
your Morgan Stanley Financial Advisor for details.
Each Contract currently offers several investment alternatives ("INVESTMENT
ALTERNATIVES"). The investment alternatives include up to 3 fixed account
options ("FIXED ACCOUNT OPTIONS"), depending on the Contract, and include 44*
variable sub-accounts ("VARIABLE SUB-ACCOUNTS") of the Allstate Financial
Advisors Separate Account I ("VARIABLE ACCOUNT"). Each Variable Sub-Account
invests exclusively in shares of the following mutual funds ("FUNDS"):
MORGAN STANLEY VARIABLE INVESTMENT SERIES (CLASS Y) FIDELITY(R) VARIABLE INSURANCE PRODUCTS
THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (CLASS II) (SERVICE CLASS 2)
VAN KAMPEN LIFE INVESTMENT TRUST (CLASS II) FRANKLIN TEMPLETON VARIABLE INSURANCE
AIM VARIABLE INSURANCE FUNDS (SERIES II) PRODUCTS TRUST (CLASS 2)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. (CLASS B) GOLDMAN SACHS VARIABLE INSURANCE TRUST
PUTNAM VARIABLE TRUST (CLASS IB)
*Up to 15 additional Variable Sub-Accounts may be available depending on the
date you purchased your Contract. Please see page 41 for information about
Sub-Accounts and/or Portfolio liquidations, mergers, closures and name changes.
Each Fund has multiple investment portfolios ("PORTFOLIOS"). Not all of the
Funds and/or Portfolios, however, may be available with your Contract. You
should check with your Morgan Stanley Financial Advisor for further information
on the availability of the Funds and/or Portfolios. Your annuity application
will list all available Portfolios.
WE (Allstate Life) have filed a Statement of Additional Information, dated April
30, 2005, with the Securities and Exchange Commission ("SEC"). It contains more
information about each Contract and is incorporated herein by reference, which
means that it is legally a part of this prospectus. Its Table of Contents
appears on page 81 of this prospectus. For a free copy, please write or call us
at the address or telephone number above, or go to the SEC's Web site
(http://www.sec.gov). You can find other information and documents about us,
including documents that are legally part of this prospectus, at the SEC's Web
site.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THE SECURITIES DESCRIBED IN THIS PROSPECTUS, NOR
IMPORTANT HAS IT PASSED ON THE ACCURACY OR THE ADEQUACY OF THIS
PROSPECTUS. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A
NOTICES FEDERAL CRIME.
INVESTMENT IN THE CONTRACTS INVOLVES INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.
1 PROSPECTUS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
- --------------------------------------------------------------------------------
OVERVIEW
- --------------------------------------------------------------------------------
Important Terms 3
- --------------------------------------------------------------------------------
Overview of Contracts 4
- --------------------------------------------------------------------------------
The Contracts at a Glance 5
- --------------------------------------------------------------------------------
How the Contracts Work 10
- --------------------------------------------------------------------------------
Expense Table 11
- --------------------------------------------------------------------------------
Financial Information 19
- --------------------------------------------------------------------------------
CONTRACT FEATURES
- --------------------------------------------------------------------------------
The Contracts 19
- --------------------------------------------------------------------------------
Purchases 22
- --------------------------------------------------------------------------------
Contract Value 23
- --------------------------------------------------------------------------------
Investment Alternatives 38
- --------------------------------------------------------------------------------
The Variable Sub-Accounts 38
- --------------------------------------------------------------------------------
The Fixed Account Options 43
- --------------------------------------------------------------------------------
Transfers 47
- --------------------------------------------------------------------------------
Expenses 50
- --------------------------------------------------------------------------------
Access to Your Money 54
- --------------------------------------------------------------------------------
Income Payments 55
- --------------------------------------------------------------------------------
PAGE
- --------------------------------------------------------------------------------
Death Benefits 64
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
More Information 72
- --------------------------------------------------------------------------------
Taxes 74
- --------------------------------------------------------------------------------
Annual Reports and Other Documents 80
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS 81
- --------------------------------------------------------------------------------
APPENDIX A - CONTRACT COMPARISON CHART 82
- --------------------------------------------------------------------------------
APPENDIX B - MARKET VALUE ADJUSTMENT 83
- --------------------------------------------------------------------------------
APPENDIX C - EXAMPLE OF CALCULATION OF INCOME PROTECTION BENEFIT 85
- --------------------------------------------------------------------------------
APPENDIX D- WITHDRAWAL ADJUSTMENT EXAMPLE-INCOME BENEFITS 86
- --------------------------------------------------------------------------------
APPENDIX E- WITHDRAWAL ADJUSTMENT EXAMPLE-DEATH BENEFITS 87
- --------------------------------------------------------------------------------
APPENDIX F- CALCULATION OF EARNINGS PROTECTION DEATH BENEFIT 88
- --------------------------------------------------------------------------------
APPENDIX G- WITHDRAWAL ADJUSTMENT EXAMPLE - TRUERETURN ACCUMULATION BENEFIT 91
- --------------------------------------------------------------------------------
APPENDIX H- SUREINCOME WITHDRAWAL BENEFIT OPTION CALCULATION EXAMPLES 92
- --------------------------------------------------------------------------------
APPENDIX I- ACCUMULATION UNIT VALUES 94
- --------------------------------------------------------------------------------
2 PROSPECTUS
IMPORTANT TERMS
- --------------------------------------------------------------------------------
This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
PAGE
- --------------------------------------------------------------------------------
AB Factor 24
- --------------------------------------------------------------------------------
Accumulation Benefit 24
- --------------------------------------------------------------------------------
Accumulation Phase 10
- --------------------------------------------------------------------------------
Accumulation Unit 23
- --------------------------------------------------------------------------------
Accumulation Unit Value 23
- --------------------------------------------------------------------------------
Allstate Life ("We") 1
- --------------------------------------------------------------------------------
Annuitant 20
- --------------------------------------------------------------------------------
Automatic Additions Program 22
- --------------------------------------------------------------------------------
Automatic Portfolio Rebalancing Program 49
- --------------------------------------------------------------------------------
Beneficiary 20
- --------------------------------------------------------------------------------
Benefit Base (for the TrueReturn Accumulation Benefit Option) 6
- --------------------------------------------------------------------------------
Benefit Base (for the SureIncome Withdrawal Benefit Option) 6
- --------------------------------------------------------------------------------
Benefit Payment 32
- --------------------------------------------------------------------------------
Benefit Payment Remaining 32
- --------------------------------------------------------------------------------
Benefit Year 32
- --------------------------------------------------------------------------------
Co-Annuitant 20
- --------------------------------------------------------------------------------
*Contract 73
- --------------------------------------------------------------------------------
Contract Anniversary 6
- --------------------------------------------------------------------------------
Contract Owner ("You") 10
- --------------------------------------------------------------------------------
Contract Value 7
- --------------------------------------------------------------------------------
Contract Year 7
- --------------------------------------------------------------------------------
Dollar Cost Averaging Program 49
- --------------------------------------------------------------------------------
Due Proof of Death 64
- --------------------------------------------------------------------------------
Earnings Protection Death Benefit Option 6
- --------------------------------------------------------------------------------
Enhanced Beneficiary Protection (Annual Increase) Option 6
- --------------------------------------------------------------------------------
Excess of Earnings Withdrawal 67
- --------------------------------------------------------------------------------
Fixed Account Options 43
- --------------------------------------------------------------------------------
Free Withdrawal Amount 53
- --------------------------------------------------------------------------------
Funds 1
- --------------------------------------------------------------------------------
Guarantee Option 23
- --------------------------------------------------------------------------------
Guarantee Period Accounts 44
- --------------------------------------------------------------------------------
Income Base 6
- --------------------------------------------------------------------------------
Income Plan 56
- --------------------------------------------------------------------------------
Income Protection Benefit Option 6
- --------------------------------------------------------------------------------
In-Force Earnings 66
- --------------------------------------------------------------------------------
In-Force Premium 66
- --------------------------------------------------------------------------------
Investment Alternatives 38
- --------------------------------------------------------------------------------
IRA Contract 7
- --------------------------------------------------------------------------------
PAGE
- --------------------------------------------------------------------------------
Issue Date 10
- --------------------------------------------------------------------------------
Market Value Adjustment 45
- --------------------------------------------------------------------------------
Maximum Anniversary Value 6
- --------------------------------------------------------------------------------
Maximum Anniversary Value (MAV) Death Benefit Option 65
- --------------------------------------------------------------------------------
Payout Phase 10
- --------------------------------------------------------------------------------
Payout Start Date 55
- --------------------------------------------------------------------------------
Portfolios 72
- --------------------------------------------------------------------------------
Qualified Contract 69
- --------------------------------------------------------------------------------
Retirement Income Guarantee Options 6
- --------------------------------------------------------------------------------
Return of Premium Death Benefit 65
- --------------------------------------------------------------------------------
Rider Anniversary 23
- --------------------------------------------------------------------------------
Rider Application Date 6
- --------------------------------------------------------------------------------
Rider Date 23
- --------------------------------------------------------------------------------
Rider Fee 6
- --------------------------------------------------------------------------------
Rider Fee Percentage 51
- --------------------------------------------------------------------------------
Rider Maturity Date 23
- --------------------------------------------------------------------------------
Rider Period 23
- --------------------------------------------------------------------------------
Rider Trade-In Option 31
- --------------------------------------------------------------------------------
Right to Cancel 22
- --------------------------------------------------------------------------------
SEC 1
- --------------------------------------------------------------------------------
Settlement Value 65
- --------------------------------------------------------------------------------
Spousal Protection Benefit (Co-Annuitant) Option 20
- --------------------------------------------------------------------------------
Spousal Protection Benefit (Co-Annuitant) Option for Custodial Individual
Retirement Accounts 20
- --------------------------------------------------------------------------------
Standard Fixed Account Option 44
- --------------------------------------------------------------------------------
SureIncome Withdrawal Benefit Option 6
- --------------------------------------------------------------------------------
Systematic Withdrawal Program 55
- --------------------------------------------------------------------------------
Tax Qualified Contract 77
- --------------------------------------------------------------------------------
Transfer Period Accounts 25
- --------------------------------------------------------------------------------
Trial Examination Period 5
- --------------------------------------------------------------------------------
TrueReturn/SM/ Accumulation Benefit Option 6
- --------------------------------------------------------------------------------
Valuation Date 22
- --------------------------------------------------------------------------------
Variable Account 72
- --------------------------------------------------------------------------------
Variable Sub-Account 38
- --------------------------------------------------------------------------------
Withdrawal Benefit Factor 32
- --------------------------------------------------------------------------------
Withdrawal Benefit Payout Phase 32
- --------------------------------------------------------------------------------
Withdrawal Benefit Payout Phase Start Date 33
- --------------------------------------------------------------------------------
* In certain states a Contract may be available only as a group Contract. If you
purchase a group Contract, we will issue you a certificate that represents your
ownership and that summarizes the provisions of the group Contract. References
to "Contract" in this prospectus include certificates, unless the context
requires otherwise. References to "Contract" also include both Contracts listed
on the cover page of this prospectus, unless otherwise noted. However, we
administer each Contract separately.
3 PROSPECTUS
OVERVIEW OF CONTRACTS
- --------------------------------------------------------------------------------
The Contracts offer many of the same basic features and benefits. They differ
primarily with respect to the charges imposed, as follows:
.. The ALLSTATE VARIABLE ANNUITY CONTRACT has a mortality and expense risk charge
of 1.10%, an administrative expense charge of 0.30%*, and a withdrawal charge
of up to 7% with a 7-year withdrawal charge period;
.. The ALLSTATE VARIABLE ANNUITY - L SHARE CONTRACT has a mortality and expense
risk charge of 1.50%, an administrative expense charge of 0.30%*, and a
withdrawal charge of up to 7% with a 3-year withdrawal charge period.
Other differences between the Contracts relate to available Fixed Account
Options. For a side-by-side comparison of these differences, please refer to
Appendix A of this prospectus.
* The administrative expense charge may be increased, but will never exceed
0.35%. Once your Contract is issued, we will not increase the administrative
expense charge for your Contract. The administrative expense charge is 0.19%
for Contracts issued before January 1, 2005.
4 PROSPECTUS
THE CONTRACTS AT A GLANCE
- --------------------------------------------------------------------------------
The following is a snapshot of the Contracts. Please read the remainder of this
prospectus for more information.
FLEXIBLE PAYMENTS You can purchase each Contract with as little as
$10,000 ($2,000 for Contracts issued with an IRA or
TSA). You can add to your Contract as often and as much
as you like, but each subsequent payment must be at
least $1,000 ($50 for automatic payments).
We reserve the right to accept a lesser initial
purchase payment amount for each Contract. We may limit
the cumulative amount of purchase payments to a maximum
of $1,000,000 in any Contract.
- ---------------------------------------------------------------------------------------
TRIAL EXAMINATION PERIOD You may cancel your Contract within 20 days of receipt
or any longer period as your state may require ("TRIAL
EXAMINATION PERIOD"). Upon cancellation, we will return
your purchase payments adjusted, to the extent federal
or state law permits, to reflect the investment
experience of any amounts allocated to the Variable
Account, including the deduction of mortality and
expense risk charges and administrative expense
charges. See "Trial Examination Period" for details.
- ---------------------------------------------------------------------------------------
EXPENSES Each Portfolio pays expenses that you will bear
indirectly if you invest in a Variable Sub-Account. You
also will bear the following expenses:
ALLSTATE VARIABLE ANNUITY CONTRACTS
.Annual mortality and expense risk charge equal to
1.10% of average daily net assets.
.Withdrawal charges ranging from 0% to 7% of purchase
payments withdrawn.
ALLSTATE VARIABLE ANNUITY - L SHARE CONTRACTS
.Annual mortality and expense risk charge equal to
1.50% of average daily net assets.
.Withdrawal charges ranging from 0% to 7% of purchase
payments withdrawn.
5 PROSPECTUS
ALL CONTRACTS
.Annual administrative expense charge of 0.30% (0.19%
for Contracts issued before January 1, 2005; up to
0.35% for future Contracts).
.Annual contract maintenance charge of $30 (waived in
certain cases).
.If you select the MAXIMUM ANNIVERSARY VALUE (MAV)
DEATH BENEFIT OPTION ("MAV DEATH BENEFIT OPTION") you
will pay an additional mortality and expense risk
charge of 0.20% (up to 0.30% for Options added in the
future).
.
If you select ENHANCED BENEFICIARY PROTECTION (ANNUAL
INCREASE) OPTION, you will pay an additional
mortality and expense risk charge of 0.30%.
.If you select the EARNINGS PROTECTION DEATH BENEFIT
OPTION you will pay an additional mortality and
expense risk charge of 0.25% or 0.40% (up to 0.35% or
0.50% for Options added in the future) depending on
the age of the oldest Owner and oldest Annuitant on
the date we receive the completed application or
request to add the benefit, whichever is later
("RIDER APPLICATION DATE").
.
If you select the TRUERETURN/SM/ ACCUMULATION BENEFIT
OPTION ("TRUERETURN OPTION") you would pay an
additional annual fee ("RIDER FEE") of 0.50% (up to
1.25% for Options added in the future) of the BENEFIT
BASE in effect on each Contract anniversary
("CONTRACT ANNIVERSARY") during the Rider Period. You
may not select the TrueReturn Option together with a
Retirement Income Guarantee Option or a SureIncome
Withdrawal Benefit Option.
.If you select the SUREINCOME WITHDRAWAL BENEFIT
OPTION ("SUREINCOME OPTION") you would pay an
additional annual fee ("SUREINCOME OPTION FEE OR
RIDER FEE") of 0.50% (up to 1.25% for Options added
in the future) of the BENEFIT BASE on each Contract
Anniversary (See the SureIncome Option Fee section).
You may not select the SureIncome Option together
with a Retirement Income Guarantee Option or a
TrueReturn Option.
.We discontinued offering RETIREMENT INCOME GUARANTEE
OPTION 1 ("RIG 1") as of January 1, 2004 (up to May
1, 2004 in certain states). If you elected RIG 1
prior to May 1, 2004, you will pay an additional
annual fee ("Rider Fee") of 0.40% of the INCOME BASE
in effect on a Contract Anniversary.
.We discontinued offering RETIREMENT INCOME GUARANTEE
OPTION 2 ("RIG 2") as of January 1, 2004 (up to May
1, 2004 in certain states). If you elected RIG 2
prior to May 1, 2004, you will pay an additional
annual Rider Fee of 0.55% of the INCOME BASE in
effect on a Contract Anniversary.
.If you select the INCOME PROTECTION BENEFIT OPTION
you will pay an additional mortality and expense risk
charge of 0.50% (up to 0.75% for Options added in the
future) during the Payout Phase of your Contract.
6 PROSPECTUS
.If you select the SPOUSAL PROTECTION BENEFIT
(CO-ANNUITANT) OPTION or SPOUSAL PROTECTION BENEFIT
(CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS ("CSP") you would pay an
additional annual fee ("RIDER FEE") of 0.10%** (up to
0.15% for Options added in the future) of the
Contract Value ("CONTRACT VALUE") on each Contract
Anniversary. These Options are only available for
certain types of IRA Contracts, which are Contracts
issued with an Individual Retirement Annuity or
Account ("IRA") under Section 408 of the Internal
Revenue Code. The CSP is only available for certain
Custodial Individual Retirement Accounts established
under Section 408 of the Internal Revenue Code. For
Contracts purchased on or after January 1, 2005, we
may discontinue offering the Spousal Protection
Benefit (Co-Annuitant) Option at any time prior to
the time you elect to receive it.
**No Rider Fee was charged for these Options for
Contract Owners who added these Options prior to
January 1, 2005. See page 20 for details.
.Transfer fee equal to 1.00% (subject to increase to
up to 2.00%) of the amount transferred after the
12/th/ transfer in any Contract Year ("CONTRACT
YEAR"), which we measure from the date we issue your
Contract or a Contract Anniversary.
. State premium tax (if your state imposes one)
. NOT ALL OPTIONS ARE AVAILABLE IN ALL STATES
WE MAY DISCONTINUE OFFERING ANY OF THESE OPTIONS AT ANY
TIME PRIOR TO THE TIME YOU ELECT TO RECEIVE IT.
- ---------------------------------------------------------------------------------------
7 PROSPECTUS
INVESTMENT ALTERNATIVES Each Contract offers several investment alternatives
including:
.
up to 3 Fixed Account Options that credit interest at
rates we guarantee, and
.44* Variable Sub-Accounts investing in Portfolios
offering professional money management by these
investment advisers:
. Morgan Stanley Investment Advisors Inc.
. Van Kampen**
. Van Kampen Asset Management
. A I M Advisors, Inc.
. Alliance Capital Management, L.P.
. Fidelity Management & Research Company
. Franklin Advisers, Inc.
. Franklin Mutual Advisers, LLC
. Templeton Investment Counsel, LLC
. Goldman Sachs Asset Management, L.P.
. Putnam Investment Management, LLC
*Up to 15 additional Variable Sub-Accounts may be
available depending on the date you purchased your
Contract. Please see page 41 for information about
Sub-Accounts and/or Portfolio liquidations, mergers,
closures and name changes.
** Morgan Stanley Investment Management Inc., the
investment adviser to the UIF Portfolios, does business
in certain instances using the name Van Kampen.
NOT ALL FIXED ACCOUNT OPTIONS ARE AVAILABLE IN ALL
STATES OR WITH ALL CONTRACTS.
To find out current rates being paid on the Fixed
Account Option(s), or to find out how the Variable
Sub-Accounts have performed, please call us at
1-800-654-2397.
- ---------------------------------------------------------------------------------------
SPECIAL SERVICES For your convenience, we offer these special services:
. AUTOMATIC PORTFOLIO REBALANCING PROGRAM
. AUTOMATIC ADDITIONS PROGRAM
. DOLLAR COST AVERAGING PROGRAM
. SYSTEMATIC WITHDRAWAL PROGRAM
- ---------------------------------------------------------------------------------------
8 PROSPECTUS
INCOME PAYMENTS You can choose fixed income payments, variable income
payments, or a combination of the two. You can receive
your income payments in one of the following ways (you
may select more than one income plan):
. life income with guaranteed number of payments
.
joint and survivor life income with guaranteed number
of payments
. guaranteed number of payments for a specified period
. life income with cash refund
. joint life income with cash refund
. life income with installment refund
. joint life income with installment refund
Prior to May 1, 2004, Allstate Life also offered two
Retirement Income Guarantee Options that guarantee a
minimum amount of fixed income payments you can receive
if you elect to receive income payments.
In addition, we offer an Income Protection Benefit
Option that guarantees that your variable income
payments will not fall below a certain level.
DEATH BENEFITS If you, the Annuitant, or Co-Annuitant die before the
Payout Start Date, we will pay a death benefit subject
to the conditions described in the Contract. In
addition to the death benefit included in your Contract
("Return of Premium Death Benefit" or "ROP Death
Benefit"), the death benefit options we currently offer
include:
. MAV DEATH BENEFIT OPTION;
.ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE)
OPTION; and
. EARNINGS PROTECTION DEATH BENEFIT OPTION
- ---------------------------------------------------------------------------------------
TRANSFERS Before the Payout Start Date, you may transfer your
Contract Value among the investment alternatives, with
certain restrictions. The minimum amount you may
transfer is $100 or the amount remaining in the
investment alternative, if less. The minimum amount
that can be transferred into the Standard Fixed Account
or Market Value Adjusted Account Options is $500.
A charge may apply after the 12/th/ transfer in each
Contract Year.
- ---------------------------------------------------------------------------------------
WITHDRAWALS You may withdraw some or all of your Contract Value at
any time during the Accumulation Phase and during the
Payout Phase in certain cases. In general, you must
withdraw at least $50 at a time. 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. A withdrawal charge and a
MARKET VALUE ADJUSTMENT may also apply.
If any withdrawal reduces your Contract Value to less
than $1,000, we will treat the request as a withdrawal
of the entire Contract Value unless the SureIncome
Withdrawal Benefit Option is in effect under your
Contract. Your Contract will terminate if you withdraw
all of your Contract Value.
9 PROSPECTUS
HOW THE CONTRACTS WORK
- --------------------------------------------------------------------------------
Each Contract basically works in two ways.
First, each Contract can help you (we assume you are the "CONTRACT OWNER") save
for retirement because you can invest in your Contract's investment alternatives
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 may allocate your purchase payments to any combination of the
Variable Sub-Accounts and/or Fixed Account Options. If you invest in a Fixed
Account Option, you will earn a fixed rate of interest that we declare
periodically. If you invest in any of the Variable Sub-Accounts, your investment
return will vary up or down depending on the performance of the corresponding
Portfolios.
Second, each 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 on page 56. 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 payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Portfolios. 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
- ------------------------------------------------------------------------------------------------------------>
You buy You save for retirement You elect to receive You can receive Or you can receive
a Contract income payments or income payments income payments
receive a lump sum for a set period for life
payment
Other income payment options are also available. See "INCOME PAYMENTS."
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 there is none, the
BENEFICIARY will exercise the rights and privileges provided by the Contract.
See "The Contracts." In addition, if you die before the Payout Start Date, we
will pay a death benefit to any surviving Contract Owner or, if there is none,
to your Beneficiary. See "Death Benefits."
Please call us at 1-800-654-2397 if you have any question about how the
Contracts work.
10 PROSPECTUS
EXPENSE TABLE
- --------------------------------------------------------------------------------
The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes that may be imposed by the state where you reside. For more
information about Variable Account expenses, see "Expenses," below. For more
information about Portfolio expenses, please refer to the prospectuses for the
Funds.
CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge (as a percentage of purchase payments withdrawn)/* /
Number of Complete Years Since We Received the Purchase Payment Being Withdrawn/Applicable Charge:
- ------------------------------------------------------------------------------------------------------------------------------------
Contract: 0 1 2 3 4 5 6 7 8+
Allstate Variable
Annuity 7% 7% 6% 5% 4% 3% 2% 0% 0%
Allstate Variable
Annuity - L Share 7% 6% 5% 0%
All Contracts:
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Contract
Maintenance Charge $30**
Transfer Fee up to 2.00% of the amount transferred***
* Each Contract Year, you may withdraw a portion of your purchase payments
(and/or your earnings, in the case of Charitable Remainder Trusts) without
incurring a withdrawal charge ("Free Withdrawal Amount"). See "Withdrawal
Charges" for more information.
** / /Waived in certain cases. See "Expenses."
*** Applies solely to the 13th and subsequent transfers within a Contract Year,
excluding transfers due to dollar cost averaging and automatic portfolio
rebalancing. We are currently assessing a transfer fee of 1.00% of the amount
transferred, however, we reserve the right to raise the transfer fee to up to
2.00% of the amount transferred.
VARIABLE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSET VALUE DEDUCTED FROM EACH VARIABLE
SUB-ACCOUNT)
If you select the basic Contract without any optional benefits, your Variable
Account expenses would be as follows:
Mortality and Expense Risk Administrative
Basic Contract (without any optional benefit) Charge Expense Charge*
- ------------------------------------------------------------------------------------------------------------------
Allstate Variable Annuity 1.10% 0.30%
- ------------------------------------------------------------------------------------------------------------------
Allstate Variable Annuity - L Share 1.50% 0.30%
- ------------------------------------------------------------------------------------------------------------------
Total Variable Account
Basic Contract (without any optional benefit) Annual Expense
- --------------------------------------------------------------------------------------
Allstate Variable Annuity 1.40%
- --------------------------------------------------------------------------------------
Allstate Variable Annuity - L Share 1.80%
- --------------------------------------------------------------------------------------
*We reserve the right to raise the administrative expense charge to 0.35%.
However, we will not increase the charge once we issue your Contract. The
administrative expense charge is 0.19% for Contracts issued before January 1,
2005.
Each Contract also offers optional riders that may be added to the Contract. For
each optional rider you select, you would pay the following additional mortality
and expense risk charge associated with each rider.
0.20% (up to 0.30% for Options added
MAV Death Benefit Option in the future)
Enhanced Beneficiary Protection (Annual Increase)
Option 0.30%
Earnings Protection Death Benefit Option (issue 0.25% (up to 0.35% for Options added
age 0-70) in the future)
Earnings Protection Death Benefit Option (issue 0.40% (up to 0.50% for Options added
age 71-79) in the future)
If you select the Options with the highest possible combination of mortality and
expense risk charges, your Variable Account expenses would be as follows,
assuming current expenses:
Contract with the MAV Death Benefit Option, Enhanced
Beneficiary Protection (Annual Increase) Option, Earnings Mortality and Expense Administrative
Protection Death Benefit Option (issue age 71-79) Risk Charge* Expense Charge*
- -------------------------------------------------------------------------------------------------------------------------------
Allstate Variable Annuity 2.00% 0.30%
- -------------------------------------------------------------------------------------------------------------------------------
Allstate Variable Annuity - L Share 2.40% 0.30%
- -------------------------------------------------------------------------------------------------------------------------------
Contract with the MAV Death Benefit Option, Enhanced
Beneficiary Protection (Annual Increase) Option, Earnings Total Variable Account
Protection Death Benefit Option (issue age 71-79) Annual Expense
- --------------------------------------------------------------------------------------------------
Allstate Variable Annuity 2.30%
- --------------------------------------------------------------------------------------------------
Allstate Variable Annuity - L Share 2.70%
- --------------------------------------------------------------------------------------------------
11 PROSPECTUS
*As described above the administrative expense charge and the mortality and
expense charge for certain Options may be higher for future Contracts.
However, we will not increase the administrative expense charge once we issue
your Contract, and we will not increase the charge for an Option once we add
the Option to your Contract. The administrative expense charge is 0.19% for
Contracts issued before January 1, 2005.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION FEE
(ANNUAL RATE AS A PERCENTAGE OF BENEFIT BASE ON A CONTRACT ANNIVERSARY)
TrueReturn/SM/ Accumulation Benefit Option 0.50%*
- -------------------------------------------------------------------------------
*Up to 1.25% for TrueReturn Options added in the future. See "TrueReturn/SM/
Accumulation Benefit Option" for details.
SUREINCOME WITHDRAWAL BENEFIT OPTION FEE
(ANNUAL RATE AS A PERCENTAGE OF BENEFIT BASE ON A CONTRACT ANNIVERSARY)
SureIncome Withdrawal Benefit Option 0.50%*
- -------------------------------------------------------------------------------
*Up to 1.25% for SureIncome Options added in the future. See "SureIncome
Withdrawal Benefit Option" for details.
RETIREMENT INCOME GUARANTEE OPTION FEE*
(ANNUAL RATE AS A PERCENTAGE OF INCOME BASE ON A CONTRACT ANNIVERSARY)
RIG 1 0.40%
- -----------------------------------------------------------------------------
RIG 2 0.55%
- -----------------------------------------------------------------------------
* We discontinued offering the Retirement Income Guarantee Options as of January
1, 2004 (up to May 1, 2004 in certain states). Fees shown apply to Contract
Owners who selected an Option prior to January 1, 2004 (up to May 1, 2004 in
certain states).
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FEE
(AS A PERCENTAGE OF CONTRACT VALUE ON EACH CONTRACT ANNIVERSARY)
Spousal Protection Benefit (Co-Annuitant) Option 0.10%*
- ------------------------------------------------------------------------
* Applies to Contract Owners who select the option on or after January 1, 2005.
Up to 0.15% for options added in the future.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS FEE
(AS A PERCENTAGE OF CONTRACT VALUE ON EACH CONTRACT ANNIVERSARY)
Spousal Protection Benefit (Co-Annuitant) Option for Custodial 0.10%*
Individual Retirement Accounts
- ------------------------------------------------------------------------
* Applies to Contract owners who select the option on or after January 1, 2005.
Up to 0.15% for options added in the future.
If you select the Spousal Protection Benefit (Co-Annuitant) Option or Spousal
Protection Benefit (Co-Annuitant) Option for Custodial Individual Retirement
Accounts on or after January 1, 2005, you will pay a Rider Fee at the annual
rate of 0.10% of the Contract Value on each Contract Anniversary. We reserve the
right to increase the annual Rider Fee to up to 0.15% of the Contract Value. If
you selected either of these Options prior to January 1, 2005, there is no
charge associated with your Option. See "Spousal Protection Benefit
(Co-Annuitant) Option Fee and Spousal Protection Benefit (Co-Annuitant) Option
for Custodial Individual Retirement Accounts Fee" for details.
12 PROSPECTUS
INCOME PROTECTION BENEFIT OPTION
(AS A PERCENTAGE OF THE AVERAGE DAILY NET VARIABLE ACCOUNT ASSETS SUPPORTING THE
VARIABLE INCOME PAYMENTS TO WHICH THE OPTION APPLIES)
Income Protection Benefit Option 0.50%*
- -------------------------------------------------------------
*The charge for the Income Protection Benefit Option applies during the Payout
Phase. We reserve the right to raise the charge to up to 0.75% for Options added
in the future. See "Income Payments - Income Protection Benefit Option," below,
for details.
PORTFOLIO ANNUAL EXPENSES - MINIMUM AND MAXIMUM
The next table shows the minimum and maximum total operating expenses charged by
the Portfolios that you may pay periodically during the time that you own the
Contract. Advisers and/or other service providers of certain Portfolios may have
agreed to waive their fees and/or reimburse Portfolio expenses in order to keep
the Portfolios' expenses below specified limits. The range of expenses shown in
this table does not show the effect of any such fee waiver or expense
reimbursement. More detail concerning each Portfolio's fees and expenses appears
in the second table below and in the prospectus for each Portfolio.
ANNUAL PORTFOLIO EXPENSES
- --------------------------------------------------------------------------------
Minimum Maximum
- --------------------------------------------------------------------------------
Total Annual Portfolio
Operating
Expenses/(1)/
(expenses that are
deducted from
Portfolio assets,
which may include
management fees,
distribution and/or
services (12b-1) fees, 0.51% 2.06%
and other expenses)
- --------------------------------------------------------------------------------
(1) Expenses are shown as a percentage of Portfolio average daily net assets
(before any waiver or reimbursement) as of December 31, 2004.
PORTFOLIO ANNUAL EXPENSES - FULL TABLE (1)
The next table shows the Portfolio operating expenses for each Portfolio
available under the Contract. These expenses may vary from year to year.
Advisers and/or other service providers of certain Portfolios have agreed to
waive their fees and/or other Portfolio expenses in order to keep the
Portfolio's expenses below specified limits. The expenses shown in the table
below do not show the effect of any such fee waiver or expense reimbursement.
All fee waiver and expense reimbursements are described in the footnotes to the
table. More detail concerning each Portfolio's fees and expenses appears in the
prospectus for each Portfolio.
RULE
MANAGEMENT 12B-1 OTHER TOTAL ANNUAL
PORTFOLIO FEES FEES EXPENSES PORTFOLIO EXPENSES
- -------------------------------------------------------------------------------
MORGAN STANLEY VARIABLE
INVESTMENT SERIES
- -------------------------------------------------------------------------------
Morgan Stanley VIS
Aggressive Equity Portfolio 0.67% 0.25% 0.18% 1.10%
- - Class Y(2)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Dividend
Growth Portfolio - Class 0.45% 0.25% 0.10% 0.80%
Y(2)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Equity 0.42% 0.25% 0.11% 0.78%
Portfolio - Class Y(2)
- -------------------------------------------------------------------------------
Morgan Stanley VIS European
Equity Portfolio - Class 0.87% 0.25% 0.17% 1.29%
Y(2,4)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Global
Advantage Portfolio - Class 0.57% 0.25% 0.27% 1.09%
Y(2,3)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Global
Dividend Growth Portfolio - 0.67% 0.25% 0.14% 1.06%
Class Y(2)
- -------------------------------------------------------------------------------
Morgan Stanley VIS High
Yield Portfolio - Class 0.42% 0.25% 0.24% 0.91%
Y(2,3)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Income
Builder Portfolio - Class 0.67% 0.25% 0.15% 1.07%
Y(2,3)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Income
Plus Portfolio - Class 0.42% 0.25% 0.12% 0.79%
Y(2,22)
- -------------------------------------------------------------------------------
Morgan Stanley VIS
Information Portfolio - 0.67% 0.25% 0.30% 1.22%
Class Y(2,3)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Limited
Duration Portfolio - Class 0.30% 0.25% 0.13% 0.68%
Y(2)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Money
Market Portfolio - Class 0.44% 0.25% 0.08% 0.77%
Y(2)
- -------------------------------------------------------------------------------
13 PROSPECTUS
Morgan Stanley VIS S&P 500
Index Portfolio - Class 0.12% 0.25% 0.14% 0.51%
Y(2,5)
- -------------------------------------------------------------------------------
Morgan Stanley VIS
Strategist Portfolio - Class 0.42% 0.25% 0.11% 0.78%
Y(2)
- -------------------------------------------------------------------------------
Morgan Stanley VIS Utilities 0.57% 0.25% 0.12% 0.94%
Portfolio - Class Y(2,3)
- -------------------------------------------------------------------------------
THE UNIVERSAL INSTITUTIONAL
FUNDS, INC.
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging
Markets Debt Portfolio, 0.75% 0.35% 0.35% 1.45%
Class II(2,3,6,7)
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging
Markets Equity Portfolio, 1.25% 0.35% 0.46% 2.06%
Class II(6,7,8)
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth 0.49% 0.35% 0.36% 1.20%
Portfolio, Class II(2,6,7)
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and
Income Portfolio, Class 0.50% 0.35% 0.34% 1.19%
II(2,6,7)
- -------------------------------------------------------------------------------
Van Kampen UIF Global
Franchise Portfolio, Class 0.80% 0.35% 0.50% 1.65%
II(6,7)
- -------------------------------------------------------------------------------
Van Kampen UIF Mid Cap
Growth Portfolio, Class 0.75% 0.35% 0.38% 1.48%
II(6,7)
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company
Growth Portfolio, Class 0.92% 0.35% 0.61% 1.88%
II(2,6,7)
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap
Value Portfolio, Class 0.72% 0.35% 0.30% 1.37%
II(2,6,7)
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real
Estate Portfolio, Class 0.76% 0.35% 0.26% 1.37%
II(6,7)
- -------------------------------------------------------------------------------
VAN KAMPEN LIFE INVESTMENT
TRUST
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive
Growth Portfolio, Class 0.75% 0.25% 0.63% 1.63%
II(9)
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock 0.57% 0.25% 0.04% 0.86%
Portfolio, Class II
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging 0.70% 0.25% 0.07% 1.02%
Growth Portfolio, Class II
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and 0.58% 0.25% 0.04% 0.87%
Income Portfolio, Class II
- -------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS
- -------------------------------------------------------------------------------
AIM V.I. Basic Value Fund - 0.72% 0.25% 0.30% 1.27%
Series II(3,10)
- -------------------------------------------------------------------------------
AIM V.I. Capital
Appreciation Fund - Series 0.61% 0.25% 0.30% 1.16%
II(3)
- -------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity 0.73% 0.25% 0.31% 1.29%
Fund - Series II (3)
- -------------------------------------------------------------------------------
AIM V.I. Premier Equity Fund 0.61% 0.25% 0.30% 1.16%
- - Series II(3)
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN VARIABLE
PRODUCTS SERIES FUND, INC.
- -------------------------------------------------------------------------------
AllianceBernstein Growth 0.55% 0.25% 0.05% 0.85%
Portfolio - Class B(3)
- -------------------------------------------------------------------------------
AllianceBernstein Growth and 0.75% 0.25% 0.13% 1.13%
Income Portfolio - Class B
- -------------------------------------------------------------------------------
AllianceBernstein
International Value 0.75% 0.25% 0.20% 1.20%
Portfolio - Class B
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap
Growth Portfolio - Class 0.75% 0.25% 0.06% 1.06%
B(3,11)
- -------------------------------------------------------------------------------
AllianceBernstein Small/Mid
Cap Value Portfolio - Class 0.75% 0.25% 0.12% 1.12%
B(11)
- -------------------------------------------------------------------------------
AllianceBernstein Utility 0.55% 0.25% 0.50% 1.30%
Income Portfolio - Class B
- -------------------------------------------------------------------------------
AllianceBernstein Value 0.55% 0.25% 0.17% 0.97%
Portfolio - Class B
- -------------------------------------------------------------------------------
FIDELITY(R) VARIABLE
INSURANCE PRODUCTS
- -------------------------------------------------------------------------------
Fidelity VIP Contrafund(R)
Portfolio - Service Class 0.57% 0.25% 0.11% 0.93%
2(12)
- -------------------------------------------------------------------------------
Fidelity VIP Growth & Income 0.47% 0.25% 0.13% 0.85%
Portfolio - Service Class 2
- -------------------------------------------------------------------------------
Fidelity VIP High Income 0.58% 0.25% 0.14% 0.97%
Portfolio - Service Class 2
- -------------------------------------------------------------------------------
Fidelity VIP Mid Cap
Portfolio - Service Class 0.57% 0.25% 0.14% 0.96%
2(12)
- -------------------------------------------------------------------------------
FRANKLIN TEMPLETON VARIABLE
INSURANCE PRODUCTS TRUST
- -------------------------------------------------------------------------------
FTVIP Franklin Flex Cap
Growth Securities Fund - 0.75% 0.25% 0.28% 1.28%
Class 2(13,14,15)
- -------------------------------------------------------------------------------
FTVIP Franklin High Income 0.56% 0.25% 0.06% 0.87%
Fund - Class 2(3,13,16)
- -------------------------------------------------------------------------------
FTVIP Franklin Income
Securities Fund - Class 0.47% 0.25% 0.02% 0.74%
2(13,16)
- -------------------------------------------------------------------------------
FTVIP Mutual Discovery
Securities Fund - Class 0.60% 0.25% 0.15% 1.00%
2(13)
- -------------------------------------------------------------------------------
FTVIP Mutual Shares
Securities Fund - Class 0.80% 0.25% 0.21% 1.26%
2(13)
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign
Securities Fund - Class 0.68% 0.25% 0.19% 1.12%
2(17)
- -------------------------------------------------------------------------------
GOLDMAN SACHS VARIABLE
INSURANCE TRUST
- -------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) 0.75% N/A 0.22% 0.97%
Small Cap Equity Fund(18,19)
- -------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) 0.65% N/A 0.08% 0.73%
U.S. Equity Fund(18,19,20)
- -------------------------------------------------------------------------------
Goldman Sachs VIT Growth and 0.75% N/A 0.11% 0.86%
Income Fund(18,19)
- -------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap 0.80% N/A 0.08% 0.88%
Value Fund(18,19)
- -------------------------------------------------------------------------------
PUTNAM VARIABLE TRUST
- -------------------------------------------------------------------------------
Putnam VT The George Putnam 0.62% 0.25% 0.11% 0.98%
Fund of Boston - Class IB
- -------------------------------------------------------------------------------
Putnam VT Growth and Income 0.48% 0.25% 0.06% 0.79%
Fund - Class IB(3)
- -------------------------------------------------------------------------------
Putnam VT International 0.75% 0.25% 0.19% 1.19%
Equity Fund - Class IB
- -------------------------------------------------------------------------------
14 PROSPECTUS
Putnam VT Investors Fund - 0.64% 0.25% 0.12% 1.01%
Class IB(21)
- -------------------------------------------------------------------------------
Putnam VT New Value Fund - 0.69% 0.25% 0.10% 1.04%
Class IB
- -------------------------------------------------------------------------------
Putnam VT Voyager Fund - 0.56% 0.25% 0.08% 0.89%
Class IB
- -------------------------------------------------------------------------------
1. Figures shown in the Table are for the year ended December 31, 2004 (except
as otherwise noted).
2. Expense information has been restated to reflect current fees in effect as of
November 1, 2004.
3. Effective May 1, 2005, the AIM V.I. Basic Value - Series II Sub-Account, the
AIM V.I. Capital Appreciation - Series II Sub-Account, the AIM V.I. Mid Cap Core
Equity - Series II Sub-Account, the AIM V.I. Premier Equity - Series II
Sub-Account, the AllianceBernstein Growth and Income - Class B Sub-Account, the
AllianceBernstein Large Cap Growth - Class B Sub-Account, the FTVIP Franklin
High Income - Class 2 Sub-Account, the Morgan Stanley VIS Global Advantage -
Class Y Sub-Account, the Morgan Stanley VIS High Yield - Class Y Sub-Account,
the Morgan Stanley VIS Income Builder - Class Y Sub-Account, the Morgan Stanley
VIS Information - Class Y Sub-Account, the Morgan Stanley VIS Utilities - Class
Y Sub-Account, the Putnam VT Growth and Income - Class IB Sub-Account and the
Van Kampen UIF Emerging Markets Debt, Class II Sub-Accounts are no longer
available for new investments. If you are currently invested in these Variable
Sub-Accounts, you may continue your investment. If prior to May 1, 2005, you
enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing or dollar cost averaging, we will continue to
effect automatic transactions to these Variable Sub-Accounts in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
4. Effective December 30, 2004, the Morgan Stanley VIS European Growth Portfolio
- - Class Y changed its name to the Morgan Stanley VIS European Equity Portfolio -
Class Y.
5. Morgan Stanley Investment Advisors Inc. has agreed to cap the Portfolio's
operating expenses (except for brokerage and "Rule 12b-1 Fees") by assuming the
Portfolio's "Other Expenses" and/or waiving its fee under the Portfolio's
Investment Advisory Agreement and the Administration Agreement to the extent
such operating expenses (except for brokerage and "Rule 12b-1 Fees") exceed, on
an annualized basis, 0.40% of the average daily net assets of the Portfolio.
6. Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
7. The fees disclosed in the Table reflect gross ratios prior to any voluntary
waivers/reimbursements of expenses by the adviser. The adviser has voluntarily
agreed to waive a portion or all of its management fee and/or reimburse expenses
to the extent necessary so that "Total Annual Portfolio Expenses," excluding
certain investment related expenses such as foreign country tax expense and
interest expense on borrowing, do not exceed the "Operating "Expense Limitation"
in the table below. The adviser may terminate these voluntary waivers at any
time at its sole discretion. Additionally, the distributor has agreed to waive a
portion of the "Rule 12b-1 Fees" for Class II shares. The distributor may
terminate these voluntary waivers at any time at its sole discretion. After such
reductions, the "Management Fees", "Rule 12b-1 Fees", "Other Expenses" and
"Total Annual Portfolio Expenses", were as follows:
Operating Expense
Limitation Management Rule 12b-1 Other
Portfolio Fees Fees Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio, 1.15% 0.75% 0.05% 0.35%
Class II
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity Portfolio, 1.70% 1.19% 0.05% 0.46%
Class II
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio, Class 1.00% 0.49% 0.05% 0.36%
II
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio, Class II 1.10% 0.50% 0.25% 0.34%
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio, Class 1.20% 0.65% 0.05% 0.50%
II
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio, Class II 1.15% 0.67% 0.10% 0.38%
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio, 1.25% 0.59% 0.05% 0.61%
Class II
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio, 1.15% 0.72% 0.10% 0.30%
Class II
- ------------------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio, Class 1.35% 0.76% 0.25% 0.26%
II
- ------------------------------------------------------------------------------------------------------------------------------------
Total
Annual
Portfolio Portfolio Expenses
- -------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio, 1.15%
Class II
- -------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity Portfolio, 1.70%
Class II
- -------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio, Class 0.90%
II
- -------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio, Class II 1.09%
- -------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio, Class 1.20%
II
- -------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio, Class II 1.15%
- -------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio, 1.25%
Class II
- -------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio, 1.12%
Class II
- -------------------------------------------------------------------------------------
15 PROSPECTUS
Van Kampen UIF U.S. Real Estate Portfolio, Class 1.27%
II
- -------------------------------------------------------------------------------------
8. Effective November 1, 2004, the adviser has agreed to limit "Total Annual
Portfolio Expenses" to 1.70%. Prior to November 1, 2004, the limitation to
"Total Annual Portfolio Expenses" was 1.80%.
9. For the year ended December 31, 2004, the adviser voluntarily waived $99,706
of its investment advisory fees and assumed $1,234 of the Portfolio's "Other
Expenses." This waiver is voluntary in nature and can be discontinued at the
adviser's discretion. When the effects of the voluntary waivers are taken into
consideration, the "Management Fees", "Rule 12b-1 Fees", "Other Expenses" and
"Total Annual Portfolio Expenses", were 0.38%, 0.25%, 0.62% and 1.25%,
respectively.
10. Effective January 1, 2005, through December 31, 2009, the advisor has
contractually agreed to waive a portion of its advisory fees. The fees waiver
reflects this arrangement. When the effects of the contractual fee waiver is
taken into consideration, the "Management Fees", "Rule 12b-1 Fees", "Other
Expenses" and "Total Annual Portfolio Expenses", as of December 31, 2004, were
0.67%, 0.25%, 0.30% and 1.22%, respectively.
11. Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio -
Class B and the AllianceBernstein Small Cap Value Portfolio - Class B changed
their names to the AllianceBernstein Large Cap Growth Portfolio - Class B and
the AllianceBernstein Small/Mid Cap Value Portfolio - Class B, respectively.
12. A portion of the brokerage commissions that the Portfolio pays may be
reimbursed and used to reduce the Portfolio's expenses. In addition, through
arrangements with the Portfolio's custodian, credits realized as a result of
uninvested cash balances are used to reduce the Portfolio's custodian expenses.
Including these reductions, the "Total Annual Portfolio Expenses" would have
been 0.91% and 0.93% for Fidelity VIP Contrafund(R) Portfolio - Service Class 2
and Fidelity VIP Mid Cap Portfolio - Service Class 2, respectively. These
offsets may be discontinued at any time.
13. While the maximum amount payable under the Portfolio's Rule 12b-1 plan is
0.35% per year of the Portfolio's average annual net assets, the Board has set
the current rate at 0.25% per year.
14. "Total Annual Portfolio Expenses" are based on contractual "Management
Fees", maximum current rate Distribution and service "Rule 12b-1 Fees" and
estimated "Other Expenses."
15. The manager has agreed in advance to waive or limit its "Management Fees" so
that the Portfolio's "Total Annual Portfolio Expenses" do not exceed 0.93%.
After May 1, 2006, the manager may end this arrangement at any time.
16. The Fund administration fee is paid indirectly through the management fee.
17. The Portfolio's manager has agreed in advance to reduce its fees from assets
invested by the Portfolio in a Franklin Templeton Money Market Fund (the Sweep
Money Fund). This reduction is required by the Portfolio's Board of Trustees and
an order by the Securities and Exchange Commission. With this reduction,
"Management Fees", "Rule 12b-1 Fees", "Other Expenses" and "Total Annual
Portfolio Expenses" were 0.63%, 0.25%, 0.19% and 1.07%, respectively.
18. "Other Expenses" include transfer agency fees and equal, on an annualized
basis, 0.04% of the average daily net assets of the Portfolio plus all other
ordinary expenses.
19. The Investment Adviser has contractually agreed to limit "Other Expenses"
(excluding "Management Fees," transfer agent fees and expenses, taxes, interest,
brokerage, litigation and indemnification costs, shareholder meeting and other
extraordinary expenses) to the extent that such expenses exceed, on an annual
basis, 0.11% of the Portfolio's average daily net assets for the Goldman Sachs
VIT CORE(SM) Small Cap Equity Fund and Goldman Sachs VIT Growth and Income Fund,
0.16% of the Portfolio's average daily net assets for the Goldman Sachs VIT
CORE(SM) U.S. Equity Fund and 0.25% of the Portfolio's average daily net assets
for the Goldman Sachs VIT Mid Cap Value Fund. The Investment Adviser has
contractually agreed to maintain these expense limitations for the Goldman Sachs
VIT CORE(SM) Small Cap Equity Fund, Goldman Sachs VIT CORE(SM) U.S. Equity Fund
and Goldman Sachs VIT Growth and Income Fund through June 30, 2005. After this
date, the Investment Adviser may cease or modify these expense limitations at
its discretion at any time. If this occurs, "Other Expenses" and "Total Annual
Portfolio Expenses"
16 PROSPECTUS
may increase without shareholder approval. When the effects of the limitations
are taken into consideration, the "Management Fees", "Rule 12b-1 Fees", "Other
Expenses" and "Total Annual Portfolio Expenses", were as follows:
Total
Other Annual
Portfolio Management Fees Rule 12b-1 Fees Expenses Portfolio
- ------------------------------------------------------------------------------------------------------------------------ Expenses
------------
Goldman Sachs VIT CORE(SM) Small Cap Equity Fund 0.75% N/A 0.15% 0.90%
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Fund 0.75% N/A 0.11% 0.86%
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Value Fund 0.80% N/A 0.08% 0.88%
- ------------------------------------------------------------------------------------------------------------------------------------
20. Effective the date of this prospectus the Investment Adviser has entered
into a Fee Reduction Commitment with the Goldman Sachs VIT CORE(SM) U.S. Equity
Fund. The commitment permanently reduces the management fee for the Portfolio to
an annual rate equal to 0.65% of the Portfolio's average daily net assets. As a
result, "Management Fees" and "Total Annual Portfolio Expenses" of the Portfolio
have been restated to reflect expenses that are expected for the current fiscal
year.
21. Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account is no
longer available for new investments. If you are currently invested in this
Variable Sub-Account, you may continue your investment. If prior to May 1, 2004,
you enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing or dollar cost averaging, we will continue to
effect automatic transactions to this Variable Sub-Account in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
22. Effective April 29, 2005, the Morgan Stanley VIS Quality Income Plus
Portfolio - Class Y changed its name to the Morgan Stanley VIS Income Plus
Portfolio - Class Y.
17 PROSPECTUS
EXAMPLE 1
This Example is intended to help you compare the cost of investing in the
Contracts with the cost of investing in other variable annuity contracts. These
costs include Contract owner transaction expenses, Contract fees, Variable
Account annual expenses, and Portfolio fees and expenses.
The example shows the dollar amount of expenses that you would bear directly or
indirectly if you:
.. invested $10,000 in the Contract for the time periods indicated;
.. earned a 5% annual return on your investment;
.. surrendered your Contract, or you began receiving income payments for a
specified period of less than 120 months, at the end of each time period;
.. elected the MAV Death Benefit Option and the Enhanced Beneficiary Protection
(Annual Increase) Option;
.. elected the Earnings Protection Death Benefit Option (assuming issue age
71-79);
.. elected RIG 2 (assuming Income Base A); and
.. elected the Spousal Protection Benefit (Co-Annuitant) Option.
THE EXAMPLE DOES NOT INCLUDE ANY TAXES OR TAX PENALTIES YOU MAY BE REQUIRED TO
PAY IF YOU SURRENDER YOUR CONTRACT.
The first line of the example assumes that the maximum fees and expenses of any
of the Portfolios are charged. The second line of the example assumes that the
minimum fees and expenses of any of the Portfolios are charged. Your actual
expenses may be higher or lower than those shown below.
Allstate Variable Annuity Allstate Variable Annuity - L Share
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------------------------------------------
Costs Based on Maximum Annual Portfolio Expenses $1,140 $2,061 $2,986 $5,484 $1,096 $1,752 $2,914 $5,794
- ------------------------------------------------------------------------------------------------------------------------------------
Costs Based on Minimum Annual Portfolio Expenses $ 981 $1,602 $2,249 $4,158 $ 937 $1,297 $2,189 $4,521
- ------------------------------------------------------------------------------------------------------------------------------------
EXAMPLE 2
THIS EXAMPLE USES THE SAME ASSUMPTIONS AS EXAMPLE 1 ABOVE, EXCEPT THAT IT
ASSUMES YOU DECIDED NOT TO SURRENDER YOUR CONTRACT, OR YOU BEGAN RECEIVING
INCOME PAYMENTS FOR A SPECIFIED PERIOD OF AT LEAST 120 MONTHS, AT THE END OF
EACH TIME PERIOD.
Allstate Variable Annuity Allstate Variable Annuity - L Share
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio $545 $1,636 $2,731 $5,484 $586 $1,752 $2,914 $5,794
Expenses
- ----------------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio $386 $1,177 $1,994 $4,158 $427 $1,297 $2,189 $4,521
Expenses
- ----------------------------------------------------------------------------------------------------
PLEASE REMEMBER THAT YOU ARE LOOKING AT EXAMPLES AND NOT A REPRESENTATION OF
PAST OR FUTURE EXPENSES. YOUR RATE OF RETURN MAY BE HIGHER OR LOWER THAN 5%,
WHICH IS NOT GUARANTEED. THE EXAMPLES DO NOT ASSUME THAT ANY PORTFOLIO EXPENSE
WAIVERS OR REIMBURSEMENT ARRANGEMENTS ARE IN EFFECT FOR THE PERIODS PRESENTED.
THE EXAMPLES REFLECT THE FREE WITHDRAWAL AMOUNTS, IF APPLICABLE, AND THE
DEDUCTION OF THE ANNUAL CONTRACT MAINTENANCE CHARGE OF $30 EACH YEAR. THE ABOVE
EXAMPLES ASSUME YOU HAVE SELECTED THE MAV DEATH BENEFIT OPTION AND THE ENHANCED
BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION, THE EARNINGS PROTECTION DEATH
BENEFIT OPTION (ASSUMING THE OLDEST CONTRACT OWNER OR ANNUITANT IS AGE 71 OR
OLDER, AND ALL ARE AGE 79 OR YOUNGER ON THE RIDER APPLICATION DATE), RIG 2 AND
THAT INCOME BASE A IS APPLIED, AND THE SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT)
OPTION. IF ANY OR ALL OF THESE FEATURES WERE NOT ELECTED, THE EXPENSE FIGURES
SHOWN ABOVE WOULD BE SLIGHTLY LOWER.
18 PROSPECTUS
FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "ACCUMULATION UNIT."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call "ACCUMULATION UNIT VALUE." Accumulation Unit Value is analogous to, but not
the same as, the share price of a mutual fund.
Accumulation Unit Values for the Contracts appear in Appendix I and in the
Statement of Additional Information. The consolidated financial statements of
Allstate Life and the financial statements of the Variable Account, which are
comprised of the underlying financial statements of the Sub-Accounts, appear in
the Statement of Additional Information.
No Accumulation Unit Values are shown for the following Variable Sub-Accounts:
AllianceBernstein International Value - Class B, AllianceBernstein Utility
Income - Class B, AllianceBernstein Value - Class B, Fidelity VIP Contrafund(R)
- - Service Class 2, Fidelity VIP Growth & Income - Service Class 2, Fidelity VIP
High Income - Service Class 2, Fidelity VIP Mid Cap - Service Class 2, FTVIP
Franklin Flex Cap Growth Securities - Class 2, FTVIP Mutual Discovery Securities
- - Class 2, Goldman Sachs VIT CORE/SM/ Small Cap Equity, Goldman Sachs VIT
CORE/SM/ U.S. Equity, Goldman Sachs VIT Growth and Income, Goldman Sachs VIT Mid
Cap Value and Putnam VT New Value - Class IB which were first offered under the
Contracts on April 30, 2005.
In addition, no Accumulation Unit Values are shown for Contracts with
administrative expense charges of 0.30% which applies to Contracts purchased on
or after January 1, 2005.
THE CONTRACT
- --------------------------------------------------------------------------------
CONTRACT OWNER
Each Contract is an agreement 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 investment alternatives during the Accumulation and Payout Phases,
.. the amount and timing of your purchase payments and withdrawals,
.. the programs you want to use to invest or withdraw money,
.. the income payment plan(s) 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 or the Annuitant
dies, and
.. any other rights that the Contract provides, including restricting income
payments to Beneficiaries.
If you die, any surviving joint 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 Primary
Beneficiary will receive any guaranteed income payments scheduled to continue.
If the Annuitant dies prior to the Payout Start Date and the Contract Owner is a
grantor trust not established by a business, the new Contract Owner will be the
Beneficiary(ies).
The Contract cannot be jointly owned by both a non-living person and a living
person unless the Contract Owner(s) assumed ownership of the Contract as a
Beneficiary(ies). The maximum age of any Contract Owner on the date we receive
the completed application for each Contract is 90.
If you select the Enhanced Beneficiary Protection (MAV) Option, the Enhanced
Beneficiary Protection (Annual Increase) Option or the Earnings Protection Death
Benefit Option, the maximum age of any Contract Owner on the Rider Application
Date is currently age 79. If you select the Spousal Protection Benefit
(Co-Annuitant) Option or the Spousal Protection (Co-Annuitant) Option for
Custodial Individual Retirement Accounts (CSP), the maximum age of any Contract
Owner or beneficial owner for CSP on the Rider Application Date is currently age
90. If you select the SureIncome Withdrawal Benefit Option, the maximum age of
any Contract Owner on the Rider Application Date is currently age 80.
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 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 retirement plans, 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
19 PROSPECTUS
with us. Once we accept the change, the change will take effect as of the date
you signed the request. We will not be liable for any payment or settlement made
prior to accepting the change. Accordingly, if you wish to change the Contract
Owner, you should deliver your written notice 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 age determines the latest Payout Start
Date and whose life determines the amount and duration of income payments (other
than under Income Plan 3). You may not change the Annuitant at any time. You may
designate a joint Annuitant, who is a second person on whose life income
payments depend, at the time you select an Income Plan. The maximum age of the
Annuitant on the date we receive the completed application for each Contract is
90.
If you select the Enhanced Beneficiary Protection (MAV) Option, Enhanced
Beneficiary Protection (Annual Increase) Option or the Earnings Protection Death
Benefit Option, the maximum age of any Annuitant on the Rider Application Date
is 79. If you select the Spousal Protection Benefit (Co-Annuitant) Option, the
maximum age of any Annuitant on the Rider Application Date is age 90. If you
select the Spousal Protection Benefit (Co-Annuitant) Option for Custodial
Individual Retirement Accounts, the maximum age of any Annuitant on the Rider
Application Date is age 90. If you select the SureIncome Withdrawal Benefit
Option, the maximum age of any Annuitant on the Rider Application Date is
currently age 80.
If you select the Income Protection Benefit Option, the oldest Annuitant and
joint Annuitant (if applicable) must be age 75 or younger on the Payout Start
Date.
If you select an Income Plan that depends on the Annuitant or a joint
Annuitant's life, we may require proof of age and sex before income payments
begin and proof that the Annuitant or joint Annuitant is still alive before we
make each payment.
CO-ANNUITANT
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION Contract Owners of IRA
Contracts that meet the following conditions and that elect the Spousal
Protection Benefit Option may name their spouse as a Co-Annuitant:
.. the individually owned Contract must be either a traditional, Roth, or
Simplified Employee Pension IRA;
.. the Contract Owner must be age 90 or younger on the Rider Application Date;
.. the Co-Annuitant must be age 79 or younger on the Rider Application Date; and
.. the Co-Annuitant must be the sole Primary Beneficiary under the Contract.
Under the Spousal Protection Benefit (Co-Annuitant) Option, the Co-Annuitant
will be considered to be an Annuitant during the Accumulation Phase, except the
Co-Annuitant will not be considered to be an Annuitant for purposes of
determining the Payout Start Date or upon the death of the Co-Annuitant. You may
change the Co-Annuitant to a new spouse only if you provide proof of remarriage
in a form satisfactory to us. At any time, there may only be one Co-Annuitant
under your Contract. See "Spousal Protection Benefit Option and Death of
Co-Annuitant" for more information.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS Contracts that meet the following conditions and that elect
the Spousal Protection Benefit (Co-Annuitant) Option for Custodial Individual
Retirement Accounts may name the spouse of the Annuitant as a Co-Annuitant:
.. the beneficially owned Contract must be a Custodial traditional IRA, Custodial
Roth IRA, or a Custodial Simplified Employee Pension IRA;
.. the Annuitant must be the beneficial owner of the Custodial traditional IRA,
Custodial Roth IRA, or Custodial Simplified Employee Pension IRA;
.. the Co-Annuitant must be the legal spouse of the Annuitant and only one
Co-Annuitant may be named;
.. the Co-Annuitant must be the sole beneficiary of the Custodial traditional
IRA, Custodial Roth IRA, or the Custodial Simplified Employee Pension IRA;
.. the Annuitant must be age 90 or younger on the Rider Application Date; and
.. the Co-Annuitant must be age 79 or younger on the Rider Application Date.
Under the Spousal Protection Benefit (Co-Annuitant) Option for Custodial
Individual Retirement Accounts, the Co-Annuitant will be considered to be an
Annuitant during the Accumulation Phase, except the Co-Annuitant will not be
considered to be an Annuitant for purposes of determining the Payout Start Date
or upon the death of the Co-Annuitant. The Co-Annuitant is not considered the
beneficial owner of the Custodial traditional IRA, Custodial Roth IRA, or the
Custodial Simplified Employee Pension IRA. See "Spousal Protection Benefit
(Co-Annuitant) Option for Custodial Individual Retirement Accounts and Death of
Co-Annuitant" for more information.
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
20 PROSPECTUS
settlement ("DEATH PROCEEDS") or become the new Contract Owner pursuant to the
Contract if the sole surviving Contract Owner dies before the Payout Start Date.
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 form to be
signed by you and filed with us. After we accept the form, the change of
Beneficiary will be effective as of the date you signed the form. Until we
receive your written notice to change a Beneficiary, we are entitled to rely on
the most recent Beneficiary information in our files. We will not be liable for
any payment or settlement made prior to accepting the change. Accordingly, if
you wish to change your Beneficiary, you should deliver your written notice to
us promptly. Each Beneficiary change is subject to any payment made by us or any
other action we take before we accept the change.
You may restrict income payments to Beneficiaries by providing us with a written
request. Once we accept the written request, the restriction will take effect as
of the date you signed the request. Any restriction is subject to any payment
made by us or any other action we take before we accept the request.
If you did not name a Beneficiary or, unless otherwise provided in the
Beneficiary designation, if a named Beneficiary is no longer living and there
are no other surviving Primary or Contingent Beneficiaries 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.
If more than one Beneficiary survives you (or the Annuitant, if the Contract
Owner is a grantor trust), 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 Annuitant if the
Contract Owner is a grantor trust), 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 this 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.
Where there are multiple beneficiaries, we will only value the Death Proceeds at
the time the first beneficiary submits the necessary documentation in good
order. Any Death Proceeds amounts attributable to any beneficiary which remain
in the Variable Sub-Accounts are subject to investment risk. If there is more
than one Beneficiary taking shares of the Death Proceeds, each Beneficiary will
be treated as a separate and independent owner of his or her respective share of
the Death Proceeds. Each Beneficiary will exercise all rights related to his or
her share of the Death Proceeds, including the sole right to select a death
settlement option, subject to any restrictions previously placed upon the
Beneficiary. Each Beneficiary may designate a Beneficiary(ies) for his or her
respective share, but that designated Beneficiary(ies) will be restricted to the
death settlement option chosen by the original Beneficiary.
If there is more than one Beneficiary and one of the Beneficiaries is a
corporation, trust or other non-living person, all Beneficiaries will be
considered to be non-living persons.
MODIFICATION OF THE CONTRACT
Only an Allstate Life officer 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. If a provision of the Contract
is inconsistent with state law, we will follow state law.
ASSIGNMENT
You may not assign an interest in this Contract as collateral or security for a
loan. However, you may assign periodic income payments under this 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 the assignor
signs it and files 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.
21 PROSPECTUS
PURCHASES
- --------------------------------------------------------------------------------
MINIMUM PURCHASE PAYMENTS
The minimum initial purchase payment for Non- Qualified Contracts is $10,000,
($2,000 for Contracts issued with an IRA or TSA). All subsequent purchase
payments under a Contract must be $1,000 or more ($50 for automatic payments).
You may make purchase payments at any time prior to the Payout Start Date;
however, additional payments may be limited in some states. Please consult with
your Morgan Stanley Financial Advisor for details. The total amount of purchase
payments we will accept for each Contract without our prior approval is
$1,000,000. We reserve the right to accept a lesser initial purchase payment
amount or lesser subsequent purchase payment amounts. We reserve the right to
limit the availability of the investment alternatives for additional
investments. We also reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of $50 or more per month by
automatically transferring money from your bank account. Please consult with
your Morgan Stanley Financial Advisor for detailed information. The AUTOMATIC
ADDITIONS PROGRAM is not available for making purchase payments into the Dollar
Cost Averaging Fixed Account Option.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payment among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percents that total 100% or in whole dollars. You can change your
allocations by calling 1-800-654-2397.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us
otherwise, we will allocate subsequent purchase payments according to the
allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our home office. If your application is incomplete, we will ask you to
complete your application within 5 business days. If you do so, we will credit
your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract at
the close of the business day on which we receive the purchase payment at our
home office.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"Valuation Dates." Our business day closes when the New York Stock Exchange
closes for regular trading, usually 4:00 p.m. Eastern Time (3:00 p.m. Central
Time). If we receive your purchase payment after 3:00 p.m. Central Time on any
Valuation Date, we will credit your purchase payment using the Accumulation Unit
Values computed on the next Valuation Date.
TRIAL EXAMINATION PERIOD
You may cancel your Contract by providing us with written notice within the
Trial Examination Period, which is the 20 day period after you receive the
Contract, or such longer period that your state may require. If you exercise
this "RIGHT TO CANCEL," the Contract terminates and we will pay you the full
amount of your purchase payments allocated to the Fixed Account. We also will
return your purchase payments allocated to the Variable Account adjusted, to the
extent federal or state law permits, to reflect investment gain or loss,
including the deduction of mortality and expense risk charges and administrative
expense charges, that occurred from the date of allocation through the date of
cancellation. If your Contract is qualified under Code Section 408(b) we will
refund the greater of any purchase payments or the Contract Value.
We reserve the right to allocate your purchase payments to the Morgan Stanley
VIS Money Market Variable Sub-Account during the Trial Examination Period.
For Contracts purchased in California by persons age 60 and older, you may elect
to defer until the end of the Trial Examination Period allocation of your
purchase payment to the Variable Sub-Accounts. Unless you instruct otherwise,
upon making this election, your purchase payment will be allocated to the Morgan
Stanley VIS Money Market Variable Sub-Account. On the next Valuation Date 40
days after the Issue Date, your Contract Value will then be reallocated in
accordance with your most recent investment allocation instructions.
State laws vary and may require a different period, other variations or
adjustments. Please refer to your Contract for state specific information.
22 PROSPECTUS
CONTRACT VALUE
- --------------------------------------------------------------------------------
On the Issue Date, the Contract Value is equal to your initial purchase payment.
Thereafter, your Contract Value at any time during the Accumulation Phase is
equal to the sum of the value of your Accumulation Units in the Variable
Sub-Accounts you have selected, plus your value in the Fixed Account Option(s)
offered by your Contract.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation
Unit Value of that Variable Sub-Account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-Account when the Accumulation Unit Value for the
Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-Account to your Contract. Withdrawals and transfers from a Variable
Sub-Account would, of course, reduce the number of Accumulation Units of that
Sub-Account allocated to your Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
for each Contract will rise or fall to reflect:
.. changes in the share price of the Portfolio in which the Variable Sub-Account
invests, and
.. the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense charge, and any provision for taxes that have accrued
since we last calculated the Accumulation Unit Value.
We determine any applicable withdrawal charges, Rider Fees (if applicable),
transfer fees, and contract maintenance charges separately for each Contract.
They do not affect the Accumulation Unit Value. Instead, we obtain payment of
those charges and fees by redeeming Accumulation Units. For details on how we
compute Accumulation Unit Values, please refer to the Statement of Additional
Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account
for each Contract on each Valuation Date. We also determine a separate set of
Accumulation Unit Values that reflect the cost of each optional benefit, or
available combination thereof, offered under the Contract.
YOU SHOULD REFER TO THE PROSPECTUSES FOR THE FUNDS THAT ACCOMPANY THIS
PROSPECTUS FOR A DESCRIPTION OF HOW THE ASSETS OF EACH PORTFOLIO ARE VALUED,
SINCE THAT DETERMINATION DIRECTLY BEARS ON THE ACCUMULATION UNIT VALUE OF THE
CORRESPONDING VARIABLE SUB-ACCOUNT AND, THEREFORE, YOUR CONTRACT VALUE.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION
We offer the TrueReturn/SM/ Accumulation Benefit Option, which is available for
an additional fee. The TrueReturn Option guarantees a minimum Contract Value on
the "RIDER MATURITY DATE." The Rider Maturity Date is determined by the length
of the Rider Period which you select. The Option provides no minimum Contract
Value if the Option terminates before the Rider Maturity Date. See "Termination
of the TrueReturn Option" below for details on termination.
The TrueReturn Option is available at issue of the Contract or may be added
later, subject to availability and issue requirements. You may not add the
TrueReturn Option to your Contract after Contract issue without prior approval
if your Contract Value is greater than $1,000,000 at the time you choose to add
the TrueReturn Option. Currently, you may have only one TrueReturn Option in
effect on your Contract at one time. You may only have one of the following in
effect on your Contract at the same time: a TrueReturn Option, a Retirement
Income Guarantee Option, or a SureIncome Option. The TrueReturn Option has no
maximum issue age, however the Rider Maturity Date must occur before the latest
Payout Start Date, which is the later of the Annuitant's 99th birthday or the
10th Contract Anniversary. Once added to your Contract, the TrueReturn Option
may be cancelled at any time on or after the 5th Rider Anniversary by notifying
us in writing in a form satisfactory to us.
The "RIDER ANNIVERSARY" is the anniversary of the Rider Date. We reserve the
right to extend the date on which the TrueReturn Option may be cancelled to up
to the 10th Rider Anniversary at any time in our sole discretion. Any change we
make will not apply to a TrueReturn Option that was added to your Contract prior
to the implementation date of the change.
When you add the TrueReturn Option to your Contract, you must select a Rider
Period and a Guarantee Option. The Rider Period and Guarantee Option you select
determine the AB Factor, which is used to determine the Accumulation Benefit,
described below. The "RIDER PERIOD" begins on the Rider Date and ends on the
Rider Maturity Date. The "RIDER DATE" is the date the TrueReturn Option was made
a part of your Contract. We currently offer Rider Periods ranging from 8 to 20
years depending on the Guarantee Option you select. You may select any Rider
Period from among those we currently offer, provided the Rider Maturity Date
occurs prior to the latest Payout Start Date. We reserve the right to offer
additional Rider Periods in the future, and to discontinue offering any of the
Rider Periods at any time. Each Model Portfolio Option available under a
Guarantee Option has specific investment requirements that are described in the
"Investment Restrictions"
23 PROSPECTUS
section below and may depend upon the Rider Date of your TrueReturn Option. We
reserve the right to offer additional Guarantee Options in the future, and to
discontinue offering any of the Guarantee Options at any time. After the Rider
Date, the Rider Period and Guarantee Option may not be changed.
The TrueReturn Option may not be available in all states. We may discontinue
offering the TrueReturn Option at any time to new Contract Owners and to
existing Contract Owners who did not elect the Option prior to the date of
discontinuance.
ACCUMULATION BENEFIT.
On the Rider Maturity Date, if the Accumulation Benefit is greater than the
Contract Value, then the Contract Value will be increased to equal the
Accumulation Benefit. The excess amount of any such increase will be allocated
to the Morgan Stanley VIS Money Market Variable Sub-Account. You may transfer
the excess amount out of the Morgan Stanley VIS Money Market Variable
Sub-Account and into another investment alternative at any time thereafter.
However, each transfer you make will count against the 12 transfers you can make
each Contract Year without paying a transfer fee. Prior to the Rider Maturity
Date, the Accumulation Benefit will not be available as a Contract Value,
Settlement Value, or Death Proceeds. Additionally, we will not pay an
Accumulation Benefit if the TrueReturn Option is terminated for any reason prior
to the Rider Maturity Date. After the Rider Maturity Date, the TrueReturn Option
provides no additional benefit.
The "ACCUMULATION BENEFIT" is equal to the Benefit Base multiplied by the AB
Factor. The "AB FACTOR" is determined by the Rider Period and Guarantee Option
you selected as of the Rider Date. The following table shows the AB Factors
available for the Rider Periods and Guarantee Options we currently offer.
AB FACTORS
RIDER PERIOD GUARANTEE GUARANTEE
(NUMBER OF YEARS) OPTION 1 OPTION 2
- ---------------------------------------------
8 100.0% NA
- ---------------------------------------------
9 112.5% NA
- ---------------------------------------------
10 125.0% 100.0%
- ---------------------------------------------
11 137.5% 110.0%
- ---------------------------------------------
12 150.0% 120.0%
- ---------------------------------------------
13 162.5% 130.0%
- ---------------------------------------------
14 175.0% 140.0%
- ---------------------------------------------
15 187.5% 150.0%
- ---------------------------------------------
16 200.0% 160.0%
- ---------------------------------------------
17 212.5% 170.0%
- ---------------------------------------------
18 225.0% 180.0%
- ---------------------------------------------
19 237.5% 190.0%
- ---------------------------------------------
20 250.0% 200.0%
- ---------------------------------------------
The following examples illustrate the Accumulation Benefit calculations under
Guarantee Options 1 and 2 on the Rider Maturity Date. For the purpose of
illustrating the Accumulation Benefit calculation, the examples assume the
Benefit Base is the same on the Rider Date and the Rider Maturity Date.
Example 1: Guarantee Option 1
Guarantee Option: 1
Rider Period: 15
AB Factor: 187.5%
Rider Date: 1/2/04
Rider Maturity Date: 1/2/19
Benefit Base on Rider Date: $50,000
Benefit Base on rider Maturity Date: $50,000
On the Rider Maturity Date (1/2/19):
Accumulation Benefit = Benefit Base on Rider Maturity
Date x AB Factor
= $50,000 x 187.5%
= $93,750
Example 2: Guarantee Option 2
Guarantee Option: 2
Rider Period: 15
AB Factor: 150.0%
Rider Date: 1/2/04
Rider Maturity Date: 1/2/19
Benefit Base on Rider Date: $50,000
Benefit Base on rider Maturity Date: $50,000
On the Rider Maturity Date (1/2/19):
Accumulation Benefit = Benefit Base on Rider Maturity
Date x AB Factor
= $50,000 x 150.0%
= $75,000
Guarantee Option 1 offers a higher AB Factor and more rider periods than
Guarantee Option 2. Guarantee Option 1 and Guarantee Option 2 have different
investment restrictions. See "Investment Requirements" below for more
information.
BENEFIT BASE.
The Benefit Base is used solely for purposes of determining the Rider Fee and
the Accumulation Benefit. The Benefit Base is not available as a Contract Value,
Settlement Value, or Death Proceeds. On the Rider Date, the "BENEFIT BASE" is
equal to the Contract Value. After the Rider Date, the Benefit Base will be
recalculated for purchase payments and withdrawals as follows:
.. The Benefit Base will be increased by purchase payments made prior to or on
the first Contract Anniversary following the Rider Date. Subject to the terms
and conditions of your Contract, you may add purchase payments after this
date, but they will not be included in the calculation of the Benefit Base.
THEREFORE, IF YOU PLAN TO MAKE PURCHASE PAYMENTS AFTER THE FIRST CONTRACT
ANNIVERSARY FOLLOWING THE RIDER DATE, YOU SHOULD CONSIDER
24 PROSPECTUS
CAREFULLY WHETHER THIS OPTION IS APPROPRIATE FOR YOUR NEEDS.
.. The Benefit Base will be decreased by a Withdrawal Adjustment for each
withdrawal you make. The Withdrawal Adjustment is equal to (a) divided by (b),
with the result multiplied by (c), where:
(a) = the withdrawal amount;
(b) = the Contract Value immediately prior to the withdrawal; and
(c) = the Benefit Base immediately prior to the withdrawal.
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. A withdrawal charge also
may apply. See Appendix G for numerical examples that illustrate how the
Withdrawal Adjustment is applied.
The Benefit Base will never be less than zero.
INVESTMENT REQUIREMENTS.
If you add the TrueReturn Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest
during the Rider Period. The specific requirements will depend on the model
portfolio option ("Model Portfolio Option") you have selected and the effective
date of your TrueReturn Option. These requirements are described below in more
detail. These requirements may include, but are not limited to, maximum
investment limits on certain Variable Sub-Accounts or on certain Fixed Account
Options, exclusion of certain Variable Sub-Accounts or of certain Fixed Account
Options, required minimum allocations to certain Variable Sub-Accounts, and
restrictions on transfers to or from certain investment alternatives. We may
also require that you use the Automatic Portfolio Rebalancing Program. We may
change the specific requirements that are applicable to a Guarantee Option or a
Model Portfolio Option available under a Guarantee Option at any time in our
sole discretion. Any changes we make will not apply to a TrueReturn Option that
was made a part of your Contract prior to the implementation date of the change,
except for changes made due to a change in investment alternatives available
under the Contract. Any changes we make will apply to a new TrueReturn Option
elected subsequent to the change pursuant to the Rider Trade-In Option.
When you add the TrueReturn Option to your Contract, you must allocate your
entire Contract Value as follows:
(1) to a Model Portfolio Option available with the Guarantee Option you
selected, as defined below; or
(2) to the DCA Fixed Account Option and then transfer all purchase payments and
interest according to a Model Portfolio Option available with the Guarantee
Option you selected; or
(3) to a combination of (1) and (2) above.
For (2) and (3) above, the requirements for the DCA Fixed Account Option must be
met. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information.
On the Rider Date, you must select only one of the Model Portfolio Options in
which to allocate your Contract Value. After the Rider Date, you may transfer
your entire Contract Value to any of the other Model Portfolio Options available
with your Guarantee Option. We currently offer several Model Portfolio Options
with each of the available Guarantee Options. The Model Portfolio Options that
are available under Guarantee Options may differ depending upon the effective
date of your TrueReturn Option. Please refer to the Model Portfolio Option 1,
Model Portfolio Option 2 and TrueBalance/SM/ Model Portfolio Options sections
below for more details. We may add other Model Portfolio Options in the future.
We also may remove Model Portfolio Options in the future anytime prior to the
date you select such Model Portfolio Option. In addition, if the investment
alternatives available under the Contract change, we may revise the Model
Portfolio Options. The following table summarizes the Model Portfolio Options
currently available for use with each Guarantee Option under the TrueReturn
Option:
GUARANTEE OPTION 1 GUARANTEE OPTION 2
- ------------------------------------------------------------------------------------------------------------
* Model Portfolio Option 1 * Model Portfolio Option 2
* TrueBalance Conservative Model Portfolio Option * TrueBalance Conservative Model
* TrueBalance Moderately Conservative Model Portfolio Option Portfolio Option
* TrueBalance Moderately
Conservative Model Portfolio
Option
* TrueBalance Moderate Model
Portfolio Option
* TrueBalance Moderately
Aggressive Model Portfolio
Option
* TrueBalance Aggressive Model
Portfolio Option
- ------------------------------------------------------------------------------------------------------------
You may not allocate any of your Contract Value to the Standard Fixed Account
Option or to the MVA Fixed Account Option. You must transfer any portion of your
Contract Value that is allocated to the Standard Fixed Account Option or to the
MVA Fixed Account Option to the Variable Sub-Accounts prior to adding the
TrueReturn Option to your Contract. Transfers from the MVA Fixed Account Option
may be subject to a Market Value Adjustment. You may allocate any portion of
your purchase payments to the DCA Fixed Account Option on the Rider Date,
provided the DCA Fixed Account Option is available with your Contract and in
your state. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information. We use the term "Transfer Period Account" to
refer to each purchase
25 PROSPECTUS
payment allocation made to the DCA Fixed Account Option for a specified term
length. At the expiration of a Transfer Period Account any remaining amounts in
the Transfer Period Account will be transferred to the Variable Sub-Accounts
according to the percentage allocations for the Model Portfolio Option you
selected.
Any subsequent purchase payments made to your Contract will be allocated to the
Variable Sub-Accounts according to your most recent instructions on file with
us. You must comply with any required percentage allocations for the Model
Portfolio Option you have selected. You may also request that purchase payments
be allocated to the DCA Fixed Account Option. Purchase payments allocated to the
DCA Fixed Account Option must be $500 or more. Any withdrawals you request will
reduce your Contract Value invested in each of the investment alternatives on a
pro rata basis in the proportion that your Contract Value in each bears to your
total Contract Value in all Variable Sub-Accounts, unless you request otherwise.
MODEL PORTFOLIO OPTION 1.
If you choose Model Portfolio Option 1 or transfer your entire Contract Value
into Model Portfolio Option 1 under Guarantee Option 1, you must allocate a
certain percentage of your Contract Value into each of three asset categories.
Please note that certain investment alternatives are not available under Model
Portfolio Option 1. You may choose the Variable Sub-Accounts in which you want
to invest, provided you maintain the percentage allocation requirements for each
category. You may also make transfers among the Variable Sub-Accounts within
each category at any time, provided you maintain the percentage allocation
requirements for each category. However, each transfer you make will count
against the 12 transfers you can make each Contract Year without paying a
transfer fee.
Effective October 1, 2004, certain Variable Sub-Accounts under Model Portfolio 1
were reclassified into different asset categories. These changes apply to True
Return Options effective prior to and on or after October 1, 2004.
The following table describes the percentage allocation requirements for Model
Portfolio Option 1 and Variable Sub-Accounts available under each category
(1,7):
MODEL PORTFOLIO OPTION 1
- ---------------------------------------------------------------------
20% Category A
50% Category B
30% Category C
0% Category D
- ---------------------------------------------------------------------
CATEGORY A
Morgan Stanley VIS Money Market - Class Y Sub-Account
CATEGORY B
Morgan Stanley VIS High Yield - Class Y Sub-Account(1)
Morgan Stanley VIS Income Plus - Class Y Sub-Account(6)
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
Fidelity VIP High Income - Service Class 2 Sub-Account(2)
FTVIP Franklin High Income - Class 2 Sub-Account(1)
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(1)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(3)
CATEGORY C
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS Equity - Class Y Sub-Account
Morgan Stanley VIS Global Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS Income Builder - Class Y Sub-Account(1)
Morgan Stanley VIS Strategist - Class Y Sub-Account
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account
Morgan Stanley VIS Utilities - Class Y Sub-Account(1)
AllianceBernstein Growth - Class B Sub-Account
AllianceBernstein Growth and Income - Class B Sub-Account(1)
AllianceBernstein International Value - Class B Sub-Account(2)
AllianceBernstein Small/Mid Cap Value - Class B Sub-Account(5)
AllianceBernstein Utility Income - Class B Sub-Account(2)
AllianceBernstein Value - Class B Sub-Account(2)
AIM V.I. Basic Value - Series II Sub-Account(1)
AIM V.I. Premier Equity - Series II Sub-Account(1)
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account(2)
Fidelity VIP Growth & Income - Service Class 2 Sub-Account(2)
Fidelity VIP Mid Cap - Service Class 2 Sub-Account(2)
FTVIP Franklin Flex Cap Growth Securities - Class 2 Sub-Account(2)
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account(2)
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account(2)
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account(2)
Goldman Sachs VIT Growth and Income Sub-Account(2)
Goldman Sachs VIT Mid Cap Value Sub-Account(2)
Putnam VT Growth and Income - Class IB Sub-Account(1)
Putnam VT International Equity - Class IB Sub-Account
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account(2)
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Emerging Markets Equity, Class II Sub-Account(3)
Van Kampen UIF Equity and Income, Class II Sub-Account(3)
Van Kampen UIF Global Franchise, Class II Sub-Account(3)
Van Kampen UIF Mid Cap Growth, Class II Sub-Account(3)
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(3)
CATEGORY D (VARIABLE SUB-ACCOUNTS NOT AVAILABLE UNDER MODEL
PORTFOLIO OPTION 1)
Morgan Stanley VIS Aggressive Equity - Class Y Sub-Account
Morgan Stanley VIS European Equity - Class Y Sub-Account(4)
Morgan Stanley VIS Global Advantage - Class Y Sub-Account(1)
Morgan Stanley VIS Information - Class Y Sub-Account(1)
AIM V.I. Capital Appreciation - Series II Sub-Account(1)
AIM V.I. Mid Cap Core Equity - Series II Sub-Account(1)
AllianceBernstein Large Cap Growth - Class B Sub-Account(1,5)
Putnam VT Investors - Class IB Sub-Account(7)
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class II Sub-Account(3)
Van Kampen UIF Small Company Growth, Class II Sub-Account
Each calendar quarter, we will use the Automatic Portfolio Rebalancing Program
to automatically rebalance your Contract Value in each Variable Sub-
26 PROSPECTUS
Account and return it to the percentage allocation requirements for Model
Portfolio Option 1. We will use the percentage allocations as of your most
recent instructions.
1) Effective May 1, 2005, the AIM V.I. Basic Value - Series II Sub-Account, the
AIM V.I. Capital Appreciation - Series II Sub-Account, the AIM V.I. Mid Cap
Core Equity - Series II Sub-Account, the AIM V.I. Premier Equity - Series II
Sub-Account, the AllianceBernstein Growth and Income - Class B Sub-Account,
the AllianceBernstein Large Cap Growth - Class B Sub-Account (formerly
AllianceBernstein Premier Growth - Class B Sub-Account), the FTVIP Franklin
High Income - Class 2 Sub-Account, the Morgan Stanley VIS Global Advantage -
Class Y Sub-Account, the Morgan Stanley VIS High Yield - Class Y Sub-Account,
the Morgan Stanley VIS Income Builder - Class Y Sub-Account, the Morgan
Stanley VIS Information - Class Y Sub-Account, the Morgan Stanley VIS
Utilities - Class Y Sub-Account, the Putnam VT Growth and Income - Class IB
Sub-Account and the Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
are no longer available for new investments. If you are currently invested in
these Variable Sub-Accounts, you may continue your investments. If prior to
May 1, 2005, you enrolled in one of our automatic transaction programs, such
as automatic additions, portfolio rebalancing or dollar cost averaging, we
will continue to effect automatic transactions to these Variable Sub-Accounts
in accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed. If you choose to add
this TrueReturn Option on or after May 1, 2005, you must transfer any portion
of your Contract Value that is allocated to these Variable Sub-Accounts to any
of the remaining Variable Sub-Accounts available with the TrueReturn Option
prior to adding the TrueReturn Option to your Contract.
2) The Variable Sub-Account was first offered under the Contracts on April 30,
2005.
3) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
4) Effective December 30, 2004, the Morgan Stanley VIS European Growth Portfolio
- Class Y, changed its name to the Morgan Stanley VIS European Equity
Portfolio - Class Y. We have made a corresponding change to the name of the
Variable Sub-Account that invests in this Portfolio.
5) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio - Class
B and the AllianceBernstein Small Cap Value Portfolio - Class B changed their
names to the AllianceBernstein Large Cap Growth Portfolio - Class B and the
AllianceBernstein Small/ Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
6) Effective April 29, 2005, the Morgan Stanley VIS Quality Income Plus
Portfolio-Class Y changed its name to Morgan Stanley VIS Income Plus Portfolio
- Class Y. We have made a corresponding change to the name of the Variable
Sub-Account that invests in this Portfolio.
7) The Putnam VT Investors - Class IB Sub-Account was only offered with
Contracts issued prior to May 1, 2004, and is no longer available for new
investments. If you invested in this Variable Sub-Account prior to May 1,
2004, you may continue your investment. If prior to May 1, 2004, you enrolled
in one of our automatic transaction programs, such as automatic additions,
portfolio rebalancing or dollar cost averaging, we will continue to effect
automatic transactions to this Variable Sub-Account in accordance with that
program. Outside of these automatic transaction programs, additional
allocations will not be allowed. On or after May 1, 2004, you must transfer
any portion of your Contract Value that is allocated to this Variable
Sub-Account to any of the remaining Variable Sub-Accounts available with
TrueReturn Option prior to adding the TrueReturn Option to your Contract.
MODEL PORTFOLIO OPTION 2
The investment requirements under Model Portfolio Option 2 depend on the Rider
Date of your TrueReturn Option.
MODEL PORTFOLIO OPTION 2 (RIDER DATE PRIOR TO OCTOBER 1, 2004)
If your TrueReturn Option Rider Date is prior to October 1, 2004, and you choose
Model Portfolio Option 2 or transfer your entire Contract Value into Model
Portfolio Option 2, you may allocate your Contract Value among any of a selected
group of available Variable Sub-Accounts listed below. You may choose the
Variable Sub-Accounts in which you want to invest, provided you maintain the
percentage allocation requirements for each category. You may also make
transfers among the Variable Sub-Accounts within each category at any time,
provided you maintain the percentage allocation requirements for each category.
However, each transfer you make will count against the 12 transfers you can make
each Contract Year without paying a transfer fee.
The following table describes the percentage allocation requirements for Model
Portfolio Option 2 (Rider Date prior to October 1, 2004) and the Variable
Sub-Accounts available under each category (1,7):
Model Portfolio Option 2 (Rider Date Prior to October 1, 2004)
- ---------------------------------------------------------------------
10% Category A
20% Category B
50% Category C
20% Category D
- ---------------------------------------------------------------------
27 PROSPECTUS
CATEGORY A
Morgan Stanley VIS Money Market - Class Y Sub-Account
CATEGORY B
Morgan Stanley VIS High Yield - Class Y Sub-Account(1)
Morgan Stanley VIS Income Plus - Class Y Sub-Account(6)
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
FTVIP Franklin High Income - Class 2 Sub-Account(1)
Fidelity VIP High Income - Service Class 2 Sub-Account(2)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(3)
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(1)(3)
CATEGORY C
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS Equity - Class Y Sub-Account
Morgan Stanley VIS Income Builder - Class Y Sub-Account
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account
Morgan Stanley VIS Strategist - Class Y Sub-Account
Morgan Stanley VIS Utilities - Class Y Sub-Account(1)
AIM V.I. Basic Value - Series II Sub-Account(1)
AIM V.I. Premier Equity - Series II Sub-Account(1)
AllianceBernstein Growth and Income - Class B Sub-Account(1)
AllianceBernstein International Value - Class B Sub-Account(2)
AllianceBernstein Utility Income - Class B Sub-Account(2)
AllianceBernstein Value - Class B Sub-Account(2)
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account(2)
Fidelity VIP Growth & Income - Service Class 2 Sub-Account(2)
Fidelity VIP Mid Cap - Service Class 2 Sub-Account(2)
FTVIP Franklin Flex Cap Growth Securities - Class 2 Sub-Account(2)
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account(2)
FTVIP Mutual Shares Securities - Class 2 Sub-Account
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account(2)
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account(2)
Goldman Sachs VIT Growth and Income Sub-Account(2)
Goldman Sachs VIT Mid Cap Value Sub-Account(2)
Putnam VT Growth and Income - Class IB Sub-Account(1)
Putnam VT New Value - Class IB Sub-Account(2)
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Equity and Income, Class II Sub-Account(3)
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(3)
CATEGORY D
Morgan Stanley VIS Aggressive Equity - Class Y Sub-Account
Morgan Stanley VIS European Equity - Class Y Sub-Account(4)
Morgan Stanley VIS Global Advantage - Class Y Sub-Account(1)
Morgan Stanley VIS Global Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS Information - Class Y Sub-Account(1)
AIM V.I. Capital Appreciation - Series II Sub-Account(1)
AIM V.I. Mid Cap Core Equity - Series II Sub-Account(1)
AllianceBernstein Growth - Class B Sub-Account
AllianceBernstein Large Cap Growth - Class B Sub-Account(1,5)
AllianceBernstein Small/Mid Cap Value - Class B Sub-Account(5)
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account(7)
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen UIF Emerging Markets Equity, Class II Sub-Account(3)
Van Kampen UIF Equity Growth, Class II Sub-Account(3)
Van Kampen UIF Global Franchise, Class II Sub-Account(1)(3)
Van Kampen UIF Mid Cap Growth, Class II Sub-Account(3)
Van Kampen UIF Small Company Growth, Class II Sub-Account(3)
Each calendar quarter, we will use the Automatic Portfolio Rebalancing Program
to automatically rebalance your Contract Value in each Variable Sub-Account and
return it to the percentage allocation requirements for Model Portfolio Option 2
(Rider Date prior to October 1, 2004). We will use the percentage allocations as
of your most recent instructions.
1) Effective May 1, 2005, the AIM V.I. Basic Value - Series II Sub-Account, the
AIM V.I. Capital Appreciation - Series II Sub-Account, the AIM V.I. Mid Cap
Core Equity - Series II Sub-Account, the AIM V.I. Premier Equity - Series II
Sub-Account, the AllianceBernstein Growth and Income - Class B Sub-Account,
the AllianceBernstein Large Cap Growth - Class B Sub-Account (formerly
AllianceBernstein Premier Growth - Class B Sub-Account), the FTVIP Franklin
High Income - Class 2 Sub-Account, the Morgan Stanley VIS Global Advantage -
Class Y Sub-Account, the Morgan Stanley VIS High Yield - Class Y Sub-Account,
the Morgan Stanley VIS Income Builder - Class Y Sub-Account, the Morgan
Stanley VIS Information - Class Y Sub-Account, the Morgan Stanley VIS
Utilities - Class Y Sub-Account, the Putnam VT Growth and Income - Class IB
Sub-Account and the Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
are no longer available for new investments. If you are currently invested in
these Variable Sub-Accounts, you may continue your investments. If prior to
May 1, 2005, you enrolled in one of our automatic transaction programs, such
as automatic additions, portfolio rebalancing or dollar cost averaging, we
will continue to effect automatic transactions to these Variable Sub-Accounts
in accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed. If you choose to add
this TrueReturn Option on or after May 1, 2005, you must transfer any portion
of your Contract Value that is allocated to these Variable Sub-Accounts to any
of the remaining Variable Sub-Accounts available with the TrueReturn Option
prior to adding the TrueReturn Option to your Contract.
2) The Variable Sub-Account was first offered under the Contracts on April 30,
2005.
3) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
28 PROSPECTUS
4) Effective December 30, 2004, the Morgan Stanley VIS European Growth Portfolio
- Class Y, changed its name to the Morgan Stanley VIS European Equity
Portfolio - Class Y. We have made a corresponding change to the name of the
Variable Sub-Account that invests in this Portfolio.
5) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio - Class
B and the AllianceBernstein Small Cap Value Portfolio - Class B changed their
names to the AllianceBernstein Large Cap Growth Portfolio - Class B and the
AllianceBernstein Small/ Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
6) Effective April 29, 2005, the Morgan Stanley VIS Quality Income Plus
Portfolio-Class Y changed its name to Morgan Stanley VIS Income Plus Portfolio
- Class Y. We have made a corresponding change to the name of the Variable
Sub-Account that invests in this Portfolio.
7) The Putnam VT Investors - Class IB Sub-Account was only offered with
Contracts issued prior to May 1, 2004, and is no longer available for new
investments. If you invested in the Variable Sub-Account that invests in this
Portfolio prior to May 1, 2004, you may continue your investment. If prior to
May 1, 2004, you enrolled in one of our automatic transaction programs, such
as automatic additions, portfolio rebalancing or dollar cost averaging, we
will continue to effect automatic transactions to this Variable Sub-Account in
accordance with that program. Outside of these automatic transaction programs,
additional allocations will not be allowed. On or after May 1, 2004, you must
transfer any portion of your Contract Value that is allocated to this Variable
Sub-Account to any of the remaining Variable Sub-Accounts available with
TrueReturn Option prior to adding the TrueReturn Option to your Contract.
MODEL PORTFOLIO OPTION 2 (RIDER DATE ON OR AFTER OCTOBER 1, 2004)
If your TrueReturn Option Rider Date is on or after October 1, 2004, and you
choose Model Portfolio Option 2 or transfer your entire Contract Value into
Model Portfolio Option 2, you may allocate your Contract Value among any of a
selected group of available Variable Sub-Accounts listed below. However, you may
not allocate your Contract Value among any of the excluded Variable Sub-Accounts
listed below. You may choose to invest in or transfer among any of the available
Variable Sub-Accounts. However, each transfer you make will count against the 12
transfers you can make each Contract Year without paying a transfer fee.
The following table lists the available and excluded Variable Sub-Accounts under
Model Portfolio Option 2(Rider Date on or after October 1, 2004)(1):
AVAILABLE
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS Equity - Class Y Sub-Account
Morgan Stanley VIS Global Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS High Yield - Class Y Sub-Account(1)
Morgan Stanley VIS Income Builder - Class Y Sub-Account(1)
Morgan Stanley VIS Income Plus - Class Y Sub-Account(6)
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
Morgan Stanley VIS Money Market - Class Y Sub-Account
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account
Morgan Stanley VIS Strategist - Class Y Sub-Account
Morgan Stanley VIS Utilities - Class Y Sub-Account(1)
AIM V.I. Basic Value - Series II Sub-Account(1)
AIM V.I. Premier Equity - Series II Sub-Account(1)
AllianceBernstein Growth - Class B Sub-Account
AllianceBernstein Growth and Income - Class B Sub-Account(1)
AllianceBernstein International Value - Class B Sub-Account(2)
AllianceBernstein Small/Mid Cap Value - Class B Sub-Account(5)
AllianceBernstein Utility Income - Class B Sub-Account(2)
AllianceBernstein Value - Class B Sub-Account(2)
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account(2)
Fidelity VIP Growth & Income - Service Class 2 Sub-Account(2)
Fidelity VIP High Income - Service Class 2 Sub-Account(2)
Fidelity VIP Mid Cap - Service Class 2 Sub-Account(2)
FTVIP Franklin Flex Cap Growth Securities - Class 2
Sub-Account(2)
FTVIP Franklin High Income - Class 2 Sub-Account(1)
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account(2)
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account(2)
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account(2)
Goldman Sachs VIT Growth and Income Sub-Account(2)
Goldman Sachs VIT Mid Cap Value Sub-Account(2)
Putnam VT Growth and Income - Class IB Sub-Account(1)
Putnam VT International Equity - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account(2)
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(1)
Van Kampen UIF Emerging Markets Equity, Class II Sub-Account(3)
Van Kampen UIF Equity and Income, Class II Sub-Account(3)
Van Kampen UIF Global Franchise, Class II Sub-Account(3)
Van Kampen UIF Mid Cap Growth, Class II Sub-Account(3)
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(3)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(3)
EXCLUDED
Morgan Stanley VIS Aggressive Equity - Class Y Sub-Account
Morgan Stanley VIS European Equity - Class Y Sub-Account(4)
Morgan Stanley VIS Global Advantage - Class Y Sub-Account(1)
Morgan Stanley VIS Information - Class Y Sub-Account(1)
AIM V.I. Capital Appreciation - Series II Sub-Account(1)
AIM V.I. Mid Cap Core Equity - Series II Sub-Account(1)
AllianceBernstein Large Cap Growth - Class B Sub-Account(1,5)
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class II Sub-Account(3)
Van Kampen UIF Small Company Growth, Class II Sub-Account
29 PROSPECTUS
1) The Putnam VT Investors - Class IB Sub-Account was only offered with
Contracts issued prior to May 1, 2004, closed to new investments effective May
1, 2004, and is not available with this TrueReturn Option. On or after May 1,
2004, you must transfer any portion of your Contract Value that is allocated
to this Variable Sub-Account to any of the remaining Variable Sub-Accounts
available with this TrueReturn Option prior to adding the TrueReturn Option to
your Contract. Effective May 1, 2005, the AIM V.I. Basic Value - Series II
Sub-Account, the AIM V.I. Capital Appreciation - Series II Sub-Account, the
AIM V.I. Mid Cap Core Equity - Series II Sub-Account, the AIM V.I. Premier
Equity - Series II Sub-Account, the AllianceBernstein Growth and Income -
Class B Sub-Account, the AllianceBernstein Large Cap Growth - Class B
Sub-Account (formerly AllianceBernstein Premier Growth - Class B Sub-Account),
the FTVIP Franklin High Income - Class 2 Sub-Account, the Morgan Stanley VIS
Global Advantage - Class Y Sub-Account, the Morgan Stanley VIS High Yield -
Class Y Sub-Account, the Morgan Stanley VIS Income Builder - Class Y
Sub-Account, the Morgan Stanley VIS Information - Class Y Sub-Account, the
Morgan Stanley VIS Utilities - Class Y Sub-Account, the Putnam VT Growth and
Income - Class IB Sub-Account and the Van Kampen UIF Emerging Markets Debt,
Class II Sub-Account are no longer available for new investments. If you are
currently invested in these Variable Sub-Accounts, you may continue your
investments. If prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing or
dollar cost averaging, we will continue to effect automatic transactions to
these Variable Sub-Accounts in accordance with that program. Outside of these
automatic transaction programs, additional allocations will not be allowed. If
you choose to add this TrueReturn Option on or after May 1, 2005, you must
transfer any portion of your Contract Value that is allocated to these
Variable Sub-Accounts to any of the remaining Variable Sub-Accounts available
with the TrueReturn Option prior to adding the TrueReturn Option to your
Contract.
2) The Variable Sub-Account was first offered under the Contracts on April 30,
2005.
3) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
4) Effective December 30, 2004, the Morgan Stanley VIS European Growth Portfolio
- Class Y, changed its name to the Morgan Stanley VIS European Equity
Portfolio - Class Y. We have made a corresponding change to the name of the
Variable Sub-Account that invests in this Portfolio.
5) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio - Class
B and the AllianceBernstein Small Cap Value Portfolio - Class B changed their
names to the AllianceBernstein Large Cap Growth Portfolio - Class B and the
AllianceBernstein Small/ Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
6) Effective April 29, 2005, the Morgan Stanley VIS Quality Income Plus
Portfolio-Class Y changed its name to Morgan Stanley VIS Income Plus Portfolio
- Class Y. We have made a corresponding change to the name of the Variable
Sub-Account that invests in this Portfolio.
TRUEBALANCE/SM/ MODEL PORTFOLIO OPTIONS.
If you choose one of the TrueBalance/SM/ Model Portfolio Options or transfer
your entire Contract Value into one of the TrueBalance/SM/ Model Portfolio
Options, you may not choose the Variable Sub-Accounts or make transfers among
the Variable Sub-Accounts in the TrueBalance Model Portfolio Option. Each
TrueBalance Model Portfolio involves an allocation of assets among a group of
pre-selected Variable Sub-Accounts. You cannot make transfers among the Variable
Sub-Accounts nor vary the Variable Sub-Accounts that comprise a TrueBalance
Model Portfolio Option. If you choose a TrueBalance Model Portfolio Option, we
will invest and periodically reallocate your Contract Value according to the
allocation percentages and requirements for the TrueBalance Model Portfolio
Option you have selected currently. For more information regarding the
TrueBalance program, see the "TrueBalance/SM/ Asset Allocation Program" section
of this prospectus. However, note that the restrictions described in this
section, specifically the restrictions on transfers and the requirement that all
of your Contract Value be allocated to a TrueBalance Model Portfolio Option,
apply to the TrueBalance program only if you have added the TrueReturn Option to
your Contract.
Please note only certain TrueBalance Model Portfolio Options are available with
your TrueReturn Option as summarized in the table under Investment Requirements
above.
CANCELLATION OF THE TRUERETURN OPTION.
You may not cancel the TrueReturn Option or make transfers, changes to your
investment allocations, or changes to the Automatic Portfolio Rebalancing
Program that are inconsistent with the investment restrictions applicable to
your Guarantee Option and/or Model Portfolio Option prior to the 5th Rider
Anniversary. On or after the 5th Rider Anniversary, we will cancel the
TrueReturn Option if you make transfers, changes to your investment allocations,
or changes to the Automatic Portfolio Rebalancing Program that are inconsistent
with the investment restrictions applicable to your Guarantee Option and/or
Model Portfolio Option. We will not cancel the TrueReturn Option or make any
changes to your investment allocations or to the Automatic Portfolio Rebalancing
Program that are inconsistent with the
30 PROSPECTUS
investment restrictions applicable to your Guarantee Option until we receive
notice from you that you wish to cancel the TrueReturn Option. No Accumulation
Benefit will be paid if you cancel the Option prior to the Rider Maturity Date.
DEATH OF OWNER OR ANNUITANT.
If the Contract Owner or Annuitant dies before the Rider Maturity Date and the
Contract is continued under Option D, as described on page 68, of the Death of
Owner or Death of Annuitant provision of your Contract, then the TrueReturn
Option will continue, unless the new Contract Owner elects to cancel this
Option. If the TrueReturn Option is continued, it will remain in effect until
terminated. If the Contract is not continued under Option D, then the TrueReturn
Option will terminate on the date we receive a Complete Request for Settlement
of the Death Proceeds.
RIDER TRADE-IN OPTION.
We offer a "RIDER TRADE-IN OPTION" that allows you to cancel your TrueReturn
Option and immediately add a new TrueReturn Option ("NEW OPTION"), provided all
of the following conditions are met:
.. The trade-in must occur on or after the 5th Rider Anniversary and prior to the
Rider Maturity Date. We reserve the right to extend the date at which time the
trade-in may occur to up to the 10th anniversary of the Rider Date at any time
in our sole discretion. Any change we make will not apply to a TrueReturn
Option that was added to your Contract prior to the implementation date of the
change.
.. The New Option will be made a part of your Contract on the date the existing
TrueReturn Option is cancelled, provided it is cancelled for reasons other
than the termination of your Contract.
.. The New Option must be a TrueReturn Option that we make available for use with
the Rider Trade-In Option.
.. The issue requirements and terms and conditions of the New Option must be met
as of the date the New Option is made a part of your Contract.
For example, if you trade-in your TrueReturn Option:
.. the new Rider Fee will be based on the Rider Fee percentage applicable to a
new TrueReturn Option at the time of trade-in;
.. the Benefit Base for the New Option will be based on the Contract Value as of
the new Rider Date;
.. the AB Factor will be determined by the Rider Periods and Guarantee Options
available with the New Option;
.. the Model Portfolio Options will be determined by the Model Portfolio Options
offered with the Guarantee Options available with the New Option;
.. any waiting period for canceling the New Option will start again on the new
Rider Date;
.. any waiting period for exercising the Rider Trade-In Option will start again
on the new Rider Date; and
.. the terms and conditions of the Rider Trade-In Option will be according to the
requirements of the New Option.
Currently, we are also making the SureIncome Option available at the time of
your first utilization of this TrueReturn Rider Trade-In Option. We may
discontinue offering the SureIncome Option under the Rider Trade-In Option for
new TrueReturn Options added in the future at anytime at our discretion. You may
cancel your TrueReturn Option and immediately add a new SureIncome Option,
provided all of the following conditions are met:
.. The trade-in must occur on or after the 5th Rider Anniversary and prior to the
Rider Maturity Date. We reserve the right to extend the date at which time the
trade-in may occur to up to the 10th anniversary of the Rider Date at any time
in our sole discretion. Any change we make will not apply to a TrueReturn
Option that was added to your Contract prior to the implementation date of the
change.
.. The new SureIncome Option will be made a part of your Contract on the date the
existing TrueReturn Option is cancelled, provided it is cancelled for reasons
other than the termination of your Contract.
.. The new SureIncome Option must be a SureIncome Option that we make available
for use with this Rider Trade-In Option.
.. The issue requirements and terms and conditions of the new SureIncome Option
must be met as of the date the new SureIncome Option is made a part of your
Contract.
You should consult with your Morgan Stanley Financial Advisor before trading in
your TrueReturn Option.
TERMINATION OF THE TRUERETURN OPTION.
The TrueReturn Option will terminate on the earliest of the following to occur:
.. on the Rider Maturity Date;
.. on the Payout Start Date;
.. on the date your Contract is terminated;
.. on the date the Option is cancelled;
.. on the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. on the date the Option is replaced with a New Option under the Rider Trade-In
Option.
We will not pay an Accumulation Benefit if the TrueReturn Option is terminated
for any reason prior to the Rider Maturity Date.
31 PROSPECTUS
SUREINCOME WITHDRAWAL BENEFIT OPTION
We offer the SureIncome Withdrawal Benefit Option which is available for an
additional fee. The SureIncome Option provides a guaranteed withdrawal benefit
that gives you the right to take limited partial withdrawals that total an
amount equal to your purchase payments (subject to certain restrictions).
Therefore, regardless of the subsequent fluctuations in the value of your
Contract Value, you are entitled to a Benefit Payment each Benefit Year until
your Benefit Base is exhausted (terms defined below).
The SureIncome Option guarantees an amount up to the "BENEFIT PAYMENT REMAINING"
which will be available for withdrawal from the Contract each "BENEFIT YEAR"
until the "BENEFIT BASE" (defined below) is reduced to zero. If the Contract
Value is reduced to zero and the Benefit Base is still greater than zero, we
will distribute an amount equal to the Benefit Base to the Contract owner as
described below under the "WITHDRAWAL BENEFIT PAYOUT PHASE".
For purposes of the SureIncome Option, "withdrawal" means the gross amount of a
withdrawal before any applicable charges such as withdrawal charges, fees, taxes
or adjustments including any applicable Market Value Adjustments and surrender
charges. Under the SureIncome Option, we do not treat a withdrawal that reduces
the Contract Value to less than $1,000 as a withdrawal of the entire Contract
Value.
The "RIDER DATE" is the date the SureIncome Option was made a part of your
Contract. The initial Benefit Year is the period between the Rider Date and the
first Contract Anniversary after the Rider Date. Each subsequent Benefit Year
will coincide with (the same as) the Contract Year.
The SureIncome Option is available at issue of the Contract, or may be added
later, subject to availability and issue requirements. You may not add the
SureIncome Option to your Contract after Contract issue without our prior
approval if your Contract Value is greater than $1,000,000 at the time you
choose to add the SureIncome Option. Currently, you may have only one SureIncome
Option in effect on your Contract at one time. You may only have one of the
following in effect on your Contract at the same time: a SureIncome Option, a
TrueReturn Option, or a Retirement Income Guarantee Option. The SureIncome
Option is only available if the oldest Contract Owner and oldest Annuitant are
age 80 or younger on the effective date of the Rider (the "Rider Application
Date") (The maximum age may depend on your state). The SureIncome Option is not
available to be added to a Contract categorized as a Tax Sheltered Annuity as
defined under Internal Revenue Code Section 403(b) at this time. We reserve the
right to make the SureIncome Option available to such Contracts on a
nondiscriminatory basis in the future at our discretion. Once added to your
Contract, the SureIncome Option may be cancelled at any time on or after the 5th
calendar year anniversary of the Rider Date by notifying us in writing in a form
satisfactory to us.
The SureIncome Option may not be available in all states. We may discontinue
offering the SureIncome Option at any time to new Contract Owners and to
existing Contract Owners who did not elect the SureIncome Option prior to the
date of discontinuance.
WITHDRAWAL BENEFIT FACTOR
The "WITHDRAWAL BENEFIT FACTOR" is used to determine the "BENEFIT PAYMENT" and
Benefit Payment Remaining. We currently offer a Withdrawal Benefit Factor equal
to 8%. We reserve the right to make other Withdrawal Benefit Factors available
in the future for new SureIncome Options and/or to eliminate the current
Withdrawal Benefit Factor. Once a Withdrawal Benefit Factor has been established
for a SureIncome Option, it cannot be changed after the Rider Date unless that
SureIncome Option is terminated.
BENEFIT PAYMENT AND BENEFIT PAYMENT REMAINING
The Benefit Payment is the amount available at the beginning of each Benefit
Year that you may withdraw during that Benefit Year. The Withdrawal Benefit
Factor and the Benefit Base are used to determine your Benefit Payment. The
Benefit Payment Remaining is the amount remaining after any previous withdrawals
in a Benefit Year that you may withdraw without reducing your Benefit Base by
more than the amount of the withdrawal and without reducing your Benefit Payment
available in future Benefit Years. Please note that any premiums or withdrawals
made on a Contract Anniversary would be applied to the Benefit Year that just
ended on that Contract Anniversary.
The Benefit Payment Remaining is equal to the Benefit Payment at the beginning
of each Benefit Year.
During each Benefit Year the Benefit Payment Remaining will be increased by
purchase payments multiplied by the Withdrawal Benefit Factor (currently 8% for
new SureIncome Options) and reduced by the amount of each withdrawal. The
Benefit Payment Remaining will never be less than zero.
On the Rider Date, the Benefit Payment is equal to the greater of:
.. The Contract Value multiplied by the Withdrawal Benefit Factor (currently 8%
for new SureIncome Options); or
.. The value of the Benefit Payment of the previous Withdrawal Benefit Option
(attached to your Contract) which is being terminated under a rider trade-in
option (see "Rider Trade-In Option" below for more information), if
applicable.
After the Rider Date, the Benefit Payment will be increased by purchase payments
multiplied by the
32 PROSPECTUS
Withdrawal Benefit Factor and affected by withdrawals as follows:
If the withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Payment is unchanged.
If the withdrawal is greater than the Benefit Payment Remaining in effect
immediately prior to the withdrawal, the Benefit Payment will be the lesser of:
.. The Benefit Payment immediately prior to the withdrawal; or
.. the Contract Value immediately prior to withdrawal less the amount of the
withdrawal, multiplied by the Withdrawal Benefit Factor.
At our discretion, the Benefit Payment available during a Benefit Year may be
increased on a nondiscriminatory basis and without prior notice in order to
satisfy IRS minimum distribution requirements on the Contract under which this
Option has been elected. We are currently not increasing the Benefit Payment
available to satisfy IRS minimum distribution requirements.
BENEFIT BASE
The Benefit Base is not available as a Contract Value or Settlement Value. The
Benefit Base is used solely to help calculate the Rider Fee, the amount that may
be withdrawn and payments that may be received under the SureIncome Option. On
the Rider Date, the Benefit Base is equal to the Contract Value. After the Rider
Date, the Benefit Base will be increased by purchase payments and decreased by
withdrawals as follows:
.. If the withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Base will be reduced
by the amount of the withdrawal.
If the withdrawal is greater than the Benefit Payment Remaining in effect
immediately prior to the withdrawal, the Benefit Base will be the lesser of:
.. The Contract Value immediately prior to withdrawal less the amount of the
withdrawal; or
.. The Benefit Base immediately prior to withdrawal less the amount of the
withdrawal.
The Benefit Base may also be reduced in other situations as detailed in the
"Owner and Assignment of Payments or Interest" section below.
IF THE BENEFIT BASE IS REDUCED TO ZERO, THIS SUREINCOME OPTION WILL TERMINATE.
For numerical examples that illustrate how the values defined under the
SureIncome Option are calculated, see Appendix H.
CONTRACT OWNER AND ASSIGNMENT OF PAYMENTS OR INTEREST
If you change the Contract Owner or assign any payments or interest under this
Contract, as allowed, to any living or non-living person other than your spouse
on or after the first calendar year anniversary of the Rider Date, the Benefit
Base will be recalculated to be the lesser of the Contract Value and the Benefit
Base at the time of assignment.
CONTRACT VALUE
If your Contract Value is reduced to zero due to fees or withdrawals and your
Benefit Base is still greater than zero, your Contract will immediately enter
the Withdrawal Benefit Payout Phase.
Under the SureIncome Option, we currently do not treat a withdrawal that reduces
the Contract Value to less than $1,000 as a withdrawal of the entire Contract
Value. We reserve the right to change this at any time.
WITHDRAWAL BENEFIT PAYOUT PHASE
Under the Withdrawal Benefit Payout Phase, the Accumulation Phase of the
Contract ends and the Contract enters the Payout Phase subject to the following:
The "WITHDRAWAL BENEFIT PAYOUT START DATE" is the date the Withdrawal Benefit
Payout Phase is entered and the Accumulation Phase of the Contract ends.
No further withdrawals, purchase payments or any other actions associated with
the Accumulation Phase can be made after the Withdrawal Benefit Payout Start
Date.
The Payout Start Date is the first day of the next Benefit Year after the
Withdrawal Benefit Payout Start Date. We reserve the right to allow other Payout
Start Dates to be requested on a nondiscriminatory basis without prior notice.
During the Withdrawal Benefit Payout Phase, we will make scheduled fixed income
payments to the Owner (or new Contract Owner) at the end of each month starting
one month after the Payout Start Date. The amount of each payment will be equal
to the Benefit Payment divided by 12, unless a payment frequency other than
monthly is requested in a form acceptable to us and received by us before the
first payment is made (the amount of each payment will be adjusted accordingly;
i.e. if the payment frequency requested is quarterly, the amount of each payment
will be equal to the Benefit Payment divided by 4). Payments will be made over a
period certain such that total payments made will equal the Benefit Base on the
Payout Start Date; therefore, the final payment may be reduced. If your Contract
is a qualified contract, meaning an individual retirement annuity qualified as
defined under Internal Revenue Code Section 408(b) or a Tax Sheltered Annuity as
defined under Internal Revenue Code Section 403(b), the period certain cannot
exceed that which is required by Internal Revenue Code Section 401(a)(9) and
regulations promulgated thereunder. Therefore, the amount of each payment under
this Option may be larger so that the sum of the payments made over this period
equals the Benefit Base on the Payout Start Date. Additionally, if your
33 PROSPECTUS
Contract is a qualified contract, we will not permit a change in the payment
frequency or level.
If your Contract is a non-qualified contract, we reserve the right to allow
other payment frequencies or levels to be requested on a nondiscriminatory basis
without prior notice. In no event will we allow more than one change in the
payment frequency or level during a Contract Year.
If the Owner dies before all payments have been made, the remaining payments
will continue to be made to the new Contract Owner as scheduled.
Once all scheduled payments have been paid, the Contract will terminate.
Generally, you may not make withdrawals, purchase payments or any other actions
associated with the Accumulation Phase after the Withdrawal Benefit Payout Start
Date.
EXAMPLE
BEGINNING OF BENEFIT YEAR 1*
Contract Value = $100,000
Benefit Base = $100,000
Benefit Payment = $8,000
Benefit Payment Remaining = $8,000
In this example, you can take a Benefit Payment of up to $8,000 in Benefit Year
1. If a withdrawal of $6,000 is taken then the following values would apply:
Contract Value = $94,000 (Assuming that your Contract Value has not been
affected by any other factors)
Benefit Base = $94,000
Benefit Payment = $8,000
Benefit Payment Remaining = $2,000
BEGINNING OF BENEFIT YEAR 2
Contract Value = $70,000 (Assuming that your contract value has declined due to
poor performance)
Benefit Base = $94,000
Benefit Payment = $8,000
Benefit Payment Remaining = $8,000 (resets at the beginning of each benefit
year)
In Benefit Year 2 you have the right to a Benefit Payment of $8,000 and since
you have not taken any withdrawals yet in Benefit Year 2, the Benefit Payment
Remaining would also be $8,000 at the beginning of Benefit Year 2.
*This example assumes an initial Contract Value of $100,000, no additional
purchase payments, a withdrawal benefit factor of 8% and does not take into
account fees or charges.
INVESTMENT REQUIREMENTS
If you add the SureIncome Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest. The
specific requirements are described below and will depend on the Model Portfolio
Option you have selected currently and your Withdrawal Benefit Factor. These
requirements may include, but are not limited to, maximum investment limits on
certain Variable Sub-Accounts or on certain Fixed Account Options, exclusion of
certain Variable Sub-Accounts or of certain Fixed Account Options, required
minimum allocations to certain Variable Sub-Accounts, and restrictions on
transfers to or from certain investment alternatives. We may also require that
you use the Automatic Portfolio Rebalancing Program. We may change the specific
requirements that are applicable at any time in our sole discretion. Any changes
we make will not apply to a SureIncome Option that was made a part of your
Contract prior to the implementation date of the change, except for changes made
due to a change in investment alternatives available under the Contract. This
restriction does not apply to a new Option elected pursuant to the Rider
Trade-In Option. We reserve the right to have requirements unique to specific
Withdrawal Benefit Factors if we make other Withdrawal Benefit Factors available
in the future including specific model portfolio options ("Model Portfolio
Options"), as described below, available only to certain Withdrawal Benefit
Factors.
When you add the SureIncome Option to your Contract, you must allocate your
entire Contract Value as follows:
1) to a MODEL PORTFOLIO OPTION available as defined below;
2) to the DCA Fixed Account Option and then transfer all purchase payments and
interest to an available Model Portfolio Option; or
3) to a combination of (1) and (2) above.
For (2) and (3) above, the requirements for the DCA Fixed Account Option must be
met. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information.
On the Rider Date, you must select only one of the Model Portfolio Options in
which to allocate your Contract Value. After the Rider Date, you may transfer
your entire Contract Value to any of the other available Model Portfolio
Options. We currently offer several Model Portfolio Options. The Model Portfolio
Options that are available may differ depending upon the effective date of your
Withdrawal Benefit Option and your Withdrawal Benefit Factor. Please refer to
the Model Portfolio Option and TrueBalance/SM/ Model Portfolio Options sections
for more details. We may add other Model Portfolio Options in the future. We
also may remove Model Portfolio Options in the future anytime prior to the date
you select such Model Portfolio Option. In addition, if the investment
alternatives available under the Contract change, we may revise the Model
Portfolio
34 PROSPECTUS
Options. The following table summarizes the Model Portfolio Options currently
available for use:
* Model Portfolio Option 1
* TrueBalance Conservative Model Portfolio Option
* TrueBalance Moderately Conservative Model Portfolio Option
* TrueBalance Moderate Model Portfolio Option
* TrueBalance Moderately Aggressive Model Portfolio Option
* TrueBalance Aggressive Model Portfolio Option
- -------------------------------------------------------------
You may not allocate any of your Contract Value to the Standard Fixed Account
Option or to the Market Value Adjusted Fixed Account Option. You must transfer
any portion of your Contract Value that is allocated to the Standard Fixed
Account Option or to the Market Value Adjusted Fixed Account Option to the
Variable Sub-Accounts prior to adding the SureIncome Option to your Contract.
Transfers from the Market Value Adjusted Fixed Account Option may be subject to
a Market Value Adjustment. You may allocate any portion of your purchase
payments to the DCA Fixed Account Option on the Rider Date, provided the DCA
Fixed Account Option is available with your Contract and in your state. See the
"Dollar Cost Averaging Fixed Account Option" section of this prospectus for more
information. We use the term "Transfer Period Account" to refer to each purchase
payment allocation made to the DCA Fixed Account Option for a specified term
length. At the expiration of a Transfer Period Account any remaining amounts in
the Transfer Period Account will be transferred to the Variable Sub-Accounts
according to your most recent percentage allocation for your Model Portfolio
Option.
Any subsequent purchase payments made to your Contract will be allocated to the
Variable Sub-Accounts according to your specific instructions or your allocation
for the previous purchase payment (for Model Portfolio Option 1) or the
percentage allocations for your current Model Portfolio Option (for TrueBalance
Model Portfolio Options) unless you request that the purchase payment be
allocated to the DCA Fixed Account Option. Purchase payments allocated to the
DCA Fixed Account Option must be $500 or more. Any withdrawals you request will
reduce your Contract Value invested in each of the investment alternatives on a
pro rata basis in the proportion that your Contract Value in each bears to your
total Contract Value in all Variable Sub-Accounts, unless you request otherwise.
MODEL PORTFOLIO OPTION 1.
If you choose Model Portfolio Option 1 or transfer your entire Contract Value
into Model Portfolio Option 1, we have divided the Variable Sub-Accounts into
two separate categories: "Available," and "Excluded." Currently, you may
allocate up to 100% of your Contract Value to the Available Variable
Sub-Accounts in any manner you choose. You may not allocate ANY PORTION of your
Contract Value to the Excluded Variable Sub-Accounts. You may make transfers
among any of the Available Variable Sub-Accounts. However, each transfer you
make will count against the 12 transfers you can make each Contract Year without
paying a transfer fee.
Currently the Available Variable Sub-Accounts and the Excluded Variable
Sub-Accounts are as follows (1):
AVAILABLE
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS Equity - Class Y Sub-Account
Morgan Stanley VIS Global Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS High Yield - Class Y Sub-Account(1)
Morgan Stanley VIS Income Builder - Class Y Sub-Account(1)
Morgan Stanley VIS Income Plus - Class Y Sub-Account(6)
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
Morgan Stanley VIS Money Market - Class Y Sub-Account
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account
Morgan Stanley VIS Strategist - Class Y Sub-Account
Morgan Stanley VIS Utilities - Class Y Sub-Account(1)
AIM V.I. Basic Value - Series II Sub-Account(1)
AIM V.I. Premier Equity - Series II Sub-Account(1)
AllianceBernstein Growth - Class B Sub-Account
AllianceBernstein Growth and Income - Class B Sub-Account(1)
AllianceBernstein International Value - Class B Sub-Account(2)
AllianceBernstein Small/Mid Cap Value - Class B Sub-Account(5)
AllianceBernstein Utility Income - Class B Sub-Account(2)
AllianceBernstein Value - Class B Sub-Account(2)
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account(2)
Fidelity VIP Growth & Income - Service Class 2 Sub-Account(2)
Fidelity VIP High Income - Service Class 2 Sub-Account(2)
Fidelity VIP Mid Cap - Service Class 2 Sub-Account(2)
FTVIP Franklin Flex Cap Growth Securities - Class 2
Sub-Account(2)
FTVIP Franklin High Income - Class 2 Sub-Account(1)
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account(2)
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account(2)
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account(2)
Goldman Sachs VIT Growth and Income Sub-Account(2)
Goldman Sachs VIT Mid Cap Value Sub-Account(2)
Putnam VT Growth and Income - Class IB Sub-Account(1)
Putnam VT International Equity - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account(2)
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(1)
Van Kampen UIF Emerging Markets Equity, Class II Sub-Account(3)
Van Kampen UIF Equity and Income, Class II Sub-Account(3)
Van Kampen UIF Global Franchise, Class II Sub-Account(3)
Van Kampen UIF Mid Cap Growth, Class II Sub-Account(3)
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(3)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(3)
EXCLUDED
Morgan Stanley VIS Aggressive Equity - Class Y Sub-Account
Morgan Stanley VIS European Equity - Class Y Sub-Account(4)
Morgan Stanley VIS Global Advantage - Class Y Sub-Account(1)
Morgan Stanley VIS Information - Class Y Sub-Account(1)
AIM V.I. Capital Appreciation - Series II Sub-Account(1)
AIM V.I. Mid Cap Core Equity - Series II Sub-Account(1)
AllianceBernstein Large Cap Growth - Class B Sub-Account(1,5)
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class II Sub-Account(3)
Van Kampen UIF Small Company Growth, Class II Sub-Account
35 PROSPECTUS
1) The Putnam VT Investors - Class IB Sub-Account was only offered with
Contracts issued prior to May 1, 2004, closed to new investments effective May
1, 2004, and is not available with the SureIncome Option. On or after May 1,
2004, you must transfer any portion of your Contract Value that is allocated
to this Variable Sub-Account to any of the remaining Variable Sub-Accounts
available with SureIncome Option prior to adding the SureIncome Option to your
Contract. Effective May 1, 2005, the AIM V.I. Basic Value - Series II
Sub-Account, the AIM V.I. Capital Appreciation - Series II Sub-Account, the
AIM V.I. Mid Cap Core Equity - Series II Sub-Account, the AIM V.I. Premier
Equity - Series II Sub-Account, the AllianceBernstein Growth and Income -
Class B Sub-Account, the AllianceBernstein Large Cap Growth - Class B
Sub-Account (formerly AllianceBernstein Premier Growth - Class B Sub-Account),
the FTVIP Franklin High Income - Class 2 Sub-Account, the Morgan Stanley VIS
Global Advantage - Class Y Sub-Account, the Morgan Stanley VIS High Yield -
Class Y Sub-Account, the Morgan Stanley VIS Income Builder - Class Y
Sub-Account, the Morgan Stanley VIS Information - Class Y Sub-Account, the
Morgan Stanley VIS Utilities - Class Y Sub-Account, the Putnam VT Growth and
Income - Class IB Sub-Account and the Van Kampen UIF Emerging Markets Debt,
Class II Sub-Account are no longer available for new investments. If you are
currently invested in these Variable Sub-Accounts, you may continue your
investments. If prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing or
dollar cost averaging, we will continue to effect automatic transactions to
these Variable Sub-Accounts in accordance with that program. Outside of these
automatic transaction programs, additional allocations will not be allowed. If
you choose to add the SureIncome Option on or after May 1, 2005, you must
transfer any portion of your Contract Value that is allocated to these
Variable Sub-Accounts to any of the remaining Variable Sub-Accounts available
with the SureIncome Option prior to adding the SureIncome Option to your
Contract.
2) The Variable Sub-Account was first offered under the Contracts on April 30,
2005.
3) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
4) Effective December 30, 2004, the Morgan Stanley VIS European Growth Portfolio
- Class Y, changed its name to the Morgan Stanley VIS European Equity
Portfolio - Class Y. We have made a corresponding change to the name of the
Variable Sub-Account that invests in that Portfolio.
5) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio - Class
B and the AllianceBernstein Small Cap Value Portfolio - Class B changed their
names to the AllianceBernstein Large Cap Growth Portfolio - Class B and the
AllianceBernstein Small/ Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
6) Effective April 29, 2005, the Morgan Stanley VIS Quality Income Plus
Portfolio-Class Y changed its name to Morgan Stanley VIS Income Plus Portfolio
- Class Y. We have made a corresponding change to the name of the Variable
Sub-Account that invests in that Portfolio.
TRUEBALANCE/SM/ MODEL PORTFOLIO OPTIONS.
If you choose one of the TrueBalance/SM/ Model Portfolio Options or transfer
your entire Contract Value into one of the TrueBalance/SM/ Model Portfolio
Options, you may not choose the Variable Sub-Accounts or make transfers among
the Variable Sub-Accounts in the TrueBalance Model Portfolio Option. Each
TrueBalance Model Portfolio involves an allocation of assets among a group of
pre-selected Variable Sub-Accounts. You cannot make transfers among the Variable
Sub-Accounts nor vary the Variable Sub-Accounts that comprise a TrueBalance
Model Portfolio Option. If you choose a TrueBalance Model Portfolio Option, we
will invest and periodically reallocate your Contract Value according to the
allocation percentages and requirements for the TrueBalance Model Portfolio
Option you have selected currently. For more information regarding the
TrueBalance program, see the "TrueBalance/SM/ Asset Allocation Program" section
of this prospectus. However, note that the restrictions described in this
section, specifically the restrictions on transfers and the requirement that all
of your Contract Value be allocated to a TrueBalance Model Portfolio Option,
apply to the TrueBalance program only if you have added the SureIncome Option to
your Contract.
CANCELLATION OF THE SUREINCOME OPTION
You may not cancel the SureIncome Option prior to the 5th calendar year
anniversary of the Rider Date. On or after the 5th calendar year anniversary of
the Rider Date you may cancel the rider by notifying us in writing in a form
satisfactory to us. We reserve the right to extend the date at which time the
cancellation may occur to up to the 10th calendar year anniversary of the Rider
Date at any time in our sole discretion. Any change we make will not apply to a
SureIncome Option that was added to your Contract prior to the implementation
date of the change.
RIDER TRADE-IN OPTION
We offer a "RIDER TRADE-IN OPTION" that allows you to cancel your SureIncome
Option and immediately add a new Withdrawal Benefit Option ("New SureIncome
Option"). We may also offer other Options ("Other New Options") under the Rider
Trade-In Option. However, you may only select one Option under this Rider
Trade-In Option at the time you cancel your SureIncome Option. Currently, we are
also making the TrueReturn
36 PROSPECTUS
Accumulation Benefit Option available at the time of your first utilization of
this Rider Trade-In Option so that you have the ability to switch from the
SureIncome Option to the TrueReturn Accumulation Benefit Option. We may
discontinue offering the TrueReturn Option under the Rider Trade-In Option for
New SureIncome Options added in the future at anytime at our discretion.
This Rider Trade-in Option is available provided all of the following conditions
are met:
.. The trade-in must occur on or after the 5th calendar year anniversary of the
Rider Date. We reserve the right to extend the date at which time the trade-in
may occur to up to the 10th calendar year anniversary of the Rider Date at any
time in our sole discretion. Any change we make will not apply to a SureIncome
Option that was added to your Contract prior to the implementation date of the
change.
.. The New Option will be made a part of your Contract on the date the existing
Option is cancelled, provided it is cancelled for reasons other than the
termination of your Contract.
.. The New Option must be an Option that we make available for use with this
Rider Trade-In Option.
.. The issue requirements and terms and conditions of the New Option must be met
as of the date the New Option is made a part of your Contract.
If the New Option is a SureIncome Option, the New Option must provide that the
new Benefit Payment be greater than or equal to your current Benefit Payment as
of the date the Rider Trade-In Option is exercised, if applicable.
You should consult with your sales representative before trading in your
SureIncome Option.
DEATH OF OWNER OR ANNUITANT
If the Owner or Annuitant dies and the Contract is continued under Option D, as
described on page 68, of the Death of Owner or Death of Annuitant provisions of
your Contract, then the SureIncome Option will continue unless the Contract
Owner (or new Contract Owner) elects to cancel the SureIncome Option. If the
SureIncome Option is continued, it will remain in effect until terminated. If
the Contract is not continued under Option D above, then the SureIncome Option
will terminate on the date we receive a Complete Request for Settlement of the
Death Proceeds.
TERMINATION OF THE SUREINCOME OPTION
This SureIncome Option will terminate on the earliest of the following to occur:
.. The Benefit Base is reduced to zero;
.. On the Payout Start Date (except if the Contract enters the Withdrawal Benefit
Payout Phase as defined under the Withdrawal Benefit Payout Phase section);
.. On the date the Contract is terminated;
.. On the date the SureIncome Option is cancelled;
On the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. On the date the SureIncome Option is replaced with a New Option under the
Rider Trade-In Option.
37 PROSPECTUS
INVESTMENT ALTERNATIVES: THE VARIABLE SUB-ACCOUNTS
- --------------------------------------------------------------------------------
You may allocate your purchase payments to up to 44* Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.
For more complete information about each Portfolio, including expenses and risks
associated with each Portfolio, please refer to the accompanying prospectuses
for the Funds. You should carefully review the Fund prospectuses before
allocating amounts to the Variable Sub-Accounts.
*Up to 15 additional Variable Sub-Accounts may be available depending on the
date you purchased your Contract. Please see page 41 for information about
Sub-Accounts and/or Portfolio liquidations, mergers, closures and name changes.
PORTFOLIO: EACH PORTFOLIO SEEKS: INVESTMENT ADVISOR:
- -------------------------------------------------------------------------------
MORGAN STANLEY VARIABLE INVESTMENT SERIES
- -------------------------------------------------------------------------------
Morgan Stanley VIS Long-term capital growth
Aggressive Equity
Portfolio - Class Y
- -------------------------------------------------------
Morgan Stanley VIS Reasonable current income
Dividend Growth and long term growth of
Portfolio - Class Y income and capital.
- -------------------------------------------------------
Morgan Stanley VIS Equity Growth of capital through
Portfolio - Class Y investments in common
stocks believed by the
Investment Manager to
have potential for
superior growth. As a
secondary objective,
income but only when
consistent with its
primary objective.
- -------------------------------------------------------
Morgan Stanley VIS To maximize the capital
European Equity appreciation of its
Portfolio - Class Y/(6)/ investments
- -------------------------------------------------------
Morgan Stanley VIS Global Long-term capital growth
Advantage Portfolio -
Class Y/(3)/
- -------------------------------------------------------
Morgan Stanley VIS Global Reasonable current income
Dividend Growth and long-term growth of
Portfolio - Class Y income and capital.
- -------------------------------------------------------
Morgan Stanley VIS High High level of current
Yield Portfolio - Class income by investing in a
Y/(3)/ diversified portfolio MORGAN STANLEY
consisting principally of INVESTMENT ADVISORS INC.
fixed-income securities,
which may include both
non-convertible and
convertible debt
securities and preferred
stocks. As a secondary
objective, capital
appreciation, but only
when consistent with its
primary objective.
- -------------------------------------------------------
Morgan Stanley VIS Income Reasonable income and, as
Builder Portfolio - a secondary objective,
Class Y/(3)/ growth of capital
- -------------------------------------------------------
Morgan Stanley VIS Income High level of current
Plus Portfolio - Class income by investing
Y/(7)/ primarily in U.S.
government securities and
other fixed-income
securities. As a
secondary objective,
capital appreciation but
only when consistent with
its primary objective.
- -------------------------------------------------------
Morgan Stanley VIS Long-term capital
Information Portfolio - appreciation
Class Y/(3)/
- -------------------------------------------------------
Morgan Stanley VIS High level of current
Limited Duration income consistent with
Portfolio - Class Y preservation of capital
- --------------------------------------------------------
Morgan Stanley VIS Money High current income,
Market Portfolio - Class preservation of capital,
Y and liquidity
- -------------------------------------------------------
Morgan Stanley VIS S&P Investment results that,
500 Index Portfolio - before expenses,
Class Y correspond to the total
return (i.e., combination
of capital changes and
income) of the Standard
and Poor's 500 Composite
Stock Price Index
- ------------------------------------------------------------------------------
38 PROSPECTUS
Morgan Stanley VIS High total investment
Strategist Portfolio - return MORGAN STANLEY
Class Y INVESTMENT ADVISORS INC.
- -------------------------------------------------------
Morgan Stanley VIS Capital appreciation and
Utilities Portfolio - current income
Class Y/(3)/
- -------------------------------------------------------------------------------
THE UNIVERSAL INSTITUTIONAL FUNDS, INC./(3)/
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging High total return by
Markets Debt Portfolio, investing primarily in
Class II/(3)/ fixed income securities
of government and
government-related
issuers and, to a lesser
extent, of corporate
issuers in emerging
market countries.
- -------------------------------------------------------
Van Kampen UIF Emerging Long-term capital
Markets Equity appreciation by investing
Portfolio, Class II primarily in
growth-oriented equity
securities of issuers in
emerging market
countries.
- --------------------------------------------------------
Van Kampen UIF Equity Long-term capital
Growth Portfolio, Class appreciation by investing
II primarily in
growth-oriented equity
securities of large
capitalization companies
- --------------------------------------------------------
Van Kampen UIF Equity and Capital appreciation and
Income Portfolio, Class current income
II
- --------------------------------------------------------
Van Kampen UIF Global Long-term capital VAN KAMPEN/(//2//)/
Franchise Portfolio, appreciation
Class II
- --------------------------------------------------------
Van Kampen UIF Mid Cap Long-term capital growth
Growth Portfolio, Class by investing primarily in
II common stocks and other
equity securities.
- -------------------------------------------------------
Van Kampen UIF Small Long-term capital
Company Growth appreciation by investing
Portfolio, Class II primarily in
growth-oriented equity
securities of small
companies.
- -------------------------------------------------------
Van Kampen UIF U.S. Mid Above-average total return
Cap Value Portfolio, over a market cycle of
Class II three to five years by
investing in common
stocks and other equity
securities
- -------------------------------------------------------
Van Kampen UIF U.S. Real Above average current
Estate Portfolio, Class income and long-term
II capital appreciation by
investing primarily in
equity securities of
companies in the U.S.
real estate industry,
including real estate
investment trusts
- -------------------------------------------------------------------------------
VAN KAMPEN LIFE INVESTMENT TRUST
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Capital growth
Growth Portfolio, Class
II
- -------------------------------------------------------
Van Kampen LIT Comstock Capital growth and income
Portfolio, Class II through investments in
equity securities,
including common stocks,
preferred stocks and
securities convertible
into common and preferred
stocks.
- -------------------------------------------------------
Van Kampen LIT Emerging Capital appreciation. VAN KAMPEN ASSET
Growth Portfolio, Class MANAGEMENT
II
- -------------------------------------------------------
Van Kampen LIT Growth and Long-term growth of
Income Portfolio, Class capital and income.
II
- -------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS/(1)/
- -------------------------------------------------------------------------------
AIM V.I. Basic Value Fund Long-term growth of
- Series II/(3)/ capital
- -------------------------------------------------------
AIM V.I. Capital Growth of capital
Appreciation Fund -
Series II/(3)/
- -------------------------------------------------------A I M ADVISORS, INC.
AIM V.I. Mid Cap Core Long-term growth of
Equity Fund - Series capital
II/(3)/
- -------------------------------------------------------
AIM V.I. Premier Equity Long-term growth of
Fund - Series II/(3)/ capital with income as a
secondary objective
- -------------------------------------------------------------------------------
39 PROSPECTUS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
- -------------------------------------------------------------------------------
AllianceBernstein Growth Long-term growth of
Portfolio - Class B capital. Current income
is incidental to the
Portfolio's objective.
- -------------------------------------------------------
AllianceBernstein Growth Reasonable current income
and Income Portfolio - and reasonable
Class B/(3)/ opportunity for
appreciation through
investments primarily in
dividend-paying common
stocks of good quality
companies
- -------------------------------------------------------ALLIANCE CAPITAL
AllianceBernstein Long-term growth of MANAGEMENT, L.P.
International Value capital
Portfolio - Class B
- -------------------------------------------------------
AllianceBernstein Large Growth of capital by
Cap Growth Portfolio - pursuing aggressive
Class B/(3,5)/ investment policies
- -------------------------------------------------------
AllianceBernstein Long-term growth of
Small/Mid Cap Value capital
Portfolio - Class B/(5)/
- -------------------------------------------------------
AllianceBernstein Utility Current income and capital
Income Portfolio - Class appreciation by investing
B primarily in equity and
fixed-income securities
of companies in the
utilities industry
- -------------------------------------------------------
AllianceBernstein Value Long-term growth of
Portfolio - Class B capital
- -------------------------------------------------------------------------------
FIDELITY(R) VARIABLE INSURANCE PRODUCTS
- -------------------------------------------------------------------------------
Fidelity VIP Long-term capital
Contrafund(R) Portfolio appreciation
- Service Class 2
- -------------------------------------------------------FIDELITY MANAGEMENT &
Fidelity VIP Growth & High total return through RESEARCH COMPANY
Income Portfolio - a combination of current
Service Class 2 income and capital
appreciation
- -------------------------------------------------------
Fidelity VIP High Income High level of current
Portfolio - Service income, while also
Class 2 considering growth of
capital
- -------------------------------------------------------
Fidelity VIP Mid Cap Long-term growth of
Portfolio - Service capital
Class 2
- -------------------------------------------------------------------------------
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
- -------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Capital appreciation
Growth Securities Fund -
Class 2
- -------------------------------------------------------
FTVIP Franklin High High level of current FRANKLIN ADVISERS, INC.
Income Fund - Class income with capital
2/(3)/ appreciation as a
secondary goal
- -------------------------------------------------------
FTVIP Franklin Income To maximize income while
Securities Fund - Class maintaining prospects for
2 capital appreciation.
- -------------------------------------------------------------------------------
FTVIP Mutual Discovery Capital appreciation
Securities Fund - Class FRANKLIN MUTUAL
2 ADVISERS, LLC
- -------------------------------------------------------
FTVIP Mutual Shares Capital appreciation with
Securities Fund - Class income as a secondary
2 goal
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Long-term capital growth. TEMPLETON INVESTMENT
Securities Fund - Class COUNSEL, LLC
2
- -------------------------------------------------------------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST
- -------------------------------------------------------
Goldman Sachs VIT Long-term growth of
CORE(SM) Small Cap capital GOLDMAN SACHS ASSET
Equity Fund MANAGEMENT, L.P.
- -------------------------------------------------------
Goldman Sachs VIT Long-term growth of
CORE(SM) U.S. Equity capital and dividend
Fund income
- -------------------------------------------------------
Goldman Sachs VIT Growth Long-term growth of
and Income Fund capital and growth of
income
- -------------------------------------------------------
Goldman Sachs VIT Mid Cap Long-term capital
Value Fund appreciation
- -------------------------------------------------------------------------------
40 PROSPECTUS
PUTNAM VARIABLE TRUST
- -------------------------------------------------------------------------------
Putnam VT The George To provide a balanced
Putnam Fund of Boston - investment composed of a
Class IB well diversified
portfolio of value stocks
and bonds, which produce
both capital growth and
current income.
- -------------------------------------------------------
Putnam VT Growth and Capital growth and current PUTNAM INVESTMENT
Income Fund - Class income. MANAGEMENT, LLC
IB/(3)/
- -------------------------------------------------------
Putnam VT International Capital appreciation.
Equity Fund - Class IB
- -------------------------------------------------------
Putnam VT Investors Fund Long-term growth of
- Class IB/(4)/ capital and any increased
income that results from
this growth.
- -------------------------------------------------------
Putnam VT New Value Fund Long-term capital
- Class IB appreciation.
- -------------------------------------------------------
Putnam VT Voyager Fund - Capital appreciation.
Class IB
- -------------------------------------------------------------------------------
(1) A Fund's investment objective(s) may be changed by the Fund's Board of
Trustees without shareholder approval.
(2) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
Effective May 1, 2004, the Morgan Stanley UIF Portfolios were rebranded the Van
Kampen UIF Portfolios.
(3) Effective May 1, 2005, the AIM V.I. Basic Value - Series II Sub-Account, the
AIM V.I. Capital Appreciation - Series II Sub-Account, the AIM V.I. Mid Cap Core
Equity - Series II Sub-Account, the AIM V.I. Premier Equity - Series II
Sub-Account, the AllianceBernstein Growth and Income - Class B Sub-Account, the
AllianceBernstein Large Cap Growth - Class B Sub-Account, the FTVIP Franklin
High Income - Class 2 Sub-Account, the Morgan Stanley VIS Global Advantage -
Class Y Sub-Account, the Morgan Stanley VIS High Yield - Class Y Sub-Account,
the Morgan Stanley VIS Income Builder - Class Y Sub-Account, the Morgan Stanley
VIS Information - Class Y Sub-Account, the Morgan Stanley VIS Utilities - Class
Y Sub-Account, the Putnam VT Growth and Income - Class IB Sub-Account and the
are no longer available for Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account new investments. If you are currently invested in these Variable
Sub-Accounts, you may continue your investment. If prior to May 1, 2005, you
enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing or dollar cost averaging, we will continue to
effect automatic transactions to these Variable Sub-Accounts in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
(4) Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account is no
longer available for new investments. If you are currently invested in this
Variable Sub-Account, you may continue your investment. If prior to May 1, 2004,
you enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing or dollar cost averaging, we will continue to
effect automatic transactions to the Variable Sub-Account in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
(5) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio -
Class B and the AllianceBernstein Small Cap Value Portfolio - Class B changed
their names to the AllianceBernstein Large Cap Growth Portfolio - Class B and
the AllianceBernstein Small/Mid Cap Value Portfolio - Class B, respectively.
(6) Effective December 30, 2004, the Morgan Stanley VIS European Growth
Portfolio - Class Y changed its name to the Morgan Stanley VIS European Equity
Portfolio - Class Y.
(7) Effective April 29, 2005, the Morgan Stanley VIS Quality Income Plus
Portfolio - Class Y changed its name to the Morgan Stanley VIS Income Plus
Portfolio - Class Y.
AMOUNTS YOU ALLOCATE TO VARIABLE SUB-ACCOUNTS MAY GROW IN VALUE, DECLINE IN
VALUE, OR GROW LESS THAN YOU EXPECT, DEPENDING ON THE INVESTMENT PERFORMANCE OF
THE PORTFOLIOS IN WHICH THOSE VARIABLE SUB-ACCOUNTS INVEST. YOU BEAR THE
INVESTMENT RISK THAT THE PORTFOLIOS MIGHT NOT MEET THEIR INVESTMENT OBJECTIVES.
SHARES OF THE PORTFOLIOS ARE NOT DEPOSITS, OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
VARIABLE INSURANCE PORTFOLIOS MIGHT NOT BE MANAGED BY THE SAME PORTFOLIO
MANAGERS WHO MANAGE RETAIL MUTUAL FUNDS WITH SIMILAR NAMES. THESE PORTFOLIOS ARE
LIKELY TO DIFFER FROM SIMILARLY NAMED RETAIL MUTUAL FUNDS IN ASSETS, CASH FLOW,
AND TAX MATTERS. ACCORDINGLY, THE HOLDINGS AND INVESTMENT RESULTS OF A VARIABLE
INSURANCE PORTFOLIO CAN BE EXPECTED TO BE HIGHER OR LOWER THAN THE INVESTMENT
RESULTS OF A SIMILARLY NAMED RETAIL MUTUAL FUND.
TRUEBALANCE/SM/ ASSET ALLOCATION PROGRAM
As a Contract Owner, you may elect to participate in the TrueBalance asset
allocation program ("TrueBalance program") for no additional charge.
Participation in the TrueBalance program may be limited if you have elected
certain Contract Options that impose restrictions on the investment alternatives
which you may select, such as the Income Protection Benefit Option, the
TrueReturn Accumulation Benefit Option or the SureIncome Withdrawal Benefit
Option. See the sections of this prospectus discussing these Options for more
information.
Asset allocation is the process by which your Contract Value is invested in
different asset classes in a way that
41 PROSPECTUS
matches your risk tolerance, time horizon, and investment goals. Theoretically,
different asset classes tend to behave differently under various economic and
market conditions. By spreading your Contract Value across a range of asset
classes, you may, over time, be able to reduce the risk of investment volatility
and potentially enhance returns. Asset allocation does not guarantee a profit or
protect against loss in a declining market.
Your Morgan Stanley Financial Advisor will help you determine whether
participating in an asset allocation program is appropriate for you. If you
decide to participate in the TrueBalance program, your Morgan Stanley Financial
Advisor may ask you to complete an investment style questionnaire to help you
and your Morgan Stanley Financial Advisor identify your investment style. Once
you and your Morgan Stanley Financial Advisor have identified your investment
style, you may select one of five currently available asset allocation model
portfolios, each with different levels of risk. The model portfolios, which have
been prepared by Ibbotson Associates Inc., ("Ibbotson"), represent five
different investment styles: conservative, moderately conservative, moderate,
moderately aggressive and aggressive. Once you select a model portfolio, your
Contract Value will be allocated among the Variable Sub-Accounts exactly
according to that model portfolio. If you wish to allocate any of your Contract
Value to any Variable Sub-Accounts not included in that model portfolio, or if
you do not wish to allocate any of your Contract Value to any Variable
Sub-Accounts included in that model portfolio, you should not elect the
TrueBalance program. We recommend that you consult with your Morgan Stanley
Financial Advisor before selecting a TrueBalance model portfolio.
Allstate Life does not intend to provide any personalized investment advice in
connection with the TrueBalance program and you should not rely on this program
as providing individualized investment recommendations to you.
Ibbotson has been licensed for use by Allstate Life. Ibbotson is not affiliated
with Allstate Life. Ibbotson does not provide advice to Allstate Life's Contract
Owners/ investors. Ibbotson does not act as "fiduciary" or as an "investment
manager", as defined under ERISA, to any Contract Owner/investor.
Ibbotson does not take into account any information about any Contract
Owner/investor or any Contract Owner's/investor's assets when creating,
providing or maintaining any TrueBalance model portfolio. Individual Contract
Owners/investors should ultimately rely on their own judgment and/or the
judgment of a financial advisor in making their investment decisions. Ibbotson
is not responsible for suitability with respect to Contract Owners'/investors'
use of the TrueBalance model portfolios.
Each of the five model portfolios specifies an allocation among a mix of
Variable Sub-Accounts that is designed to meet the investment goals of the
applicable investment style. On the business day we approve your participation
in the TrueBalance program, we will automatically reallocate any existing
Contract Value in the Variable Sub-Accounts according to the model portfolio you
selected. If any portion of your existing Contract Value is allocated to the
Standard Fixed Account or MVA Fixed Account Options and you wish to allocate any
portion of it to the model portfolio, you must transfer that portion to the
Variable Sub-Accounts. In addition, as long as you participate in the
TrueBalance program, you must allocate all of your purchase payments to the
Fixed Account Options and/or the Variable Sub-Accounts currently offered in your
model portfolio. Any purchase payments you allocate to the DCA Fixed Account
Option will be automatically transferred, along with interest, in equal monthly
installments to the Variable Sub-Accounts according to the model portfolio you
selected.
We use the term "Transfer Period Account" to refer to each purchase payment
allocation made to the DCA Fixed Account Option for a specified term length. At
the expiration of a Transfer Period Account any remaining amounts in the
Transfer Period Account will be transferred to the Variable Sub-Accounts
according to the percentage allocation for the model portfolio you selected.
Ibbotson may review and analyze the model portfolios periodically and may create
new or revised TrueBalance model portfolios at any time. Allstate Life will not
automatically reallocate your Contract Value allocated to the Variable
Sub-Accounts to match any new or revised model portfolios prepared by Ibbotson
or any other firm chosen by Allstate Life. If you are invested in the
TrueBalance model portfolio, your Morgan Stanley Financial Advisor will notify
you of any new or revised TrueBalance model portfolios prepared by Ibbotson or
any other firm chosen by Allstate Life. If you wish to invest in accordance with
a new or revised TrueBalance model portfolio, you must submit a transfer request
to transfer your Contract Value in your existing TrueBalance model portfolio in
accordance with the new TrueBalance model portfolio. If you do not request a
transfer to a new TrueBalance model portfolio, we will continue to rebalance
your Contract Value in accordance with your existing TrueBalance model
portfolio. At any given time, you may only elect a TrueBalance model portfolio
that is available at the time of election.
You may only select one model portfolio at a time. However, you may change your
selection of model portfolio at any time, provided you select a currently
available model portfolio. Each change you make in your model portfolio
selection will count against the 12 transfers you can make each Contract Year
without paying a transfer fee. You should consult with your Morgan Stanley
Financial Advisor before making a change to your model portfolio selection to
determine whether the new model portfolio is appropriate for your needs.
42 PROSPECTUS
Since the performance of each Variable Sub-Account may cause a shift in the
percentage allocated to each Variable Sub-Account, at least once every calendar
quarter we will automatically rebalance all of your Contract Value in the
Variable Sub-Accounts according to your currently selected model portfolio.
Unless you notify us otherwise, any purchase payments you make after electing
the TrueBalance program will be allocated to your model portfolio and/or to the
Fixed Account Options according to your most recent instructions on file with
us. Once you elect to participate in the TrueBalance program, you may allocate
subsequent purchase payments to any of the Fixed Account Options available with
your Contract and/or to any of the Variable Sub-Accounts included in your model
portfolio, but only according to the allocation specifications of that model
portfolio. You may not allocate subsequent purchase payments to a Variable
Sub-Account that is not included in your model portfolio. Subsequent purchase
payments allocated to the Variable Sub-Accounts will be automatically rebalanced
at the end of the next calendar quarter according to the allocation percentages
for your currently selected model portfolio.
THE FOLLOWING APPLIES TO TRUEBALANCE MODEL PORTFOLIOS SELECTED WITH THE
TRUERETURN OPTION OR THE SUREINCOME OPTION:
For TrueBalance model portfolios selected with the TrueReturn Option or
SureIncome Option, you must allocate all of your Contract Value to a TrueBalance
Model Portfolio Option, and you may not choose the Variable Sub-Accounts or make
transfers among the Variable Sub-Accounts in the TrueBalance Model Portfolio
Option. If you choose a TrueBalance Model Portfolio Option, we will invest and
periodically reallocate your Contract Value according to the allocation
percentages and requirements for the TrueBalance Model Portfolio Option you
selected. You may, however, elect to reallocate your entire Contract Value from
one Model Portfolio Option to another Model Portfolio Option available with your
Option.
If you own the TrueReturn Option, on the Rider Maturity Date, the Contract Value
may be increased due to the Option. Any increase will be allocated to the Morgan
Stanley VIS Money Market-Class Y Sub-Account. You may make transfers from this
Variable Sub-Account to the Fixed Account Options (as allowed) or to the
Variable Sub-Accounts included in your model portfolio, but only according to
the allocation specification of that model portfolio. All of your Contract Value
in the Variable Sub-Accounts will be automatically rebalanced at the next
calendar quarter according to the allocation percentages for your currently
selected model portfolio.
THE FOLLOWING APPLIES TO TRUEBALANCE MODEL PORTFOLIOS SELECTED WITHOUT THE
TRUERETURN OPTION OR THE SUREINCOME OPTION:
For TrueBalance model portfolios selected without the TrueReturn or SureIncome
Option, you may not make transfers from the Variable Sub-Accounts to any of the
other Variable Sub-Accounts. You may make transfers, as allowed under the
Contract, from the Fixed Account Options to other Fixed Account Options or to
the Variable Sub-Accounts included in your model portfolio, but only according
to the allocation specifications of that model portfolio. You may make transfers
from the Variable Sub-Accounts to any of the Fixed Account Options, except the
DCA Fixed Account Option. Transfers to Fixed Account Options may be inconsistent
with the investment style you selected and with the purpose of the TrueBalance
program. However, all of your Contract Value in the Variable Sub-Accounts will
be automatically rebalanced at the next calendar quarter according to the
percentage allocations for your currently selected model portfolio. You should
consult with your Morgan Stanley Financial Advisor before making transfers.
If you make a partial withdrawal from any of the Variable Sub-Accounts, your
remaining Contract Value in the Variable Sub-Accounts will be automatically
rebalanced at the end of the next calendar quarter according to the percentage
allocations for your currently selected model portfolio. If you are
participating in the Systematic Withdrawal Program when you add the TrueBalance
program or change your selection of model portfolios, you may need to update
your withdrawal instructions. If you have any questions, please consult your
Morgan Stanley Financial Advisor.
Your participation in the TrueBalance program is subject to the program's terms
and conditions, and you may change model portfolios or terminate your
participation in the TrueBalance program at any time by notifying us in a form
satisfactory to us. We reserve the right to modify or terminate the TrueBalance
program at any time.
INVESTMENT ALTERNATIVES: THE FIXED ACCOUNT OPTIONS
- --------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments to the Fixed Account
Options. The Fixed Account Options we offer include the DOLLAR COST AVERAGING
FIXED ACCOUNT OPTION, the STANDARD FIXED ACCOUNT OPTION, and the MARKET VALUE
ADJUSTED FIXED ACCOUNT OPTION. We may offer additional Fixed Account Options in
the future. Some Options are not available in all states. In addition,
Allstate Life may limit the availability of some Fixed Account Options. Please
consult with your representative for current information. The Fixed Account
supports our insurance and annuity obligations. The Fixed Account consists of
our general
43 PROSPECTUS
assets other than those in segregated asset accounts. We have sole discretion to
invest the assets of the Fixed Account, subject to applicable law. Any money you
allocate to the Fixed Account does not entitle you to share in the investment
experience of the Fixed Account.
DOLLAR COST AVERAGING FIXED ACCOUNT OPTION
The Dollar Cost Averaging Fixed Account Option ("DCA Fixed Account Option") is
one of the investment alternatives that you can use to establish a Dollar Cost
Averaging Program, as described on page 49.
This option allows you to allocate purchase payments to the Fixed Account that
will then automatically be transferred, along with interest, in equal monthly
installments to the investment alternatives that you have selected. In the
future, we may offer other installment frequencies in our discretion. Each
purchase payment allocated to the DCA Fixed Account Option must be at least
$500.
At the time you allocate a purchase payment to the DCA Fixed Account Option, you
must specify the term length over which the transfers are to take place. We
use the term "Transfer Period Account" to refer to each purchase payment
allocation made to the DCA Fixed Account Option for a specified term length. You
establish a new Transfer Period Account each time you allocate a purchase
payment to the DCA Fixed Account Option. We currently offer term lengths from
which you may select for your Transfer Period Account(s), ranging from 3 to 12
months. We may modify or eliminate the term lengths we offer in the future.
Refer to Appendix A for more information.
Your purchase payments will earn interest while in the DCA Fixed Account Option
at the interest rate in effect at the time of the allocation, depending on the
term length chosen for the Transfer Period Account and the type of Contract you
have. The interest rates may also differ from those available for other Fixed
Account Options. The minimum interest rate associated with the DCA Fixed Account
Option is based upon state requirements and the date an application to purchase
a Contract is signed. This minimum interest rate will not change after Contract
issue.
You must transfer all of your money, plus accumulated interest, out of a
Transfer Period Account to other investment alternatives in equal monthly
installments during the term of the Transfer Period Account. We reserve the
right to restrict the investment alternatives available for transfers from any
Transfer Period Account. You may not transfer money from the Transfer Period
Accounts to any of the Fixed Account Options available under your Contract. The
first transfer will occur on the next Valuation Date after you establish a
Transfer Period Account. If we do not receive an allocation instruction from you
when we receive the purchase payment, we will transfer each installment to the
Morgan Stanley VIS Money Market Variable Sub-Account until we receive a
different allocation instruction. At the expiration of a Transfer Period Account
any remaining amounts in the Transfer Period Account will be transferred to the
Morgan Stanley VIS Money Market Variable Sub-Account unless you request a
different investment alternative. Transferring Contract Value to the Morgan
Stanley VIS Money Market Variable Sub-Account in this manner may not be
consistent with the theory of dollar cost averaging described on page 49.
If you discontinue the DCA Fixed Account Option before the expiration of a
Transfer Period Account, we will transfer any remaining amount in the Transfer
Period Account to the Morgan Stanley VIS Money Market Variable Sub-Account
unless you request a different investment alternative.
You may not transfer money into the DCA Fixed Account Option or add to an
existing Transfer Period Account. You may not use the Automatic Additions
Program to allocate purchase payments to the DCA Fixed Account Option.
The DCA Fixed Account Option may not be available in your state. Please check
with your Morgan Stanley Financial Advisor for availability.
STANDARD FIXED ACCOUNT OPTION
You may allocate purchase payments or transfer amounts into the Standard Fixed
Account Option. Each such allocation establishes a "GUARANTEE PERIOD ACCOUNT"
within the Standard Fixed Account Option ("Standard Fixed Guarantee Period
Account"), which is defined by the date of the allocation and the length of the
initial interest rate guarantee period ("STANDARD FIXED GUARANTEE PERIOD"). You
may not allocate a purchase payment or transfer to any existing Guarantee Period
Account. Each purchase payment or transfer allocated to a Standard Fixed
Guarantee Period Account must be at least $500.
At the time you allocate a purchase payment or transfer amount to the Standard
Fixed Account Option, you must select the Guarantee Period for that allocation
from among the available Standard Fixed Guarantee Periods. For Allstate Variable
Annuity Contracts, we currently offer Standard Fixed Guarantee Periods of 1, 3,
5 and 7 years in length. For Allstate Variable Annuity - L Share Contracts, we
currently are not offering the Standard Fixed Account Option. Refer to Appendix
A for more information. We may offer other Guarantee Periods in the future. If
you allocate a purchase payment to the Standard Fixed Account Option, but do not
select a Standard Fixed Guarantee Period for the new Standard Fixed Guarantee
Period Account, we will allocate the purchase payment or transfer to a new
Standard Fixed Guarantee Period Account with the same Standard Fixed Guarantee
Period as the Standard Fixed Guarantee Period Account of your most recent
purchase payment or transfer. If we no longer offer that Standard Fixed
44 PROSPECTUS
Guarantee Period, then we will allocate the purchase payment or transfer to a
new Standard Fixed Guarantee Period Account with the next shortest term
currently offered. If you have not made a prior allocation to a Guarantee Period
Account, then we will allocate the purchase payment or transfer to a new
Standard Fixed Guarantee Period Account of the shortest Standard Fixed Guarantee
Period we are offering at that time.
Some Standard Fixed Guarantee Periods are not available in all states. Please
check with your Morgan Stanley Financial Advisor for availability.
The amount you allocate to a Standard Fixed Guarantee Period Account will earn
interest at the interest rate in effect for that Standard Fixed Guarantee Period
at the time of the allocation. Interest rates may differ depending on the type
of Contract you have and may also differ from those available for other Fixed
Account Options. The minimum interest rate associated with the Standard Fixed
Account Option is based upon state requirements and the date an application to
purchase a Contract is signed. This minimum interest rate will not change after
Contract issue.
In any Contract Year, the combined amount of withdrawals and transfers from a
Standard Fixed Guarantee Period Account may not exceed 30% of the amount used to
establish that Standard Fixed Guarantee Period Account. This limitation is
waived if you withdraw your entire Contract Value. It is also waived for amounts
in a Standard Fixed Guarantee Period Account during the 30 days following its
renewal date ("30-DAY WINDOW"), described below, and for a single withdrawal
made by your surviving spouse within one year of continuing the Contract after
your death.
Amounts under the 30% limit that are not withdrawn in a Contract Year do not
carry over to subsequent Contract Years.
At the end of a Standard Fixed Guarantee Period and each year thereafter, we
will declare a renewal interest rate that will be guaranteed for 1 year.
Subsequent renewal dates will be on the anniversaries of the first renewal date.
Prior to a renewal date, we will send you a notice that will outline the options
available to you. During the 30-Day Window following the expiration of a
Standard Fixed Guarantee Period Account, the 30% limit for transfers and
withdrawals from that Guarantee Period Account is waived and you may elect to:
.. transfer all or part of the money from the Standard Fixed Guarantee Period
Account to establish a new Guarantee Period Account within the Standard Fixed
Account Option or the Market Value Adjusted Fixed Account Option, if
available; or
.. transfer all or part of the money from the Standard Fixed Guarantee Period
Account to other investment alternatives available at the time; or
.. withdraw all or part of the money from the Standard Fixed Guarantee Period
Account. Withdrawal charges and taxes may apply.
Withdrawals taken to satisfy IRS minimum distribution rules will count against
the 30% limit. The 30% limit will be waived for a Contract Year to the extent
that:
.. you have already exceeded the 30% limit and you must still make a withdrawal
during that Contract Year to satisfy IRS minimum distribution rules; or
.. you have not yet exceeded the 30% limit but you must make a withdrawal during
that Contract Year to satisfy IRS minimum distribution rules, and such
withdrawal will put you over the 30% limit.
The money in the Standard Fixed Guarantee Period Account will earn interest at
the declared renewal rate from the renewal date until the date we receive
notification of your election. If we receive notification of your election to
make a transfer or withdrawal from a renewing Standard Fixed Guarantee Period
Account on or before the renewal date, the transfer or withdrawal will be deemed
to have occurred on the renewal date. If we receive notification of your
election to make a transfer or withdrawal from the renewing Standard Fixed
Guarantee Period Account after the renewal date, but before the expiration of
the 30-Day Window, the transfer or withdrawal will be deemed to have occurred on
the day we receive such notice. Any remaining balance not withdrawn or
transferred from the renewing Standard Fixed Guarantee Period Account will
continue to earn interest until the next renewal date at the declared renewal
rate. If we do not receive notification from you within the 30-Day Window, we
will assume that you have elected to renew the Standard Fixed Guarantee Period
Account and the amount in the renewing Standard Fixed Guarantee Period Account
will continue to earn interest at the declared renewal rate until the next
renewal date, and will be subject to all restrictions of the Standard Fixed
Account Option.
The Standard Fixed Account Option currently is not available with the Allstate
Variable Annuity - L Share Contract.
MARKET VALUE ADJUSTED FIXED ACCOUNT OPTION
You may allocate purchase payments or transfer amounts into the Market Value
Adjusted Fixed Account Option. Each such allocation establishes a Guarantee
Period Account within the Market Value Adjusted Fixed Account Option ("Market
Value Adjusted Fixed Guarantee Period Account"), which is defined by the date of
the allocation and the length of the initial interest rate guarantee period
("MARKET VALUE ADJUSTED FIXED GUARANTEE PERIOD"). You may not allocate a
purchase payment or transfer to any existing Guarantee Period Account. Each
purchase payment or transfer allocated to a Market Value Adjusted Fixed
Guarantee Period Account must be at least $500.
45 PROSPECTUS
At the time you allocate a purchase payment or transfer amount to the Market
Value Adjusted Fixed Account Option, you must select the Guarantee Period for
that allocation from among the Guarantee Periods available for the Market Value
Adjusted Fixed Account Option ("Market Value Adjusted Fixed Guarantee Periods").
We currently offer Market Value Adjusted Fixed Guarantee Periods of 3, 5, 7, and
10 years. Refer to Appendix A for more information. We may offer other Guarantee
Periods in the future. If you allocate a purchase payment to the Market Value
Adjusted Fixed Account Option, but do not select a Market Value Adjusted Fixed
Guarantee Period for the new Market Value Adjusted Fixed Guarantee Period
Account, we will allocate the purchase payment or transfer to a new Market Value
Adjusted Fixed Guarantee Period Account with the same Market Value Adjusted
Fixed Guarantee Period as the Market Value Adjusted Fixed Guarantee Period
Account of your most recent purchase payment or transfer. If we no longer offer
that Market Value Adjusted Fixed Guarantee Period, then we will allocate the
purchase payment or transfer to a new Market Value Adjusted Fixed Guarantee
Period Account with the next shortest term currently offered. If you have not
made a prior allocation to a Market Value Adjusted Fixed Guarantee Period
Account, then we will allocate the purchase payment or transfer to a new Market
Value Adjusted Fixed Guarantee Period Account of the shortest Market Value
Adjusted Fixed Guarantee Period we are offering at that time. The Market Value
Adjusted Fixed Account Option is not available in all states. Please check with
your Morgan Stanley Financial Advisor for availability.
The amount you allocate to a Market Value Adjusted Fixed Guarantee Period
Account will earn interest at the interest rate in effect for that Market Value
Adjusted Fixed Guarantee Period at the time of the allocation. Interest rates
may differ depending on the type of Contract you have and may also differ from
those available for other Fixed Account Options.
Withdrawals and transfers from a Market Value Adjusted Fixed Guarantee Period
Account may be subject to a Market Value Adjustment. A Market Value Adjustment
may also apply to amounts in the Market Value Adjusted Fixed Account Option if
we pay Death Proceeds or if the Payout Start Date begins on a day other than
during the 30-day period after such Market Value Adjusted Fixed Guarantee Period
Account expires ("30-Day MVA Window"). We will not make a Market Value
Adjustment if you make a transfer or withdrawal during the 30-Day MVA Window.
We apply a Market Value Adjustment to reflect changes in interest rates from the
time you first allocate money to a Market Value Adjusted Fixed Guarantee Period
Account to the time the money is taken out of that Market Value Adjusted Fixed
Guarantee Period Account under the circumstances described above. We use the
U.S. Treasury Note Constant Maturity Yields as reported in Federal Reserve Board
Statistical Release H.15 ("TREASURY RATE") to calculate the Market Value
Adjustment. We do so by comparing the Treasury Rate for a maturity equal to the
Market Value Adjusted Fixed Guarantee Period at the time the Market Value
Adjusted Fixed Guarantee Period Account is established with the Treasury Rate
for the same maturity at the time the money is taken from the Market Value
Adjusted Fixed Guarantee Period Account.
The Market Value Adjustment may be positive or negative, depending on changes in
interest rates. As such, you bear the investment risk associated with changes in
interest rates. If interest rates have increased since the establishment of a
Market Value Adjusted Fixed Guarantee Period Account, the Market Value
Adjustment, together with any applicable withdrawal charges, premium taxes, and
income tax withholdings could reduce the amount you receive upon full withdrawal
from a Market Value Adjusted Fixed Guarantee Period Account to an amount less
than the purchase payment used to establish that Market Value Adjusted Fixed
Guarantee Period Account.
Generally, if at the time you establish a Market Value Adjusted Fixed Guarantee
Period Account, the Treasury Rate for a maturity equal to that Market Value
Adjusted Fixed Guarantee Period is higher than the applicable Treasury Rate at
the time money is to be taken from the Market Value Adjusted Fixed Guarantee
Period Account, the Market Value Adjustment will be positive. Conversely, if at
the time you establish a Market Value Adjusted Fixed Guarantee Period Account,
the applicable Treasury Rate is lower than the applicable Treasury Rate at the
time the money is to be taken from the Market Value Adjusted Fixed Guarantee
Period Account, the Market Value Adjustment will be negative.
For example, assume that you purchase a Contract and allocate part of the
initial purchase payment to the Market Value Adjusted Fixed Account Option to
establish a 5-year Market Value Adjusted Fixed Guarantee Period Account. Assume
that the 5-year Treasury Rate at that time is 4.50%. Next, assume that at the
end of the 3rd year, you withdraw money from the Market Value Adjusted Fixed
Guarantee Period Account. If, at that time, the 5-year Treasury Rate is 4.20%,
then the Market Value Adjustment will be positive. Conversely, if the 5-year
Treasury Rate at that time is 4.80%, then the Market Value Adjustment will be
negative.
The formula used to calculate the Market Value Adjustment and numerical examples
illustrating its application are shown in Appendix B of this prospectus.
At the end of a Market Value Adjusted Fixed Guarantee Period, the Market Value
Adjusted Fixed Guarantee Period Account expires and we will automatically
transfer the money from such Guarantee Period Account to establish a new Market
Value Adjusted Fixed Guarantee Period Account with the same Market Value
Adjusted Fixed Guarantee Period, unless you notify us otherwise.
The new Market Value Adjusted Fixed Guarantee Period
46 PROSPECTUS
Account will be established as of the day immediately following the expiration
date of the expiring Market Value Adjusted Guarantee Period Account ("New
Account Start Date.") If the Market Value Adjusted Fixed Guarantee Period is no
longer being offered, we will establish a new Market Value Adjusted Fixed
Guarantee Period Account with the next shortest Market Value Adjusted Fixed
Guarantee Period available. Prior to the expiration date, we will send you a
notice, which will outline the options available to you. During the 30-Day MVA
Window a Market Value Adjustment will not be applied to transfers and
withdrawals from the expiring Market Value Adjusted Fixed Guarantee Period
Account and you may elect to:
.. transfer all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account to establish a new Guarantee Period Account within
the Standard Fixed Account Option or the Market Value Adjusted Fixed Account
Option, if available; or
.. transfer all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account to other investment alternatives available at the
time; or
.. withdraw all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account. Withdrawal charges and taxes may apply.
The money in the Market Value Adjusted Fixed Guarantee Period Account will earn
interest at the interest rate declared for the new Market Value Adjusted Fixed
Guarantee Period Account from the New Account Start Date until the date we
receive notification of your election. If we receive notification of your
election to make a transfer or withdrawal from an expiring Market Value Adjusted
Fixed Guarantee Period Account on or before the New Account Start Date, the
transfer or withdrawal will be deemed to have occurred on the New Account Start
Date. If we receive notification of your election to make a transfer or
withdrawal from the expiring Market Value Adjusted Fixed Guarantee Period
Account after the New Account Start Date, but before the expiration of the
30-Day MVA Window, the transfer or withdrawal will be deemed to have occurred on
the day we receive such notice. Any remaining balance not withdrawn or
transferred will earn interest for the term of the new Market Value Adjusted
Fixed Guarantee Period Account, at the interest rate declared for such Account.
If we do not receive notification from you within the 30-Day Window, we will
assume that you have elected to transfer the amount in the expiring Market Value
Adjusted Fixed Guarantee Period Account to establish a new Market Value Adjusted
Fixed Guarantee Period Account with the same Market Value Adjusted Fixed
Guarantee Period, and the amount in the new Market Value Adjusted Fixed
Guarantee Period Account will continue to earn interest at the interest rate
declared for the new Market Value Adjusted Fixed Guarantee Period Account, and
will be subject to all restrictions of the Market Value Adjusted Fixed Account
Option. If we no longer offer that Market Value Adjusted Fixed Guarantee Period,
the Market Value Adjusted Fixed Guarantee Period for the new Market Value
Adjusted Fixed Guarantee Period Account will be the next shortest term length we
offer for the Market Value Adjusted Fixed Account Option at that time, and the
interest rate will be the rate declared by us at that time for such term.
INVESTMENT ALTERNATIVES: TRANSFERS
- --------------------------------------------------------------------------------
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. You may not transfer Contract Value to the DCA Fixed
Account Option or add to an existing Transfer Period Account. You may request
transfers in writing on a form that we provided or by telephone according to the
procedure described below.
You may make up to 12 transfers per Contract Year without charge. A transfer fee
equal to 1.00% of the amount transferred applies to each transfer after the 12th
transfer in any Contract Year. This fee may be changed, but in no event will it
exceed 2.00% of the amount transferred. Multiple transfers on a single Valuation
Date are considered a single transfer for purposes of assessing the transfer
fee. If you added the TrueReturn or SureIncome Option to your Contract, certain
restrictions on transfers apply. See the "TrueReturn/SM /Accumulation Benefit
Option" and "Withdrawal Benefit Option" sections of this prospectus for more
information.
The minimum amount that you may transfer from the Standard Fixed Account Option,
Market Value Adjusted Fixed Account Option or a Variable Sub-Account is $100 or
the total remaining balance in the Standard Fixed Account Option, Market Value
Adjusted Fixed Account Option or the Variable Sub-Account, if less. These
limitations do not apply to the DCA Fixed Account Option. The total amount that
you may transfer or withdraw from a Standard Fixed Guarantee Period Account in a
Contract Year is 30% of the amount used to establish that Guarantee Period
Account. See "Standard Fixed Account Option". The minimum amount that can be
transferred to the Standard Fixed Account Option and the Market Value Adjusted
Fixed Account Option is $500.
We will process transfer requests that we receive before 3:00 p.m. Central Time
on any Valuation Date using the Accumulation Unit Values for that Date. We will
process requests completed after 3:00 p.m. on any Valuation Date using the
Accumulation Unit Values for the next Valuation Date. The Contract permits us to
defer transfers from the Fixed Account Options for up to 6
47 PROSPECTUS
months from the date we receive your request. If we decide to postpone transfers
from any Fixed Account Option for 30 days or more, we will pay interest as
required by applicable law. Any interest would be payable from the date we
receive the transfer request to the date we make the transfer.
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. You may make up to 12 transfers per
Contract Year within each Income Plan. You may not convert any portion of your
fixed income payments into variable income payments. You may not make transfers
among Income Plans. You may make transfers from the variable income payments to
the fixed income payments to increase the proportion of your income payments
consisting of fixed income payments, unless you have selected the Income
Protection Benefit Option.
TELEPHONE OR ELECTRONIC TRANSFERS
You may make transfers by telephone by calling 1-800-654-2397. The cut off time
for telephone transfer requests is 3:00 p.m. Central time. In the event that the
New York Stock Exchange closes early, i.e., before 3:00 p.m. Central Time, or in
the event that the Exchange closes early for a period of time but then reopens
for trading on the same day, we will process telephone transfer requests as of
the close of the Exchange on that particular day. We will not accept telephone
requests received from you at any telephone number other than the number that
appears in this paragraph or received after the close of trading on the
Exchange. If you own the Contract with a joint Contract Owner, unless we receive
contrary instructions, we will accept instructions from either you or the other
Contract Owner.
We may suspend, modify or terminate the telephone transfer privilege, as well as
any other electronic or automated means we previously approved, at any time
without notice.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
MARKET TIMING & EXCESSIVE TRADING
The Contracts are intended for long-term investment. Market timing and excessive
trading can potentially dilute the value of Variable Sub-Accounts and can
disrupt management of a Portfolio and raise its expenses, which can impair
Portfolio performance and adversely affect your Contract Value. Our policy is
not to accept knowingly any money intended for the purpose of market timing or
excessive trading. Accordingly, you should not invest in the Contract if your
purpose is to engage in market timing or excessive trading, and you should
refrain from such practices if you currently own a Contract.
We seek to detect market timing or excessive trading activity by reviewing
trading activities. Portfolios also may report suspected market-timing or
excessive trading activity to us. If, in our judgment, we determine that the
transfers are part of a market timing strategy or are otherwise harmful to the
underlying Portfolio, we will impose the trading limitations as described below
under "Trading Limitations." Because there is no universally accepted definition
of what constitutes market timing or excessive trading, we will use our
reasonable judgment based on all of the circumstances.
While we seek to deter market timing and excessive trading in Variable
Sub-Accounts, because our procedures involve the exercise of reasonable
judgment, we may not identify or prevent some market timing or excessive
trading. Moreover, imposition of trading limitations is triggered by the
detection of market timing or excessive trading activity, and the trading
limitations are not applied prior to detection of such trading activity.
Therefore, our policies and procedures do not prevent such trading activity
before it is detected. As a result, some investors may be able to engage in
market timing and excessive trading, while others are prohibited, and the
portfolio may experience the adverse effects of market timing and excessive
trading described above.
TRADING LIMITATIONS
We reserve the right to limit transfers among the investment alternatives in any
Contract year, or to refuse any transfer request, if:
.. we believe, in our sole discretion, that certain trading practices, such as
excessive trading, by, or on behalf of, one or more Contract Owners, or a
specific transfer request or group of transfer requests, may have a
detrimental effect on the Accumulation Unit Values of any Variable Sub-Account
or on the share prices of the corresponding Portfolio or otherwise would be to
the disadvantage of other Contract Owners; or
.. we are informed by one or more of the Portfolios that they intend to restrict
the purchase, exchange, or redemption of Portfolio shares because of excessive
trading or because they believe that a specific transfer or group of transfers
would have a detrimental effect on the prices of Portfolio shares.
In making the determination that trading activity constitutes market timing or
excessive trading, we will consider, among other things:
48 PROSPECTUS
.. the total dollar amount being transferred, both in the aggregate and in the
transfer request;
.. the number of transfers you make over a period of time and/or the period of
time between transfers (note: one set of transfers to and from a Variable
Sub-Account in a short period of time can constitute market timing);
.. whether your transfers follow a pattern that appears designed to take
advantage of short term market fluctuations, particularly within certain
Variable Sub-Account underlying Portfolios that we have identified as being
susceptible to market timing activities;
.. whether the manager of the underlying Portfolio has indicated that the
transfers interfere with Portfolio management or otherwise adversely impact
the Portfolio; and
.. the investment objectives and/or size of the Variable Sub-Account underlying
Portfolio.
We seek to apply these trading limitations uniformly. However, because these
determinations involve the exercise of discretion, it is possible that we may
not detect some market timing or excessive trading activity. As a result, it is
possible that some investors may be able to engage in market timing or excessive
trading activity, while others are prohibited, and the Portfolio may experience
the adverse effects of market timing and excessive trading described above.
If we determine that a Contract Owner has engaged in market timing or excessive
trading activity, we will restrict that Contract Owner from making future
additions or transfers into the impacted Variable Sub-Account(s). If we
determine that a Contract Owner has engaged in a pattern of market timing or
excessive trading activity involving multiple Variable Sub-Accounts, we will
also require that all future transfer requests be submitted through regular U.S.
mail thereby refusing to accept transfer requests via telephone, facsimile,
Internet, or overnight delivery.
In our sole discretion, we may revise our Trading Limitations at any time as
necessary to better deter or minimize market timing and excessive trading or to
comply with regulatory requirements.
SHORT TERM TRADING FEES
We reserve the right to assess short-term trading fees in connection with
transfers from Variable Sub-Accounts that occur within a certain number of days
following the date of allocation to the Variable Sub-Accounts. Such fees may
vary by Variable Sub-Account, but will only apply to those Variable Sub-Accounts
corresponding to underlying mutual funds that assess such fees.
DOLLAR COST AVERAGING PROGRAM
Through our Dollar Cost Averaging Program, you may automatically transfer a
fixed dollar amount on a regular basis from any Variable Sub-Account or any
Fixed Account Option to any of the other Variable Sub-Accounts. You may not use
the Dollar Cost Averaging Program to transfer amounts to the Fixed Account
Options. This program is available only during the Accumulation Phase.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market. Call or write us for instructions on how to enroll.
AUTOMATIC PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. Money you
allocate to the Fixed Account will not be included in the rebalancing.
We will rebalance your account quarterly, semi-annually, or annually. We will
measure these periods according to your instructions. We will transfer amounts
among the Variable Sub-Accounts to achieve the percentage allocations you
specify. You can change your allocations at any time by contacting us in writing
or by telephone. The new allocation will be effective with the first rebalancing
that occurs after we receive your written or telephone request. We are not
responsible for rebalancing that occurs prior to receipt of proper notice of
your request.
Example:
Assume that you want your initial purchase payment split among 2 Variable
Sub-Accounts. You want 40% to be in the Morgan Stanley VIS Income Plus -
Class Y Sub-Account and 60% to be in the Van Kampen LIT Aggressive Growth,
Class II Sub-Account. Over the next 2 months the bond market does very well
while the stock market performs poorly. At the end of the first quarter,
the Morgan Stanley VIS Income Plus - Class Y Sub-Account now represents 50%
of your holdings because of its increase in value. If you choose to have
your holdings in a Contract or Contracts rebalanced quarterly, on the first
day of the next quarter we would sell some of your units in the Morgan
Stanley VIS Income Plus - Class Y Sub-Account for the appropriate
Contract(s) and use the money to buy more units in the Van Kampen LIT
Aggressive Growth, Class II Sub-Account so that the
49 PROSPECTUS
percentage allocations would again be 40% and 60% respectively.
The transfers made under the program do not count towards the 12 transfers you
can make without paying a transfer fee, and are not subject to a transfer fee.
Portfolio rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Contract Value allocated to the better performing segments.
EXPENSES
- --------------------------------------------------------------------------------
As a Contract Owner, you will bear, directly or indirectly, the charges and
expenses described below.
CONTRACT MAINTENANCE CHARGE
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$30 contract maintenance charge from your assets invested in the Morgan Stanley
VIS Money Market Variable Sub-Account. If there are insufficient assets in that
Variable Sub-Account, we will deduct the balance of the charge proportionally
from the other Variable Sub-Accounts. We also will deduct this charge if you
withdraw your entire Contract Value, unless your Contract qualifies for a
waiver. During the Payout Phase, we will deduct the charge proportionately from
each income payment.
The charge is to compensate us for the cost of administering the Contracts and
the Variable Account. Maintenance costs include expenses we incur in billing and
collecting purchase payments; keeping records; processing death claims, cash
withdrawals, and policy changes; proxy statements; calculating Accumulation Unit
Values and income payments; and issuing reports to Contract Owners and
regulatory agencies. We cannot increase the charge. We will waive this charge:
.. for the remaining term of the Contract once your total purchase payments to
the Contract equal $50,000 or more; or
.. for a Contract Anniversary, if on that date, your entire Contract Value is
allocated to the Fixed Account Options, or after the Payout Start Date, if all
income payments are fixed income payments.
We reserve the right to waive this charge for all Contracts.
ADMINISTRATIVE EXPENSE CHARGE
We deduct an administrative expense charge daily at an annual rate of 0.30%
(0.19% for Contracts issued before January 1, 2005) of the average daily net
assets you have invested in the Variable Sub-Accounts. We intend this charge to
cover actual administrative expenses that exceed the revenues from the contract
maintenance charge. There is no necessary relationship between the amount of
administrative charge imposed on a given Contract and the amount of expenses
that may be attributed to that Contract. We assess this charge each day during
the Accumulation Phase and the Payout Phase. We may increase this charge for
Contracts issued in the future, but in no event will it exceed 0.35%. We
guarantee that after your Contract is issued we will not increase this charge
for your Contract.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily from the net assets you have
invested in the Variable Sub-Accounts. We assess mortality and expense risk
charges during the Accumulation and Payout Phases of the Contract, except as
noted below. The annual mortality and expense risk charge for the Contracts
without any optional benefit are as follows:
ALLSTATE VARIABLE ANNUITY 1.10%
- ---------------------------------------------------
ALLSTATE VARIABLE ANNUITY - L SHARE
1.50%
- ---------------------------------------------------
The mortality and expense risk charge is for all the insurance benefits
available with your Contract (including our guarantee of annuity rates and the
death benefits), for certain expenses of the Contract, and for assuming the risk
(expense risk) that the current charges will not be sufficient in the future to
cover the cost of administering the Contract. If the charges under the Contract
are not sufficient, then we will bear the loss. We charge an additional amount
for the optional benefits to compensate us for the additional risk that we
accept by providing these options.
You will pay additional mortality and expense risk charges if you add any
optional benefits to your Contract. The additional mortality and expense risk
charge you pay will depend upon which of the options you select:
.. MAV Death Benefit Option: The current mortality and expense risk charge for
this option is 0.20%. This charge may be increased, but will never exceed
0.30%. We guarantee that we will not increase the mortality and expense risk
charge for this option after you have added it to your Contract. We deduct the
charge for this option only during the Accumulation Phase.
.. Enhanced Beneficiary Protection (Annual Increase) Option: The current
mortality and expense risk charge for this option is 0.30%. This charge will
never exceed 0.30%. We guarantee that we will not increase the mortality and
expense risk charge for this option after you have added it to your Contract.
We deduct the charge for this option only during the Accumulation Phase.
50 PROSPECTUS
.. Earnings Protection Death Benefit Option: The current mortality and expense
risk charge for this option is:
. 0.25% (maximum of 0.35%) if the oldest Contract Owner and oldest Annuitant
are age 70 or younger on the Rider Application Date;
. 0.40% (maximum of 0.50%) if the oldest Contract Owner or oldest Annuitant
is age 71 or older and both are age 79 or younger on the Rider Application
Date.
The charges may be increased but they will never exceed the maximum charges
shown above. We guarantee that we will not increase the mortality and expense
risk charge for this option after you have added it to your Contract. However,
if your spouse elects to continue the Contract in the event of your death and if
he or she elects to continue the Earnings Protection Death Benefit Option, the
charge will be based on the ages of the oldest new Contract Owner and the oldest
Annuitant at the time the Contract is continued. Refer to the Death Benefit
Payments provision in this prospectus for more information. We deduct the
charge for this option only during the Accumulation Phase.
.. Income Protection Benefit Option: The current mortality and expense risk
charge for this option is 0.50%. This charge may be increased, but will never
exceed 0.75%. We guarantee that we will not increase the mortality and expense
risk charge for this option after you have added it to your Contract. The
charge will be deducted only during the Payout Phase.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION FEE
We charge a separate annual Rider Fee for the TrueReturn Option. The current
annual Rider Fee is 0.50% of the Benefit Base. We deduct the Rider Fee on each
Contract Anniversary during the Rider Period or until you terminate the Option,
if earlier. We reserve the right to increase the Rider Fee to up to 1.25%. We
currently charge the same Rider Fee regardless of the Rider Period and Guarantee
Option you select, however we reserve the right to charge different fees for
different Rider Periods and Guarantee Options in the future. However, once we
issue your Option, we cannot change the Rider Fee that applies to your Contract.
If you elect to exercise the Rider Trade-In Option, the new Rider Fee will be
based on the Rider Fee percentage applicable to a new TrueReturn Option at the
time of trade-in.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro rata
basis in the proportion that your value in each Variable Sub-Account bears to
your total value in all Variable Sub-Accounts. Rider Fees will decrease the
number of Accumulation Units in each Variable Sub-Account. If you terminate this
Option prior to the Rider Maturity Date on a date other than a Contract
Anniversary, we will deduct an entire Rider Fee from your Contract Value on the
date the Option is terminated. However, if the Option is terminated due to death
of the Contract Owner or Annuitant, we will not charge a Rider Fee unless the
date we receive a Complete Request for Settlement of the Death Proceeds is also
a Contract Anniversary. If the Option is terminated on the Payout Start Date,
we will not charge a Rider Fee unless the Payout Start Date is also a Contract
Anniversary. Additionally, if you elect to exercise the Rider Trade-In Option
and cancel the Option on a date other than a Contract Anniversary, we will not
deduct a Rider Fee on the date the Option is terminated. Refer to the
"TrueReturn/sm/ Accumulation Benefit Option" section of this prospectus for more
information.
SPOUSAL PROTECTION BENEFIT(CO-ANNUITANT) OPTION FEE AND SPOUSAL PROTECTION
BENEFIT(CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL RETIREMENT ACCOUNTS FEE
We charge a separate annual Rider Fee for both the Spousal Protection Benefit
(Co-Annuitant) Option and Spousal Protection Benefit (Co-Annuitant) Option for
Custodial Individual Retirement Accounts. The current annual Rider Fee is 0.10%
of the Contract Value for either Option. This applies to all new Options added
on or after January 1, 2005. For Options added prior to January 1, 2005, there
is no charge associated with the Options. We deduct the Rider Fee on each
Contract Anniversary up to and including the date you terminate the Option. We
reserve the right to increase the annual Rider Fee to up to 0.15% of the
Contract Value. We reserve the right to charge different Rider Fees for new
Spousal Protection Benefit (Co-Annuitant) Options and/ or new Spousal Protection
Benefit (Co-Annuitant) Options for Custodial Individual Retirement Accounts we
offer in the future. Once we issue your Option, we cannot change the Rider Fee
that applies to your Contract.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro-rata
basis in the proportion that your value in each Variable Sub-Account bears to
your total value in all Variable Sub-Accounts. Rider Fees will decrease the
number of Accumulation Units in each Variable Sub-Account. If, at the time the
Rider Fee is deducted, the Rider Fee exceeds the total value in all Variable
Sub-Accounts, the excess of the Rider Fee over the total value in all Variable
Sub-Accounts will be waived.
The first Rider Fee will be deducted on the first Contract Anniversary following
the Rider Date. A Rider Fee will be deducted on each subsequent Contract
Anniversary up to and including the date the Option is terminated. We will not
charge a Rider Fee on the date the Option is terminated, on a date other than
the Contract Anniversary, if the Option is terminated on the Payout Start Date
or due to death of the Contract Owner or Annuitant.
51 PROSPECTUS
For the first Contract Anniversary following the Rider Date, the Rider Fee is
equal to the number of months from the Rider Date to the first Contract
Anniversary, divided by twelve, multiplied by 0.10%, with the result multiplied
by the Contract Value as of the first Contract Anniversary. For subsequent
Contract Anniversaries, the Rider Fee is equal to 0.10% multiplied by the
Contract Value as of that Contract Anniversary. If you terminate this Option on
a date other than a Contract Anniversary, we will deduct a Rider Fee. The Rider
Fee will be pro-rated to cover the period from the last Contract Anniversary to
the date of termination, or if you terminate this Option during the first
Benefit Year, from the Rider Date to the date of termination. The pro-rated
Rider Fee will be equal to the number of full months from the Contract
Anniversary to the date of termination, or if you terminate this Option during
the first Contract Year after adding the Option, the number of full months from
the Rider Date to the date of termination, divided by twelve, multiplied by
0.10%, with the result multiplied by the Contract Value immediately prior to the
termination.
RETIREMENT INCOME GUARANTEE OPTION FEE
We discontinued offering the Retirement Income Guarantee Options as of January
1, 2004 (up to May 1, 2004 in certain states). Fees described below apply to
Contract Owners who selected an Option prior to January 1, 2004 (up to May 1,
2004 in certain states). We impose a separate annual Rider Fee for RIG 1 and RIG
2. The current annual Rider Fee for RIG 1 is 0.40% of the Income Base on each
Contract Anniversary. The current annual Rider Fee for RIG 2 is 0.55% of the
Income Base on each Contract Anniversary. See "Retirement Income Guarantee
Options" for details.
We deduct the Rider Fees only from the Variable Sub-Account(s) on a pro-rata
basis. For the initial Contract Anniversary after the Rider Date, we will deduct
a fee pro rated to cover the period from the Rider Date to the Contract
Anniversary. In the case of a full withdrawal of the Contract Value on any date
other than the Contract Anniversary, we will deduct from the amount paid upon
withdrawal the Rider Fee multiplied by the appropriate Income Base immediately
prior to the withdrawal pro rated to cover the period the Option was in effect
during the current Contract Year. We will not deduct the Rider Fee during the
Payout Phase.
SUREINCOME WITHDRAWAL BENEFIT OPTION FEE
We charge a separate annual fee for the SureIncome Option ("SureIncome Option
Fee" or "Rider Fee"). The current annual Rider Fee is 0.50% of the Benefit Base.
We deduct the Rider Fee on each Contract Anniversary up to and including the
date you terminate the Option. We reserve the right to increase the Rider Fee to
up to 1.25% of the Benefit Base. We reserve the right to charge different Rider
Fees for different Withdrawal Benefit Factors we may offer in the future. Once
we issue your SureIncome Option, we cannot change the Rider Fee that applies to
your Contract. If you elect to exercise the Rider Trade-In Option, the new Rider
Fee will be based on the Rider Fee percentage applicable to a new SureIncome
Option at the time of trade-in.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro-rata
basis in the proportion that your Contract Value in each Variable Sub-Account
bears to your total Contract Value in all Variable Sub-Accounts. Rider Fees will
decrease the number of Accumulation Units in each Variable Sub-Account. If, at
the time the Rider Fee is deducted, the Rider Fee exceeds the total Contract
Value in all Variable Sub-Accounts, the excess of the Rider Fee over the total
Contract Value in all Variable Sub-Accounts will be waived.
The first Rider Fee will be deducted on the first Contract Anniversary following
the Rider Date. A Rider Fee will be deducted on each subsequent Contract
Anniversary up to and including the date the SureIncome Option is terminated.
For the first Contract Anniversary following the Rider Date, the Rider Fee is
equal to the number of months from the Rider Date to the first Contract
Anniversary, divided by twelve, multiplied by 0.50%, with the result multiplied
by the Benefit Base as of the first Contract Anniversary. For subsequent
Contract Anniversaries, the Rider Fee is equal to the 0.50% multiplied by the
Benefit Base as of that Contract Anniversary.
If you terminate this SureIncome Option on a date other than a Contract
Anniversary, we will deduct a Rider Fee unless the termination is on the Payout
Start Date or is due to the death of the Contract Owner or Annuitant. The Rider
Fee will be pro-rated to cover the period from the last Contract Anniversary to
the date of termination or, if you terminate the SureIncome Option during the
first Benefit Year, from the Rider Date to the date of termination. The
pro-rated Rider Fee will be equal to the number of full months from the Contract
Anniversary to the date of termination or, if you terminate this Option during
the first Benefit Year, the number of full months from the Rider Date to the
date of termination, divided by twelve, multiplied by 0.50%, with the result
multiplied by the Benefit Base immediately prior to the withdrawal or
termination. The Rider Fee will be waived during the Withdrawal Benefit Payout
Phase.
TRANSFER FEE
We impose a fee upon transfers in excess of 12 during any Contract Year. The
current fee is equal to 1.00% of the dollar amount transferred. This fee may be
increased, but in no event will it exceed 2.00% of the dollar amount
transferred. We will not charge a transfer fee on transfers that are part of a
Dollar Cost Averaging Program or Automatic Portfolio Rebalancing Program.
52 PROSPECTUS
WITHDRAWAL CHARGE
We may assess a withdrawal charge from the purchase payment(s) you withdraw. The
amount of the charge will depend on the number of years that have elapsed since
we received the purchase payment being withdrawn. A schedule showing the
withdrawal charges applicable to each Contract appears on page 11. If you make a
withdrawal before the Payout Start Date, we will apply the withdrawal charge
percentage in effect on the date of the withdrawal, or the withdrawal charge
percentage in effect on the following day, whichever is lower.
Withdrawals also may be subject to tax penalties or income tax. You should
consult with your tax counsel or other tax advisor regarding any withdrawals.
Withdrawals from the Market Value Adjusted Fixed Account Option may be subject
to a market value adjustment. Refer to page 45 for more information on market
value adjustments.
FREE WITHDRAWAL AMOUNT
You can withdraw up to the Free Withdrawal Amount each Contract Year without
paying the withdrawal charge. The Free Withdrawal Amount for a Contract Year is
equal to 15% of all purchase payments that are subject to a withdrawal charge as
of the beginning of that Contract Year, plus 15% of the purchase payments added
to the Contract during the Contract Year. The withdrawal charge applicable to
Contracts owned by Charitable Remainder Trusts is described below.
Purchase payments no longer subject to a withdrawal charge will not be used to
determine the Free Withdrawal Amount for a Contract Year, nor will they be
assessed a withdrawal charge, if withdrawn. The Free Withdrawal Amount is not
available in the Payout Phase.
You may withdraw up to the Free Withdrawal Amount in each Contract Year it is
available without paying a withdrawal charge; however, the amount withdrawn may
be subject to a Market Value Adjustment or applicable taxes. If you do not
withdraw the entire Free Withdrawal Amount in a Contract Year, any remaining
portion may not be carried forward to increase the Free Withdrawal Amount in a
later Contract Year.
For purposes of assessing the withdrawal charge, we will treat withdrawals as
coming from the oldest purchase payments first as follows:
1) Purchase payments that no longer are subject to withdrawal charges;
2) Free Withdrawal Amount (if available);
3) Remaining purchase payments subject to withdrawal charges, beginning with the
oldest purchase payment;
4) Any earnings not previously withdrawn.
However, for federal income tax purposes, earnings are considered to come out
first, which means that you will pay taxes on the earnings portion of your
withdrawal.
If the Contract Owner is a Charitable Remainder Trust, the Free Withdrawal
Amount in a Contract Year is equal to the greater of:
.. The Free Withdrawal Amount described above; or
.. Earnings as of the beginning of the Contract Year that have not been
previously withdrawn.
For purposes of assessing the withdrawal charge for a Charitable Remainder
Trust-Owned Contract, we will treat withdrawals as coming from the earnings
first and then the oldest purchase payments as follows:
1) Earnings not previously withdrawn;
2) Purchase payments that are no longer subject to withdrawal charges;
3) Free Withdrawal Amount in excess of earnings;
4) Purchase payments subject to withdrawal charges, beginning with the oldest
purchase payment.
ALL CONTRACTS
We do not apply a withdrawal charge in the following situations:
.. the death of the Contract Owner or Annuitant (unless the Settlement Value is
used);
.. withdrawals taken to satisfy IRS minimum distribution rules for the Contract;
or
.. withdrawals that qualify for one of the waivers described below.
We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts. To the extent that the withdrawal charge does not cover all sales
commissions and other promotional or distribution expenses, we may use any of
our corporate assets, including potential profit which may arise from the
mortality and expense risk charge or any other charges or fee described above,
to make up any difference.
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. 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,
53 PROSPECTUS
2. we receive your request for withdrawal and written proof of the stay no later
than 90 days following the end of your or the Annuitant's stay at the long term
care facility or hospital, and
3. a physician must have prescribed the stay and the stay must be medically
necessary (as defined in the Contract).
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 adequate proof of diagnosis to us before or at the time you
request the withdrawal.
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,
2. you or the Annuitant receive Unemployment Compensation for at least 30 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 some time 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 each
investment alternative in the proportion that the Contract Value in the
investment alternative bears to the total Contract Value.
DEDUCTION FOR SEPARATE ACCOUNT INCOME TAXES
We are not currently maintaining a provision for taxes. In the future, however,
we may establish a provision for taxes if we determine, in our sole discretion,
that we will incur a tax as a result of the operation of the Variable Account.
We will deduct for any taxes we incur as a result of the operation of the
Variable Account, whether or not we previously made a provision for taxes and
whether or not it was sufficient. Our status under the Internal Revenue Code is
briefly described in the "Taxes" section of this prospectus.
OTHER EXPENSES
Each Portfolio deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are held
by the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectuses for the Portfolios. For a summary of Portfolio annual
expenses, see pages 13. We may receive compensation from the investment
advisers, administrators or distributors, or their affiliates, of the Portfolios
in connection with the administrative, distribution, or other services we
provide to the Portfolios.
ACCESS TO YOUR MONEY
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You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals also are available under limited circumstances on
or after the Payout Start Date. See "Income Plans" on page 56.
54 PROSPECTUS
The amount payable upon withdrawal is the Contract Value (or portion thereof)
next computed after we receive the request for a withdrawal at our home office,
adjusted by any applicable Market Value Adjustment, less any applicable
withdrawal charges, income tax withholding, penalty tax, contract maintenance
charge, Rider Fee, and any premium taxes. We will pay withdrawals from the
Variable Account within 7 days of receipt of the request, subject to
postponement in certain circumstances. You can withdraw money from the Variable
Account or the Fixed Account Option(s) available under your Contract. To
complete a partial withdrawal from the Variable Account, we will cancel
Accumulation Units in an amount equal to the withdrawal and any applicable
charges, fees and premium taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored.
In general, you must withdraw at least $50 at a time.
Withdrawals from the Standard Fixed Account Option may be subject to a
restriction. See "Standard Fixed Account Options" on page 44.
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 penalty tax. If any withdrawal reduces
your Contract Value to less than $1,000, we will treat the request as a
withdrawal of the entire Contract Value unless the SureIncome Withdrawal Benefit
Option is currently attached to your Contract. If you request a total
withdrawal, we may require that you return your Contract to us. Your Contract
will terminate if you withdraw all of your Contract Value, subject to certain
exceptions if the SureIncome Withdrawal Benefit Option is currently attached to
your Contract. See "SureIncome Withdrawal Benefit Option" for more details. We
will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, adjusted by any applicable Market Value Adjustment, less
withdrawal and other charges and taxes.
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1. The New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted,
2. An emergency exists as defined by the SEC, or
3. The SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Option(s)
available under your Contract for up to 6 months or shorter period if required
by law. If we delay payment or transfer for 30 days or more, we will pay
interest as required by law.
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. Please consult your sales representative or call us at 1-800-654-2397 for
more information.
Depending on fluctuations in the value of the Variable Sub-Accounts and the
value of the Fixed Account Options, systematic withdrawals may reduce or even
exhaust the Contract Value. Income taxes may apply to systematic withdrawals.
Please consult your tax advisor before taking any withdrawal.
We will make systematic withdrawal payments to you or your designated payee. At
our discretion, 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.
MINIMUM CONTRACT VALUE
If your request for a partial withdrawal would reduce your Contract Value to
less than $1,000, we may treat it as a request to withdraw your entire Contract
Value unless the SureIncome Withdrawal Benefit Option is currently attached to
your Contract. 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. If we terminate your Contract, we will distribute to
you its Contract Value, adjusted by any applicable Market Value Adjustment, less
withdrawal and other charges and applicable taxes.
INCOME PAYMENTS
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PAYOUT START DATE
The Payout Start Date is the day that we apply your Contract Value adjusted by
any applicable Market Value Adjustment and less applicable taxes to an Income
Plan. The first income payment must occur at least 30 days after the Issue Date.
The Payout Start Date may be no later than:
.. the Annuitant's 99th 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.
55 PROSPECTUS
INCOME PLANS
An "Income Plan" is a series of payments made on a scheduled basis to you or to
another person designated by you. You may select more than one Income Plan. If
you choose more than one Income Plan, you must specify what proportions of your
Contract Value, adjusted by any Market Value Adjustment and less any applicable
taxes, should be allocated to each such Income Plan. For tax reporting purposes,
your cost basis and any gain on the Contract will be allocated proportionally to
each Income Plan you select based on the proportion of your Contract Value
applied to each such Income Plan. We reserve the right to limit the number of
Income Plans that you may select. If you choose to add the Income Protection
Benefit Option, certain restrictions may apply as described under "Income
Protection Benefit Option," below. If you do not select an Income Plan, we will
make income payments in accordance with Income Plan 1 with a Guaranteed Payment
Period of 10 years. If any Contract Owner dies during the Payout Phase, 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" section of this prospectus. Any remaining income payments
will be paid to the new Contract Owner as scheduled. Income payments to
Beneficiaries may be subject to restrictions established by the Contract Owner.
After the Payout Start Date, you may not make withdrawals (except as described
below) or change your choice of Income Plan.
Currently seven Income Plans are available. Depending on the Income Plan(s) you
choose, you may receive:
.. fixed income payments;
.. variable income payments; or
.. a combination of the two.
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 basis 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 591/2 may be
subject to an additional 10% federal tax penalty.
The seven Income Plans are:
INCOME PLAN 1 - LIFE INCOME WITH 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 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 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 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. You may elect a reduced survivor plan of 50%, 66% or 75%
of the payment amount. If you do not elect a reduced survivor amount, the
payments will remain at 100%. If you elect a reduced survivor payment plan, the
amount of each income payment initially will be higher but a reduction will take
place at the later of 1) the death of an Annuitant; or 2) at the end of the
guaranteed payment period.
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 prior to 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. We will
deduct the mortality and expense risk charge from the assets of the Variable
Sub-Account supporting this Income Plan even though we may not bear any
mortality risk. You may make withdrawals, change the length of the guaranteed
payment period, or change the frequency of income payments under Income Plan 3.
See "Modifying Payments" and "Payout Withdrawals" below for more details.
INCOME PLAN 4 -LIFE INCOME WITH CASH REFUND. Under this plan, we make periodic
income payments until the death of the Annuitant. If the death of the Annuitant
occurs before the total amount applied to an Income Plan is paid out, we will
pay a lump sum payment of the remaining amount. Payments under this plan are
available only as fixed income payments.
INCOME PLAN 5 -JOINT LIFE INCOME WITH CASH REFUND. Under this plan, we make
periodic income payments until the deaths of both the Annuitant and joint
Annuitant. If the deaths of both the Annuitant and joint Annuitant occur before
the total amount applied to an Income Plan is paid out, we will pay a lump sum
payment of the remaining amount. Currently, a reduced survivor plan is not
available. Payments under this plan are available only as fixed income payments.
INCOME PLAN 6 -LIFE INCOME WITH INSTALLMENT REFUND. Under this plan, we make
periodic income payments until the later of (1) the death of the Annuitant,
56 PROSPECTUS
or (2) the total amount paid out under the annuity is equal to the total amount
applied to the Income Plan. If the death of the Annuitant occurs before the
total amount applied to an Income Plan is paid out, we will continue to make
payments in the same manner until any remaining payments are paid out. Payments
under this plan are available only as fixed income payments.
INCOME PLAN 7 - JOINT LIFE INCOME WITH INSTALLMENT REFUND. Under this plan, we
make periodic income payments until the later of (1) the deaths of both the
Annuitant and joint Annuitant, or (2) the total amount paid out under the
annuity is equal to the total amount applied to the Income Plan. If the deaths
of both the Annuitant and joint Annuitant occur before the total amount applied
to an Income Plan is paid out, we will continue to make payments in the same
manner until any remaining payments are paid out. Currently, a reduced survivor
plan is not available. Payments under this plan are available only as fixed
income payments.
If you choose an Income Plan with payments that continue for the life of the
Annuitant or joint Annuitant, we may require proof of age and sex of the
Annuitant or joint Annuitant before starting income payments, and proof that the
Annuitant or joint Annuitant is alive before we make each payment. Please note
that under Income Plans 1 and 2, if you do not select a Guaranteed Payment
Period, it is possible that the payee could receive only one income payment if
the Annuitant and any joint Annuitant both die before the second income payment,
or only two income payments if they die before the third income payment, and so
on.
The length of any Guaranteed Payment Period under your selected Income Plan
generally will affect the dollar amounts of each income payment. As a general
rule, longer Guarantee Payment 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 guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a specified Guaranteed Payment Period.
MODIFYING PAYMENTS
After the Payout Start Date, you may make the following changes under Income
Plan 3:
.. You may request to modify the length of the Guaranteed Payment Period.
Currently, we allow you to make this change once each Contract Year. We
reserve the right to change this practice at any time without prior notice. If
you elect to change the length of the Guaranteed Payment Period, the new
Guaranteed Payment Period must be within the original minimum and maximum
period you would have been permitted to select on the Payout Start Date.
However, the maximum payment period permitted will be shortened by the period
elapsed since the original Guaranteed Payment Period began. If you change the
length of your Guaranteed Payment Period, we will compute the present value of
your remaining payments, using the same assumptions we would use if you were
terminating the income payments, as described in Payout Withdrawal. We will
then adjust the remaining payments to equal what that value would support
based on those same assumptions and based on the revised Guaranteed Payment
Period.
.. You may request to change the frequency of your payments. We currently allow
you to make this change once each Contract Year. We reserve the right to
change this practice at any time without prior notice.
Changes to either the frequency of payments or length of the Guaranteed Payment
Period will result in a change to the payment amount and may change the amount
of each payment that is taxable to you.
Modifying payments of this Contract may not be allowed under qualified plans. In
order to satisfy required minimum distributions ("RMD") under current Treasury
regulations, once income payments have begun over a Guaranteed Payment Period,
the Guaranteed Payment Period may not be changed even if the new period is
shorter than the maximum permitted. Please consult with a competent tax advisor
prior to making a request to modify payments if your contract is subject to RMD
requirements.
Any change to either the frequency of payments or length of a Guaranteed
Payment Period will take effect on the next payment date after we accept the
requested change.
PAYOUT WITHDRAWAL
You may terminate all or a portion of the income payments being made under
Income Plan 3 at any time and withdraw their present value ("withdrawal value"),
subject to a Payout Withdrawal Charge, by writing to us ("Payout Withdrawal").
For variable income payments, the withdrawal value is equal to the present value
of the variable income payments being terminated, calculated using a discount
rate equal to the assumed investment rate that was used in determining the
initial variable payment. For fixed income payments, the withdrawal value is
equal to the present value of the fixed income payments being terminated,
calculated using a discount rate equal to the applicable current interest rate
(this may be the initial interest rate in some states). The applicable current
interest rate is the rate we are using on the date we receive your Payout
Withdrawal request to determine income payments for a new annuitization with a
payment period equal to the remaining payment period of the income payments
being terminated.
A Payout Withdrawal must be a least $50. If any Payout Withdrawal reduces the
value of the remaining income payments to an amount not sufficient to provide an
initial
57 PROSPECTUS
payment of at least $20, we reserve the right to terminate the Contract and pay
you the present value of the remaining income payments in a lump sum. If you
withdraw the entire value of the remaining income payments, the Contract will
terminate.
You must specify the investment alternative(s) from which you wish to make a
Payout Withdrawal. If you withdraw a portion of the value of your remaining
income payments, the payment period will remain unchanged and your remaining
payment amounts will be reduced proportionately.
PAYOUT WITHDRAWAL CHARGE
To determine the Payout Withdrawal Charge, we assume that purchase payments are
withdrawn first, beginning with the oldest payment. When an amount equal to all
purchase payments has been withdrawn, additional withdrawals will not be
assessed a Payout Withdrawal Charge.
Payout Withdrawals will be subject to a Payout Withdrawal Charge for each
Contract as follows:
Number of Complete Years Since We Received the Purchase Payment Being Withdrawn/Applicable Charge:
Contract: 0 1 2 3 4 5 6 7 8+
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Allstate Variable
Annuity 7% 7% 6% 5% 4% 3% 2% 0% 0%
Allstate Variable
Annuity - L Share 7% 6% 5% 0%
ADDITIONAL INFORMATION. We may make other Income Plans available. You may
obtain information about them by writing or calling us. On the Payout Start
Date, you must specify the portion of the Contract Value to be applied to
variable income payments and the portion to be applied to fixed income payments.
For the portion of your Contract Value to be applied to variable income
payments, you must also specify the Variable Sub-Accounts on which to base the
variable income payments as well as the allocation among those Variable
Sub-Accounts. If you do not choose how the Contract Value is to be applied, then
the portion of the Contract Value in the Variable Account on the Payout Start
Date will be applied to variable income payments, according to the Variable
Sub-Account allocations as of the Payout Start Date, and the remainder of the
Contract Value will be applied to fixed income payments.
We will apply your Contract Value, adjusted by any applicable Market Value
Adjustment, less applicable taxes to your Income Plan(s) on the Payout Start
Date. We can make income payments in monthly, quarterly, semi-annual or annual
installments, as you select. If the Contract Value is less than $2,000 when it
is applied to the Income Plan(s) you choose, or not enough to provide an initial
payment of at least $20 when it is applied to the Income Plan(s) you choose, and
state law permits, we may:
.. terminate the Contract and pay you the Contract Value, adjusted by any
applicable Market Value Adjustment and less any applicable taxes, in a lump
sum instead of the periodic payments you have chosen, or
.. reduce the frequency of your payments so that each payment will be at least
$20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by (a) company mortality experience or (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments, which may
be more or less than your total purchase payments because (a) variable income
payments vary with the investment results of the underlying Portfolios; and (b)
under some of the Income Plans, we make income payments only so long as an
Annuitant is alive or any applicable Guaranteed Payment Period has not yet
expired.
In calculating the amount of the periodic payments in the annuity tables in the
Contracts, we used an assumed investment rate ("AIR", also known as benchmark
rate) of 3%. Currently, you may choose either a 6%, 5%, or 3% AIR per year. If
you select the Income Protection Benefit Option, however, the 3% AIR must apply.
The 6% and 5% AIR may not be available in all states (check with your
representative for availability). Currently, if you do not choose one, the 5%
AIR will automatically apply (except in states in which the 5% AIR is not
available; in those states, the 3% AIR will automatically apply). You may not
change the AIR after you have selected an Income Plan.
We reserve the right to offer other assumed investment rates. If the actual net
investment return of the Variable Sub-Accounts you choose is less than the AIR,
then the dollar amount of your variable income payments will decrease. The
dollar amount of your variable income payments will increase, however, if the
actual net investment return exceeds the AIR. The dollar amount of the variable
income payments stays level if the net investment return equals the AIR. With a
higher AIR, your initial income payment will be larger than with a lower AIR.
While income payments continue to be made, however, this disparity will become
smaller and, if the payments have continued long enough, each payment will be
smaller than if you had initially chosen a lower AIR.
Please refer to the Statement of Additional Information for more detailed
information as to how we determine variable income payments.
58 PROSPECTUS
You may also elect a variable income payment stream consisting of level monthly,
quarterly or semi-annual payments. If you elect to receive level monthly,
quarterly or semi-annual payments, the payments must be recalculated annually.
You may only elect to receive level payments at or before the Payout Start Date.
If you have elected level payments for an Income Plan(s), you may not make any
variable to fixed payment transfers within such Income Plan(s). We will
determine the amount of each annual payment as described above, place this
amount in our general account, and then distribute it in level monthly,
quarterly or semi-annual payments. The sum of the level payments will exceed the
annual calculated amount because of an interest rate factor we use, which may
vary from year to year, but will not be less than 2% per year. We do not allow
withdrawals of the annual amount unless you make a full or partial withdrawal
request of the value of the remaining payments under Income Plan 3. Withdrawals
will be assessed a Payout Withdrawal Charge, if applicable. If the Annuitant
dies while you are receiving level payments, you will not be entitled to receive
any remaining level payments for that year (unless the Annuitant dies before the
end of the Guaranteed Payment Period). For example, if you have selected Income
Plan 1 with no Guaranteed Payment Period and the Annuitant dies during the year,
the Beneficiary will not be entitled to receive the remaining level payments for
that year.
INCOME PROTECTION BENEFIT OPTION
We offer an Income Protection Benefit Option, which may be added to your
Contract on the Payout Start Date for an additional mortality and expense risk
charge if you have selected variable income payments subject to the following
conditions:
.. The Annuitant and joint Annuitant, if applicable, must be age 75 or younger on
the Payout Start Date.
.. You must choose Income Plan 1 or 2, and the Guaranteed Payment Period must be
for at least 120 months, unless the Internal Revenue Service requires a
different payment period.
.. You may apply the Income Protection Benefit Option to more than one Income
Plan.
.. The AIR must be 3% for the Income Plan(s) to which you wish to apply this
benefit.
.. You may only add the Income Protection Benefit Option on the Payout Start Date
and, once added, the option cannot be cancelled.
.. You may not convert variable income payments to fixed income payments.
You may not add the Income Protection Benefit Option without our prior approval
if your Contract Value is greater than $1,000,000 at the time you choose to add
the Income Protection Benefit Option.
If you select the Income Protection Benefit Option, we guarantee that your
variable income payments under each of the Income Plans to which the option is
applied will never be less that 85% of the initial variable amount income value
("Income Protection Benefit"), as calculated on the Payout Start Date under such
Income Plans, unless you have elected a reduced survivor payment plan under
Income Plan 2. If you have elected a reduced survivor plan, we guarantee that
your variable income payments to which the option is applied will never be less
than 85% of the initial variable amount income value prior to the later of 1)
the death of Annuitant; or 2) the end of the guarantee payment period. On or
after the later of these events, we guarantee that your variable income payments
will never be less than 85% of the initial variable amount income value
multiplied by the percentage you elected for your reduced survivor plan. See
Appendix C for numerical examples that illustrate how the Income Protection
Benefit is calculated.
If you add the Income Protection Benefit Option to your Contract, the mortality
and expense risk charge during the Payout Phase will be increased. The change
for the Income Protection Benefit Option will apply only to the Income Plan(s)
to which the option has been applied. Currently, the charge for this option is
0.50%. We may change the amount we charge, but it will not exceed 0.75%. Once
the option is issued, we will not increase what we charge you for the benefit.
In order to ensure that we achieve adequate investment diversification ("INCOME
PROTECTION DIVERSIFICATION REQUIREMENT"), we reserve the right, in our sole
discretion, to impose limitations on the investment alternatives in which you
may invest during the Payout Phase with respect to the assets supporting the
variable income payments to which the Income Protection Benefit Option applies.
These limitations may include, but are not limited to, maximum investment limits
on certain Variable Sub-Accounts, exclusion of certain Variable Sub-Accounts,
required minimum allocations to certain Variable Sub-Accounts, and/or the
required use of Automatic Portfolio Rebalancing.
To achieve our Income Protection Diversification Requirement, we have divided
the Variable Sub-Accounts into three separate categories: "unrestricted,"
"restricted" and "excluded." Currently, we require that you allocate between 30%
to 100% of the assets supporting your variable income payments to the
unrestricted Variable Sub-Accounts in any manner you choose. You may allocate up
to 70% of the assets supporting your variable income payments to the restricted
Variable Sub-Accounts. You may not, however, allocate more than 20% of the
assets supporting your variable income payments to any one of the restricted
Variable Sub-Accounts. You may not allocate ANY PORTION of the assets supporting
your variable income payments to the excluded Variable Sub-Accounts.
In the following three tables, we list our current Income Protection
Diversification Requirement:
59 PROSPECTUS
UNRESTRICTED VARIABLE SUB-ACCOUNTS. There is no limit to the amount of assets
supporting your variable income payments that you may allocate to any one or
more of the following Variable Sub-Accounts. Currently, we require that you
allocate AT LEAST 30% of the assets supporting your variable income payments to
this category.
Morgan Stanley VIS Income Plus - Class Y Sub-Account/(6)/
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
Morgan Stanley VIS Money Market - Class Y Sub-Account
RESTRICTED VARIABLE SUB-ACCOUNTS. You may allocate up to 70% of the amount of
assets supporting your variable income payments to the following Variable
Sub-Accounts. Currently, you may not allocate more than 20% of the amount of
assets supporting your variable income payments to any one of the restricted
Variable Sub-Accounts.
Morgan Stanley VIS Aggressive Equity - Class Y Sub-Account
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS Equity - Class Y Sub-Account
Morgan Stanley VIS European Equity - Class Y Sub-Account/(4)/
Morgan Stanley VIS Global Advantage - Class Y Sub-Account/(1)/
Morgan Stanley VIS Global Dividend Growth - Class Y Sub-Account
Morgan Stanley VIS High Yield - Class Y Sub-Account/(1)/
Morgan Stanley VIS Income Builder - Class Y Sub-Account/(1)/
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account
Morgan Stanley VIS Strategist - Class Y Sub-Account
Morgan Stanley VIS Utilities - Class Y Sub-Account/(1)/
AIM V.I. Basic Value - Series II Sub-Account/(1)/
AIM V.I. Premier Equity - Series II Sub-Account/(1)/
AllianceBernstein Growth - Class B Sub-Account
AllianceBernstein Growth and Income - Class B Sub-Account/(1)/
AllianceBernstein International Value - Class B Sub-Account/(2)/
AllianceBernstein Large Cap Growth - Class B Sub-Account/(1,5)/
AllianceBernstein Small/Mid Cap Value - Class B Sub-Account/(5)/
AllianceBernstein Utility Income - Class B Sub-Account/(2)/
AllianceBernstein Value - Class B Sub-Account/(2)/
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account/(2)/
Fidelity VIP Growth & Income - Service Class 2 Sub-Account/(2)/
Fidelity VIP High Income - Service Class 2 Sub-Account/(2)/
Fidelity VIP Mid Cap - Service Class 2 Sub-Account/(2)/
FTVIP Franklin High Income - Class 2 Sub-Account/(1)/
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account/(2)/
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account/(2)/
Goldman Sachs VIT Growth and Income Sub-Account/(2)/
Goldman Sachs VIT Mid Cap Value Sub-Account/(2)/
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account/(1)/
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account/(1)/
Putnam VT New Value - Class IB Sub-Account/(2)/
Putnam VT Voyager - Class IB Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Equity and Income, Class II Sub-Account/(3)/
Van Kampen UIF Equity Growth, Class II Sub-Account/(3)/
60 PROSPECTUS
Van Kampen UIF Global Franchise, Class II Sub-Account/(3)/
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account/(3)/
Van Kampen UIF U.S. Real Estate, Class II Sub-Account/(3)/
EXCLUDED VARIABLE SUB-ACCOUNTS. Currently, none of the following Variable
Sub-Accounts are available to support variable income payments.
Morgan Stanley VIS Information - Class Y Sub-Account/(1)/
AIM V.I. Capital Appreciation - Series II Sub-Account/(1)/
AIM V.I. Mid Cap Core Equity - Series II Sub-Account/(1)/
FTVIP Franklin Flex Cap Growth Securities - Class 2 Sub-Account/(2)/
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account/(2)/
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen UIF Small Company Growth, Class II Sub-Account/(3)/
Van Kampen UIF Emerging Markets Equity, Class II Sub-Account/(3)/
Van Kampen UIF Mid Cap Growth, Class II Sub-Account/(3)/
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account/(1,3)/
1) The Putnam VT Investors - Class IB Sub-Account (Restricted) was only offered
with Contracts issued prior to May 1, 2004, and closed to new investments
effective May 1, 2004. Effective May 1, 2005, the AIM V.I. Basic Value -
Series II Sub-Account (Restricted), the AIM V.I. Capital Appreciation - Series
II Sub-Account (Excluded), the AIM V.I. Mid Cap Core Equity - Series II
Sub-Account (Excluded), the AIM V.I. Premier Equity - Series II Sub-Account
(Restricted), the AllianceBernstein Growth and Income - Class B Sub-Account
(Restricted), the AllianceBernstein Large Cap Growth - Class B Sub-Account
(formerly AllianceBernstein Premier Growth - Class B Sub-Account)
(Restricted), the FTVIP Franklin High Income - Class 2 Sub-Account
(Restricted), the Morgan Stanley VIS Global Advantage - Class Y Sub-Account
(Restricted), the Morgan Stanley VIS High Yield - Class Y Sub-Account
(Restricted), the Morgan Stanley VIS Income Builder - Class Y Sub-Account
(Restricted), the Morgan Stanley VIS Information - Class Y Sub-Account
(Excluded), the Morgan Stanley VIS Utilities - Class Y Sub-Account
(Restricted), the Putnam VT Growth and Income - Class IB
Sub-Account(Restricted) and the Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account (Excluded) are no longer available for new investments. If you
are currently invested in these Variable Sub-Accounts, you may continue your
investments. If prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing or
dollar cost averaging, we will continue to effect automatic transactions to
these Portfolios in accordance with that program. If you choose to add the
Income Protection Benefit Option on or after May 1, 2005, you must transfer
any portion of your Contract Value that is allocated to these Variable
Sub-Accounts to any of the remaining Variable Sub-Accounts available with the
Income Protection Benefit Option prior to adding the Income Protection Benefit
Option to your Contract.
2) The Variable Sub-Account was first offered under the Contracts on April 30,
2005.
3) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
4) Effective December 30, 2004, the Morgan Stanley VIS European Growth Portfolio
- Class Y, changed its name to the Morgan Stanley VIS European Equity
Portfolio - Class Y. We have made a corresponding change to the name of the
Variable Sub-Account that invests in that Portfolio.
5) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio - Class
B and the AllianceBernstein Small Cap Value Portfolio - Class B changed their
names to the AllianceBernstein Large Cap Growth Portfolio - Class B and the
AllianceBernstein Small/ Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
6) Effective April 29, 2005, the Morgan Stanley VIS Quality Income Plus
Portfolio-Class Y changed its name to Morgan Stanley VIS Income Plus Portfolio
- Class Y. We have made a corresponding change to the name of the Variable
Sub-Accounts that invest in these Portfolios.
You must use quarterly Automatic Portfolio Rebalancing to meet our Income
Protection Diversification Requirement. On the date of each rebalancing, we will
reallocate the amount of the assets supporting your variable income payments
according to the rebalancing percentages you have selected, subject to the then
current restrictions and exclusions in effect. We expect that the restrictions
and exclusions for each category will change from time to time. Any change in
these restrictions and exclusions will become effective no later than the next
61 PROSPECTUS
regularly scheduled rebalancing of your Variable Sub-Account choices on or
immediately after the date of change.
The Income Protection Diversification Requirement is based on a model. We may
use a model developed and maintained by us or we may elect to use a model
developed or provided by an independent third party. We will notify you at least
30 days before we make any change to our Income Protection Diversification
Requirement.
We may determine which Variable Sub-Accounts are eligible for each category or
we may elect to follow the recommendations of an independent third party. We may
at any time make new determinations as to which Variable Sub-Accounts are
unrestricted, restricted or excluded. We may do so for a variety of reasons
including, but not limited to, a change in the investment objectives or policies
of a Portfolio, or the failure, in our sole determination, of such Portfolio to
invest in accordance with its stated investment objective or policies.
Transfers made for purposes of meeting the Income Protection Diversification
Requirement will not count towards the number of free transfers you may make
each Contract Year. See "Investment Alternatives: Transfers," above, for
additional information.
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. The guaranteed income payment amounts will
change if the frequency of payments or the length of the payment period changes.
We calculate the fixed income payments by:
.. adjusting the portion of the Contract Value in any Fixed Account Option on the
Payout Start Date by any applicable Market Value Adjustment;
.. deducting any applicable taxes; and
.. applying the resulting amount to the greater of (a) the appropriate income
payment factor for the selected Income Plan from the Income Payment Table in
your Contract or (b) such other income payment factor as we are offering on
the Payout Start Date.
We may defer your request to make a withdrawal from fixed income payments for a
period of up to 6 months or whatever shorter time state law may require. If we
defer 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.
RETIREMENT INCOME GUARANTEE OPTIONS Effective January 1, 2004, we ceased
offering the Retirement Income Guarantee Options ("RIG 1" and "RIG 2"), except
in a limited number of states. Effective May 1, 2004, the RIG 1 and RIG 2
Options are no longer available in any state. If you added a Retirement Income
Guarantee Option to your Contract prior to January 1, 2004 (up to May 1, 2004 in
certain states), your Option will continue to apply to your Contract. Also,
effective January 1, 2004, we discontinued the Trade-In Program. If you
previously elected a RIG Option, you may cancel your RIG 1 or RIG 2 Option
during the 60-day period following your next 3/rd/ Contract Anniversary after
January 1, 2004. If you do not cancel the Option during this 60-day period, you
will not be permitted to cancel it later. Please check with your Morgan Stanley
Financial Advisor for details.
The following describes the Retirement Income Guarantee Options for Contract
Owners who elected the Option prior to May 1, 2004.
We refer to the issue date of the option as the "RIDER DATE." You may add only
one Retirement Income Guarantee Option to your Contract. The oldest Contract
Owner and oldest Annuitant must be age 75 or younger on the Rider Application
Date. Once you add a rider to your Contract, it may not be cancelled except
during the 60-day period following the next 3rd Contract Anniversary after
January 1, 2004, as described above.
WE RESERVE THE RIGHT TO IMPOSE LIMITATIONS ON THE INVESTMENT ALTERNATIVES IN
WHICH YOU MAY INVEST AS A CONDITION OF THESE OPTIONS. THESE RESTRICTIONS MAY
INCLUDE, BUT ARE NOT LIMITED TO, MAXIMUM INVESTMENT LIMITS ON CERTAIN INVESTMENT
ALTERNATIVES, EXCLUSION OF CERTAIN INVESTMENT ALTERNATIVES, REQUIRED MINIMUM
ALLOCATIONS TO CERTAIN VARIABLE SUB-ACCOUNTS AND/OR THE AUTOMATIC PORTFOLIO
REBALANCING. CURRENTLY, NO SUCH RESTRICTIONS ARE BEING IMPOSED.
For each option, an "INCOME BASE" is calculated, which is used only for the
purpose of calculating the "GUARANTEED RETIREMENT INCOME BENEFIT" and the
appropriate "RIDER FEE," all defined below. The Income Base does not provide a
Contract Value or guarantee performance of any investment option. The Income
Base for RIG 1 and RIG 2 are described in more detail below.
You may apply the Income Base less applicable taxes to an Income Plan on the
Payout Start Date and receive the Guaranteed Retirement Income Benefit if all of
the following conditions are satisfied:
.. The Payout Start Date must be on or after the 10/th/ Contract Anniversary of
the Rider Date.
.. The Payout Start Date must occur during the 30-day period following a Contract
Anniversary.
.. The oldest Annuitant must be age 99 or younger as of the Payout Start Date.
.. You must select Fixed Amount Income Payments only.
.. You must select Income Plan 1 or 2, with a Guaranteed Payment Period of at
least:
. 120 months, if the youngest Annuitant is age 80 or younger as of the Payout
Start Date; or
62 PROSPECTUS
. 60 months, if the youngest Annuitant is older than age 80 as of the Payout
Start Date.
The "GUARANTEED RETIREMENT INCOME BENEFIT" is determined by applying the Income
Base, less any applicable taxes, to the appropriate monthly income payment
factor shown in the Income Payment Tables in your Contract for the selected
Income Plan.
If a different payment frequency (quarterly, semi-annual, or annual) or
different Income Plan is selected, an income payment factor for the selected
payment frequency and Income Plan is determined on the same mortality and
interest rate basis as the Income Payment Tables shown in your Contract.
On the Payout Start Date, the income payments for the selected Income Plan will
be the greater of:
.. The Guaranteed Retirement Income Benefit; or
.. For fixed income payments, the Contract Value, adjusted by any applicable
Market Value Adjustment, less any applicable taxes is applied to the greater
of: the appropriate income payment factor for the selected Income Plan from
the income payment tables in your Contract, or an income payment factor for
the selected Income Plan that we are offering on the Payout Start Date.
We assess an annual Rider Fee if you selected one of the Retirement Income
Guarantee Options. The Rider Fee is deducted on each Contract Anniversary on a
pro rata basis from each of the Variable Sub-Accounts in which your Contract
Value is invested on that date. The Rider Fee will decrease the number of
Accumulation Units in each Variable Sub-Account. The Rider Fee is deducted only
during the Accumulation Phase of the Contract. For the first Contract
Anniversary following the Rider Date, the Rider Fee will be prorated to cover
the period between the Rider Date and the first Contract Anniversary after the
Rider Date. In the case of a full withdrawal of the Contract Value, the Rider
Fee is prorated to cover the period between the Contract Anniversary immediately
prior to the withdrawal and the date of the withdrawal.
The Rider Fee for RIG 1 is 0.40% of the Income Base on each Contract
Anniversary. The Rider Fee for RIG 2 is 0.55% of the Income Base on each
Contract Anniversary.
These options will terminate and the corresponding Rider Fee will cease on the
earliest of the following to occur:
.. The date the Contract is terminated;
.. If the Contract is not continued in the Accumulation Phase under either the
Death of Owner or Death of Annuitant provisions of the Contract. The option
will terminate on the date we determine the Death Proceeds;
.. The Payout Start Date; or
.. You elect to cancel your RIG 1 or RIG 2 Option during the 60-day period
following the next 3rd Contract Anniversary after January 1, 2004 (since we
discontinued offering the Trade-In Program as of that date).
Otherwise, the options may not be terminated or cancelled.
CALCULATION OF INCOME BASE.
On the Rider Date, the "RIG 1 INCOME BASE" is equal to the Contract Value. The
RIG 1 Income Base, plus purchase payments made after the Rider Date and less RIG
1 withdrawal adjustments for withdrawals made after the Rider Date, will
accumulate interest on a daily basis at a rate equivalent to 5% per year (3% in
certain states), subject to the "CAP" defined below. This accumulation will
continue until the first Contract Anniversary following the 85/th/ birthday of
the oldest Contract Owner or oldest Annuitant, whichever occurs first. After the
5% interest accumulation ends (3% in certain states), the RIG 1 Income Base will
continue to be increased by purchase payments and reduced by RIG 1 withdrawal
adjustments for withdrawals until the option terminates. The "RIG 1 WITHDRAWAL
ADJUSTMENT" is defined below.
The RIG 1 Income Base will not exceed a CAP equal to:
.. 200% of the Contract Value as of the Rider Date; plus
.. 200% of purchase payments made after the Rider Date, but excluding any
purchase payments made in the 12-month period immediately prior to the Payout
Start Date; minus
.. RIG 1 Withdrawal Adjustments for any withdrawals made after the Rider Date.
RIG 1 WITHDRAWAL ADJUSTMENT. Prior to the first Contract Anniversary following
the 85/th/ birthday of the oldest Contract Owner or oldest Annuitant, whichever
is earlier, the withdrawal adjustment is as follows:
.. In each Contract Year, for the portion of withdrawals that do not cumulatively
exceed 5% (3% in certain states) of
63 PROSPECTUS
the RIG 1 Income Base as of the beginning of the Contract Year (or as of
the Rider Date for the first Contract Year in which RIG 1 is added), the
withdrawal adjustment is equal to the amount withdrawn (or portion thereof)
multiplied by a discount factor. The discount factor is calculated using a
5% annual interest rate (3% in certain states) and the portion of the
Contract Year between the withdrawal date and the end of the Contract Year.
This withdrawal adjustment has the effect of reducing the RIG 1 Income Base
at the end of the Contract Year by the actual amount of the withdrawal. In
other words, for purposes of calculating the RIG 1 Income Base, the
withdrawal is treated as if it occurred at the end of the Contract Year.
.. In each Contract Year, for the portion of withdrawals that cumulatively exceed
5% (3% in certain states) of the RIG 1 Income Base as of the beginning of the
Contract Year (or as of the Rider Date for the first Contract Year in which
RIG 1 is added), the withdrawal adjustment is equal to the withdrawal amount
(or portion thereof), divided by the Contract Value immediately prior to the
withdrawal and reduced for the portion of withdrawals that does not
cumulatively exceed 5% (3% in certain states), and the result multiplied by
the most recently calculated RIG 1 Income Base, reduced for the portion of
withdrawal that does not cumulatively exceed 5% (3% in certain states).
On or after the first Contract Anniversary following the 85/th/ birthday of the
oldest Contract Owner or the Annuitant, all withdrawal adjustments are equal to
the withdrawal amount, divided by the Contract Value immediately prior to the
withdrawal, and the result multiplied by the most recently calculated RIG 1
Income Base.
See Appendix D for numerical examples that illustrate how the RIG 1 Withdrawal
Adjustment is applied.
The "RIG 2 INCOME BASE" is defined as the greater of "INCOME BASE A" or "INCOME
BASE B."
"INCOME BASE A" and its corresponding Withdrawal Adjustment are calculated in
the same manner as the RIG 1 Income Base and RIG 1 Withdrawal Adjustment.
On the Rider Date, "INCOME BASE B" is equal to the Contract Value. After the
Rider Date and prior to the Payout Start Date, Income Base B is recalculated
each time a purchase payment or withdrawal is made as well as on each Contract
Anniversary as follows:
.. Each time a purchase payment is made, Income Base B is increased by the amount
of the purchase payment.
.. Each time a withdrawal is made, Income Base B is reduced by a proportional
withdrawal adjustment, defined as the withdrawal amount divided by the
Contract Value immediately prior to the withdrawal, and the result multiplied
by the most recently calculated Income Base B.
.. On each Contract Anniversary until the first Contract Anniversary following
the 85/th/ birthday of the oldest Contract Owner or oldest Annuitant,
whichever occurs first, Income Base B is equal to the greater of the Contract
Value on that date or the most recently calculated Income Base B.
If no purchase payments or withdrawals are made after the Rider Date, Income
Base B will be equal to the greatest of the Contract Value on the Rider Date and
the Contract Values on each subsequent Contract Anniversary until the earlier of
the Payout Start Date or the Contract Anniversary following the 85/th/ birthday
of the oldest Contact Owner or oldest Annuitant, whichever occurs first.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain 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
applicable 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 BENEFITS
- --------------------------------------------------------------------------------
DEATH PROCEEDS
Under certain conditions, described below, we will pay Death Proceeds for this
Contract on the death of the Contract Owner, Annuitant, or Co-Annuitant if the
death occurs prior to the Payout Start Date. If the Owner or Annuitant 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" for more
information.
We will determine the value of the Death Proceeds as of the end of the Valuation
Date during which we receive the first Complete Request for Settlement (the next
Valuation Date, if we receive the request after 3:00 p.m. Central Time). In
order to be considered a "COMPLETE REQUEST FOR SETTLEMENT," a claim for
distribution of the Death Proceeds must include "DUE PROOF OF DEATH" in any of
the following forms of documentation:
.. A certified copy of the 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.
"DEATH PROCEEDS" are determined based on when we receive a Complete Request for
Settlement:
.. If we receive a Complete Request for Settlement within 180 days of the death
of the Contract Owner, Annuitant, or Co-Annuitant, as applicable, the Death
Proceeds is equal to the "DEATH BENEFIT."
.. If we receive a Complete Request for Settlement more than 180 days after the
death of the Contract Owner, Annuitant, or Co-Annuitant, as applicable, the
Death Proceeds are equal to the greater of the Contract Value or Settlement
Value. We reserve the right to waive or extend, in a nondiscriminatory manner,
the 180-day period in which the Death Proceeds will equal the Death Benefit.
64 PROSPECTUS
Where there are multiple beneficiaries, we will only value the Death Proceeds at
the time the first beneficiary submits the necessary documentation in good
order. Any Death Proceeds amounts attributable to any beneficiary which remain
in the Variable Sub-Accounts are subject to investment risk.
DEATH BENEFIT OPTIONS
In addition to the ROP Death Benefit included in your Contract, we offer the
following death benefit options which may be added to your Contract:
.. MAV Death Benefit Option
.. Enhanced Beneficiary Protection (Annual Increase) Option
.. Earnings Protection Death Benefit Option
The amount of the Death Benefit depends on which death benefit option(s) you
select. Not all death benefit options are available in all states.
You may select any combination of death benefit options on the issue date of
your Contract or at a later date, subject to state availability and issue age
restrictions. You may not add any death benefit option(s) to your Contract after
Contract issue without our prior approval if your Contract Value is greater than
$1,000,000 at the time you choose to add the death benefit option(s).
The "DEATH BENEFIT" is equal to the Earnings Protection Death Benefit (if
selected) plus the greatest of:
.. The Contract Value;
.. The Settlement Value;
.. The ROP Death Benefit;
.. The MAV Death Benefit Option (if selected); or
.. The Enhanced Beneficiary Protection (Annual Increase) Option (if selected).
The "Settlement Value" is the amount that would be paid in the event of a full
withdrawal of the Contract Value.
The "ROP DEATH BENEFIT" is equal to the sum of all purchase payments, reduced by
a proportional withdrawal adjustment for each withdrawal. The withdrawal
adjustment is equal to the withdrawal amount divided by the Contract Value
immediately prior to the withdrawal, and the result is multiplied by:
The sum of all purchase payments made prior to the withdrawal, less any prior
withdrawal adjustments.
MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT OPTION.
The "MAV DEATH BENEFIT OPTION" is only available if the oldest Contract Owner
and oldest Annuitant are age 79 or younger on the Rider Application Date. There
is an additional mortality and expense risk charge for this death benefit
option, currently equal to 0.20%. We may change what we charge for this death
benefit option, but it will never exceed 0.30%. Once added to your Contract, we
guarantee that we will not increase the mortality and expense risk charge you
pay for this death benefit option.
On the date we issue the rider for this benefit ("Rider Date"), the MAV DEATH
BENEFIT is equal to the Contract Value. After the Rider Date and prior to the
date we determine the Death Proceeds (see "Death Proceeds" on page 64), the MAV
Death Benefit is recalculated each time a purchase payment or withdrawal is made
as well as on each Contract Anniversary as follows:
.. Each time a purchase payment is made, the MAV Death Benefit is increased by
the amount of the purchase payment.
.. Each time a withdrawal is made, the MAV Death Benefit is reduced by a
proportional withdrawal adjustment, defined as the withdrawal amount divided
by the Contract Value immediately prior to the withdrawal, and the result
multiplied by the most recently calculated MAV Death Benefit.
.. On each Contract Anniversary until the first Contract Anniversary following
the 80/TH/ birthday of the oldest Contract Owner or oldest Annuitant,
whichever occurs first, the MAV Death Benefit is recalculated as the greater
of the Contract Value on that date or the most recently calculated MAV Death
Benefit.
If no purchase payments or withdrawals are made after the Rider Date, the MAV
Death Benefit will be equal to the greatest of the Contract Value on the Rider
Date and the Contract Values on each subsequent Contract Anniversary after the
Rider Date, but before the date we determine the Death Proceeds. If, upon death
of the Contract Owner, the Contract is continued under Option D as described on
page 68 below, and if the oldest New Contract Owner and the oldest Annuitant are
age 80 or younger on the date we determine the Death Proceeds, then the MAV
Death Benefit Option will continue. The MAV Death Benefit will continue to be
recalculated for purchase payments, withdrawals, and on each Contract
Anniversary after the date we determine the Death Proceeds until the earlier of:
.. The first Contract Anniversary following the 80/th/ birthday of either the
oldest New Contract Owner or the oldest Annuitant, whichever is earlier.
(After the 80/th/ birthday of either the oldest New Contract Owner or
the oldest Annuitant, whichever is earlier, the MAV Death Benefit will be
recalculated only for purchase payments and withdrawals); or
.. The date we next determine the Death Proceeds.
ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION.
The Enhanced Beneficiary Protection (Annual Increase) Option is only available
if the oldest Contract Owner and oldest Annuitant are age 79 or younger on the
Rider Application Date. There is an additional mortality and expense risk charge
for this death benefit option,
65 PROSPECTUS
currently equal to 0.30%. We may change what we charge for this death benefit
option, but it will never exceed 0.30%. Once added to your Contract, we
guarantee that we will not increase the mortality and expense risk charge you
pay for this death benefit option.
On the date we issue the rider for this benefit ("Rider Date"), the Enhanced
Beneficiary Protection (Annual Increase) Benefit is equal to the Contract Value.
The Enhanced Beneficiary Protection (Annual Increase) Benefit, plus purchase
payments made after the Rider Date and less withdrawal adjustments for
withdrawals made after the Rider Date, will accumulate interest on a daily basis
at a rate equivalent to 5% per year (3% in certain states), subject to the "CAP"
defined below. This accumulation will continue until the earlier of:
(a) the first Contract Anniversary following the 80/th/ birthday of the oldest
Contract Owner or oldest Annuitant, whichever occurs first; or
(b) the date we determine the Death Proceeds.
After the 5% interest accumulation ends (3% in certain states), the Enhanced
Beneficiary Protection (Annual Increase) Benefit will continue to be increased
by purchase payments and reduced by withdrawal adjustments for withdrawals until
the death benefit option terminates. The withdrawal adjustment is a proportional
adjustment, defined as the withdrawal amount divided by the Contract Value
immediately prior to the withdrawal, and the result multiplied by the amount of
the Enhanced Beneficiary Protection (Annual Increase) Benefit immediately prior
to the withdrawal.
The Enhanced Beneficiary Protection (Annual Increase) Benefit CAP is equal to:
.. 200% of the Contract Value as of the Rider Date; plus
.. 200% of purchase payments made after the Rider Date, but excluding any
purchase payments made in the 12-month period immediately prior to the death
of the Contract Owner or the Annuitant; minus
.. Withdrawal adjustments for any withdrawals made after the Rider Date. Refer to
Appendix E for withdrawal adjustment examples.
If, upon death of the Contract Owner, the Contract is continued under Option D
as described on page 68, and if the oldest New Contract Owner and the oldest
Annuitant are age 80 or younger on the date we determine the Death Proceeds,
then the Enhanced Beneficiary Protection (Annual Increase) Option will continue.
The amount of the Enhanced Beneficiary Protection (Annual Increase) Benefit as
of the date we determine the Death Proceeds, plus subsequent purchase payments,
less withdrawal adjustments for any subsequent withdrawals, will accumulate
daily at a rate equivalent to 5% per year (3% in certain states) from the date
we determine the Death Proceeds, until the earlier of:
.. The first Contract Anniversary following the 80/th/ birthday of either the
oldest New Contract Owner or the oldest Annuitant, whichever is earlier.
(After the 80/th/ birthday of either the oldest New Owner or the oldest
Annuitant, whichever is earlier, the Enhanced Beneficiary Protection (Annual
Increase) Benefit will be recalculated only for purchase payments and
withdrawals); or
.. The date we next determine the Death Proceeds.
EARNINGS PROTECTION DEATH BENEFIT OPTION.
The "EARNINGS PROTECTION DEATH BENEFIT OPTION" is only available if the oldest
Contract Owner and oldest Annuitant are age 79 or younger on the Rider
Application Date. There is an additional mortality and expense risk charge for
this death benefit option, currently equal to:
.. 0.25%, if the oldest Contract Owner and oldest Annuitant are age 70 or younger
on the Rider Application Date; and
.. 0.40%, if the oldest Contract Owner or oldest Annuitant is over age 70 and all
are age 79 or younger on the Rider Application Date.
We may change what we charge for this death benefit option, but it will never
exceed 0.35% for issue ages 0-70 and 0.50% for issue ages 71-79. Once added to
your Contract, we guarantee that we will not increase the mortality and expense
risk charge you pay for this death benefit option. However, if your spouse
elects to continue the Contract in the event of your death and if he or she
elects to continue the Earnings Protection Death Benefit Option, the mortality
and expense risk charge for the death benefit option will be based on the ages
of the oldest new Contract Owner and the oldest Annuitant at the time the
Contract is continued.
If the oldest Contract Owner and oldest Annuitant are age 70 or younger on the
Rider Application Date, the EARNINGS PROTECTION DEATH BENEFIT is equal to the
lesser of:
.. 100% of "IN-FORCE PREMIUM" (excluding purchase payments made after the date we
issue the rider for this benefit ("Rider Date") and during the twelve-month
period immediately prior to the death of the Contract Owner or Annuitant); or
.. 40% of "IN-FORCE EARNINGS"
calculated as of the date we determine the Death Proceeds.
If the oldest Contract Owner or oldest Annuitant is over age 70 and all are age
79 or younger on the Rider Application Date, the EARNINGS PROTECTION DEATH
BENEFIT is equal to the lesser of:
.. 50% of "IN-FORCE PREMIUM" (excluding purchase payments made after the Rider
Date and during the twelve-month period immediately prior to the death of the
Contract Owner or Annuitant); or
.. 25% of "IN-FORCE EARNINGS"
66 PROSPECTUS
calculated as of the date we determine the Death Proceeds.
IN-FORCE EARNINGS are equal to the current Contract Value less In-Force Premium.
If this quantity is negative, then In-Force Earnings are equal to zero.
IN-FORCE PREMIUM is equal to the Contract Value on the Rider Date, plus the sum
of all purchase payments made after the Rider Date, less the sum of all
"EXCESS-OF-EARNINGS WITHDRAWALS" made after the Rider Date.
An EXCESS-OF-EARNINGS WITHDRAWAL is equal to the excess, if any, of the amount
of the withdrawal over the amount of the In-Force Earnings immediately prior to
the withdrawal.
Refer to Appendix F for numerical examples that illustrate how the Earnings
Protection Death Benefit Option is calculated.
If, upon death of the Contract Owner, the Contract is continued under Option D
as described on page 68 below, and if the oldest new Owner and the oldest
Annuitant are younger than age 80 on the date we determine the Death Proceeds,
then this death benefit option will continue unless the New Contract Owner
elects to terminate the death benefit option. If the death benefit option is
continued, the following will apply as of the date we determine the Death
Proceeds upon continuation:
.. The Rider Date will be changed to the date we determine the Death Proceeds;
.. The In-Force Premium is equal to the Contract Value as of the new Rider Date
plus all purchase payments made after the Rider Date, less the sum of all the
Excess-of-Earnings Withdrawals made after the Rider Date;
.. The Earnings Protection Death Benefit after the new Rider Date will be
determined as described above, but using the ages of the oldest new Contract
Owner and the oldest Annuitant as of the new Rider Date.
.. The mortality and expense risk charge, for this rider, will be determined as
described above, but using the ages of the oldest new Contract Owner and the
oldest Annuitant as of the new Rider Date.
If either the Contract Owner's or the Annuitant's age is misstated, the Earnings
Protection Death Benefit and the mortality and expense risk charge for this
death benefit option will be calculated according to the corrected age as of the
Rider Date. Your Contract Value will be adjusted to reflect the mortality and
expense risk charge for this death benefit option that should have been assessed
based on the corrected age.
ALL OPTIONS.
WE RESERVE THE RIGHT TO IMPOSE LIMITATIONS ON THE INVESTMENT ALTERNATIVES IN
WHICH YOU MAY INVEST AS A CONDITION OF THESE OPTIONS. THESE RESTRICTIONS MAY
INCLUDE, BUT ARE NOT LIMITED TO, MAXIMUM INVESTMENT LIMITS ON CERTAIN INVESTMENT
ALTERNATIVES, EXCLUSION OF CERTAIN INVESTMENT ALTERNATIVES, REQUIRED MINIMUM
ALLOCATIONS TO CERTAIN VARIABLE SUB-ACCOUNTS AND/OR THE REQUIRED USE OF
AUTOMATIC PORTFOLIO REBALANCING. CURRENTLY, NO SUCH RESTRICTIONS ARE BEING
IMPOSED.
These death benefit options will terminate and the corresponding Rider Fee will
cease on the earliest of the following to occur:
.. the date the Contract is terminated;
.. if, upon the death of the Contract Owner, the Contract is continued under
Option D as described in the Death of Owner section on page 68, and either the
oldest New Owner or the oldest Annuitant is older than age 80 (age 80 or older
for the Earnings Protection Death Benefit Option) on the date we determine the
Death Proceeds. The death benefit option will terminate on the date we
determine the Death Proceeds;
.. if the Contract is not continued in the Accumulation Phase under either the
Death of Owner or Death of Annuitant provisions of the Contract. The death
benefit option will terminate on the date we determine the Death Proceeds;
.. on the date the Contract Owner (if the current Contract Owner is a living
person) is changed for any reason other than death unless the New Contract
Owner is a trust and the Annuitant is the current Contract Owner;
.. on the date the Contract Owner (if the current Contract Owner is a non-living
person) is changed for any reason unless the New Contract Owner is a
non-living person or is the current Annuitant; or
.. the Payout Start Date.
Notwithstanding the preceding, in the event of the Contract Owner's death, if
the Contract Owner's spouse elects to continue the Contract (as permitted in the
Death of Owner provision below) he or she may terminate the Earnings Protection
Death Benefit at that time.
DEATH BENEFIT PAYMENTS
DEATH OF CONTRACT OWNER
If a Contract Owner dies prior to the Payout Start Date, then the surviving
Contract Owners will be "NEW CONTRACT OWNERS". If there are no surviving
Contract Owners, then subject to any restrictions previously placed upon them,
the Beneficiaries will be the New Contract Owners.
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, subject
to any restrictions previously placed upon
67 PROSPECTUS
the New Contract Owner. 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 following Category 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.
NEW CONTRACT OWNER CATEGORIES
CATEGORY 1. If your spouse (or Annuitant's spouse in the case of a grantor
trust-owned Contract) is the sole New Contract Owner of the entire Contract,
your spouse must choose from among the death settlement Options A, B, C, D, or E
described below. If he or she does not choose one of these Options, then Option
D will apply.
CATEGORY 2. If the New Contract Owner is a living person who is not your spouse
(or Annuitant's spouse in the case of a grantor trust-owned Contract), or there
is more than one New Contract Owner, all of whom are living persons, each New
Contract Owner must choose from among the death settlement Options A, B, C, or E
described below. If a New Contract Owner does not choose one of these Options,
then Option C will apply for that New Contract Owner.
CATEGORY 3. If there are one or more New Contract Owner(s) and at least one of
the New Contract Owners is a non-living person such as a corporation or a trust,
all New Contract Owners are considered to be non-living persons for purposes of
the death settlement options. Each New Contract Owner must choose death
settlement Option A or C described below. If a New Contract Owner does not
choose one of these Options, then Option C will apply for that New Contract
Owner.
The death settlement options we currently offer are:
OPTION A. The New Contract Owner may elect to receive the Death Proceeds in a
lump sum.
OPTION B. The New Contract Owner may elect to apply the Death Proceeds to one
of the Income Plans described above. Such income payments must begin within one
year of the date of death and must be payable:
.. Over the life of the New Contract Owner; or
.. For a guaranteed payment period of at least 5 years (60 months), but not to
exceed the life expectancy of the New Contract Owner; or
.. Over the life of the New Contract Owner with a guaranteed payment period of at
least 5 years (60 months), but not to exceed the life expectancy of the New
Contract Owner.
OPTION C. The New Contract Owner may elect to receive the Contract Value
payable within 5 years of the date of death. The Contract Value, as of the date
we receive the first Complete Request for Settlement, will be reset to equal the
Death Proceeds as of that date. Any excess amount of the Death Proceeds over the
Contract Value on that date will be allocated to the Morgan Stanley VIS Money
Market Variable Sub-Account unless the New Contract Owner provides other
allocation instructions.
The New Contract Owner may not make any additional purchase payments under this
option. Withdrawal charges will be waived for any withdrawals made during the
5-year period after the date of death; however, amounts withdrawn may be subject
to Market Value Adjustments. The New Contract Owner may exercise all rights set
forth in the Transfers provision.
If the New Contract Owner dies before the Contract Value is completely
withdrawn, the New Contract Owner's Beneficiary(ies) will receive the greater of
the remaining Settlement Value or the remaining Contract Value within 5 years of
the date of the original Contract Owner's death.
OPTION D. The New Contract Owner may elect to continue the Contract in the
Accumulation Phase. If the Contract Owner was also the Annuitant, then the New
Contract Owner will be the new Annuitant. This Option may only be exercised once
per Contract. The Contract Value, as of the date we receive the first Complete
Request for Settlement, will be reset to equal the Death Proceeds as of that
date.
Unless otherwise instructed by the continuing spouse, the excess, if any, of the
Death Proceeds over the Contract Value will be allocated to the Sub-Accounts of
the Variable Account. This excess will be allocated in proportion to your
Contract Value in those Sub-Accounts as of the end of the Valuation Date that we
receive the complete request for settlement except that any portion of this
excess attributable to the Fixed Account Options will be allocated to the Morgan
Stanley VIS Money Market Variable Sub-Account.
Within 30 days after the date we determine the Death Proceeds, the New Contract
Owner may make a one- time transfer of all or a portion of the excess of the
Death Proceeds, if any, into any combination of Variable Sub-Accounts, the
Standard Fixed Account and the Market Value Adjusted Fixed Account without
incurring a transfer fee, provided the investment alternative is available with
the Contract at that time. Any such transfer does not count as one of the free
transfers allowed each Contract Year and is subject to any minimum allocation
amount specified in this Contract.
The New Contract Owner 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 and a 10% tax
penalty if the New Contract Owner is under age 59 1/2.
OPTION E. Effective July 1, 2005, for Nonqualified Contracts, the New Contract
Owner may elect to make
68 PROSPECTUS
withdrawals at least annually of amounts equal to the "ANNUAL REQUIRED
DISTRIBUTION" calculated for each calendar year. The first such withdrawal must
occur within:
.. One year of the date of death;
.. The same calendar year as the date we receive the first Complete Request for
Settlement; and
.. One withdrawal frequency.
The New Contract Owner must select the withdrawal frequency (monthly, quarterly,
semi-annual, or annual). Once this option is elected and frequency of
withdrawals is chosen, they cannot be changed by the New Contract Owner and
become irrevocable.
In the calendar year in which the Death Proceeds are determined, the ANNUAL
REQUIRED DISTRIBUTION is equal to the Contract Value on the date of the first
distribution divided by the "Life Expectancy" of the New Contract Owner, and the
result multiplied by a fraction that represents the portion of the calendar year
remaining after the date of the first distribution. (The Contract Value, as of
the date we receive the Complete Request for Settlement, will be reset to equal
the Death Proceeds as of that date. The Contract Value on the date of the first
distribution may be more or less than the Contract Value as of the date we
receive the Complete Request for Settlement.) The Life Expectancy in that
calendar year is equal to the life expectancy value from IRS Tables, based on
the age of the New Contract Owner as of his or her birthday in the same calendar
year.
In any subsequent calendar year, the Annual Required Distribution is equal to
the Contract Value as of December 31 of the prior year divided by the remaining
Life Expectancy of the New Contract Owner. In each calendar year after the
calendar year in which the first distribution occurred, the Life Expectancy of
the New Contract Owner is the Life Expectancy calculated in the previous
calendar year minus one (1) year. If the Life Expectancy is less than one (1),
the Annual Required Distribution is equal to the Contract Value.
If the New Contract Owner dies before the Contract Value is completely
withdrawn, the scheduled withdrawals will continue to be paid to the New
Contract Owner's Beneficiary(ies). The Contract Value invested in the Variable
Sub-Accounts will be subject to investment risk until it is withdrawn.
We reserve the right to offer additional death settlement options.
DEATH OF ANNUITANT
If the Annuitant dies prior to the Payout Start Date, then the surviving
Contract Owners will have the Options available to the New Contract Owner,
determined by the applicable following category in which the New Contract Owner
is defined, unless:
.. The Annuitant was also the Contract Owner, in which case the Death of Owner
provisions above apply; or
.. The Contract Owner is a grantor trust not established by a business, in which
case the Beneficiary(ies) will be deemed the New Contract Owners and the Death
of Contract Owner provisions above will apply.
SURVIVING CONTRACT OWNER CATEGORIES
CATEGORY 1. If the Contract Owner is a living person, prior to the Annuitant's
death, the Contract Owner must choose from among the death settlement Options A,
B, or D described below. If the Contract Owner does not choose one of these
Options, then Option D will apply.
CATEGORY 2. If the Contract Owner is a non-living person such as a corporation
or a trust, the Contract Owner must choose from death settlement Options A or C
described below. If the Contract Owner does not choose one of these Options,
then Option C will apply.
The death settlement options we currently offer are:
OPTION A. The Contract Owner may elect to receive the Death Proceeds in a lump
sum.
OPTION B. The Contract Owner may elect to apply the Death Proceeds to one of
the Income Plans described above. Such income payments must begin within one
year of the date of death.
OPTION C. The Contract Owner may elect to receive the Contract Value payable
within 5 years of the date of death. The Contract Value, as of the date we
receive the first Complete Request for Settlement, will be reset to equal the
Death Proceeds as of that date. Any excess amount of the Death Proceeds over the
Contract Value on that date will be allocated to the Morgan Stanley VIS Money
Market Variable Sub-Account unless the Contract Owner provides other allocation
instructions.
The Contract Owner may not make any additional purchase payments under this
option. Withdrawal charges will be waived for any withdrawals made during the
5-year period after the date of death; however, amounts withdrawn may be subject
to Market Value Adjustments. The Contract Owner may exercise all rights set
forth in the Transfers provision.
OPTION D. The Contract Owner may elect to continue the Contract and the
youngest Contract Owner will become the new Annuitant. The Contract Value of the
continued Contract will not be adjusted to equal the Death Proceeds.
We reserve the right to offer additional death settlement options.
QUALIFIED CONTRACTS
The death settlement options for qualified plans, including IRAs, may be
different to conform with the individual tax requirements of each type of
qualified plan.
69 PROSPECTUS
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.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION AND DEATH OF CO-ANNUITANT
We offer a Spousal Protection Benefit (Co-Annuitant) Option that may be added to
your Contract subject to the following conditions:
.. The individually owned Contract must be either a traditional, Roth, or
Simplified Employee Pension IRA.
.. The Contract Owner's spouse must be the sole Primary Beneficiary of the
Contract and will be the named Co-Annuitant.
.. The Contract Owner must be age 90 or younger on the Rider Application Date,
and the Co-Annuitant must be age 79 or younger on the Rider Application Date.
.. The Option may be added at Contract issue or anything after Contract issue
through April 30, 2005. On or after May 1, 2005, the Option may only be added
when we issue the Contract or within 6 months of the Contract Owner's
marriage. We may require proof of marriage in a form satisfactory to us.
Currently, you may not add the Option to your Contract without our prior
approval if your Contract Value is greater than $1,000,000 at the time you
choose to add the Option.
Under the Spousal Protection Benefit Option, the Co-Annuitant will be considered
to be an Annuitant under the Contract during the Accumulation Phase except that
the Death of Annuitant provision does not apply on the death of the
Co-Annuitant, and the latest Payout Start Date will be based solely on the
Contract Owner's age.
You may change the Co-Annuitant to a new spouse only if you provide proof of
remarriage in a form satisfactory to us. Once we accept a change, the change
will take effect on the date you signed the request. Each change is subject to
any payment we make or other action we take before we accept it. At any time,
there may only be one Co-Annuitant under your Contract.
There is an annual Rider Fee of 0.10% of the Contract Value for new Options
added on or after January 1, 2005. For Options added prior to this date, there
is no charge for this Option. We reserve the right to assess an annual Rider Fee
not to exceed 0.15% for Options added in the future. Once this Option is added
to your Contract, we guarantee that we will not increase what we charge you for
this Option. For Contracts purchased on or after January 1, 2005, we may
discontinue offering the Spousal Protection Benefit (Co-Annuitant) Option at any
time prior to the time you elect to receive it.
The option will terminate upon the date termination is accepted by us or will
terminate on the earliest of the following occurrences:
.. upon the death of the Co-Annuitant (as of the date we determine the Death
Proceeds);
.. upon the death of the Contract Owner (as of the date we determine the Death
Proceeds);
.. on the date the Contract is terminated;
.. on the Payout Start Date; or
.. on the date you change the beneficiary of the Contract and the change is
accepted by us;
.. for options added on or after January 1, 2005, the Owner may terminate the
option upon the divorce of the Owner and the Co-Annuitant by providing written
notice and proof of divorce in a form satisfactory to us;
.. for options added prior to January 1, 2005, the Owner may terminate this
option at anytime by written notice in a form satisfactory to us.
Once terminated, a new Spousal Protection Benefit (Co-Annuitant) Option cannot
be added to the Contract unless the last option attached to the Contract was
terminated due to divorce or a change of beneficiary.
DEATH OF CO-ANNUITANT. If the Co-Annuitant dies prior to the Payout Start Date,
subject to the following conditions, the Contract will be continued according to
Option D under the "Death of Owner" provision of your Contract:
.. The Co-Annuitant must have been your legal spouse on the date of his or her
death; and
.. Option D of the "Death of Owner" provision of your Contract has not previously
been exercised.
The Contract may only be continued once under Option D under the "Death of
Owner" provision. For a description of Option D, see the "Death of Owner"
section of this prospectus.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS AND DEATH OF CO-ANNUITANT. We offer a Spousal Protection
Benefit (Co-Annuitant) Option for certain Custodial Individual Retirement
Accounts established under Code Section 408(a) that may be added to your
Contract. CSP may not be available in all states. CSP is subject to the
following conditions ("CSP Conditions"):
.. The beneficially owned Contract must be a Custodial traditional IRA, Custodial
Roth IRA, or a Custodial Simplified Employee Pension IRA.
.. The Annuitant must be the beneficial owner of the Custodial traditional IRA,
Custodial Roth IRA, or Custodial Simplified Employee Pension IRA.
.. The Co-Annuitant must be the legal spouse of the Annuitant. Only one
Co-Annuitant may be named.
70 PROSPECTUS
.. The Co-Annuitant must be the sole beneficiary of the Custodial traditional
IRA, Custodial Roth IRA, or the Custodial Simplified Employee Pension IRA.
.. The Annuitant must be age 90 or younger on the CSP Application Date.
.. The Co-Annuitant must be age 79 or younger on the CSP Application Date.
.. The CSP may be added at Contract issue or anytime after Contract issue through
April 30, 2005. On or after May 1, 2005, the CSP may only be added when we
issue the Contract or within 6 months of the beneficial owner's marriage. We
may require proof of marriage in a form satisfactory to us. Currently, you may
not add the CSP to your Contract without our prior approval if your Contract
Value is greater than $1,000,000 at the time you choose to add the CSP.
.. We have made no payments under any Income Plan.
.. There is an annual Rider Fee of 0.10% of the Contract Value for new Options
added on or after January 1, 2005. For Options added prior to this date, there
is no charge for this Option. We reserve the right to increase the annual
Rider Fee to up to 0.15% of the Contract Value.
Under CSP, the Co-Annuitant will be considered to be an Annuitant under the
Contract during the Accumulation Phase except that:
.. The Co-Annuitant will not be considered to be an Annuitant for purposes of
determining the Payout Start Date.
.. The "Death of Annuitant" provision of the Contract does not apply on the death
of the Co-Annuitant.
.. The Co-Annuitant is not considered the beneficial owner of the Custodial
traditional IRA, Custodial Roth IRA, or the Custodial Simplified Employee
Pension IRA.
You may change the Co-Annuitant to a new spouse only if you provide proof of
remarriage in a form satisfactory to us. Once we accept a change, the change
will take effect on the date you signed the request. Each change is subject to
any payment we make or other action we take before we accept it. At any time,
there may only be one Co-Annuitant under your Contract.
For Spousal Protection Benefit (Co-Annuitant) Options for Custodial Individual
Retirement Accounts added on or after January 1, 2005, there is an annual Rider
Fee of 0.10% of the Contract Value for this Option. For Options added prior to
this date, there is no charge for this Option. We reserve the right to assess an
annual Rider Fee not to exceed 0.15% for Options added in the future. Once this
Option is added to your Contract, we guarantee that we will not increase what we
charge you for this Option. For Contracts issued on or after January 1, 2005, we
may discontinue offering the Spousal Protection Benefit (Co-Annuitant) Option
for Custodial Individual Retirement Accounts at any time to new Contract Owners
and to existing Contract Owners who did not elect the Option prior to the date
of discontinuance.
The Owner may terminate CSP upon the divorce of the Annuitant and the
Co-Annuitant by providing written notice and proof of divorce in a form
satisfactory to us. The Owner may also terminate CSP upon a change in the
beneficiary of the IRA by providing written notice and proof of the change in a
form satisfactory to us. CSP will terminate upon the date termination is
accepted by us or on the earliest of the following occurrences:
.. On the date CSP is terminated as described above; or
.. Upon the death of the Annuitant; or
.. Upon the death of the Co-Annuitant; or
.. On the date the Contract is terminated; or
.. On the Payout Start Date.
Once terminated, a new CSP cannot be added to the Contract unless the last
option attached to the Contract was terminated due to divorce or change of
beneficiary of the IRA.
Death of Co-Annuitant. This section applies if:
.. The CSP Conditions are met.
.. The Annuitant was, at the time of the Co-Annuitant's death, the beneficial
owner of the Custodial traditional IRA, Custodial Roth IRA, or Custodial
Simplified Employee Pension IRA.
.. We have received proof satisfactory to us that the Co-Annuitant has died.
.. The Co-Annuitant was, at the time of the Co-Annuitant's death, the sole
beneficiary of the Custodial traditional IRA, Custodial Roth IRA, or Custodial
Simplified Employee Pension IRA, and
.. The Co-Annuitant was, at the time of the Co-Annuitant's death, the legal
spouse of the Annuitant.
If this section applies and if the Co-Annuitant dies prior to the Payout Start
Date, then, subject to the following conditions, the Contract may be continued
according to Option D under the "Death of Owner" provisions under the same terms
and conditions that would apply if the Co-Annuitant were the Owner of the
Contract before death and the sole new Owner of the Contract were the Annuitant
provided that:
.. The Co-Annuitant was the legal spouse of the Annuitant on the date of
Annuitant's death.
.. The Owner does not thereafter name a new Co-Annuitant; and
.. The Owner of the Custodial traditional IRA, Custodial Roth IRA, or Custodial
Simplified Employee Pension IRA remains the Custodian; and
.. The Contract may only be continued once.
71 PROSPECTUS
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.
VARIABLE ACCOUNT
Allstate Life established the Allstate Financial Advisors Separate Account I in
1999. We have registered the Variable Account with the SEC as a unit investment
trust. The SEC does not supervise the management of the Variable Account or
Allstate Life.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under Illinois law. That means we account for the Variable
Account's income, gains and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Allstate Life.
The Variable Account currently consists of multiple Variable Sub-Accounts. Each
Variable Sub-Account offered under this Contract invests in a corresponding
Portfolio. We may add new Variable Sub-Accounts or eliminate one or more of
them, if we believe marketing, tax, or investment conditions so warrant. We do
not guarantee the investment performance of the Variable Account, its
Sub-Accounts or the Portfolios. We may use the Variable Account to fund our
other annuity contracts. We will account separately for each type of annuity
contract funded by the Variable Account.
THE PORTFOLIOS
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolios at their net asset value.
VOTING PRIVILEGES. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Portfolios that we
hold directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract Owners entitled to give such
instructions.
As a general rule, before the Payout Start Date, the Contract Owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Portfolio as of the record
date of the meeting. After the Payout Start Date the person receiving income
payments has the voting interest. The payee's number of votes will be determined
by dividing the reserve for such Contract allocated to the applicable
Sub-Account by the net asset value per share of the corresponding Portfolio. The
votes decrease as income payments are made and as the reserves for the Contract
decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion. We will apply voting instructions to
abstain on any item to be voted upon on a pro-rata basis to reduce the votes
eligible to be cast.
We reserve the right to vote Portfolio shares as we see fit without regard to
voting instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report we send to you.
CHANGES IN PORTFOLIOS. If the shares of any of the Portfolios are no longer
available for investment by the Variable Account or if, in our judgment, further
investment in such shares is no longer desirable in view of the purposes of the
Contract, we may eliminate that Portfolio and substitute shares of another
eligible investment fund. Any substitution of securities will comply with the
requirements of the Investment Company Act of 1940. We also may add new Variable
Sub-Accounts that invest in additional underlying funds. We will notify you in
advance of any change.
CONFLICTS OF INTEREST. Certain of the Portfolios sell their shares to separate
accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the same Portfolio. The board of directors/trustees of these Portfolios monitors
for possible conflicts among separate accounts
72 PROSPECTUS
buying shares of the Portfolios. Conflicts could develop for a variety of
reasons. For example, differences in treatment under tax and other laws or the
failure by a separate account to comply with such laws could cause a conflict.
To eliminate a conflict, the Portfolio's board of directors/trustees may require
a separate account to withdraw its participation in a Portfolio. A Portfolio's
net asset value could decrease if it had to sell investment securities to pay
redemption proceeds to a separate account withdrawing because of a conflict.
THE CONTRACT
DISTRIBUTION. The Contracts are distributed exclusively by their principal
underwriter, Morgan Stanley DW Inc. ("Morgan Stanley DW"). Morgan Stanley DW,
a wholly owned subsidiary of Morgan Stanley, is located at 1585 Broadway, New
York, New York 10036. Morgan Stanley DW is a registered broker-dealer under the
Securities Exchange Act of 1934, as amended, and is a member of the New York
Stock Exchange and the NASD. Contracts are sold through the registered
representatives of Morgan Stanley DW Inc. These 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.
We will pay commissions to Morgan Stanley DW for selling the Contracts. We may
pay to Morgan Stanley DW up to a maximum sales commission of 6.0% of total
purchase payments and a sales administration expense charge of up to 0.75%. In
addition, we may pay ongoing annual compensation of up to 1.25% of Contract
value. 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.
Individual representatives receive a portion of compensation paid to Morgan
Stanley DW in accordance with Morgan Stanley DW's practices.
We also make additional payments to Morgan Stanley DW for promotional marketing
and educational expenses and to reimburse certain expenses of registered
representatives relating to sales of Contracts. For more information on the
exact compensation arrangement associated with this Contract, please consult
your registered representative.
In addition, Morgan Stanley DW may pay annually to its representatives, from its
profits, a persistency bonus that will take into account, among other things,
the length of time purchase payments have been held under the Contract and
Contract Value.
ADMINISTRATION. We have primary responsibility for all administration of the
Contracts and the Variable Account.
We provide the following administrative services, among others:
.. issuance of the Contracts;
.. maintenance of Contract Owner records;
.. Contract Owner services;
.. calculation of unit values;
.. maintenance of the Variable Account; and
.. preparation of Contract Owner reports.
We will send you Contract statements and transaction confirmations at least
annually. 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 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 will
make the adjustment as of the date that we receive notice of the potential
error.
We will also 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
Foley & Lardner, LLP, Washington, D.C., has advised Allstate Life on certain
federal securities law matters. All matters of Illinois law pertaining to the
Contracts, including the validity of the Contracts and Allstate Life's right to
issue such Contracts under Illinois insurance law, have been passed upon by
Michael J. Velotta, General Counsel of Allstate Life.
73 PROSPECTUS
TAXES
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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. Since the Variable Account is not an entity separate from Allstate
Life, and its operations form a part of Allstate Life, it will not be taxed
separately. Investment income and realized capital gains of the Variable Account
are automatically applied to increase reserves under the Contract. Under
existing federal income tax law, Allstate Life believes that the Variable
Account investment income and capital gains will not be taxed to the extent that
such income and gains are applied to increase the reserves under the Contract.
Accordingly, Allstate Life does not anticipate that it will incur any federal
income tax liability attributable to the Variable Account, and therefore
Allstate Life does not intend to make provisions for any such taxes. If Allstate
Life is taxed on investment income or capital gains of the Variable Account,
then Allstate Life may impose a charge against the Variable Account in order to
make provision for such taxes.
TAXATION OF VARIABLE 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,
.. the investments of the Variable Account are "adequately diversified" according
to Treasury Department regulations, and
.. Allstate Life is considered the owner of the Variable Account assets for
federal income tax purposes.
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
beneficiary. A trust named beneficiary, 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.
DIVERSIFICATION REQUIREMENTS. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the Contract owner during the taxable
year. Although Allstate Life does not have control over the Portfolios or their
investments, we expect the Portfolios to meet the diversification requirements.
OWNERSHIP TREATMENT. The IRS has stated that a contract owner will be
considered the owner of separate account assets if he possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. At the time the diversification regulations were issued, the
Treasury Department announced that the regulations do not provide guidance
concerning circumstances in which investor control of the separate account
investments may cause a Contract owner to be treated as the owner of the
separate account. The Treasury Department also stated that future
74 PROSPECTUS
guidance would be issued regarding the extent that owners could direct
sub-account investments without being treated as owners of the underlying assets
of the separate account.
Your rights under the Contract are different than those described by the IRS in
private and published rulings in which it found that Contract owners were not
owners of separate account assets. For example, if your contract offers more
than twenty (20) investment alternatives you have the choice to allocate
premiums and contract values among a broader selection of investment
alternatives than described in such rulings. You may be able to transfer among
investment alternatives more frequently than in such rulings. These differences
could result in you being treated as the owner of the Variable Account. If this
occurs, income and gain from the Variable Account assets would be includible in
your gross income. Allstate Life does not know what standards will be set forth
in any regulations or rulings which the Treasury Department may issue. It is
possible that future standards announced by the Treasury Department could
adversely affect the tax treatment of your Contract. We reserve the right to
modify the Contract as necessary to attempt to prevent you from being considered
the federal tax owner of the assets of the Variable Account. However, we make no
guarantee that such modification to the Contract will be successful.
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 full withdrawal
under a Non-Qualified Contract, the amount received will be taxable only to the
extent it exceeds the investment in the Contract.
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. If you elect variable annuity payments, the amount
excluded from taxable income is determined by dividing the investment in the
Contract by the total number of expected payments. The annuity payments will be
fully taxable after the total amount of the investment in the Contract is
excluded using these ratios. If any variable payment is less than the excludable
amount you should contact a competent tax advisor to determine how to report any
unrecovered investment. 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.
TAXATION OF LEVEL MONTHLY VARIABLE ANNUITY PAYMENTS. You may have an option to
elect a variable income payment stream consisting of level monthly payments that
are recalculated annually. Although we will report your levelized payments to
the IRS in the year distributed, it is possible the IRS could determine that
receipt of the first monthly payout of each annual amount is constructive
receipt of the entire annual amount. If the IRS were to take this position, the
taxable amount of your levelized payments would be accelerated to the time of
the first monthly payout and reported in the tax year in which the first monthly
payout is received.
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.
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:
75 PROSPECTUS
.. 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 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
76 PROSPECTUS
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 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
77 PROSPECTUS
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 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
78 PROSPECTUS
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.
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).
79 PROSPECTUS
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).
ANNUAL REPORTS AND OTHER DOCUMENTS
- --------------------------------------------------------------------------------
Allstate Life's Annual Report on Form 10-K for the year ended December 31,
2004, 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 450 Fifth Street, N.W., Washington, D.C.
20549. For more information on the operations of 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:
1-800-654-2397).
80 PROSPECTUS
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Additions, Deletions, or Substitutions of Investments
- --------------------------------------------------------------------------------
The Contracts
- --------------------------------------------------------------------------------
Calculation of Accumulation Unit Values
- --------------------------------------------------------------------------------
Calculation of Variable Income Payments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
General Matters
- --------------------------------------------------------------------------------
Experts
- --------------------------------------------------------------------------------
Financial Statements
- --------------------------------------------------------------------------------
Appendix A
- --------------------------------------------------------------------------------
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.
81 PROSPECTUS
APPENDIX A
CONTRACT COMPARISON CHART
FEATURE ALLSTATE VARIABLE ALLSTATE VARIABLE ANNUITY - L
- ------------------------- ANNUITY SHARE
----------------------------------------------------------
DCA Fixed Account 3 to 6 month transfer
Option periods 3 to 6 month transfer periods
7 to 12 month transfer 7 to 12 month transfer periods
periods
----------------------------------------------------------
Standard Fixed Account 1-, 3-*, 5-*, and 7-* N/A
Option year guarantee periods
- -----------------------------------------------------------------------------------
MVA Fixed Account 3-, 5-, 7-, and 10- 3-, 5-, 7-, and 10- year guarantee
Option** year guarantee periods periods
- -----------------------------------------------------------------------------------
Mortality and Expense
Risk Charge 1.10% 1.50%
(Base Contract)
- -----------------------------------------------------------------------------------
Withdrawal Charge 7/ 7/ 6/ 5/ 4/ 3/ 2 7/ 6/ 5
(% of purchase payment)
- -----------------------------------------------------------------------------------
Withdrawal Charge Confinement, Terminal Confinement, Terminal
Waivers Illness, Unemployment Illness, Unemployment
- -----------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fixed Account Options available depend on the type of Contract you have
purchased and the state in which your Contract was issued. The table summarizes
the availability of the Fixed Account Options in general. Please check with your
Morgan Stanley Financial Advisor for specific details for your state.
* Available only in states in which the MVA Fixed Account Option is not offered.
** Not available in states in which the 3-, 5-, or 7-year Standard Fixed Account
Options are offered.
82 PROSPECTUS
APPENDIX B - MARKET VALUE ADJUSTMENT
- --------------------------------------------------------------------------------
The Market Value Adjustment is based on the following:
I = the Treasury Rate for a maturity equal to the term length of the
Guarantee Period Account for the week preceding the establishment of
the Market Value Adjusted Fixed Guarantee Period Account;
J = the Treasury Rate for a maturity equal to the term length of the
Market Value Adjusted Fixed Guarantee Period Account for the week
preceding the date amounts are transferred or withdrawn from the
Market Value Adjusted Fixed Guarantee Period Account, the date we
determine the Death Proceeds, or the Payout Start Date, as the case
may be ("Market Value Adjustment Date").
N = the number of whole and partial years from the Market Value
Adjustment Date to the expiration of the term length of the Market
Value Adjusted Fixed Guarantee Period Account.
Treasury Rate means the U.S. Treasury Note Constant Maturity yield as reported
in Federal Reserve Bulletin Release H.15. If such yields cease 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
To determine the Market Value Adjustment, we will multiply the Market Value
Adjustment factor by the amount transferred, withdrawn, paid as Death Proceeds,
or applied to an Income Plan from a Market Value Adjusted Fixed Guarantee Period
Account at any time other than during the 30 day period after such Guarantee
Period Account expires. NOTE: These examples assume that premium taxes are not
applicable.
EXAMPLES OF MARKET VALUE ADJUSTMENT
$10,000 allocated to a Market Value Adjusted Fixed Guarantee
Purchase Payment: Period Account
Guarantee Period: 5 years
Interest Rate: 4.50%
Full Withdrawal: End of Contract Year 3
Contract: Allstate Variable Annuity*
EXAMPLE 1: (ASSUMES DECLINING INTEREST RATES)
Step 1: Calculate Contract Value at = $10,000.00 X (1.045) /3/ = $11,411.66
End of Contract Year 3:
Step 2: Calculate the Free = .15 X $10,000 = $1500
Withdrawal Amount:
Step 3: Calculate the Withdrawal = .06 X ($10,000 - $1,500) = $510
Charge:
Step 4: Calculate the Market Value I = 4.50%
Adjustment: J = 4.20%
730 DAYS
N = -------- = 2
365 DAYS
Market Value Adjustment Factor: .9 X [I -
(J + .0025)] X N
= .9 X [.045 - (.042 + .0025)] X 2 = .0009
Market Value Adjustment = Market Value
Adjustment Factor X Amount
Subject To Market Value Adjustment:
= .0009 X $11,411.66 = $10.27
Step 5: Calculate the amount = $11,411.66 - $510 + $10.27 = $10,911.93
received by Contract owner as a
result of full withdrawal at the
end of Contract Year 3:
83 PROSPECTUS
EXAMPLE 2: (ASSUMES RISING INTEREST RATES)
Step 1: Calculate Contract Value at End of Contract Year 3: = $10,000.00 X (1.045) /3/ = $11,411.66
Step 2: Calculate The Free Withdrawal Amount: = .15 X $10,000 = $1,500
Step 3: Calculate the Withdrawal Charge: = 0.06 X ($10,000 - $1,500) = $510
Step 4: Calculate the Market Value Adjustment: I = 4.50%
J = 4.80%
730 DAYS
N = ----------- = 2
365 DAYS
Market Value Adjustment Factor: .9 X [I - (J + .0025)] X N
= .9 X [(.045 - (.048 + .0025)] X (2) = -.0099
Market Value Adjustment = Market Value Adjustment Factor X
Amount Subject To Market Value Adjustment:
= -.0099 X $11,411.66 = -$112.98
Step 5: Calculate the amount received by Contract owner as a = $11,411.66 - $510 - $112.98 = $10,788.68
result of full withdrawal at the end of Contract Year 3:
*These examples assume the election of the ALLSTATE VARIABLE ANNUITY CONTRACT
for the purpose of illustrating the Market Value Adjustment calculation. The
amounts would be different under the ALLSTATE VARIABLE ANNUITY - L SHARE
CONTRACT, which has different expenses and withdrawal charges.
84 PROSPECTUS
APPENDIX C
EXAMPLE OF CALCULATION OF INCOME PROTECTION BENEFIT
- --------------------------------------------------------------------------------
Appendix C illustrates how we calculate the amount guaranteed under the Income
Protection Benefit Option. Please remember that you are looking at an example
only. Please also remember that the Income Protection Benefit Option may only be
added to Income Plans 1 and/or 2, and only to those Income Plans for which you
have selected variable income payments.
To illustrate the calculation of the amount guaranteed under the Income
Protection Benefit Option, we assume the following:
Adjusted age of Annuitant on the Payout Start 65
Date:
- -------------------------------------------------------------------------------
Sex of Annuitant: male
- -------------------------------------------------------------------------------
Income Plan selected: 1
- -------------------------------------------------------------------------------
Payment frequency: monthly
- -------------------------------------------------------------------------------
Amount applied to variable income payments $100,000.00
under the Income Plan:
- -------------------------------------------------------------------------------
The example assumes that the withdrawal charge period has expired for all
purchase payments. In accordance with the terms of the Contract, the following
additional assumptions apply:
Assumed investment rate: 3%
- -------------------------------------------------------------------------------
Guaranteed minimum variable income 85% of the initial variable amount income
payment: value
- -------------------------------------------------------------------------------
STEP 1 - CALCULATION OF THE INITIAL VARIABLE AMOUNT INCOME VALUE:
Using the assumptions stated above, the initial monthly income payment is $5.49
per $1,000 applied to variable income payments under Income Plan 1. Therefore,
the initial variable amount income value = $100,000 X $5.49/1000 = $549.00.
STEP 2 - CALCULATION OF THE AMOUNT GUARANTEED UNDER THE INCOME PROTECTION
BENEFIT OPTION:
guaranteed minimum variable income payment = 85% X initial variable amount
income value = 85% X $549.00 = $466.65.
STEP 3 - ILLUSTRATION OF THE EFFECT OF THE MINIMUM PAYMENT GUARANTEE UNDER THE
INCOME PROTECTION BENEFIT OPTION:
If in any month your variable income payments would fall below the amount
guaranteed under the Income Protection Benefit Option, your payment for that
month will equal the guaranteed minimum variable income payment. For example,
you would receive $466.65 even if the amount of your monthly income payment
would have been less than that as a result of declining investment experience.
On the other hand, if your monthly income payment is greater than the minimum
guaranteed $466.65, you would receive the greater amount.
85 PROSPECTUS
APPENDIX D
WITHDRAWAL ADJUSTMENT EXAMPLE - INCOME BENEFITS*
- --------------------------------------------------------------------------------
Issue Date: January 1, 2003
Initial Purchase Payment: $50,000.
Income Benefit Amount
Contract
Type Beginning Value Maximum 5%
of Contract Transaction After Anniversary Roll-Up
Date Occurrence Value Amount Occurrence Value Value**
- ------------------------------------------------------------------------------------------------------------------------------------
1/1/04 Contract Anniversary $55,000 _ $55,000 $55,000 $52,500
- ------------------------------------------------------------------------------------------------------------------------------------
7/1/04 Partial Withdrawal $60,000 $15,000 $45,000 $41,250 $40,176
- ------------------------------------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted income benefits in the example
above. Please note that the withdrawal adjustment reduces the Maximum
Anniversary Value by the same proportion as the withdrawal reduces the Contract
Value. The withdrawal adjustment reduces the 5% Roll-Up Value part
dollar-for-dollar and part proportionally.
- -------------------------------------------------------------------------------
MAXIMUM ANNIVERSARY VALUE INCOME BENEFIT
- -------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial (b) $60,000
Withdrawal
- -------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior (c) $55,000
to Partial Withdrawal
- -------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,750
- -------------------------------------------------------------------------------
Adjusted Income Benefit $41,250
- -------------------------------------------------------------------------------
5% ROLL-UP VALUE INCOME BENEFIT**
- -------------------------------------------------------------------------------
Total Partial Withdrawal Amount (a) $15,000
- -------------------------------------------------------------------------------
STEP I - DOLLAR FOR DOLLAR PORTION
- -------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial (b) $60,000
Withdrawal
- -------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior
to Partial Withdrawal (assumes 181 days worth of (c) $53,786
interest on $52,500 and $54,600, respectively)
- -------------------------------------------------------------------------------
Partial Withdrawal Amount (Corridor = 5% of (d) $ 2,625
Roll-Up Value on 1/1/04)
- -------------------------------------------------------------------------------
Dollar for Dollar Withdrawal Adjustment (e)=(d)*1.05^-0.5 $ 2,562
(discounted for a half year's worth of interest)
- -------------------------------------------------------------------------------
Contract Value After Step 1 (b')=(b)-(d) $57,375
- -------------------------------------------------------------------------------
Adjusted Income Benefit After Step 1 (c')=(c)-(e) $51,224
- -------------------------------------------------------------------------------
STEP 2 - PROPORTIONAL PORTION
- -------------------------------------------------------------------------------
Partial Withdrawal Amount (a')=(a)-(d) $12,375
- -------------------------------------------------------------------------------
Proportional Adjustment (a')/(b')*(c') $11,048
- -------------------------------------------------------------------------------
Contract Value After Step 2 (b')-(a') $45,000
- -------------------------------------------------------------------------------
Adjusted Income Benefit After Step 2 $40,176
- -------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values and Maximum Anniversary
Value for all Contracts, net of applicable fees and charges. Actual income
benefit amounts will differ due to the different fees and charges under each
Contract. Please remember that you are looking at an example and that your
investment performance may be greater or lower than the figures shown.
** In certain states, the Roll-Up Value Income Benefit accumulates interest on a
daily basis at a rate equivalent to 3% per year rather than 5%. If calculations
assumed an interest rate of 3% per year, the adjusted income benefit would be
lower.
86 PROSPECTUS
APPENDIX E
WITHDRAWAL ADJUSTMENT EXAMPLE - DEATH BENEFITS*
- --------------------------------------------------------------------------------
Issue Date: January 1, 2005
Initial Purchase Payment: $50,000
Death Benefit Amount
----------------------------------------
Beginning Contract Maximum
Type of Contract Transaction Value After Purchase Anniversary Enhanced
Date Occurrence Value Amount Occurrence Payment Value Value Beneficiary
- ------------------------------------------------------------------------------------------------------------------------ Value**
------------
1/1/06 Contract Anniversary $55,000 _ $55,000 $50,000 $55,000 $52,500
- ------------------------------------------------------------------------------------------------------------------------------------
7/1/06 Partial Withdrawal $60,000 $15,000 $45,000 $37,500 $41,250 $40,339
- ------------------------------------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted death benefits in the example
above. Please note that the withdrawal reduces the Purchase Payment Value, the
Maximum Anniversary Value, and the Enhanced Beneficiary Value by the same
proportion as the withdrawal reduces the Contract Value.
- -----------------------------------------------------------------------------------
PURCHASE PAYMENT VALUE DEATH BENEFIT
- -----------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -----------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- -----------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to (c) $50,000
Partial Withdrawal
- -----------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $12,500
- -----------------------------------------------------------------------------------
Adjusted Death Benefit $37,500
- -----------------------------------------------------------------------------------
MAV DEATH BENEFIT
- -----------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -----------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- -----------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to (c) $55,000
Partial Withdrawal
- -----------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,750
- -----------------------------------------------------------------------------------
Adjusted Death Benefit $41,250
- -----------------------------------------------------------------------------------
ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE)
BENEFIT**
- -----------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -----------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- -----------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to
Partial Withdrawal (assumes 181 days worth of interest (c) $53,786
on $52,500 and $54,600, respectively)
- -----------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,446
- -----------------------------------------------------------------------------------
Adjusted Death Benefit $40,339
- -----------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values and Maximum Anniversary
Value for all Contracts, net of applicable fees and charges. Actual death
benefit amounts will differ due to the different fees and charges under each
Contract. Please remember that you are looking at an example and that your
investment performance may be greater or lower than the figures shown.
** Calculations for the Enhanced Beneficiary Protection (Annual Increase)
Benefit assumed that interest accumulates on a daily basis at a rate equivalent
to 5% per year. In certain states, the benefit provides for interest that
accumulates at a rate of 3% per year. If calculations assumed an interest rate
of 3% per year, the adjusted death benefit would be lower.
87 PROSPECTUS
APPENDIX F
CALCULATION OF EARNINGS PROTECTION DEATH BENEFIT*
- --------------------------------------------------------------------------------
The following are examples of the Earnings Protection Death Benefit Option. For
illustrative purposes, the examples assume Earnings in each case. Please
remember that you are looking at examples and that your investment performance
may be greater or lower than the figures shown.
EXAMPLE 1: ELECTED WHEN CONTRACT WAS ISSUED WITHOUT ANY SUBSEQUENT ADDITIONS OR
WITHDRAWALS
In this example, assume that the oldest Contract Owner is age 55 on the Rider
Application Date and elects the Earnings Protection Death Benefit Option when
the Contract is issued. The Contract Owner makes an initial purchase payment of
$100,000. After four years, the Contract Owner dies. On the date Allstate Life
receives a Complete Request for Settlement, the Contract Value is $125,000.
Prior to his death, the Contract Owner did not make any additional purchase
payments or take any withdrawals.
Excess of Earnings Withdrawals = $0
Purchase Payments in the 12 months prior to = $0
death
In-Force Premium = $100,000
($100,000 + $0 - $0)
In-Force Earnings = $25,000
($125,000 - $100,000)
EARNINGS PROTECTION DEATH BENEFIT** = 40 % * $25,000 = $10,000
Since 40% of In-Force Earnings is less than 100% of the In-Force Premium
(excluding purchase payments in the 12 months prior to death), the In-Force
Earnings are used to compute the Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
will differ due to the different fees and charges under each Contract.
**If the oldest Contract Owner or Annuitant had been over age 70, and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($6,250.00).
EXAMPLE 2: ELECTED WHEN CONTRACT WAS ISSUED WITH SUBSEQUENT WITHDRAWALS
In this example, assume the same facts as above, except that the Contract Owner
has taken a withdrawal of $10,000 during the second year of the Contract.
Immediately prior to the withdrawal, the Contract Value is $105,000. Here,
$5,000 of the withdrawal is in excess of the In-Force Earnings at the time of
the withdrawal. The Contract Value on the date Allstate Life receives a Complete
Request for Settlement will be assumed to be $114,000.
Excess of Earnings Withdrawals = $5,000
($10,000-$5,000)
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $95,000
($100,000+$0-$5,000)
In-Force Earnings = $19,000
($114,000-$95,000)
EARNINGS PROTECTION DEATH BENEFIT** = 40%*$19,000=$7,600
Since 40% of In-Force Earnings is less than 100% of the In-Force Premium
(excluding purchase payments in the 12 months prior to death), the In-Force
Earnings are used to compute the Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
will differ due to the different fees and charges under each Contract.
**If the oldest Contract Owner or Annuitant had been over age 70, and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($4,750.00).
88 PROSPECTUS
EXAMPLE 3: ELECTED AFTER CONTRACT WAS ISSUED WITH SUBSEQUENT ADDITIONS AND
WITHDRAWALS
This example is intended to illustrate the effect of adding the Earnings
Protection Death Benefit Option after the Contract has been issued and the
effect of later purchase payments. In this example, assume that the oldest
Contract Owner is age 72 on the Rider Application Date. At the time the Contract
is issued, the Contract Owner makes a purchase payment of $100,000. After two
years pass, the Contract Owner elects to add the Earnings Protection Death
Benefit Option. On the date this Rider is added, the Contract Value is $110,000.
Two years later, the Contract Owner withdraws $50,000. Immediately prior to the
withdrawal, the Contract Value is $130,000. Another two years later, the
Contract Owner makes an additional purchase payment of $40,000. Immediately
after the additional purchase payment, the Contract Value is $130,000. Two years
later, the Contract Owner dies with a Contract Value of $140,000 on the date
Allstate Life receives a Complete Request for Settlement.
Excess of Earnings Withdrawals = $30,000
($50,000-$20,000)
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $120,000
($110,000+$40,000-$30,000)
In-Force Earnings = $20,000
($140,000-$120,000)
EARNINGS PROTECTION DEATH BENEFIT** = 25%*$20,000=$5,000
In this example, In-Force Premium is equal to the Contract Value on Rider
Application Date plus the additional purchase payment and minus the
Excess-of-Earnings Withdrawal.
Since 25% of In-Force Earnings is less than 50% of the In-Force Premium
(excluding purchase payments in the 12 months prior to death), the In-Force
Earnings are used to compute the Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
will differ due to the different fees and charges under each Contract.
**If the oldest Contract Owner or Annuitant had been age 70 or younger on the
Rider Application Date, the Earnings Protection Death Benefit would be 40% of
the In-Force Earnings ($8,000.00).
EXAMPLE 4: SPOUSAL CONTINUATION
This example is intended to illustrate the effect of a surviving spouse electing
to continue the Contract upon the death of the Contract Owner on a Contract with
the Earnings Protection Death Benefit Option. In this example, assume that the
oldest Contract Owner is age 60 at the time the Contract is purchased (with the
Earnings Protection Death Benefit Option and MAV Death Benefit Option) with a
$100,000 purchase payment. Five years later the Contract Owner dies and the
surviving spouse elects to continue the Contract. The Contract Value and Maximum
Anniversary Value at this time are $150,000 and $160,000, respectively.
Excess of Earnings Withdrawals = $0
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $100,000
($100,000+$0-$0)
In-Force Earnings = $50,000
($150,000-$100,000)
Earnings Protection Death Benefit** = 40%*$50,000=$20,000
Contract Value = $150,000
Death Benefit = $160,000
Earnings Protection Death Benefit = $20,000
Continuing Contract Value = $180,000
($160,000+$20,000)
Since 40% of In-Force Earnings is less than 100% of the In-Force Premium
(excluding purchase payments in the 12 months prior to death), the In-Force
Earnings are used to compute the Earnings Protection Death Benefit amount.
Assume the surviving spouse is age 72 when the Contract is continued. At this
time, the surviving spouse has the option to continue the Earnings Protection
Death Benefit Option at an additional mortality and expense risk charge of 0.40%
and with an In-Force Premium amount equal to the Contract Value and the Rider
Date reset to the date the Contract is continued. If this selection is made, the
Earnings Protection Death Benefit will be equal to the lesser of 25% of the In--
89 PROSPECTUS
Force Earnings and 50% of In-Force Premium. Otherwise, the surviving spouse may
elect to terminate the Earnings Protection Death Benefit Option at the time of
continuation.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values and
Maximum Anniversary Values for all Contracts, net of applicable fees and
charges. Actual death benefit amounts will differ due to the different fees and
charges under each Contract.
**If the oldest Contract Owner or Annuitant had been over age 70, and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($12,500.00).
90 PROSPECTUS
APPENDIX G
WITHDRAWAL ADJUSTMENT EXAMPLE - TRUERETURN ACCUMULATION BENEFIT*
- --------------------------------------------------------------------------------
ISSUE DATE: January 2, 2005
INITIAL PURCHASE PAYMENT: $50,000
INITIAL BENEFIT BASE: $50,000
Beginning Contract
Type of Contract Transaction Value After
Date Occurrence Value Amount Occurrence Benefit Base
- --------------------------------------------------------------------------------------------------------
1/2/06 Contract Anniversary $55,000 _ $55,000 $50,000
- --------------------------------------------------------------------------------------------------------
7/2/06 Partial Withdrawal $60,000 $15,000 $45,000 $37,500
- --------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted Benefit Bases in the example
above. Please note the withdrawal reduces the Benefit Bases by the same
proportion as the withdrawal reduces the Contract Value.
- -----------------------------------------------------------------------------------
BENEFIT BASE
- -----------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -----------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- -----------------------------------------------------------------------------------
Value of Benefit Base Amount Immediately Prior to (c) $50,000
Partial Withdrawal
- -----------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $12,500
- -----------------------------------------------------------------------------------
Adjusted Benefit Base $37,500
- -----------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values, net of applicable fees
and charges for all Contracts. Actual Contract Values will differ due to the
different fees and charges under each Contract. Please remember that you are
looking at an example and that your investment performance may be greater or
lower than the figures shown.
91 PROSPECTUS
APPENDIX H - SUREINCOME WITHDRAWAL BENEFIT OPTION CALCULATION EXAMPLES
- --------------------------------------------------------------------------------
Example 1: Assume you purchase an Allstate Variable Annuity contract with a
- ----------
$100,000 initial purchase payment and add the SureIncome Option at issue.
Your Benefit Base is $100,000, which is your initial purchase payment of
$100,000. Your Benefit Payment is $8,000, which is 8% of your initial purchase
payment. Your Benefit Payment Remaining for this Benefit Year is $8,000, which
is equal to your Benefit Payment at the beginning of this Benefit Year.
Example 2: Assume Example 1 is continued and an additional purchase payment of
- ----------
40,000 is made in the first Benefit Year.
The Benefit Base is increased to $140,000, which is your prior Benefit Base
($100,000) plus your additional purchase payment ($40,000). The Benefit Payment
is increased to $11,200, which is your prior Benefit Payment ($8,000) plus 8% of
your additional purchase payment ($40,000). The Benefit Payment Remaining is
increased to $11,200, which is your Benefit Payment Remaining prior to your
additional purchase payment ($8,000) plus 8% of your additional purchase payment
($40,000).
Example 3: Assume Example 1 is continued and a withdrawal of $8,000 is made
- ----------
during the first Benefit Year.
The Benefit Base is reduced to $92,000, which is your prior Benefit Base
($100,000) less your withdrawal ($8,000). The Benefit Payment is unchanged and
remains $8,000. The Benefit Payment Remaining in the first Benefit Year is $0,
which is your Benefit Payment Remaining prior to your withdrawal ($8,000) less
your withdrawal ($8,000).
Example 4: Assume example 1 is continued and a withdrawal of $25,000 is made
- ----------
during the first Benefit Year. Assume the Contract Value prior to the withdrawal
was $130,000. Because the $25,000 withdrawal is larger than the Benefit Payment
Remaining, the Benefit Base and Benefit Payment will be recalculated according
to applicable formulas.
The Benefit Base is reduced to $75,000, determined by the following calculation:
the lesser of ($130,000 - $25,000) and ($100,000 - $25,000)=$75,000. The Benefit
Payment remains $8,000, determined by the following calculation: the lesser of
($8,000) and (8% x ($130,000-$25,000))=$8,000. There is no Benefit Payment
Remaining because the withdrawal has reduced it to $0.
Example 5: Assume example 3 is continued and an additional withdrawal of $5,000
- ----------
is taken in the same year (the first Benefit Year). Assume the Contract Value
prior to the additional withdrawal was $60,000. Because the $5,000 withdrawal is
larger than the Benefit Payment Remaining ($0), the Benefit Base and Benefit
Payment will be recalculated according to applicable formulas.
The Benefit Base is reduced to $55,000, determined by the following calculation:
the lesser of ($60,000 - $5,000) and ($92,000 - $5,000)=$55,000. The Benefit
Payment is reduced to $4,400, determined by the following formula: the lesser of
($8,000) and ((8% x ($60,000-$5,000))=$4,400. The Benefit Payment Remaining is
unchanged at $0.
Example 6: Assume example 5 is continued and an additional Purchase Payment of
- ----------
40,000 is made in the same year (the first Benefit Year).
The Benefit Base is increased to $95,000, which is your prior Benefit Base
($55,000) plus your additional purchase payment ($40,000). The Benefit Payment
is increased to $7,600, which is your prior Benefit Payment ($4,400) plus 8% of
your additional purchase payment ($40,000). The Benefit Payment Remaining is
increased to $3,200, which is your Benefit Payment Remaining prior to your
additional purchase payment ($0) plus 8% of your additional purchase payment
($40,000).
92 PROSPECTUS
Example 7: Assume example 6 is continued and an additional withdrawal of $3,200
- ----------
is taken in the same year (the first Benefit Year).
The Benefit Base is reduced to $91,800, which is your prior Benefit Base
($95,000) less your withdrawal ($3,200). The Benefit Payment is unchanged and
remains $7,600. The Benefit Payment Remaining is reduced to $0, which is your
Benefit Payment Remaining prior to your withdrawal ($3,200) less your withdrawal
($3,200).
93 PROSPECTUS
APPENDIX I- ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
Appendix I presents the Accumulation Unit Values and number of Accumulation
Units outstanding for each Variable Sub-Account since the Variable Sub-Accounts
were first offered under the Contracts. This Appendix includes Accumulation Unit
Values representing the highest and lowest available combinations of Contract
charges that affect Accumulation Unit Values for each Contract. The Statement of
Additional Information, which is available upon request without charge, contains
the Accumulation Unit Values for all other available combinations for each
Contract. Please contract us at 1-800-654-2397 to obtain a copy of the Statement
of Additional Information.
ALLSTATE VARIABLE ANNUITY CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER OF
ACCUMULATION UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS
WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- ---------------------------------------------------------------------------------------------
SUB-ACCOUNTS
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Aggressive Equity - Class Y Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.234
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.234 $ 13.583
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 24,578 35,573
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.260
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.260 $ 13.095
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 237,797 556,690
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Equity - Class Y Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.884
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.884 $ 13.005
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 180,194 463,438
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS European Equity - Class Y Sub-Account(1)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.690
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.690 $ 14.090
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 65,859 102,460
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Advantage - Class Y Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.603
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.603 $ 13.968
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,209 19,661
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Growth - Class Y Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.971
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.971 $ 14.679
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 150,827 331,007
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS High Yield - Class Y Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.331
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.331 $ 12.255
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 95,060 191,354
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Builder - Class Y Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.666
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.666 $ 12.750
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 83,633 132,998
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus - Class Y Sub-Account(1)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 10.311
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 10.311 $ 10.694
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 285,576 1,071,611
- ---------------------------------------------------------------------------------------------
94 PROSPECTUS
Morgan Stanley VIS Information - Class Y Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 14.965
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 14.965 $ 15.267
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 56,208 53,334
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 10.018
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 10.018 $ 10.005
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 337,847 691,339
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Money Market - Class Y Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 9.936
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.936 $ 9.868
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 184,536 812,228
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.114
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.114 $ 13.188
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 380,784 779,233
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Strategist - Class Y Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.034
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.034 $ 13.080
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 156,369 290,870
- ---------------------------------------------------------------------------------------------
Morgan Stanley VIS Utilities - Class Y Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.505
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.505 $ 13.660
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 30,741 45,533
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(2,3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.319
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.319 $ 12.299
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 32,114 141,903
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity, Class II Sub-Account (3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 14.912
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 14.912 $ 18.105
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 35,093 100,831
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account (3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.622
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.622 $ 12.793
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 125,143 215,383
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account (3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.715
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.715 $ 12.423
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 121,087 179,761
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account (3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.251
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.251 $ 13.637
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 91,178 311,486
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth, Class II Sub-Account (3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.116
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 13.116 $ 15.727
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 104,776 190,348
- ---------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II Sub-Account (3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.621
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 13.621 $ 15.993
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 104,846 150,004
- ---------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account (3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.408
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 13.408 $ 15.158
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 162,337 366,700
- ---------------------------------------------------------------------------------------------
95 PROSPECTUS
Van Kampen UIF U.S. Real Estate, Class II Sub-Account (3)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.785
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.785 $ 17.172
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 95,259 267,480
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.864
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.864 $ 14.589
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 64,393 91,273
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.525
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.525 $ 14.519
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 611,638 1,368,363
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.853
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.853 $ 12.493
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 105,623 143,473
- ---------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.423
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.423 $ 13.994
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 346,255 706,160
- ---------------------------------------------------------------------------------------------
AIM V.I. Basic Value - Series II Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.922
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.922 $ 14.138
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 93,006 197,926
- ---------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation - Series II Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.268
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.268 $ 12.876
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 41,151 74,440
- ---------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity - Series II Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 10.826
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 41,968
- ---------------------------------------------------------------------------------------------
AIM V.I. Premier Equity - Series II Sub-Account (2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.785
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.785 $ 12.272
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 59,649 45,741
- ---------------------------------------------------------------------------------------------
AllianceBernstein Growth - Class B Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.479
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.479 $ 14.108
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 84,678 170,808
- ---------------------------------------------------------------------------------------------
96 PROSPECTUS
AllianceBernstein Growth and Income - Class B Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.313
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.313 $ 13.518
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 186,043 415,731
- ---------------------------------------------------------------------------------------------
AllianceBernstein International Value - Class B Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth - Class B Sub-Account(2,4)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.511
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.511 $ 12.311
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 61,318 104,368
- ---------------------------------------------------------------------------------------------
AllianceBernstein Small/Mid Cap Value - Class B Sub-Account(4)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.642
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 13.642 $ 16.034
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 128,236 220,201
- ---------------------------------------------------------------------------------------------
AllianceBernstein Utility Income - Class B Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
AllianceBernstein Value - Class B Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
Fidelity VIP Growth & Income - Service Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
Fidelity VIP High Income - Service Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Securities - Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
FTVIP Franklin High Income - Class 2 Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 10.717
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 126,010
- ---------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 11.263
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 117,847
- ---------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities - Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 10.974
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 89,975
- ---------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 11.543
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 91,246
- ---------------------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
97 PROSPECTUS
Goldman Sachs VIT Mid Cap Value Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.342
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.342 $ 12.114
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 59,242 89,594
- ---------------------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account(2)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.318
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.318 $ 13.510
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 8,159 83,914
- ---------------------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.688
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.688 $ 14.553
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 71,672 165,086
- ---------------------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account (5)
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.184
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.184 $ 13.547
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 8,159 5,886
- ---------------------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- ---------------------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.752
- ---------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.752 $ 12.184
- ---------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 63,955 135,230
- ---------------------------------------------------------------------------------------------
* The Allstate Variable Annuity Contracts and all of the Variable Sub-Accounts
shown above were first offered under the Contracts on May 1, 2003, except for
the AIM V.I. Mid Cap Core Equity - Series II Sub-Account, FTVIP Franklin High
Income - Class 2 Sub-Account, FTVIP Franklin Income Securities - Class 2
Sub-Account, FTVIP Mutual Shares Securities - Class 2 Sub-Account, and FTVIP
Templeton Foreign Securities - Class 2 Sub-Account, which were first offered
under the Contracts on May 1, 2004, and the AllianceBernstein International
Value - Class B Sub-Account, the AllianceBernstein Utility Income - Class B
Sub-Account, the AllianceBernstein Value - Class B Sub-Account, the Fidelity VIP
Contrafund(R) - Service Class 2 Sub-Account, the Fidelity VIP Growth & Income -
Service Class 2 Sub-Account, the Fidelity VIP High Income - Service Class 2
Sub-Account, the Fidelity VIP Mid Cap - Service Class 2 Sub-Account, the FTVIP
Franklin Flex Cap Growth Securities - Class 2 Sub-Account, the FTVIP Mutual
Discovery Securities - Class 2 Sub-Account, the Goldman Sachs VIT CORE(SM) Small
Cap Equity Sub-Account, the Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account,
the Goldman Sachs VIT Growth and Income Sub-Account, the Goldman Sachs VIT Mid
Cap Value Sub-Account and the Putnam VT New Value - Class IB Sub-Account which
were first offered under the Contracts on April 30, 2005. Accumulation Unit
Values for the Variable Sub-Accounts first offered under the Contracts on April
30, 2005 are not shown. The Accumulation Unit Values in this table reflect a
mortality and expense risk charge of 1.10% and an administration expense charge
of 0.19%.
(1) Effective December 30, 2004 and April 29, 2005, respectively, the Morgan
Stanley VIS European Growth Portfolio - Class Y and Morgan Stanley VIS Quality
Income Plus Portfolio - Class Y changed their names to Morgan Stanley VIS
European Equity Portfolio - Class Y and Morgan Stanley VIS Income Plus Portfolio
- - Class Y, respectively. We have made a corresponding change in the name of the
Variable Sub-accounts that invest in these Portfolios.
(2) Effective May 1, 2005, the AIM V.I. Basic Value - Series II Sub-Account, the
AIM V.I. Capital Appreciation - Series II Sub-Account, the AIM V.I. Mid Cap Core
Equity - Series II Sub-Account, the AIM V.I. Premier Equity - Series II
Sub-Account, the AllianceBernstein Growth and Income - Class B Sub-Account, the
AllianceBernstein Large Cap Growth - Class B Sub-Account, the FTVIP Franklin
High Income - Class 2 Sub-Account, the Morgan Stanley VIS Global Advantage -
Class Y Sub-Account, the Morgan Stanley VIS High Yield - Class Y Sub-Account,
the Morgan Stanley VIS Income Builder - Class Y Sub-Account, the Morgan Stanley
VIS Information - Class Y Sub-Account, the Morgan Stanley VIS Utilities
Portfolio - Class Y, the Putnam VT Growth and Income Fund - Class IB and the Van
Kampen UIF Emerging Markets Debt Portfolio, Class II are no longer available for
new investments. If you are currently invested in these Variable Sub-Accounts,
you may continue your investment. If prior to May 1, 2005, you enrolled in one
of our automatic transaction programs, such as automatic additions, portfolio
rebalancing or dollar cost averaging, we will continue to effect automatic
transactions to these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(4) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio -
Class B and the AllianceBernstein Small Cap Value Portfolio - Class B changed
their names to the AllianceBernstein Large Cap Growth Portfolio - Class B and
the AllianceBernstein Small/Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
(5) Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account is no
longer available for new investments. If you are currently invested in this
Variable Sub-Account, you may continue your investment. If prior to May 1, 2004,
you enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing or dollar cost averaging, we will continue to
effect automatic transactions to this Variable Sub-Account in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
98 PROSPECTUS
ALLSTATE VARIABLE ANNUITY CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER OF
ACCUMULATION UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS
WERE FIRST OFFERED* (WITH THE MAV DEATH BENEFIT OPTION, THE ENHANCED BENEFICIARY
PROTECTION (ANNUAL INCREASE) OPTION AND THE EARNINGS PROTECTION DEATH BENEFIT
OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
Morgan Stanley VIS Aggressive Equity - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.159
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.159 $ 13.377
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 189 951
- -------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.185
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.185 $ 12.897
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 20,116 18,199
- -------------------------------------------------------------------------------
Morgan Stanley VIS Equity - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.812
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.812 $ 12.808
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 22,754 25,327
- -------------------------------------------------------------------------------
Morgan Stanley VIS European Equity - Class Y
Sub-Account(1)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.613
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.613 $ 13.877
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,061 3,942
- -------------------------------------------------------------------------------
Morgan Stanley VIS Global Advantage - Class Y
Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.526
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.526 $ 13.757
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 979 0
- -------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Growth - Class Y
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.892
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.892 $ 14.457
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,234 11,314
- -------------------------------------------------------------------------------
Morgan Stanley VIS High Yield - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.262
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.262 $ 12.069
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,624 5,399
- -------------------------------------------------------------------------------
Morgan Stanley VIS Income Builder - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.595
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.595 $ 12.556
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 388 388
- -------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus - Class Y Sub-Account(1)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.248
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.248 $ 10.532
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 36,354 31,834
- -------------------------------------------------------------------------------
Morgan Stanley VIS Information - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 14.874
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.874 $ 15.036
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 297 388
- -------------------------------------------------------------------------------
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.957
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.957 $ 9.853
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 22,303 25,373
- -------------------------------------------------------------------------------
99 PROSPECTUS
Morgan Stanley VIS Money Market - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.875
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.875 $ 9.719
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 45,906 100,138
- -------------------------------------------------------------------------------
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.040
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.040 $ 12.988
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 15,094 15,844
- -------------------------------------------------------------------------------
Morgan Stanley VIS Strategist - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.961
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.961 $ 12.882
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 14,926 15,995
- -------------------------------------------------------------------------------
Morgan Stanley VIS Utilities - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.435
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.435 $ 13.453
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,101 1,096
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II
Sub-Account(2,3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.250
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.250 $ 12.113
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 15,238 793
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity, Class II
Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 14.821
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.821 $ 17.831
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 12,008 578
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.643
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.643 $ 12.234
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 732 1,444
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.551
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.551 $ 12.599
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,382 8,845
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.176
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.176 $ 13.430
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,170 4,254
- -------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 13.036
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.036 $ 15.489
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,524 7,472
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 13.538
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.538 $ 15.751
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 12,094 7,725
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 13.327
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.327 $ 14.928
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 13,892 9,406
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.707
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.707 $ 16.912
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,217 7,785
- -------------------------------------------------------------------------------
100 PROSPECTUS
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.785
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.785 $ 14.368
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 428 1,015
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.449
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.449 $ 14.299
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 73,598 44,257
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.781
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.781 $ 12.304
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 7,119 5,330
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.347
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.347 $ 13.782
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 52,658 27,103
- -------------------------------------------------------------------------------
AIM V.I. Basic Value - Series II Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.843
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.843 $ 13.924
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,967 4,311
- -------------------------------------------------------------------------------
AIM V.I. Capital Appreciation - Series II Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.193
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.193 $ 12.681
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,401 895
- -------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity - Series II Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 10.760
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 0
- -------------------------------------------------------------------------------
AIM V.I. Premier Equity - Series II Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.713
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.713 $ 12.086
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,619 6,687
- -------------------------------------------------------------------------------
AllianceBernstein Growth - Class B Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.403
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.403 $ 13.894
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,243 6,926
- -------------------------------------------------------------------------------
AllianceBernstein Growth and Income - Class B
Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.238
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.238 $ 13.313
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 30,085 30,581
- -------------------------------------------------------------------------------
AllianceBernstein International Value - Class B
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth - Class B
Sub-Account(2,4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.441
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.441 $ 12.124
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,752 11,686
- -------------------------------------------------------------------------------
AllianceBernstein Small/Mid Cap Value - Class B
Sub-Account(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 13.558
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.558 $ 15.791
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,419 7,226
- -------------------------------------------------------------------------------
AllianceBernstein Utility Income - Class B Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
101 PROSPECTUS
AllianceBernstein Value - Class B Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Fidelity VIP Growth & Income - Service Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Fidelity VIP High Income - Service Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
FTVIP Franklin High Income - Class 2 Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 10.652
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 1,781
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 11.194
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 1,924
- -------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 10.907
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 7,597
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $ 11.472
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 0
- -------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
102 PROSPECTUS
Goldman Sachs VIT Mid Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.273
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.273 $ 11.931
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 1,133
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.243
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.243 $ 13.306
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 14,285 12,788
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.611
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.611 $ 14.333
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 128 2,233
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.109
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.109 $ 13.342
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.680
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.680 $ 11.999
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,470 2,601
- -------------------------------------------------------------------------------
* The Allstate Variable Annuity Contracts and all of the Variable Sub-Accounts
shown above were first offered under the Contracts with the MAV Death Benefit
Option, the Enhanced Beneficiary Protection (Annual Increase) Option and the
Earnings Protection Death Benefit Option on May 1, 2003, except for the AIM V.I.
Mid Cap Core Equity - Series II Sub-Account, FTVIP Franklin High Income - Class
2 Sub-Account, FTVIP Franklin Income Securities - Class 2 Sub-Account, FTVIP
Mutual Shares Securities - Class 2 Sub-Account, and FTVIP Templeton Foreign
Securities - Class 2 Sub-Account, which were first offered under the Contracts
on May 1, 2004, and the AllianceBernstein International Value - Class B
Sub-Account, the AllianceBernstein Utility Income - Class B Sub-Account, the
AllianceBernstein Value - Class B Sub-Account, the Fidelity VIP Contrafund(R) -
Service Class 2 Sub-Account, the Fidelity VIP Growth & Income - Service Class 2
Sub-Account, the Fidelity VIP High Income - Service Class 2 Sub-Account, the
Fidelity VIP Mid Cap - Service Class 2 Sub-Account, the FTVIP Franklin Flex Cap
Growth Securities - Class 2 Sub-Account, the FTVIP Mutual Discovery Securities -
Class 2 Sub-Account, the Goldman Sachs VIT CORE(SM) Small Cap Equity
Sub-Account, the Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account, the Goldman
Sachs VIT Growth and Income Sub-Account, the Goldman Sachs VIT Mid Cap Value
Sub-Account and the Putnam VT New Value - Class IB Sub-Account which were first
offered under the Contracts on April 30, 2005. Accumulation Unit Values for the
Variable Sub-Accounts first offered under the Contracts on April 30, 2005 are
not shown. The Accumulation Unit Values in this table reflect a mortality and
expense risk charge of 2.00% and an administration expense charge of 0.19%.
(1) Effective December 30, 2004 and April 29, 2005, respectively, the Morgan
Stanley VIS European Growth Portfolio - Class Y and Morgan Stanley VIS Quality
Income Plus Portfolio - Class Y changed their names to Morgan Stanley VIS
European Equity Portfolio - Class Y and Morgan Stanley VIS Income Plus Portfolio
- - Class Y, respectively. We have made a corresponding change in the name of the
Variable Sub-accounts that invest in these Portfolios.
(2) Effective May 1, 2005, the AIM V.I. Basic Value - Series II Sub-Account, the
AIM V.I. Capital Appreciation - Series II Sub-Account, the AIM V.I. Mid Cap Core
Equity - Series II Sub-Account, the AIM V.I. Premier Equity - Series II
Sub-Account, the AllianceBernstein Growth and Income - Class B Sub-Account, the
AllianceBernstein Large Cap Growth - Class B Sub-Account, the FTVIP Franklin
High Income - Class 2 Sub-Account, the Morgan Stanley VIS Global Advantage -
Class Y Sub-Account, the Morgan Stanley VIS High Yield - Class Y Sub-Account,
the Morgan Stanley VIS Income Builder - Class Y Sub-Account, the Morgan Stanley
VIS Information - Class Y Sub-Account, the Morgan Stanley VIS Utilities
Portfolio - Class Y, the Putnam VT Growth and Income Fund - Class IB and the Van
Kampen UIF Emerging Markets Debt Portfolio, Class II are no longer available for
new investments. If you are currently invested in these Variable Sub-Accounts,
you may continue your investment. If prior to May 1, 2005, you enrolled in one
of our automatic transaction programs, such as automatic additions, portfolio
rebalancing or dollar cost averaging, we will continue to effect automatic
transactions to these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(4) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio -
Class B and the AllianceBernstein Small Cap Value Portfolio - Class B changed
their names to the AllianceBernstein Large Cap Growth Portfolio - Class B and
the AllianceBernstein Small/Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
103 PROSPECTUS
(5) Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account is no
longer available for new investments. If you are currently invested in this
Variable Sub-Account, you may continue your investment. If prior to May 1, 2004,
you enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing or dollar cost averaging, we will continue to
effect automatic transactions to this Variable Sub-Account in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
104 PROSPECTUS
ALLSTATE VARIABLE ANNUITY-L SHARE CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER
OF ACCUMULATION UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS
WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 2003 2004
31,
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
Morgan Stanley VIS Aggressive Equity - Class Y
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.201
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.201 $ 13.491
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,634 10,689
- -------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.227
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.227 $ 13.007
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 66,915 240,939
- -------------------------------------------------------------------------------
Morgan Stanley VIS Equity - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.852
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.852 $ 12.918
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 46,977 184,114
- -------------------------------------------------------------------------------
Morgan Stanley VIS European Equity - Class Y
Sub-Account(1)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.656
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.656 $ 13.995
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 15,404 35,187
- -------------------------------------------------------------------------------
Morgan Stanley VIS Global Advantage - Class Y
Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.568
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.568 $ 13.874
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 11,186 16,323
- -------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Growth - Class Y
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.936
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 12.936 $ 14.580
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 78,822 127,171
- -------------------------------------------------------------------------------
Morgan Stanley VIS High Yield - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.301
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.301 $ 12.172
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 65,540 163,222
- -------------------------------------------------------------------------------
Morgan Stanley VIS Income Builder - Class Y
Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.634
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 11.634 $ 12.664
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 21,733 47,530
- -------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus - Class Y Sub-Account(1)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 10.283
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 10.283 $ 10.622
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 184,686 643,073
- -------------------------------------------------------------------------------
Morgan Stanley VIS Information - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 14.925
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 14.925 $ 15.164
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,426 4,859
- -------------------------------------------------------------------------------
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 9.991
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.991 $ 9.937
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 206,331 413,637
- -------------------------------------------------------------------------------
Morgan Stanley VIS Money Market - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 10.000 $ 9.909
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.909 $ 9.802
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 108,929 428,989
- -------------------------------------------------------------------------------
105 PROSPECTUS
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account $ 10.000 $ 12.081
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.081 $ 13.099
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 103,071 207,780
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Morgan Stanley VIS Strategist - Class Y Sub-Account $ 10.000 $ 12.001
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.001 $ 12.992
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 70,971 147,140
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Morgan Stanley VIS Utilities - Class Y Sub-Account(2) $ 10.000 $ 11.474
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.474 $ 13.568
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 6,583 31,117
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II $ 10.000 $ 11.288
Sub-Account (2,3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.288 $ 12.216
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 9,598 69,282
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity, Class II $ 10.000 $ 14.872
Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 14.872 $ 17.983
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 15,373 39,200
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account (3) $ 10.000 $ 11.683
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.683 $ 12.339
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 51,300 103,097
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account $ 10.000 $ 11.590
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.590 $ 12.707
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 31,795 121,831
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account (3) $ 10.000 $ 12.217
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.217 $ 13.545
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 64,033 234,429
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth, Class II Sub-Account (3) $ 10.000 $ 13.080
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 13.080 $ 15.621
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 56,943 107,152
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II Sub-Account $ 10.000 $ 13.584
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 13.584 $ 15.885
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 66,608 104,445
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account $ 10.000 $ 13.372
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 13.372 $ 15.056
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 88,639 199,551
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account (3) $ 10.000 $ 12.750
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.750 $ 17.057
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 61,183 172,705
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account $ 10.000 $ 12.829
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.829 $ 14.490
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 14,674 22,291
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
106 PROSPECTUS
Van Kampen LIT Comstock, Class II Sub-Account $ 10.000 $ 12.491
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.491 $ 14.421
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 286,089 699,495
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account $ 10.000 $ 11.821
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.821 $ 12.409
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 67,081 101,974
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account $ 10.000 $ 12.390
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.390 $ 13.900
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 176,200 319,496
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AIM V.I. Basic Value - Series II Sub-Account(2) $ 10.000 $ 12.887
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.887 $ 14.042
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 29,372 99,790
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AIM V.I. Capital Appreciation - Series II Sub-Account(2) $ 10.000 $ 12.234
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.234 $ 12.789
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 12,830 21,060
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity - Series II Sub-Account(2) - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.797
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - 21,750
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AIM V.I. Premier Equity - Series II Sub-Account (2) $ 10.000 $ 11.753
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.753 $ 12.189
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 5,582 15,922
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AllianceBernstein Growth - Class B Sub-Account $ 10.000 $ 12.446
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.446 $ 14.013
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 28,817 80,635
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AllianceBernstein Growth and Income - Class B $ 10.000 $ 12.279
Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.279 $ 13.427
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 54,387 166,492
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AllianceBernstein International Value - Class B - -
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth - Class B $ 10.000 $ 11.480
Sub-Account(2,4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.480 $ 12.228
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 40,183 66,960
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AllianceBernstein Small/Mid Cap Value - Class B $ 10.000 $ 13.605
Sub-Account(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 13.605 $ 15.926
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 46,809 101,345
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AllianceBernstein Utility Income - Class B Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
AllianceBernstein Value - Class B Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
107 PROSPECTUS
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Fidelity VIP Growth & Income - Service Class 2 - -
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Fidelity VIP High Income - Service Class 2 Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Fidelity VIP Mid Cap - Service Class 2 Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Securities - Class 2 - -
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
FTVIP Franklin High Income - Class 2 Sub-Account(2) - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.688
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - 105,202
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 11.233
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - 86,915
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities - Class 2 Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 10.944
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - 51,882
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account - $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $ 11.511
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - 36,969
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Value Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
108 PROSPECTUS
Putnam VT The George Putnam Fund of Boston - Class IB $ 10.000 $ 11.311
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.311 $ 12.033
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 50,397 50,051
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account(2) $ 10.000 $ 12.285
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.285 $ 13.419
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 28,104 34,565
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account $ 10.000 $ 12.654
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.654 $ 14.455
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 57,292 104,567
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account (5) $ 10.000 $ 12.151
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 12.151 $ 13.455
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 1,120 1,114
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account $ 10.000 $ 11.720
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 11.720 $ 12.102
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period 44,404 93,142
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
* The Allstate Variable Annuity-L Share Contracts and all of the Variable
Sub-Accounts shown above were first offered under the Contracts on May 1, 2003,
except for the AIM V.I. Mid Cap Core Equity - Series II Sub-Account, FTVIP
Franklin High Income - Class 2 Sub-Account, FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Mutual Shares Securities - Class 2 Sub-Account, and
FTVIP Templeton Foreign Securities - Class 2 Sub-Account, which were first
offered under the Contracts on May 1, 2004, and the AllianceBernstein
International Value - Class B Sub-Account, the AllianceBernstein Utility Income
- - Class B Sub-Account, the AllianceBernstein Value - Class B Sub-Account, the
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account, the Fidelity VIP
Growth & Income - Service Class 2 Sub-Account, the Fidelity VIP High Income -
Service Class 2 Sub-Account, the Fidelity VIP Mid Cap - Service Class 2
Sub-Account, the FTVIP Franklin Flex Cap Growth Securities - Class 2
Sub-Account, the FTVIP Mutual Discovery Securities - Class 2 Sub-Account, the
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account, the Goldman Sachs VIT
CORE(SM) U.S. Equity Sub-Account, the Goldman Sachs VIT Growth and Income
Sub-Account, the Goldman Sachs VIT Mid Cap Value Sub-Account and the Putnam VT
New Value - Class IB Sub-Account which were first offered under the Contracts on
April 30, 2005. Accumulation Unit Values for the Variable Sub-Accounts first
offered under the Contracts on April 30, 2005 are not shown. The Accumulation
Unit Values in this table reflect a mortality and expense risk charge of 1.50%
and an administration expense charge of 0.19%.
(1) Effective December 30, 2004 and April 29, 2005, respectively, the Morgan
Stanley VIS European Growth Portfolio - Class Y and Morgan Stanley VIS Quality
Income Plus Portfolio - Class Y changed their names to Morgan Stanley VIS
European Equity Portfolio - Class Y and Morgan Stanley VIS Income Plus Portfolio
- - Class Y, respectively. We have made a corresponding change in the name of the
Variable Sub-accounts that invest in these Portfolios.
(2) Effective May 1, 2005, the AIM V.I. Basic Value - Series II Sub-Account, the
AIM V.I. Capital Appreciation - Series II Sub-Account, the AIM V.I. Mid Cap Core
Equity - Series II Sub-Account, the AIM V.I. Premier Equity - Series II
Sub-Account, the AllianceBernstein Growth and Income - Class B Sub-Account, the
AllianceBernstein Large Cap Growth - Class B Sub-Account, the FTVIP Franklin
High Income - Class 2 Sub-Account, the Morgan Stanley VIS Global Advantage -
Class Y Sub-Account, the Morgan Stanley VIS High Yield - Class Y Sub-Account,
the Morgan Stanley VIS Income Builder - Class Y Sub-Account, the Morgan Stanley
VIS Information - Class Y Sub-Account, the Morgan Stanley VIS Utilities
Portfolio - Class Y, the Putnam VT Growth and Income Fund - Class IB and the Van
Kampen UIF Emerging Markets Debt Portfolio, Class II are no longer available for
new investments. If you are currently invested in these Variable Sub-Accounts,
you may continue your investment. If prior to May 1, 2005, you enrolled in one
of our automatic transaction programs, such as automatic additions, portfolio
rebalancing or dollar cost averaging, we will continue to effect automatic
transactions to these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(4) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio -
Class B and the AllianceBernstein Small Cap Value Portfolio - Class B changed
their names to the AllianceBernstein Large Cap Growth Portfolio - Class B and
the AllianceBernstein Small/Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
(5) Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account is no
longer available for new investments. If you are currently invested in this
Variable Sub-Account, you may continue your investment. If prior to May 1, 2004,
you enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing or dollar cost averaging, we will continue to
effect automatic transactions to this Variable Sub-Account in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
109 PROSPECTUS
ALLSTATE VARIABLE ANNUITY-L SHARE CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER
OF ACCUMULATION UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS
WERE FIRST OFFERED* (WITH THE MAV DEATH BENEFIT OPTION, THE ENHANCED BENEFICIARY
PROTECTION (ANNUAL INCREASE) OPTION AND THE EARNINGS PROTECTION DEATH BENEFIT
OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
Morgan Stanley VIS Aggressive Equity - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.126
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.126 $13.286
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 975 2,497
- -------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.152
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.152 $12.809
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 9,726 13,250
- -------------------------------------------------------------------------------
Morgan Stanley VIS Equity - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.780
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.780 $12.721
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 8,629 6,633
- -------------------------------------------------------------------------------
Morgan Stanley VIS European Equity - Class Y Sub-Account(1)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.579
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.579 $13.782
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,328 3,942
- -------------------------------------------------------------------------------
Morgan Stanley VIS Global Advantage - Class Y
Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.492
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.492 $13.663
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,841 1,851
- -------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Growth - Class Y
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.857
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.857 $14.359
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,126 15,771
- -------------------------------------------------------------------------------
Morgan Stanley VIS High Yield - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.232
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.232 $11.987
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,462 8,598
- -------------------------------------------------------------------------------
Morgan Stanley VIS Income Builder - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.563
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.563 $12.471
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,527 4,145
- -------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus - Class Y Sub-Account(1)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.220
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.220 $10.460
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 13,208 30,413
- -------------------------------------------------------------------------------
Morgan Stanley VIS Information - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $14.833
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.833 $14.934
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,964 5,754
- -------------------------------------------------------------------------------
Morgan Stanley VIS Limited Duration - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.930
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.930 $ 9.786
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 28,903 45,574
- -------------------------------------------------------------------------------
110 PROSPECTUS
Morgan Stanley VIS Money Market - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.848
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.848 $ 9.652
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 34 3,303
- -------------------------------------------------------------------------------
Morgan Stanley VIS S&P 500 Index - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.007
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.007 $12.900
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,343 11,431
- -------------------------------------------------------------------------------
Morgan Stanley VIS Strategist - Class Y Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.928
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.928 $12.794
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,574 11,396
- -------------------------------------------------------------------------------
Morgan Stanley VIS Utilities - Class Y Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.404
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.404 $13.362
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,063 5,082
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
(2,3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.219
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.219 $12.030
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 819 1,348
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity, Class II
Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $14.781
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.781 $17.709
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 6
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.519
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.519 $12.514
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,613 6,479
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.611
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.611 $12.151
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,422 6,273
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.143
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.143 $13.339
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,320 6,166
- -------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $13.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.000 $15.384
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,978 11,035
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II Sub-Account
(3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $13.501
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.501 $15.644
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,773 3,184
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $13.290
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.290 $14.827
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 9,060 15,617
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account (3)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.672
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.672 $16.797
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 9,699 9,204
- -------------------------------------------------------------------------------
111 PROSPECTUS
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.750
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.750 $14.270
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,072 4,072
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.415
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.415 $14.201
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 54,058 67,986
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.749
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.749 $12.220
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 9,005 12,541
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.314
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.314 $13.689
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,194 22,591
- -------------------------------------------------------------------------------
AIM V.I. Basic Value - Series II Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.808
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.808 $13.829
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 7,325 7,540
- -------------------------------------------------------------------------------
AIM V.I. Capital Appreciation - Series II Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.160
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.160 $12.595
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 7,325 3,493
- -------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity - Series II Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $10.730
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 0
- -------------------------------------------------------------------------------
AIM V.I. Premier Equity - Series II Sub-Account (2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.681
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.681 $12.004
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 799 799
- -------------------------------------------------------------------------------
AllianceBernstein Growth - Class B Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.369
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.369 $13.800
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,816 16,835
- -------------------------------------------------------------------------------
AllianceBernstein Growth and Income - Class B
Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.204
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.204 $13.222
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 7,429 13,342
- -------------------------------------------------------------------------------
AllianceBernstein International Value - Class B Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth - Class B
Sub-Account(2,4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.410
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.410 $12.042
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,318 4,534
- -------------------------------------------------------------------------------
AllianceBernstein Small/Mid Cap Value - Class B
Sub-Account(4)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $13.521
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.521 $15.684
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,234 11,695
- -------------------------------------------------------------------------------
AllianceBernstein Utility Income - Class B Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
112 PROSPECTUS
AllianceBernstein Value - Class B Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Fidelity VIP Growth & Income - Service Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Fidelity VIP High Income - Service Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
FTVIP Franklin High Income - Class 2 Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $10.623
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 0
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $11.164
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 0
- -------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $10.877
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 1,636
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - $11.441
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - 410
- -------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) Small Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
113 PROSPECTUS
Goldman Sachs VIT Mid Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.242
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.242 $11.850
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,556 2,552
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account(2)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.210
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.210 $13.215
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.577
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.577 $14.235
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,690 10,996
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account (5)
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.076
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.076 $13.251
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period - -
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period - -
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period - -
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.648
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.648 $11.917
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,000 1,219
- -------------------------------------------------------------------------------
* The Allstate Variable Annuity-L Share Contracts and all of the Variable
Sub-Accounts shown above were first offered under the Contracts with the MAV
Death Benefit Option, the Enhanced Beneficiary Protection (Annual Increase)
Option and the Earnings Protection Death Benefit Option on May 1, 2003, except
for the AIM V.I. Mid Cap Core Equity - Series II Sub-Account, FTVIP Franklin
High Income - Class 2 Sub-Account, FTVIP Franklin Income Securities - Class 2
Sub-Account, FTVIP Mutual Shares Securities - Class 2 Sub-Account, and FTVIP
Templeton Foreign Securities - Class 2 Sub-Account, which were first offered
under the Contracts on May 1, 2004, and the AllianceBernstein International
Value - Class B Sub-Account, the AllianceBernstein Utility Income - Class B
Sub-Account, the AllianceBernstein Value - Class B Sub-Account, the Fidelity VIP
Contrafund(R) - Service Class 2 Sub-Account, the Fidelity VIP Growth & Income -
Service Class 2 Sub-Account, the Fidelity VIP High Income - Service Class 2
Sub-Account, the Fidelity VIP Mid Cap - Service Class 2 Sub-Account, the FTVIP
Franklin Flex Cap Growth Securities - Class 2 Sub-Account, the FTVIP Mutual
Discovery Securities - Class 2 Sub-Account, the Goldman Sachs VIT CORE(SM) Small
Cap Equity Sub-Account, the Goldman Sachs VIT CORE(SM) U.S. Equity Sub-Account,
the Goldman Sachs VIT Growth and Income Sub-Account, the Goldman Sachs VIT Mid
Cap Value Sub-Account and the Putnam VT New Value - Class IB Sub-Account which
were first offered under the Contracts on April 30, 2005. Accumulation Unit
Values for the Variable Sub-Accounts first offered under the Contracts on April
30, 2005 are not shown. The Accumulation Unit Values in this table reflect a
mortality and expense risk charge of 2.40% and an administration expense charge
of 0.19%.
(1) Effective December 30, 2004 and April 29, 2005, respectively, the Morgan
Stanley VIS European Growth Portfolio - Class Y and Morgan Stanley VIS Quality
Income Plus Portfolio - Class Y changed their names to Morgan Stanley VIS
European Equity Portfolio - Class Y and Morgan Stanley VIS Income Plus Portfolio
- - Class Y, respectively. We have made a corresponding change in the name of the
Variable Sub-accounts that invest in these Portfolios.
(2) Effective May 1, 2005, the AIM V.I. Basic Value - Series II Sub-Account, the
AIM V.I. Capital Appreciation - Series II Sub-Account, the AIM V.I. Mid Cap Core
Equity - Series II Sub-Account, the AIM V.I. Premier Equity - Series II
Sub-Account, the AllianceBernstein Growth and Income - Class B Sub-Account, the
AllianceBernstein Large Cap Growth - Class B Sub-Account, the FTVIP Franklin
High Income - Class 2 Sub-Account, the Morgan Stanley VIS Global Advantage -
Class Y Sub-Account, the Morgan Stanley VIS High Yield - Class Y Sub-Account,
the Morgan Stanley VIS Income Builder - Class Y Sub-Account, the Morgan Stanley
VIS Information - Class Y Sub-Account, the Morgan Stanley VIS Utilities
Portfolio - Class Y, the Putnam VT Growth and Income Fund - Class IB and the Van
Kampen UIF Emerging Markets Debt Portfolio, Class II are no longer available for
new investments. If you are currently invested in these Variable Sub-Accounts,
you may continue your investment. If prior to May 1, 2005, you enrolled in one
of our automatic transaction programs, such as automatic additions, portfolio
rebalancing or dollar cost averaging, we will continue to effect automatic
transactions to these Variable Sub-Accounts in accordance with that program.
Outside of these automatic transaction programs, additional allocations will not
be allowed.
(3) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(4) Effective May 2, 2005, the AllianceBernstein Premier Growth Portfolio -
Class B and the AllianceBernstein Small Cap Value Portfolio - Class B changed
their names to the AllianceBernstein Large Cap Growth Portfolio - Class B and
the AllianceBernstein Small/Mid Cap Value Portfolio - Class B, respectively. We
have made a corresponding change to the name of the Variable Sub-Accounts that
invest in these Portfolios.
114 PROSPECTUS
(5) Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account is no
longer available for new investments. If you are currently invested in this
Variable Sub-Account, you may continue your investment. If prior to May 1, 2004,
you enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing or dollar cost averaging, we will continue to
effect automatic transactions to this Variable Sub-Account in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
115 PROSPECTUS
THE ALLSTATE ADVISOR VARIABLE ANNUITIES
(ADVISOR, ADVISOR PREFERRED)
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 PROSPECTUS DATED APRIL 30, 2005
-------------------------------------------------------------------------------
Allstate Life Insurance Company ("Allstate Life") is offering the following
individual and group flexible premium deferred variable annuity contracts (each,
a "CONTRACT"):
.. ALLSTATE ADVISOR
.. ALLSTATE ADVISOR PREFERRED
This prospectus contains information about each Contract that you should know
before investing. Please keep it for future reference. Both Contracts may not be
available in all states or through your sales representative. Please check with
your sales representative for details.
Each Contract currently offers several investment alternatives ("INVESTMENT
ALTERNATIVES"). The investment alternatives include up to 3 fixed account
options ("FIXED ACCOUNT OPTIONS"), depending on the Contract, and include 52*
variable sub-accounts ("VARIABLE SUB-ACCOUNTS") of the Allstate Financial
Advisors Separate Account I ("VARIABLE ACCOUNT"). Each Variable Sub-Account
invests exclusively in shares of the following mutual funds ("FUNDS"):
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST (CLASS 2) PUTNAM VARIABLE TRUST (CLASS IB)
LORD ABBETT SERIES FUND, INC. (CLASS VC) STI CLASSIC VARIABLE TRUST
OPPENHEIMER VARIABLE ACCOUNT FUNDS (SERVICE SHARES) VAN KAMPEN LIFE INVESTMENT TRUST (CLASS II)
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
(CLASS II)
*Up to four additional Variable Sub-Accounts may be available depending on the
date you purchased your Contract. Please see pages 36-37 for information about
Sub-Account and/or Portfolio liquidations, mergers, closures and name changes.
Each Fund has multiple investment Portfolios ("PORTFOLIOS"). Not all of the
Funds and/or Portfolios, however, may be available with your Contract. You
should check with your sales representative for further information on the
availability of the Funds and/or Portfolios. Your annuity application will list
all available Portfolios.
WE (Allstate Life) have filed a Statement of Additional Information, dated April
30, 2005 with the Securities and Exchange Commission ("SEC"). It contains more
information about each Contract and is incorporated herein by reference, which
means that it is legally a part of this prospectus. Its Table of Contents
appears on page 75 of this prospectus. For a free copy, please write or call us
at the address or telephone number above, or go to the SEC's Web site
(http://www.sec.gov). You can find other information and documents about us,
including documents that are legally part of this prospectus, at the SEC's Web
site.
THE SECURITIES AND EXCHANGE COMMISSION 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.
IMPORTANT THE CONTRACTS MAY BE DISTRIBUTED THROUGH BROKER-DEALERS THAT
HAVE RELATIONSHIPS WITH BANKS OR OTHER FINANCIAL INSTITUTIONS
NOTICES OR BY EMPLOYEES OF SUCH BANKS. HOWEVER, THE CONTRACTS ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY SUCH INSTITUTIONS
OR ANY FEDERAL REGULATORY AGENCY. INVESTMENT IN THE CONTRACTS
INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL.
THE CONTRACTS ARE NOT FDIC INSURED.
1 PROSPECTUS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
- --------------------------------------------------------------------------------
OVERVIEW
- --------------------------------------------------------------------------------
Important Terms 3
- --------------------------------------------------------------------------------
Overview of Contracts 4
- --------------------------------------------------------------------------------
The Contracts at a Glance 5
- --------------------------------------------------------------------------------
How the Contracts Work 10
- --------------------------------------------------------------------------------
Expense Table 11
- --------------------------------------------------------------------------------
Financial Information 18
- --------------------------------------------------------------------------------
CONTRACT FEATURES
- --------------------------------------------------------------------------------
The Contract 19
- --------------------------------------------------------------------------------
Purchases 21
- --------------------------------------------------------------------------------
Contract Value 22
- --------------------------------------------------------------------------------
Investment Alternatives 34
- --------------------------------------------------------------------------------
The Variable Sub-Accounts 34
- --------------------------------------------------------------------------------
The Fixed Account Options 37
- --------------------------------------------------------------------------------
Transfers 41
- --------------------------------------------------------------------------------
Expenses 43
- --------------------------------------------------------------------------------
Access to Your Money 48
- --------------------------------------------------------------------------------
PAGE
- --------------------------------------------------------------------------------
Income Payments 49
- --------------------------------------------------------------------------------
Death Benefits 57
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
More Information 65
- --------------------------------------------------------------------------------
Taxes 68
- --------------------------------------------------------------------------------
Annual Reports and Other Documents 74
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS 75
- --------------------------------------------------------------------------------
APPENDIX A - CONTRACT COMPARISON CHART 76
- --------------------------------------------------------------------------------
APPENDIX B - MARKET VALUE ADJUSTMENT 77
- --------------------------------------------------------------------------------
APPENDIX C - EXAMPLE OF CALCULATION OF INCOME PROTECTION BENEFIT 79
- --------------------------------------------------------------------------------
APPENDIX D-WITHDRAWAL ADJUSTMENT EXAMPLE-INCOME BENEFITS 80
- --------------------------------------------------------------------------------
APPENDIX E-WITHDRAWAL ADJUSTMENT EXAMPLE-DEATH BENEFITS 81
- --------------------------------------------------------------------------------
APPENDIX F-CALCULATION OF EARNINGS PROTECTION DEATH BENEFIT 82
- --------------------------------------------------------------------------------
APPENDIX G- WITHDRAWAL ADJUSTMENT EXAMPLE-TRUERETURN ACCUMULATION BENEFIT 85
- --------------------------------------------------------------------------------
APPENDIX H-SUREINCOME WITHDRAWAL BENEFIT OPTION CALCULATION EXAMPLES 86
- --------------------------------------------------------------------------------
APPENDIX I-ACCUMULATION UNIT VALUES 88
- --------------------------------------------------------------------------------
2 PROSPECTUS
IMPORTANT TERMS
- --------------------------------------------------------------------------------
This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
PAGE
- --------------------------------------------------------------------------------
AB Factor 23
- --------------------------------------------------------------------------------
Accumulation Benefit 23
- --------------------------------------------------------------------------------
Accumulation Phase 10
- --------------------------------------------------------------------------------
Accumulation Unit 22
- --------------------------------------------------------------------------------
Accumulation Unit Value 22
- --------------------------------------------------------------------------------
Allstate Life ("We") 1
- --------------------------------------------------------------------------------
Annuitant 19
- --------------------------------------------------------------------------------
Automatic Additions Program 21
- --------------------------------------------------------------------------------
Automatic Portfolio Rebalancing Program 43
- --------------------------------------------------------------------------------
Beneficiary 19
- --------------------------------------------------------------------------------
Benefit Base (for the TrueReturn Accumulation Benefit Option) 23
- --------------------------------------------------------------------------------
Benefit Base (for the SureIncome Withdrawal Benefit Option) 30
- --------------------------------------------------------------------------------
Benefit Payment 29
- --------------------------------------------------------------------------------
Benefit Payment Remaining 29
- --------------------------------------------------------------------------------
Benefit Year 29
- --------------------------------------------------------------------------------
Co-Annuitant 19
- --------------------------------------------------------------------------------
*Contract 18
- --------------------------------------------------------------------------------
Contract Anniversary 6
- --------------------------------------------------------------------------------
Contract Owner ("You") 10
- --------------------------------------------------------------------------------
Contract Value 7
- --------------------------------------------------------------------------------
Contract Year 7
- --------------------------------------------------------------------------------
Dollar Cost Averaging Program 42
- --------------------------------------------------------------------------------
Due Proof 47
- --------------------------------------------------------------------------------
Due Proof of Death 57
- --------------------------------------------------------------------------------
Earnings Protection Death Benefit Option 60
- --------------------------------------------------------------------------------
Enhanced Beneficiary Protection (Annual Increase) Option 59
- --------------------------------------------------------------------------------
Excess of Earnings Withdrawal 60
- --------------------------------------------------------------------------------
Fixed Account Options 37
- --------------------------------------------------------------------------------
Free Withdrawal Amount 46
- --------------------------------------------------------------------------------
Funds 1
- --------------------------------------------------------------------------------
Guarantee Period Accounts 38
- --------------------------------------------------------------------------------
Guarantee Option 22
- --------------------------------------------------------------------------------
Income Base 55
- --------------------------------------------------------------------------------
Income Plan 49
- --------------------------------------------------------------------------------
Income Protection Benefit Option 52
- --------------------------------------------------------------------------------
In-Force Earnings 60
- --------------------------------------------------------------------------------
In-Force Premium 60
- --------------------------------------------------------------------------------
Investment Alternatives 34
- --------------------------------------------------------------------------------
IRA Contract 5
- --------------------------------------------------------------------------------
PAGE
- --------------------------------------------------------------------------------
Issue Date 10
- --------------------------------------------------------------------------------
Market Timing and Excessive Trading 41
- --------------------------------------------------------------------------------
Market Value Adjustment 9
- --------------------------------------------------------------------------------
Maximum Anniversary Value (MAV) Death Benefit Option 58
- --------------------------------------------------------------------------------
Payout Phase 10
- --------------------------------------------------------------------------------
Payout Start Date 50
- --------------------------------------------------------------------------------
Portfolios 1
- --------------------------------------------------------------------------------
Qualified Contract 18
- --------------------------------------------------------------------------------
Retirement Income Guarantee Options 55
- --------------------------------------------------------------------------------
Return of Premium Death Benefit 9
- --------------------------------------------------------------------------------
Rider Anniversary 22
- --------------------------------------------------------------------------------
Rider Application Date 6
- --------------------------------------------------------------------------------
Rider Date 22
- --------------------------------------------------------------------------------
Rider Fee 44
- --------------------------------------------------------------------------------
Rider Fee Percentage 44
- --------------------------------------------------------------------------------
Rider Maturity Date 22
- --------------------------------------------------------------------------------
Rider Period 22
- --------------------------------------------------------------------------------
Rider Trade-In Option 28
- --------------------------------------------------------------------------------
Right to Cancel 21
- --------------------------------------------------------------------------------
SEC 1
- --------------------------------------------------------------------------------
Settlement Value 23
- --------------------------------------------------------------------------------
Spousal Protection Benefit (Co-Annuitant) Option 45
- --------------------------------------------------------------------------------
Spousal Protection Benefit (Co-Annuitant) Option for Custodial Individual
Retirement Accounts 45
- --------------------------------------------------------------------------------
Standard Fixed Account Option 38
- --------------------------------------------------------------------------------
SureIncome Withdrawal Benefit Option 29
- --------------------------------------------------------------------------------
Systematic Withdrawal Program 49
- --------------------------------------------------------------------------------
Tax Qualified Contract 71
- --------------------------------------------------------------------------------
Transfer Period Account 37
- --------------------------------------------------------------------------------
Trial Examination Period 5
- --------------------------------------------------------------------------------
TrueReturn /SM/ Accumulation Benefit Option 6
- --------------------------------------------------------------------------------
Unemployment Compensation 47
- --------------------------------------------------------------------------------
Valuation Date 21
- --------------------------------------------------------------------------------
Variable Account 65
- --------------------------------------------------------------------------------
Variable Sub-Account 34
- --------------------------------------------------------------------------------
Withdrawal Benefit Factor 29
- --------------------------------------------------------------------------------
Withdrawal Benefit Payout Phase 30
- --------------------------------------------------------------------------------
Withdrawal Benefit Payout Start Date 30
- --------------------------------------------------------------------------------
* In certain states a Contract may be available only as a group Contract. If you
purchase a group Contract, we will issue you a certificate that represents
your ownership and that summarizes the provisions of the group Contract.
References to "Contract" in this prospectus include certificates, unless the
context requires otherwise. References to "Contract" also include both
Contracts listed on the cover page of this prospectus, unless otherwise
noted. However, we administer each Contract separately.
3 PROSPECTUS
OVERVIEW OF CONTRACTS
- --------------------------------------------------------------------------------
The Contracts offer many of the same basic features and benefits. They differ
primarily with respect to the charges imposed, as follows:
.. The ALLSTATE ADVISOR CONTRACT has a mortality and expense risk charge of
1.10%, an administrative expense charge of 0.19%*, and a withdrawal charge of
up to 7% with a 7-year withdrawal charge period;
.. The ALLSTATE ADVISOR PREFERRED CONTRACT WITH 5-YEAR WITHDRAWAL CHARGE OPTION
("Package III") has a mortality and expense risk charge of 1.40%, an
administrative expense charge of 0.19%*, and a withdrawal charge of up to 7%
with a 5-year withdrawal charge period;
.. The ALLSTATE ADVISOR PREFERRED CONTRACT WITH 3-YEAR WITHDRAWAL CHARGE OPTION
("Package II") has a mortality and expense risk charge of 1.50%, an
administrative expense charge of 0.19%*, and a withdrawal charge of up to 7%
with a 3-year withdrawal charge period; and
.. The ALLSTATE ADVISOR PREFERRED CONTRACT WITH NO WITHDRAWAL CHARGE OPTION
("Package I") has a mortality and expense risk charge of 1.60%, an
administrative expense charge of 0.19%*, and no withdrawal charges.
Other differences between the Contracts relate to available Fixed Account
Options. For a side-by-side comparison of these differences, please refer to
Appendix A of this prospectus.
* The administrative expense charge may be increased, but will never exceed
0.35%. Once your Contract is issued, we will not increase the administrative
expense charge for your Contract.
4 PROSPECTUS
THE CONTRACTS AT A GLANCE
- --------------------------------------------------------------------------------
The following is a snapshot of the Contracts. Please read the remainder of this
prospectus for more information.
FLEXIBLE PAYMENTS You can purchase each Contract with as little as
$10,000 ($2,000 for Contracts issued with an IRA or
TSA). You can add to your Contract as often and as much
as you like, but each subsequent payment must be at
least $1,000 ($50 for automatic payments).
We reserve the right to accept a lesser initial
purchase payment amount for each Contract. We may limit
the cumulative amount of purchase payments to a maximum
of $1,000,000 in any Contract.
- ---------------------------------------------------------------------------------------
TRIAL EXAMINATION PERIOD You may cancel your Contract within 20 days of receipt
or any longer period as your state may require ("TRIAL
EXAMINATION PERIOD"). Upon cancellation, we will return
your purchase payments adjusted, to the extent federal
or state law permits, to reflect the investment
experience of any amounts allocated to the Variable
Account, including the deduction of mortality and
expense risk charges and administrative expense
charges. See "Trial Examination Period" for details.
- ---------------------------------------------------------------------------------------
EXPENSES Each Portfolio pays expenses that you will bear
indirectly if you invest in a Variable Sub-Account. You
also will bear the following expenses:
ALLSTATE ADVISOR CONTRACTS
.Annual mortality and expense risk charge equal to
1.10% of average daily net assets.
.Withdrawal charges ranging from 0% to 7% of purchase
payments withdrawn.
ALLSTATE ADVISOR PREFERRED CONTRACTS (WITH 5-YEAR
WITHDRAWAL CHARGE OPTION)
.Annual mortality and expense risk charge equal to
1.40% of average daily net assets.
.Withdrawal charges ranging from 0% to 7% of purchase
payments withdrawn.
ALLSTATE ADVISOR PREFERRED CONTRACTS (WITH 3-YEAR
WITHDRAWAL CHARGE OPTION)
.Annual mortality and expense risk charge equal to
1.50% of average daily net assets.
.Withdrawal charges ranging from 0% to 7% of purchase
payments withdrawn.
5 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS (WITH NO
WITHDRAWAL CHARGE OPTION)
.Annual mortality and expense risk charge equal to
1.60% of average daily net assets.
. No withdrawal charge.
ALL CONTRACTS
.Annual administrative expense charge of 0.19% (up to
0.35% for future Contracts).
.Annual contract maintenance charge of $30 (waived in
certain cases).
.If you select the MAXIMUM ANNIVERSARY VALUE (MAV)
DEATH BENEFIT OPTION ("MAV DEATH BENEFIT OPTION") you
will pay an additional mortality and expense risk
charge of 0.20% (up to 0.30% for Options added in the
future).
.
If you select ENHANCED BENEFICIARY PROTECTION (ANNUAL
INCREASE) OPTION, you will pay an additional
mortality and expense risk charge of 0.30%.
.If you select the EARNINGS PROTECTION DEATH BENEFIT
OPTION you will pay an additional mortality and
expense risk charge of 0.25% or 0.40% (up to 0.35% or
0.50% for Options added in the future) depending on
the age of the oldest Owner and oldest Annuitant on
the date we receive the completed application or
request to add the benefit, whichever is later
("RIDER APPLICATION DATE").
.
If you select the TRUERETURN/SM/ ACCUMULATION BENEFIT
OPTION ("TRUERETURN OPTION") you will pay an
additional annual fee ("RIDER FEE") of 0.50% (up to
1.25% for Options added in the future) of the BENEFIT
BASE in effect on each Contract Anniversary
("CONTRACT ANNIVERSARY") during the Rider Period. You
may not select the TrueReturn Option together with a
Retirement Income Guarantee Option or a SureIncome
Withdrawal Benefit Option.
.If you select the SUREINCOME WITHDRAWAL BENEFIT
OPTION ("SUREINCOME OPTION") you would pay an
additional annual fee ("SUREINCOME OPTION FEE OR
RIDER FEE") of 0.50% (up to 1.25% for Options added
in the future) of the BENEFIT BASE on each Contract
Anniversary (See the SureIncome Option Fee section).
You may not select the SureIncome Option together
with a Retirement Income Guarantee Option or a
TrueReturn Option.
.We discontinued offering the RETIREMENT INCOME
GUARANTEE OPTION 1 ("RIG 1") as of January 1, 2004.
If you selected RIG 1 prior to January 1, 2004, you
will pay an additional annual fee ("Rider Fee") of
0.40% of the INCOME BASE in effect on a Contract
Anniversary.
.We discontinued offering the RETIREMENT INCOME
GUARANTEE OPTION 2 ("RIG 2") as of January 1, 2004.
If you selected RIG 2 prior to January 1, 2004, you
will pay an additional annual Rider Fee of 0.55% of
the INCOME BASE in effect on a Contract Anniversary.
6 PROSPECTUS
.If you select the INCOME PROTECTION BENEFIT OPTION
you will pay an additional mortality and expense risk
charge of 0.50% (up to 0.75% for Options added in the
future) during the Payout Phase of your Contract.
.If you select the SPOUSAL PROTECTION BENEFIT
(CO-ANNUITANT) OPTION or SPOUSAL PROTECTION BENEFIT
(CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS ("CSP") you would pay an
additional annual fee ("RIDER FEE") of 0.10%** (up to
0.15% for Options added in the future) of the
Contract value ("CONTRACT VALUE") on each Contract
Anniversary. These Options are only available for
certain types of IRA Contracts, which are Contracts
issued with an Individual Retirement Annuity or
Account ("IRA") under Section 408 of the Internal
Revenue Code. The CSP is only available for certain
Custodial Individual Retirement Accounts established
under Section 408 of the Internal Revenue Code. For
Contracts purchased on or after January 1, 2005, we
may discontinue offering the Spousal Protection
Benefit (Co-Annuitant) Option at any time prior to
the time you elect to receive it.
**No Rider Fee was charged for these Options for
Contract Owners who added these Options prior to
January 1, 2005. See page 45 for details.
.Transfer fee equal to 1.00% (subject to increase to
up to 2.00%) of the amount transferred after the
12/th/ transfer in any Contract year ("CONTRACT
YEAR"), which we measure from the date we issue your
Contract or a Contract Anniversary.
. State premium tax (if your state imposes one)
WE MAY DISCONTINUE OFFERING ANY OF THESE OPTIONS AT
ANYTIME PRIOR TO THE TIME YOU ELECT TO RECEIVE IT.
- ---------------------------------------------------------------------------------------
7 PROSPECTUS
INVESTMENT ALTERNATIVES Each Contract offers several investment alternatives
including:
.
up to 3 Fixed Account Options that credit interest at
rates we guarantee, and
.52* Variable Sub-Accounts investing in Portfolios
offering professional money management by these
investment advisers:
. Franklin Advisers, Inc.
. Franklin Advisory Services, LLC
. Franklin Mutual Advisers, LLC
. Lord, Abbett & Co. LLC
. OppenheimerFunds, Inc.
. Putnam Investment Management, LLC
. Templeton Asset Management Ltd.
. Templeton Investment Counsel, LLC
. Trusco Capital Management, Inc.
. Van Kampen Asset Management
. Van Kampen**
* Up to four additional Variable Sub-Accounts may be
available depending on the date you purchased your
Contract. Please see pages 36-37 for information
about Sub-Account and/or Portfolio liquidations,
mergers, closures and name changes.
**Morgan Stanley Investment Management Inc., the
adviser to the UIF Portfolios, does business in
certain instances using the name Van Kampen.
NOT ALL FIXED ACCOUNT OPTIONS ARE AVAILABLE IN ALL
STATES OR WITH ALL CONTRACTS.
To find out current rates being paid on the Fixed
Account Option(s), or to find out how the Variable
Sub-Accounts have performed, please call us at
1-800-203-0068.
- ---------------------------------------------------------------------------------------
SPECIAL SERVICES For your convenience, we offer these special services:
. AUTOMATIC PORTFOLIO REBALANCING PROGRAM
. AUTOMATIC ADDITIONS PROGRAM
. DOLLAR COST AVERAGING PROGRAM
. SYSTEMATIC WITHDRAWAL PROGRAM
- ---------------------------------------------------------------------------------------
8 PROSPECTUS
INCOME PAYMENTS You can choose fixed income payments, variable income
payments, or a combination of the two. You can receive
your income payments in one of the following ways (you
may select more than one income plan):
. life income with guaranteed number of payments
.
joint and survivor life income with guaranteed number
of payments
. guaranteed number of payments for a specified period
. life income with cash refund
. joint life income with cash refund
. life income with installment refund
. joint life income with installment refund
Prior to January 1, 2004, Allstate Life also offered
two Retirement Income Guarantee Options that guarantee
a minimum amount of fixed income payments you can
receive if you elect to receive income payments.
In addition, we offer an Income Protection Benefit
Option that guarantees that your variable income
payments will not fall below a certain level.
DEATH BENEFITS If you, the Annuitant, or Co-Annuitant die before the
Payout Start Date, we will pay a death benefit subject
to the conditions described in the Contract. In
addition to the death benefit included in your Contract
("Return of Premium Death Benefit" or "ROP Death
Benefit"), the death benefit options we currently offer
include:
. MAV DEATH BENEFIT OPTION;
.ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE)
OPTION; and
. EARNINGS PROTECTION DEATH BENEFIT OPTION
- ---------------------------------------------------------------------------------------
TRANSFERS Before the Payout Start Date, you may transfer your
Contract Value among the investment alternatives, with
certain restrictions. The minimum amount you may
transfer is $100 or the amount remaining in the
investment alternative, if less. The minimum amount
that can be transferred into the Standard Fixed Account
or Market Value Adjusted Account Options is $500.
A charge may apply after the 12/th/ transfer in each
Contract Year. See page 42 for information about short
term trading fees.
- ---------------------------------------------------------------------------------------
WITHDRAWALS You may withdraw some or all of your Contract Value at
any time during the Accumulation Phase and during the
Payout Phase in certain cases. In general, you must
withdraw at least $50 at a time. 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. A withdrawal charge and a
MARKET VALUE ADJUSTMENT may also apply. If any
withdrawal reduces your Contract Value to less than
$1,000, we will treat the request as a withdrawal of
the entire Contract Value unless the SureIncome
Withdrawal Benefit Option is in effect under your
Contract. Your Contract will terminate if you withdraw
all of your Contract Value.
9 PROSPECTUS
HOW THE CONTRACTS WORK
- --------------------------------------------------------------------------------
Each Contract basically works in two ways.
First, each Contract can help you (we assume you are the "CONTRACT OWNER") save
for retirement because you can invest in your Contract's investment alternatives
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 may allocate your purchase payments to any combination of the
Variable Sub-Accounts and/or Fixed Account Options. If you invest in a Fixed
Account Option, you will earn a fixed rate of interest that we declare
periodically. If you invest in any of the Variable Sub-Accounts, your investment
return will vary up or down depending on the performance of the corresponding
Portfolios.
Second, each 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 on page 49. 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 payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Portfolios. 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
- ------------------------------------------------------------------------------------------------------------>
You buy You save for retirement You elect to receive You can receive Or you can receive
a Contract income payments or income payments income payments
receive a lump sum for a set period for life
payment
Other income payment options are also available. See "INCOME PAYMENTS."
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 there is none, the
BENEFICIARY will exercise the rights and privileges provided by the Contract.
See "The Contracts." In addition, if you die before the Payout Start Date, we
will pay a death benefit to any surviving Contract Owner or, if there is none,
to your Beneficiary. See "Death Benefits."
Please call us at 1-800-203-0068 if you have any question about how the
Contracts work.
10 PROSPECTUS
EXPENSE TABLE
- --------------------------------------------------------------------------------
The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes that may be imposed by the state where you reside. For more
information about Variable Account expenses, see "Expenses," below. For more
information about Portfolio expenses, please refer to the prospectuses for the
Portfolios.
CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge (as a percentage of purchase payments withdrawn)/* /
Number of Complete Years Since We Received the Purchase Payment Being Withdrawn/Applicable Charge:
- ------------------------------------------------------------------------------------------------------------------------------------
Contract: 0 1 2 3 4 5 6 7 7+
Allstate Advisor 7% 7% 6% 5% 4% 3% 2% 0% 0%
Allstate Advisor
Preferred with:
5-Year Withdrawal
Charge Option 7% 6% 5% 4% 3% 0%
3-Year Withdrawal
Charge Option 7% 6% 5% 0%
No Withdrawal Charge
Option None
All Contracts:
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Contract
Maintenance Charge $30**
Transfer Fee up to 2.00% of the amount transferred***
* Each Contract Year, you may withdraw a portion of your purchase payments
(and/or your earnings, in the case of Charitable Remainder Trusts) without
incurring a withdrawal charge ("Free Withdrawal Amount"). See "Withdrawal
Charges" for more information.
** / /Waived in certain cases. See "Expenses."
*** Applies solely to the 13th and subsequent transfers within a Contract Year,
excluding transfers due to dollar cost averaging and automatic portfolio
rebalancing. We are currently assessing a transfer fee of 1.00% of the amount
transferred, however, we reserve the right to raise the transfer fee to up to
2.00% of the amount transferred.
VARIABLE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSET VALUE DEDUCTED FROM EACH VARIABLE
SUB-ACCOUNT)
If you select the basic Contract without any optional benefits, your Variable
Account expenses would be as follows:
Mortality and Expense Risk Administrative
Basic Contract (without any optional benefit) Charge Expense Charge*
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor 1.10% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge Option) 1.40% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge Option) 1.50% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 1.60% 0.19%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Variable Account
Basic Contract (without any optional benefit) Annual Expense
- ------------------------------------------------------------------------------------------------------
Allstate Advisor 1.29%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge Option) 1.59%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge Option) 1.69%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 1.79%
- ------------------------------------------------------------------------------------------------------
*We reserve the right to raise the administrative expense charge to 0.35%.
However, we will not increase the charge once we issue your Contract.
Each Contract also offers optional riders that may be added to the Contract. For
each optional rider you select, you would pay the following additional mortality
and expense risk charge associated with each rider.
0.20% (up to 0.30% for Options added in
MAV Death Benefit Option the future)
Enhanced Beneficiary Protection (Annual Increase)
Option 0.30 %
Earnings Protection Death Benefit Option (issue 0.25% (up to 0.35% for Options added in
age 0-70) the future)
Earnings Protection Death Benefit Option (issue 0.40% (up to 0.50% for Options added in
age 71-79) the future)
11 PROSPECTUS
If you select the Options with the highest possible combination of mortality and
expense risk charges, your Variable Account expenses would be as follows,
assuming current expenses:
Contract with the MAV Death Benefit Option, Enhanced
Beneficiary Protection (Annual Increase) Option, and Earnings Mortality and Expense Administrative
Protection Death Benefit Option (issue age 71-79) Risk Charge* Expense Charge*
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor 2.00% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge Option) 2.30% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge Option) 2.40% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 2.50% 0.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Contract with the MAV Death Benefit Option, Enhanced
Beneficiary Protection (Annual Increase) Option, and Earnings Total Variable Account
Protection Death Benefit Option (issue age 71-79) Annual Expense
- ------------------------------------------------------------------------------------------------------
Allstate Advisor 2.19%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge Option) 2.49%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge Option) 2.59%
- ------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 2.69%
- ------------------------------------------------------------------------------------------------------
*As described above the administrative expense charge and the mortality and
expense charge for certain Options may be higher for future Contracts.
However, we will not increase the administrative expense charge once we issue
your Contract, and we will not increase the charge for an Option once we add
the Option to your Contract.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION FEE
(ANNUAL RATE AS A PERCENTAGE OF BENEFIT BASE ON A CONTRACT ANNIVERSARY)
TrueReturn/SM/ Accumulation Benefit Option 0.50%*
- -------------------------------------------------------------------------------
*Up to 1.25% for TrueReturn Options added in the future. See "TrueReturn/SM/
Accumulation Benefit Option" for details.
SUREINCOME WITHDRAWAL BENEFIT OPTION FEE
(ANNUAL RATE AS A PERCENTAGE OF BENEFIT BASE ON A CONTRACT ANNIVERSARY)
SureIncome Withdrawal Benefit Option 0.50%*
- -------------------------------------------------------------------------------
*Up to 1.25% for SureIncome Options added in the future. See "SureIncome
Withdrawal Benefit Option" for details.
RETIREMENT INCOME GUARANTEE OPTION FEE*
(ANNUAL RATE AS A PERCENTAGE OF INCOME BASE ON A CONTRACT ANNIVERSARY)
RIG 1 0.40%
- -----------------------------------------------------------------------------
RIG 2 0.55%
- -----------------------------------------------------------------------------
* We discontinued offering the Retirement Income Guarantee Option as of January
1, 2004. Fees shown apply to owners who selected the option prior to January
1, 2004.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FEE
(AS A PERCENTAGE OF CONTRACT VALUE ON EACH CONTRACT ANNIVERSARY)
Spousal Protection Benefit (Co-Annuitant) Option 0.10%*
- ------------------------------------------------------------------------
* Applies to Contract Owners who select the option on or after January 1, 2005.
Up to 0.15% for options added in the future.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS FEE
(AS A PERCENTAGE OF CONTRACT VALUE ON EACH CONTRACT ANNIVERSARY)
Spousal Protection Benefit (Co-Annuitant) Option for Custodial 0.10%*
Individual Retirement Accounts
- ------------------------------------------------------------------------
* Applies to Contract Owners who select the option on or after January 1, 2005.
Up to 0.15% for options added in the future.
12 PROSPECTUS
If you select the Spousal Protection Benefit (Co-Annuitant) Option or Spousal
Protection Benefit (Co-Annuitant) Option for Custodial Individual Retirement
Accounts on or after January 1, 2005, you will pay a Rider Fee at the annual
rate of 0.10% of the Contract Value on each Contract Anniversary. We reserve the
right to increase the annual Rider Fee to up to 0.15% of the Contract Value. If
you selected either of these Options prior to January 1, 2005, there is no
charge associated with your Option. See "Spousal Protection Benefit
{Co-Annuitant) Option Fee and Spousal Protection Benefit (Co-Annuitant) Option
for Custodial Individual Retirement Accounts Fee" for details.
INCOME PROTECTION BENEFIT OPTION
(AS A PERCENTAGE OF THE AVERAGE DAILY NET VARIABLE ACCOUNT ASSETS SUPPORTING THE
VARIABLE INCOME PAYMENTS TO WHICH THE OPTION APPLIES)
Income Protection Benefit Option 0.50%*
- -------------------------------------------------------------
*The charge for the Income Protection Benefit Option applies during the Payout
Phase. We reserve the right to raise the charge to up to 0.75% for Options added
in the future. See "Income Payments - Income Protection Benefit Option" for
details.
PORTFOLIO ANNUAL EXPENSES - MINIMUM AND MAXIMUM
The next table shows the minimum and maximum total operating expenses charged by
the Portfolios that you may pay periodically during the time that you own the
Contract. Advisers and/or other service providers of certain Portfolios may have
agreed to waive their fees and/or reimburse Portfolio expenses in order to keep
the Portfolios' expenses below specified limits. The range of expenses shown in
this table does not show the effect of any such fee waiver or expense
reimbursement. More detail concerning each Portfolio's fees and expenses appears
in the second table below and in the prospectus for each Portfolio.
ANNUAL PORTFOLIO EXPENSES
- ----------------------------------------------------------------------------------
Minimum Maximum
- ----------------------------------------------------------------------------------
Total Annual Portfolio
Operating
Expenses/(1)/
(expenses that are
deducted from
Portfolio assets,
which may include
management fees,
distribution and/or
services (12b-1) fees, 0.74% 3.89%
and other expenses)
- ----------------------------------------------------------------------------------
(1) Expenses are shown as a percentage of Portfolio average daily net assets
(before any waiver or reimbursement) as of December 31, 2004.
PORTFOLIO ANNUAL EXPENSES - FULL TABLE (1)
The next table shows the Portfolio operating expenses for each Portfolio
available under the Contract. These expenses may vary from year to year.
Advisers and/or other service providers of certain Portfolios have agreed to
waive their fees and/or other Portfolio expenses in order to keep the
Portfolio's expenses below specified limits. The expenses shown in the table
below do not show the effect of any such fee waiver or expense reimbursement.
All fee waiver and expense reimbursements are described in the footnotes to the
table. More detail concerning each Portfolio's fees and expenses appears in the
prospectus for each Portfolio.
Total
Rule Portfolio
Management 12b-1 Other Annual
Portfolio Fees Fees Expenses Expenses
- -------------------------------------------------------------------------------
STI Classic Capital Appreciation 1.15% N/A 0.28% 1.43%
Fund(2)
- -------------------------------------------------------------------------------
STI Classic Growth and Income 0.90% N/A 0.63% 1.53%
Fund(2)
- -------------------------------------------------------------------------------
STI Classic International Equity 1.25% N/A 2.64% 3.89%
Fund(2)
- -------------------------------------------------------------------------------
STI Classic Investment Grade Bond 0.74% N/A 0.45% 1.19%
Fund(2)
- -------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Fund(2) 1.15% N/A 0.50% 1.65%
- -------------------------------------------------------------------------------
STI Classic Small Cap Value Equity 1.15% N/A 0.42% 1.57%
Fund(2)
- -------------------------------------------------------------------------------
STI Classic Value Income Stock 0.80% N/A 0.31% 1.11%
Fund(2)
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income 0.49% 0.25% 0.03% 0.77%
Securities Fund - Class 2(3,4)
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities 0.47% 0.25% 0.02% 0.74%
Fund - Class 2(3,4)
- -------------------------------------------------------------------------------
13 PROSPECTUS
FTVIP Franklin Large Cap Growth 0.75% 0.25% 0.04% 1.04%
Securities Fund - Class 2(3,4)
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value 0.53% 0.25% 0.18% 0.96%
Securities Fund - Class 2(4,5)
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund 0.49% 0.25% 0.05% 0.79%
- - Class 2 (3,4)
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund 0.80% 0.25% 0.21% 1.26%
- - Class 2(4)
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets 1.25% 0.25% 0.29% 1.79%
Securities Fund - Class 2
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities 0.68% 0.25% 0.19% 1.12%
Fund - Class 2(5)
- -------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value 0.75% N/A 2.31% 3.06%
Portfolio(6)
- -------------------------------------------------------------------------------
Lord Abbett Series Fund - 0.50% N/A 0.48% 0.98%
Bond-Debenture Portfolio(6)
- -------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth 0.50% N/A 0.39% 0.89%
and Income Portfolio
- -------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth 0.80% N/A 1.06% 1.86%
Opportunities Portfolio(6)
- -------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap 0.75% N/A 0.42% 1.17%
Value Portfolio
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth 0.67% 0.25% 0.07% 0.99%
Fund/VA - Service Shares
- -------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - 0.72% 0.25% 0.05% 1.02%
Service Shares
- -------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - 0.64% 0.25% 0.02% 0.91%
Service Shares(7)
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation 0.72% 0.25% 0.02% 0.99%
Fund/VA - Service Shares
- -------------------------------------------------------------------------------
Oppenheimer Global Securities 0.63% 0.25% 0.03% 0.91%
Fund/VA - Service Shares
- -------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - 0.72% 0.25% 0.04% 1.01%
Service Shares
- -------------------------------------------------------------------------------
Oppenheimer Main Street Fund(R)/VA 0.66% 0.25% 0.01% 0.92%
- - Service Shares
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap 0.75% 0.25% 0.06% 1.06%
Fund(R)/VA - Service Shares
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 0.71% 0.25% 0.03% 0.99%
- - Service Shares
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of 0.62% 0.25% 0.11% 0.98%
Boston - Class IB
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation 0.70% 0.25% 0.23% 1.18%
Fund - Class IB
- -------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - 0.48% 0.25% 0.06% 0.79%
Class IB
- -------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - 0.70% 0.25% 0.15% 1.10%
Class IB(8)
- -------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class 0.67% 0.25% 0.12% 1.04%
IB
- -------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB(9) 0.60% 0.25% 0.10% 0.95%
- -------------------------------------------------------------------------------
Putnam VT International Equity Fund 0.75% 0.25% 0.19% 1.19%
- - Class IB
- -------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB 0.64% 0.25% 0.12% 1.01%
- -------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class 0.45% 0.25% 0.10% 0.80%
IB(9)
- -------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - 0.60% 0.25% 0.09% 0.94%
Class IB(8)
- -------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB 0.69% 0.25% 0.10% 1.04%
- -------------------------------------------------------------------------------
Putnam VT Research Fund - Class 0.65% 0.25% 0.15% 1.05%
IB(8)
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and 0.70% 0.25% 0.15% 1.10%
Income Fund - Class IB(8)
- -------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB 0.65% 0.25% 0.14% 1.04%
- -------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB 0.56% 0.25% 0.08% 0.89%
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth 0.75% 0.25% 0.63% 1.63%
Portfolio, Class II(11,12)
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio, 0.57% 0.25% 0.04% 0.86%
Class II
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth 0.70% 0.25% 0.07% 1.02%
Portfolio, Class II
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income 0.58% 0.25% 0.04% 0.87%
Portfolio, Class II
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market 0.49% 0.25% 0.22% 0.96%
Portfolio, Class II(11,12)
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets 0.75% 0.35% 0.35% 1.45%
Debt Portfolio, Class II(13,14,15)
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income 0.49% 0.35% 0.36% 1.20%
Portfolio, Class II(13,14,15)
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth 0.50% 0.35% 0.34% 1.19%
Portfolio, Class II(13,14,15)
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise 0.80% 0.35% 0.50% 1.65%
Portfolio, Class II(13,14)
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth 0.92% 0.35% 0.61% 1.88%
Portfolio, Class II(13,14,15)
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value 0.72% 0.35% 0.30% 1.37%
Portfolio, Class II(13,14,15)
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate 0.76% 0.35% 0.26% 1.37%
Portfolio, Class II(13,14)
- -------------------------------------------------------------------------------
1. Figures shown in the Table are for the year ended December 31, 2004 (except
as otherwise noted).
2. The Investment Adviser has voluntarily agreed to waive all or a portion of
its fees and to reimburse Portfolio expenses. Fee waivers and expense
reimbursements are voluntary, with the exception of the STI Classic Growth and
14 PROSPECTUS
Income Fund, (for which the expense limit is contractual until May 1, 2005), and
may be terminated at any time. When the effects of these fee waivers and expense
reimbursements are taken into consideration, the "Management Fees", "Rule 12b-1
Fees", "Other Expenses" and "Total Annual Portfolio Expenses", were as follows:
Management Rule 12b-1 Other Total Annual
PORTFOLIO Fees Fees Expenses Portfolio Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
STI Classic Capital Appreciation Fund 0.87% N/A 0.28% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
STI Classic Growth and Income Fund 0.55% N/A 0.63% 1.18%
- ------------------------------------------------------------------------------------------------------------------------------------
STI Classic International Equity Fund 0.00% N/A 1.60% 1.60%
- ------------------------------------------------------------------------------------------------------------------------------------
STI Classic Investment Grade Bond Fund 0.30% N/A 0.45% 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Fund 0.65% N/A 0.50% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Fund 0.78% N/A 0.42% 1.20%
- ------------------------------------------------------------------------------------------------------------------------------------
STI Classic Value Income Stock Fund 0.64% N/A 0.31% 0.95%
- ------------------------------------------------------------------------------------------------------------------------------------
3. The Fund administration fee is paid indirectly through the management fee.
4. While the maximum amount payable under the Portfolio's Rule 12b-1 plan is
0.35% per year of the Portfolio's average annual net assets, the Portfolio's
Board of Trustees has set the current rate at 0.25% per year.
5. The Portfolio's manager has agreed in advance to reduce its fees from assets
invested by the Portfolio in a Franklin Templeton Money Market Fund (the Sweep
Money Fund). This reduction is required by the Portfolio's Board of Trustees and
an order by the Securities and Exchange Commission. With this reduction,
"Management Fees", "Rule 12b-1 Fees", "Other Expenses" and "Total Annual
Portfolio Expenses" were as follows:
Management Rule 12b-1 Other Total Annual
PORTFOLIO Fees Fees Expenses Portfolio Expenses
- ------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value 0.49% 0.25% 0.18% 0.92%
Securities Fund - Class 2
- ------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities 0.63% 0.25% 0.19% 1.07%
Fund - Class 2
- ------------------------------------------------------------------------------------------
6. For the year ending December 31, 2005, Lord, Abbett & Co. LLC has
contractually agreed to reimburse a portion of each Portfolio's expenses to the
extent necessary to maintain its "Other Expenses" at an aggregate rate of 0.40%
of its average daily net assets. With this reimbursement, "Management Fees",
"Rule 12b-1 Fees", "Other Expenses" and "Total Annual Portfolio Expenses" are as
follows:
Total
Annual
Management Rule 12b-1 Other Portfolio
PORTFOLIO Fees Fees Expenses Expenses
- -----------------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio 0.75% N/A 0.39% 1.14%
- -----------------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio 0.50% N/A 0.40% 0.90%
- -----------------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio 0.80% N/A 0.40% 1.20%
- -----------------------------------------------------------------------------------------------------------------------------
7. Effective April 29, 2005, the Oppenheimer Bond Fund/VA - Service Shares
changed its name to Oppenheimer Core Bond/VA - Service Shares Sub-Account.
8. Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income -
Class IB Sub-Account are no longer available for new investments. If you are
currently invested in these Variable Sub-Accounts, you may continue your
investment. If, prior to October 1, 2004, you enrolled in one of our automatic
transaction programs, such as automatic additions, portfolio rebalancing, or
dollar cost averaging, we will continue to effect automatic transactions into
these Variable Sub-Accounts in accordance with that program. Outside of these
automatic transaction programs, additional allocations will not be allowed.
9. Reflects Putnam Management's agreement, effective January 28, 2004, to waive
fees and reimburse expenses of the Portfolio through December 31, 2005 to the
extent necessary to ensure that the Portfolio's expenses do not exceed the
average expenses of the Portfolios viewed by Lipper Inc. as having the same
investment classification or objective as the Portfolio. The expense
reimbursement is based on a comparison of the Portfolio's expenses with the
average annualized operating expenses of the Portfolios in its Lipper peer
group, as reported by Lipper, for each calendar quarter during the Portfolio's
last fiscal year, excluding "Rule 12b-1 Fees" and without giving effect to any
expense offset and
15 PROSPECTUS
brokerage service arrangements that may reduce fund expenses. After such
reductions, the "Management Fees", "Rule 12b-1 Fees", "Other Expenses" and
"Total Annual Portfolio Expenses", were as follows:
Management Rule 12b-1 Other Total Annual
PORTFOLIO Fees Fees Expenses Portfolio Expenses
- ---------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB 0.57% 0.25% 0.10% 0.92%
- ---------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB 0.43% 0.25% 0.10% 0.78%
- ---------------------------------------------------------------------------------------------------------
10. For the year ended December 31, 2004, the adviser voluntarily waived $99,706
of its investment advisory fees and assumed $1,234 of the Portfolio's other
expenses. This waiver is voluntary in nature and can be discontinued at the
adviser's discretion.
11. For the year ended December 31, 2004, the adviser waived approximately
$68,600 of its advisory fees. Under the terms of the advisory agreement, if the
total ordinary business expenses, exclusive of taxes, distribution fees and
interest, exceed.95% of the average daily net assets of the Portfolio, the
adviser will reimburse the Portfolio for the amount of the excess. The adviser
has agreed to waive all expenses in excess 0.85% of average net assets. This
waiver is voluntary and can be discontinued at any time.
12. The fees disclosed in the Table reflect gross ratios prior to any voluntary
waivers/reimbursements of expenses by the adviser. When the effects of the
voluntary waivers discussed in footnotes 10 and 11 are taken into consideration,
the "Management Fees", "Rule 12b-1 Fees", "Other Expenses" and "Total Annual
Portfolio Expenses", were as follows:
Management Rule 12b-1 Other Total Annual
PORTFOLIO Fees Fees Expenses Portfolio Expenses
- -------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth 0.38% 0.25% 0.62% 1.25%
Portfolio, Class II
- -------------------------------------------------------------------------------------------
Van Kampen LIT Money Market 0.38% 0.25% 0.22% 0.85%
Portfolio, Class II
- -------------------------------------------------------------------------------------------
13. Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
14. The fees disclosed in the Table reflect gross ratios prior to any voluntary
waivers/reimbursements of expenses by the adviser. The adviser has voluntarily
agreed to waive a portion or all of its management fee and/or reimburse expenses
to the extent necessary so that "Total Annual Portfolio Expenses," excluding
certain investment related expenses such a foreign country tax expense and
interest expense on borrowing, do not exceed the "Operating "Expense Limitation"
in the table below. The adviser may terminate these voluntary waivers at any
time at its sole discretion. Additionally, the distributor has agreed to waive a
portion of the "Rule 12b-1 Fees" for Class II shares. The distributor may
terminate these voluntary waivers at any time at its sole discretion. After such
reductions, the "Management Fees", "Rule 12b-1 Fees", "Other Expenses" and
"Total Annual Portfolio Expenses", were as follows:
Operating
Expense Management Rule 12b-1 Other Total Annual
PORTFOLIO Limitation Fees Fees Expenses Portfolio Expenses
- ---------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio, 1.15% 0.75% 0.05% 0.35% 1.15%
Class II
- ---------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio, Class 1.00% 0.49% 0.05% 0.36% 0.90%
II
- ---------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio, Class II 1.10% 0.50% 0.25% 0.34% 1.09%
- ---------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio, Class 1.20% 0.65% 0.05% 0.50% 1.20%
II
- ---------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio, 1.25% 0.59% 0.05% 0.61% 1.25%
Class II
- ---------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio, 1.15% 0.72% 0.10% 0.30% 1.12%
Class II
- ---------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio, Class 1.35% 0.76% 0.25% 0.26% 1.27%
II
- ---------------------------------------------------------------------------------------------------------------------
15. Expense information has been restated to reflect current fees in effect as
of November 1, 2004.
16 PROSPECTUS
EXAMPLE 1
This Example is intended to help you compare the cost of investing in the
Contracts with the cost of investing in other variable annuity contracts. These
costs include Contract owner transaction expenses, Contract fees, Variable
Account annual expenses, and Portfolio fees and expenses.
The example shows the dollar amount of expenses that you would bear directly or
indirectly if you:
.. invested $10,000 in the Contract for the time periods indicated;
.. earned a 5% annual return on your investment;
.. surrendered your Contract, or you began receiving income payments for a
specified period of less than 120 months, at the end of each time period;
.. elected the MAV Death Benefit Option and the Enhanced Beneficiary Protection
(Annual Increase) Option;
.. elected the Earnings Protection Death Benefit Option (assuming issue age
71-79);
.. elected RIG 2 (assuming Income Base A); and
.. elected the Spousal Protection Benefit (Co-Annuitant) Option.
THE EXAMPLE DOES NOT INCLUDE ANY TAXES OR TAX PENALTIES YOU MAY BE REQUIRED TO
PAY IF YOU SURRENDER YOUR CONTRACT.
The first line of the example assumes that the maximum fees and expenses of any
of the Portfolios are charged. The second line of the example assumes that the
minimum fees and expenses of any of the Portfolios are charged. Your actual
expenses may be higher or lower than those shown below.
Allstate Advisor
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------------------
Costs Based on Maximum Annual Portfolio Expenses $1,316 $2,554 $3,749 $6,725
- --------------------------------------------------------------------------------------------
Costs Based on Minimum Annual Portfolio Expenses $ 993 $1,638 $2,308 $4,268
- --------------------------------------------------------------------------------------------
Allstate Advisor Preferred Allstate Advisor Preferred
(5 Year) (3 Year)
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio $1,261 $2,553 $3,621 $6,919 $1,272 $2,241 $3,663 $6,982
Expenses
- ------------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio $ 939 $1,643 $2,198 $4,538 $ 949 $1,333 $2,247 $4,627
Expenses
- ------------------------------------------------------------------------------------------------
Allstate Advisor Preferred
(0 Year)
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------
Costs Based on Maximum $772 $2,269 $3,705 $7,045
Annual Portfolio
Expenses
- ------------------------------------------------------------
Costs Based on Minimum $449 $1,362 $2,295 $4,714
Annual Portfolio
Expenses
- ------------------------------------------------------------
EXAMPLE 2
This Example uses the same assumptions as Example 1 above, except that it
assumes you decided not to surrender your Contract, or you began receiving
income payments for a specified period of at least 120 months, at the end of
each time period.
Allstate Advisor
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio $721 $2,129 $3,494 $6,725
Expenses
- ------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio $398 $1,213 $2,053 $4,268
Expenses
- ------------------------------------------------------------
Allstate Advisor Preferred Allstate Advisor Preferred
(5 Year) (3 Year)
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio $751 $2,213 $3,621 $6,919 $762 $2,241 $3,663 $6,982
Expenses
- ------------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio $429 $1,303 $2,198 $4,538 $439 $1,333 $2,247 $4,627
Expenses
- ------------------------------------------------------------------------------------------------
Allstate Advisor Preferred
(0 Year)
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------
Costs Based on Maximum $772 $2,269 $3,705 $7,045
Annual Portfolio
Expenses
- ------------------------------------------------------------
Costs Based on Minimum $449 $1,362 $2,295 $4,714
Annual Portfolio
Expenses
- ------------------------------------------------------------
PLEASE REMEMBER THAT YOU ARE LOOKING AT EXAMPLES AND NOT A REPRESENTATION OF
PAST OR FUTURE EXPENSES. YOUR RATE OF RETURN MAY BE HIGHER OR LOWER THAN 5%,
WHICH IS NOT GUARANTEED. THE EXAMPLES DO NOT ASSUME THAT ANY PORTFOLIO EXPENSE
WAIVERS OR REIMBURSEMENT ARRANGEMENTS ARE IN EFFECT FOR THE PERIODS PRESENTED.
THE EXAMPLES REFLECT THE FREE WITHDRAWAL AMOUNTS, IF APPLICABLE, AND THE
DEDUCTION OF THE ANNUAL CONTRACT MAINTENANCE CHARGE OF $30 EACH YEAR. THE ABOVE
EXAMPLES ASSUME YOU HAVE SELECTED THE MAV DEATH BENEFIT
17 PROSPECTUS
OPTION AND THE ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION, THE
EARNINGS PROTECTION DEATH BENEFIT OPTION (ASSUMING THE OLDEST CONTRACT OWNER OR
ANNUITANT IS AGE 71 OR OLDER, AND ALL ARE AGE 79 OR YOUNGER ON THE RIDER
APPLICATION DATE), RIG 2 AND THAT INCOME BASE A IS APPLIED AND THE SPOUSAL
PROTECTION BENEFIT (CO-ANNUITANT) OPTION. IF ANY OR ALL OF THESE FEATURES WERE
NOT ELECTED, THE EXPENSE FIGURES SHOWN ABOVE WOULD BE SLIGHTLY LOWER.
FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "ACCUMULATION UNIT."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call "ACCUMULATION UNIT VALUE." Accumulation Unit Value is analogous to, but not
the same as, the share price of a mutual fund.
Accumulation Unit Values for the Contracts appear in Appendix I and in the
Statement of Additional Information. The consolidated financial statements of
Allstate Life and the financial statements of the Variable Account, which are
comprised of the underlying financial statements of the Sub-Accounts, appear in
the Statement of Additional Information.
THE CONTRACT
- --------------------------------------------------------------------------------
CONTRACT OWNER
Each Contract is an agreement 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 investment alternatives during the Accumulation and Payout Phases,
.. the amount and timing of your purchase payments and withdrawals,
.. the programs you want to use to invest or withdraw money,
.. the income payment plan(s) 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 or the Annuitant
dies, and
.. any other rights that the Contract provides, including restricting income
payments to Beneficiaries.
If you die, any surviving joint 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 Primary
Beneficiary will receive any guaranteed income payments scheduled to continue.
If the Annuitant dies prior to the Payout Start Date and the Contract Owner is a
grantor trust not established by a business, the new Contract Owner will be the
Beneficiary(ies).
The Contract cannot be jointly owned by both a non-living person and a living
person unless the Contract Owner(s) assumed ownership of the Contract as a
Beneficiary(ies). The maximum age of any Contract Owner on the date we receive
the completed application for each Contract is 90.
If you select the Enhanced Beneficiary Protection (MAV) Option, the Enhanced
Beneficiary Protection (Annual Increase) Option or the Earnings Protection Death
Benefit Option the maximum age of any Contract Owner on the Rider Application
Date is currently age 79. If you select the Spousal Protection Benefit
(Co-Annuitant) Option or the Spousal Protection Benefit (Co-Annuitant) Option
for Custodial Individual Retirement Accounts, the maximum age of any Contract
Owner or beneficial owner for CSP on the Rider Application Date is currently age
90. If you select the SureIncome Withdrawal Benefit Option, the maximum age of
any Contract Owner on the Rider Application Date is currently age 85.
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 retirement plans, 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 the change, the change will
take effect as of the date you signed the request. We will not be liable for any
payment or settlement made prior to accepting the change. Accordingly, if you
wish to change the Contract Owner, you should deliver your written notice 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
18 PROSPECTUS
advisor prior to making a request for a change of Contract Owner.
ANNUITANT
The Annuitant is the individual whose age determines the latest Payout Start
Date and whose life determines the amount and duration of income payments (other
than under Income Plan 3). You may not change the Annuitant at any time. You may
designate a joint Annuitant, who is a second person on whose life income
payments depend, at the time you select an Income Plan. The maximum age of the
Annuitant on the date we receive the completed application for each Contract is
90.
If you select the Enhanced Beneficiary Protection (MAV) Option, Enhanced
Beneficiary Protection (Annual Increase) Option or the Earnings Protection Death
Benefit Option the maximum age of any Annuitant on the Rider Application Date is
79. If you select the Spousal Protection Benefit (Co-Annuitant) Option, the
maximum age of any Annuitant on the Rider Application Date is age 90. If you
select the Spousal Protection Benefit (Co-Annuitant) Option for Custodial
Individual Retirement Accounts, the maximum age of any Annuitant on the Rider
Application Date is age 90. If you select the SureIncome Withdrawal Benefit
Option, the maximum age of any Contract Owner on the Rider Application Date is
currently age 85.
If you select the Income Protection Benefit Option, the oldest Annuitant and
joint Annuitant (if applicable) must be age 75 or younger on the Payout Start
Date.
If you select an Income Plan that depends on the Annuitant or a joint
Annuitant's life, we may require proof of age and sex before income payments
begin and proof that the Annuitant or joint Annuitant is still alive before we
make each payment.
CO-ANNUITANT
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION
Contract Owners of IRA Contracts that meet the following conditions and that
elect the Spousal Protection Benefit Option may name their spouse as a
Co-Annuitant:
.. the individually owned Contract must be either a traditional, Roth or
Simplified Employee Pension IRA;
.. the Contract Owner must be age 90 or younger on the Rider Application Date;
.. the Co-Annuitant must be age 79 or younger on the Rider Application Date; and
.. the Co-Annuitant must be the sole Primary Beneficiary under the Contract.
Under the Spousal Protection Benefit (Co-Annuitant) Option, the Co-Annuitant
will be considered to be an Annuitant during the Accumulation Phase, except the
Co-Annuitant will not be considered to be an Annuitant for purposes of
determining the Payout Start Date or upon the death of the Co-Annuitant. You may
change the Co-Annuitant to a new spouse only if you provide proof of remarriage
in a form satisfactory to us. At any time, there may only be one Co-Annuitant
under your Contract. See "Spousal Protection Benefit Option and Death of
Co-Annuitant" for more information.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS
Contract Owners that meet the following conditions and that elect the Spousal
Protection Benefit (Co-Annuitant) Option for Custodial Individual Retirement
Accounts may name the spouse of the Annuitant as a Co-Annuitant:
.. the beneficially owned Contract must be a Custodial traditional IRA, Custodial
Roth IRA, or a Custodial Simplified Employee Pension IRA;
.. the Annuitant must be the beneficial owner of the Custodial traditional IRA,
Custodial Roth IRA, or Custodial Simplified Employee Pension IRA;
.. the Co-Annuitant must be the legal spouse of the Annuitant and only one
Co-Annuitant may be named;
.. the Co-Annuitant must be the sole beneficiary of the Custodial traditional
IRA, Custodial Roth IRA, or the Custodial Simplified Employee Pension IRA;
.. the Annuitant must be age 90 or younger on the Rider Application Date; and
.. the Co-Annuitant must be age 79 or younger on the Rider Application Date.
Under the Spousal Protection Benefit (Co-Annuitant) Option for Custodial
Individual Retirement Accounts, the Co-Annuitant will be considered to be an
Annuitant during the Accumulation Phase, except the Co-Annuitant will not be
considered to be an Annuitant for purposes of determining the Payout Start Date
or upon the death of the Co-Annuitant. The Co-Annuitant is not considered the
beneficial owner of the Custodial traditional IRA, Custodial Roth IRA, or the
Custodial Simplified Employee Pension IRA. See "Spousal Protection Benefit
(Co-Annuitant) Option for Custodial Individual Retirement Accounts and Death of
Co-Annuitant" for more information.
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 settlement ("DEATH
PROCEEDS") or become the new Contract Owner pursuant to the Contract if the sole
surviving Contract Owner dies before the Payout Start Date. 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
19 PROSPECTUS
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 form to be
signed by you and filed with us. After we accept the form, the change of
Beneficiary will be effective as of the date you signed the form. Until we
receive your written notice to change a Beneficiary, we are entitled to rely on
the most recent Beneficiary information in our files. We will not be liable for
any payment or settlement made prior to accepting the change. Accordingly, if
you wish to change your Beneficiary, you should deliver your written notice to
us promptly. Each Beneficiary change is subject to any payment made by us or any
other action we take before we accept the change.
You may restrict income payments to Beneficiaries by providing us with a written
request. Once we accept the written request, the restriction will take effect as
of the date you signed the request. Any restriction is subject to any payment
made by us or any other action we take before we accept the request.
If you did not name a Beneficiary or, unless otherwise provided in the
Beneficiary designation, if a named Beneficiary is no longer living and there
are no other surviving Primary or Contingent Beneficiaries 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.
If more than one Beneficiary survives you (or the Annuitant, if the Contract
Owner is a grantor trust), 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 Annuitant if the
Contract owner is not a living person), 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 this 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.
Where there are multiple beneficiaries, we will only value the Death Proceeds at
the time the first beneficiary submits the necessary documentation in good
order. Any Death Proceeds amounts attributable to any beneficiary which remain
in the Variable Sub-Accounts are subject to investment risk. If there is more
than one Beneficiary taking shares of the Death Proceeds, each Beneficiary will
be treated as a separate and independent owner of his or her respective share of
the Death Proceeds. Each Beneficiary will exercise all rights related to his or
her share of the Death Proceeds, including the sole right to select a death
settlement option, subject to any restrictions previously placed upon the
Beneficiary. Each Beneficiary may designate a Beneficiary(ies) for his or her
respective share, but that designated Beneficiary(ies) will be restricted to the
death settlement option chosen by the original Beneficiary.
If there is more than one Beneficiary and one of the Beneficiaries is a
corporation, trust or other non-living person, all Beneficiaries will be
considered to be non-living persons.
MODIFICATION OF THE CONTRACT
Only an Allstate Life officer 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. If a provision of the Contract
is inconsistent with state law, we will follow state law.
ASSIGNMENT
You may not assign an interest in this Contract as collateral or security for a
loan. However, you may assign periodic income payments under this 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 the assignor
signs it and files 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.
20 PROSPECTUS
PURCHASES
- --------------------------------------------------------------------------------
MINIMUM PURCHASE PAYMENTS
The minimum initial purchase payment for Non- Qualified Contracts is $10,000,
($2,000 for Contracts issued with an IRA or TSA). All subsequent purchase
payments under a Contract must be $1,000 or more ($50 for automatic payments).
You may make purchase payments at any time prior to the Payout Start Date;
however, additional payments may be limited in some states. Please consult with
your representative for details. The total amount of purchase payments we will
accept for each Contract without our prior approval is $1,000,000. We reserve
the right to accept a lesser initial purchase payment amount or lesser
subsequent purchase payment amounts. We reserve the right to limit the
availability of the investment alternatives for additional investments. We also
reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of $50 or more per month by
automatically transferring money from your bank account. Please consult with
your sales representative for detailed information. The AUTOMATIC ADDITIONS
PROGRAM is not available for making purchase payments into the Dollar Cost
Averaging Fixed Account Option.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payment among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percents that total 100% or in whole dollars. You can change your
allocations by calling 1-800-203-0068.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us
otherwise, we will allocate subsequent purchase payments according to the
allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our home office. If your application is incomplete, we will ask you to
complete your application within 5 business days. If you do so, we will credit
your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract at
the close of the business day on which we receive the purchase payment at our
home office.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"Valuation Dates." Our business day closes when the New York Stock Exchange
closes for regular trading, usually 4:00 p.m. Eastern Time (3:00 p.m. Central
Time). If we receive your purchase payment after 3:00 p.m. Central Time on any
Valuation Date, we will credit your purchase payment using the Accumulation Unit
Values computed on the next Valuation Date.
TRIAL EXAMINATION PERIOD
You may cancel your Contract by providing us with written notice within the
Trial Examination Period, which is the 20 day period after you receive the
Contract, or such longer period that your state may require. If you exercise
this "RIGHT TO CANCEL," the Contract terminates and we will pay you the full
amount of your purchase payments allocated to the Fixed Account. We also will
return your purchase payments allocated to the Variable Account adjusted, to the
extent federal or state law permits, to reflect investment gain or loss,
including the deduction of mortality and expense risk charges and administrative
expense charges, that occurred from the date of allocation through the date of
cancellation. If your Contract is qualified under Code Section 408(b), we will
refund the greater of any purchase payments or the Contract Value.
We reserve the right to allocate your purchase payments to the Putnam VT Money
Market Variable Sub-Account during the Trial Examination Period.
For Contracts purchased in California by persons age 60 and older, you may elect
to defer until the end of the Trial Examination Period allocation of your
purchase payment to the Variable Sub-Accounts. Unless you instruct otherwise,
upon making this election, your purchase payment will be allocated to the Putnam
VT Money Market Variable Sub-Account. On the next Valuation Date 40 days after
the Issue Date, your Contract Value will then be reallocated in accordance with
your most recent investment allocation instructions.
State laws vary and may require a different period, other variations or
adjustments. Please refer to your Contract for state specific information.
21 PROSPECTUS
CONTRACT VALUE
- --------------------------------------------------------------------------------
On the Issue Date, the Contract Value is equal to your initial purchase payment.
Thereafter, your Contract Value at any time during the Accumulation Phase is
equal to the sum of the value of your Accumulation Units in the Variable
Sub-Accounts you have selected, plus your value in the Fixed Account Option(s)
offered by your Contract.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation
Unit Value of that Variable Sub-Account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-Account when the Accumulation Unit Value for the
Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-Account to your Contract. Withdrawals and transfers from a Variable
Sub-Account would, of course, reduce the number of Accumulation Units of that
Sub-Account allocated to your Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
for each Contract will rise or fall to reflect:
.. changes in the share price of the Portfolio in which the Variable Sub-Account
invests, and
.. the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense charge, and any provision for taxes that have accrued
since we last calculated the Accumulation Unit Value.
We determine any applicable withdrawal charges, Rider Fees (if applicable),
transfer fees, and contract maintenance charges separately for each Contract.
They do not affect the Accumulation Unit Value. Instead, we obtain payment of
those charges and fees by redeeming Accumulation Units. For details on how we
compute Accumulation Unit Values, please refer to the Statement of Additional
Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account
for each Contract on each Valuation Date. We also determine a separate set of
Accumulation Unit Values that reflect the cost of each optional benefit, or
available combination thereof, offered under the Contract.
YOU SHOULD REFER TO THE PROSPECTUSES FOR THE FUNDS THAT ACCOMPANIES THIS
PROSPECTUS FOR A DESCRIPTION OF HOW THE ASSETS OF EACH PORTFOLIO ARE VALUED,
SINCE THAT DETERMINATION DIRECTLY BEARS ON THE ACCUMULATION UNIT VALUE OF THE
CORRESPONDING VARIABLE SUB-ACCOUNT AND, THEREFORE, YOUR CONTRACT VALUE.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION
We offer the TrueReturn/SM/ Accumulation Benefit Option, which is available for
an additional fee. The TrueReturn Option guarantees a minimum Contract Value on
the "RIDER MATURITY DATE." The Rider Maturity Date is determined by the length
of the Rider Period which you select. The Option provides no minimum Contract
Value if the Option terminates before the Rider Maturity Date. See "Termination
of the TrueReturn Option" below for details on termination.
The TrueReturn Option is available at issue of the Contract or may be added
later, subject to availability and issue requirements. You may not add the
TrueReturn Option to your Contract after Contract issue without prior approval
if your Contract Value is greater than $1,000,000 at the time you choose to add
the TrueReturn Option. Currently, you may have only one TrueReturn Option in
effect on your Contract at one time. You may only have one of the following in
effect on your Contract at the same time: a TrueReturn Option, a Retirement
Income Guarantee Option, or a SureIncome Option. The TrueReturn Option has no
maximum issue age, however the Rider Maturity Date must occur before the latest
Payout Start Date, which is the later of the Annuitant's 99th birthday or the
10th Contract Anniversary. Once added to your Contract, the TrueReturn Option
may be cancelled at any time on or after the 5th Rider Anniversary by:
.. notifying us in writing in a form satisfactory to us.
The "RIDER ANNIVERSARY" is the anniversary of the Rider Date. We reserve the
right to extend the date on which the TrueReturn Option may be cancelled to up
to the 10th Rider Anniversary at any time in our sole discretion. Any change we
make will not apply to a TrueReturn Option that was added to your Contract prior
to the implementation date of the change.
When you add the TrueReturn Option to your Contract, you must select a Rider
Period and a Guarantee Option. The Rider Period and Guarantee Option you select
determine the AB Factor, which is used to determine the Accumulation Benefit,
described below. The "RIDER PERIOD" begins on the Rider Date and ends on the
Rider Maturity Date. The "RIDER DATE" is the date the TrueReturn Option was made
a part of your Contract. We currently offer Rider Periods ranging from 8 to 20
years depending on the Guarantee Option you select. You may select any Rider
Period from among those we currently offer, provided the Rider Maturity Date
occurs prior to the latest Payout Start Date. We reserve the right to offer
additional Rider Periods in the future, and to discontinue offering any of the
Rider Periods at any time. We currently offer two "GUARANTEE OPTIONS," Guarantee
Option 1 and Guarantee Option 2. The Model Portfolio Option under a Guarantee
Option has specific
22 PROSPECTUS
investment requirements, that are described in the "Investment Requirements"
section below and may depend upon the Rider Date of your TrueReturn Option. We
reserve the right to offer additional Guarantee Options in the future, and to
discontinue offering any of the Guarantee Options at any time. After the Rider
Date, the Rider Period and Guarantee Option may not be changed.
The TrueReturn Option may not be available in all states. We may discontinue
offering the TrueReturn Option at any time to new Contract Owners and to
existing Contract Owners who did not elect the Option prior to the date of
discontinuance.
ACCUMULATION BENEFIT.
On the Rider Maturity Date, if the Accumulation Benefit is greater than the
Contract Value, then the Contract Value will be increased to equal the
Accumulation Benefit. The excess amount of any such increase will be allocated
to the Putnam VT Money Market Variable Sub-Account. You may transfer the excess
amount out of the Putnam VT Money Market Variable Sub-Account and into another
investment alternative at any time thereafter. However, each transfer you make
will count against the 12 transfers you can make each Contract Year without
paying a transfer fee. Prior to the Rider Maturity Date, the Accumulation
Benefit will not be available as a Contract Value, Settlement Value, or Death
Proceeds. Additionally, we will not pay an Accumulation Benefit if the
TrueReturn Option is terminated for any reason prior to the Rider Maturity Date.
After the Rider Maturity Date, the TrueReturn Option provides no additional
benefit.
The "ACCUMULATION BENEFIT" is equal to the Benefit Base multiplied by the AB
Factor. The "AB FACTOR" is determined by the Rider Period and Guarantee Option
you selected as of the Rider Date. The following table shows the AB Factors
available for the Rider Periods and Guarantee Options we currently offer.
AB FACTORS
RIDER PERIOD GUARANTEE GUARANTEE
(NUMBER OF YEARS) OPTION 1 OPTION 2
- ---------------------------------------------
8 100.0% NA
- ---------------------------------------------
9 112.5% NA
- ---------------------------------------------
10 125.0% 100.0%
- ---------------------------------------------
11 137.5% 110.0%
- ---------------------------------------------
12 150.0% 120.0%
- ---------------------------------------------
13 162.5% 130.0%
- ---------------------------------------------
14 175.0% 140.0%
- ---------------------------------------------
15 187.5% 150.0%
- ---------------------------------------------
16 200.0% 160.0%
- ---------------------------------------------
17 212.5% 170.0%
- ---------------------------------------------
18 225.0% 180.0%
- ---------------------------------------------
19 237.5% 190.0%
- ---------------------------------------------
20 250.0% 200.0%
- ---------------------------------------------
The following examples illustrate the Accumulation Benefit calculations under
Guarantee Options 1 and 2 on the Rider Maturity Date. For the purpose of
illustrating the Accumulation Benefit calculation, the examples assume the
Benefit Base is the same on the Rider Date and the Rider Maturity Date.
Example 1: Guarantee Option 1
Guarantee Option: 1
Rider Period: 15
AB Factor: 187.5%
Rider Date: 1/2/04
Rider Maturity Date: 1/2/19
Benefit Base on Rider Date: $50,000
Benefit Base on rider Maturity Date: $50,000
On the Rider Maturity Date (1/2/19):
Accumulation Benefit = Benefit Base on Rider Maturity
Date x AB Factor
= $50,000 x 187.5%
= $93,750
Example 2: Guarantee Option 2
Guarantee Option: 2
Rider Period: 15
AB Factor: 150.0%
Rider Date: 1/2/04
Rider Maturity Date: 1/2/19
Benefit Base on Rider Date: $50,000
Benefit Base on rider Maturity Date: $50,000
On the Rider Maturity Date (1/2/19):
Accumulation Benefit = Benefit Base on Rider Maturity
Date x AB Factor
= $50,000 x 150.0%
= $75,000
Guarantee Option 1 offers a higher AB Factor and more rider periods than
Guarantee Option 2. Guarantee Option 1 and Guarantee Option 2 have different
investment restrictions. See "Investment Requirements" below for more
information.
BENEFIT BASE.
The Benefit Base is used solely for purposes of determining the Rider Fee and
the Accumulation Benefit. The Benefit Base is not available as a Contract Value,
Settlement Value, or Death Proceeds. On the Rider Date, the "BENEFIT BASE" is
equal to the Contract Value. After the Rider Date, the Benefit Base will be
recalculated for purchase payments and withdrawals as follows:
.. The Benefit Base will be increased by purchase payments made prior to or on
the first Contract Anniversary following the Rider Date. Subject to the terms
and conditions of your Contract, you may add purchase payments after this
date, but they will not be included in the calculation of the Benefit Base.
THEREFORE, IF YOU PLAN TO MAKE PURCHASE
23 PROSPECTUS
PAYMENTS AFTER THE FIRST CONTRACT ANNIVERSARY FOLLOWING THE RIDER DATE, YOU
SHOULD CONSIDER CAREFULLY WHETHER THIS OPTION IS APPROPRIATE FOR YOUR NEEDS.
.. The Benefit Base will be decreased by a Withdrawal Adjustment for each
withdrawal you make. The Withdrawal Adjustment is equal to (a) divided by (b),
with the result multiplied by (c), where:
(a) = the withdrawal amount;
(b) = the Contract Value immediately prior to the withdrawal; and
(c) = the Benefit Base immediately prior to the withdrawal.
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. A withdrawal charge also
may apply. See Appendix G for numerical examples that illustrate how the
Withdrawal Adjustment is applied.
The Benefit Base will never be less than zero.
INVESTMENT REQUIREMENTS.
If you add the TrueReturn Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest
during the Rider Period. The specific requirements will depend on the Model
Portfolio Option you select and the effective date of your TrueReturn Option.
These requirements are described below in more detail. These requirements may
include, but are not limited to, maximum investment limits on certain Variable
Sub-Accounts or on certain Fixed Account Options, exclusion of certain Variable
Sub-Accounts or of certain Fixed Account Options, required minimum allocations
to certain Variable Sub-Accounts, and restrictions on transfers to or from
certain investment alternatives. We may also require that you use the Automatic
Portfolio Rebalancing Program. We may change the specific requirements that are
applicable to a Guarantee Option at any time in our sole discretion. Any changes
we make will not apply to a TrueReturn Option that was made a part of your
Contract prior to the implementation date of the change, except for changes made
due to a change in investment alternatives available under the Contract. Any
changes we make will apply to a new TrueReturn Option elected pursuant to the
Rider Trade-In Option.
When you add the TrueReturn Option to your Contract, you must allocate your
entire Contract Value as follows:
(1) to a model portfolio option ("MODEL PORTFOLIO OPTION") available with the
Guarantee Option you selected, as defined below; or
(2) to the DCA Fixed Account Option and then transfer all purchase payments and
interest according to a Model Portfolio Option available with the Guarantee
Option you selected; or
(3) to a combination of (1) and (2) above.
For (2) and (3) above, the requirements for the DCA Fixed Account Option must be
met. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information.
On the Rider Date, you must select only one of the Model Portfolio Options in
which to allocate your Contract Value. We currently offer one Model Portfolio
Option with each of the available Guarantee Options. The Model Portfolio Options
that are available under Guarantee Options may differ depending upon the
effective date of your TrueReturn Option. Please refer to the Model Portfolio
Option 1 and Model Portfolio Option 2 sections for more details. We may add
Model Portfolio Options in the future. The following table summarizes the Model
Portfolio Option currently available for use with each Guarantee Period under
the TrueReturn Option:
GUARANTEE OPTION 1 GUARANTEE OPTION 2
- ----------------------------------------------------
Model Portfolio Option 1 Model Portfolio Option 2
- ----------------------------------------------------
You may not allocate any of your Contract Value to the Standard Fixed Account
Option or to the MVA Fixed Account Option. You must transfer any portion of your
Contract Value that is allocated to the Standard Fixed Account Option or to the
MVA Fixed Account Option to the Variable Sub-Accounts prior to adding the
TrueReturn Option to your Contract. Transfers from the MVA Fixed Account Option
may be subject to a Market Value Adjustment. You may allocate any portion of
your purchase payments to the DCA Fixed Account Option on the Rider Date,
provided the DCA Fixed Account Option is available with your Contract and in
your state. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information. We use the term "Transfer Period Account" to
refer to each purchase payment allocation made to the DCA Fixed Account Option
for a specified term length. At the expiration of a Transfer Period Account any
remaining amounts in the Transfer Period Account will be transferred to the
Variable Sub-Accounts according to the percentage allocations for the Model
Portfolio you selected.
Any subsequent purchase payments made to your Contract will be allocated to the
Variable Sub-Accounts according to your most recent instructions on file with
us. You must comply with any required percentage allocations for the Model
Portfolio Option you have selected. You may also request that purchase payments
be allocated to the DCA Fixed Account Option. Purchase payments allocated to the
DCA Fixed Account Option must be $500 or more. Any withdrawals you request will
reduce each of the investment alternatives on a pro rata basis in the proportion
that your value in each bears to
24 PROSPECTUS
your total value in all Variable Sub-Accounts, unless you request otherwise.
MODEL PORTFOLIO OPTION 1.
If you choose or transfer your entire Contract Value into Model Portfolio Option
1 under Guarantee Option 1, you must allocate a certain percentage of your
Contract Value into each of three asset categories. Please note that certain
Investment Alternatives are not available under Model Portfolio Option 1. You
may choose the Variable Sub-Accounts in which you want to invest, provided you
maintain the percentage allocation requirements for each category. You may also
make transfers among the Variable Sub-Accounts within each category at any time,
provided you maintain the percentage allocation requirements for each category.
However, each transfer you make will count against the 12 transfers you can make
each Contract Year without paying a transfer fee.
Effective October 1, 2004, certain Variable Sub-Accounts under Model Portfolio 1
were reclassified into different asset categories. These changes apply to True
Return Options effective prior to and on or after October 1, 2004. The following
table describes the percentage allocation requirements for Model Portfolio
Option 1 and Variable Sub-Accounts available under each category(1):
MODEL PORTFOLIO OPTION 1
- -------------------------------------------------------------------
20% Category A
50% Category B
30% Category C
0% Category D
- -------------------------------------------------------------------
CATEGORY A
Putnam VT Money Market - Class IB Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------
CATEGORY B
FTVIP Franklin U.S. Government - Class 2 Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account(3)
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT Income - Class IB Sub-Account
STI Classic Investment Grade Bond Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(2)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(2)
- -------------------------------------------------------------------
CATEGORY C
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account
Lord Abbett Series - Growth and Income Sub-Account
Lord Abbett Series - Growth Opportunities Sub-Account
Lord Abbett Series - Mid-Cap Value Sub-Account
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares
Sub-Account
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Research - Class IB Sub-Account(1)
Putnam VT Utilities Growth and Income - Class IB Sub-Account(1)
Putnam VT Voyager - Class IB Sub-Account
STI Classic Capital Appreciation Sub-Account
STI Classic Growth and Income Sub-Account
STI Classic International Equity Sub-Account
STI Classic Small Cap Value Equity Sub-Account
STI Classic Value Income Stock Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Equity and Income, Class II Sub-Account(2)
Van Kampen UIF Global Franchise, Class II Sub-Account(2)
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(2)
- -------------------------------------------------------------------
CATEGORY D
(VARIABLE SUB-ACCOUNTS NOT AVAILABLE UNDER MODEL PORTFOLIO OPTION
1)
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Health Sciences - Class IB Sub-Account(1)
Putnam VT New Opportunities - Class IB Sub-Account(1)
Putnam VT Vista - Class IB Sub-Account
STI Classic Mid-Cap Equity Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class II Sub-Account(2)
Van Kampen UIF Small Company Growth, Class II Sub-Account(2)
- -------------------------------------------------------------------
Each calendar quarter, we will use the Automatic Portfolio Rebalancing Program
to automatically rebalance your Contract Value in each Variable Sub-Account and
return it to the percentage allocation requirements for Model Portfolio Option
1. We will use the percentage allocations as of your most recent instructions.
1) The Putnam VT Health Sciences - Class IB Sub-Account (Category D under
TrueReturn), the Putnam VT New Opportunities - Class IB Sub-Account (Category
D under TrueReturn), Putnam VT Research - Class IB Sub-Account (Category C
under TrueReturn), and the Putnam VT Utilities Growth and Income - Class IB
Sub-Account (Category C under TrueReturn) were only offered with Contracts
issued prior to October 1, 2004 and closed to new investments effective
October 1, 2004. If you choose this TrueReturn Option on or after October 1,
2004, you must transfer any portion of your Contract Value that is allocated
to these Variable Sub-Accounts to any of the remaining Variable Sub-Accounts
available with the TrueReturn Option prior to adding the TrueReturn Option to
your Contract.
25 PROSPECTUS
2) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares changed
its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have made a
corresponding change to the name of the Variable Sub-Account that invests in
this Portfolio.
MODEL PORTFOLIO OPTION 2.
The investment requirements under Model Portfolio Option 2 depend on the Rider
Date of your TrueReturn Option.
MODEL PORTFOLIO OPTION 2 (RIDER DATE PRIOR TO OCTOBER 1, 2004)
If your TrueReturn Option Rider Date is prior to October 1, 2004 and you select
Model Portfolio Option 2, you must allocate your Contract Value among four asset
categories in accordance with the percentage allocation requirements set out in
the table below. You may choose the Variable Sub-Accounts in which you want to
invest, provided you maintain the percentage allocation requirements for each
category. You may also make transfers among the Variable Sub-Accounts within
each category at any time, provided you maintain the percentage allocation
requirements for each category. However, each transfer you make will count
against the 12 transfers you can make each Contract Year without paying a
transfer fee.
The following table describes the percentage allocation requirements for Model
Portfolio Option 2 (Rider Date prior to October 1, 2004) and the Variable
Sub-Accounts available under each category(1):
MODEL PORTFOLIO OPTION 2
(RIDER DATE PRIOR TO OCTOBER 1, 2004)
- -------------------------------------------------------------------
10% Category A
20% Category B
50% Category C
20% Category D
- -------------------------------------------------------------------
CATEGORY A
Putnam VT Money Market - Class IB Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------
CATEGORY B
FTVIP Franklin U.S. Government - Class 2 Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account(3)
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT Income - Class IB Sub-Account
STI Classic Investment Grade Bond Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(2)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(2)
- -------------------------------------------------------------------
CATEGORY C
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account
Lord Abbett Series - Growth and Income Sub-Account
Lord Abbett Series - Growth Opportunities Sub-Account
Lord Abbett Series - Mid-Cap Value Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Research - Class IB Sub-Account(1)
Putnam VT Utilities Growth and Income - Class IB Sub-Account(1)
STI Classic Growth and Income Sub-Account
STI Classic Value Income Stock Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Equity and Income, Class II Sub-Account(2)
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(2)
- -------------------------------------------------------------------
CATEGORY D
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares
Sub-Account
Putnam VT Health Sciences - Class IB Sub-Account(1)
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT New Opportunities - Class IB Sub-Account(1)
Putnam VT Vista - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
STI Classic Capital Appreciation Sub-Account
STI Classic International Equity Sub-Account
STI Classic Mid-Cap Equity Sub-Account
STI Classic Small Cap Value Equity Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class II Sub-Account(2)
Van Kampen UIF Global Franchise, Class II Sub-Account(2)
Van Kampen UIF Small Company Growth, Class II Sub-Account(2)
- -------------------------------------------------------------------
Each calendar quarter, we will use the Automatic Portfolio Rebalancing Program
to automatically rebalance your Contract Value in each Variable Sub-Account and
return it to the percentage allocation requirements for Model Portfolio Option 2
(Rider Date prior to October 1, 2004). We will use the percentage allocations as
of your most recent instructions.
1) The Putnam VT Health Sciences - Class IB Sub-Account (Category D under
TrueReturn), the Putnam VT New Opportunities - Class IB Sub-Account (Category
D under TrueReturn), the Putnam VT Research - Class IB Sub-Account (Category C
under TrueReturn), and the Putnam VT Utilities Growth and Income - Class IB
Sub-Account (Category C under TrueReturn) were only
26 PROSPECTUS
offered with Contracts issued prior to October 1, 2004 and closed to new
investments effective October 1, 2004.
2) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares changed
its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have made a
corresponding change to the name of the Variable Sub-Account that invests in
this Portfolio.
MODEL PORTFOLIO OPTION 2 (RIDER DATE ON OR AFTER OCTOBER 1, 2004)
If your TrueReturn Option Rider Date is on or after October 1, 2004, and you
select Model Portfolio Option 2, you may allocate your Contract Value among any
of a selected group of available Variable Sub-Accounts listed below. However,
you may not allocate your Contract Value among any of the excluded Variable
Sub-Accounts listed below. You may choose to invest in or transfer among any of
the available Variable Sub-Accounts. However, each transfer you make will
count against the 12 transfers you can make each Contract Year without paying a
transfer fee.
The following table lists the available and excluded Variable Sub-Accounts
available under Model Portfolio Option 2 (Rider Date on or after October 1,
2004)(1):
AVAILABLE
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Franklin U.S. Government - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account
Lord Abbett Series - Growth and Income Sub-Account
Lord Abbett Series - Growth Opportunities Sub-Account
Lord Abbett Series - Mid-Cap Value Sub-Account
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account(3)
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares
Sub-Account
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT Income - Class IB Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT Money Market - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
STI Classic Capital Appreciation Sub-Account
STI Classic Growth and Income Sub-Account
STI Classic International Equity Sub-Account
STI Classic Investment Grade Bond Sub-Account
STI Classic Small Cap Value Equity Sub-Account
STI Classic Value Income Stock Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(2)
Van Kampen UIF Equity and Income, Class II Sub-Account(2)
Van Kampen UIF Global Franchise, Class II Sub-Account(2)
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(2)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(2)
EXCLUDED
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Vista - Class IB Sub-Account
STI Classic Mid-Cap Equity Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class II Sub-Account(2)
Van Kampen UIF Small Company Growth, Class II Sub-Account(2)
1) The Putnam VT Health Sciences - Class IB Sub-Account, the Putnam VT New
Opportunities - Class IB Sub-Account, the Putnam VT Research - Class IB
Sub-Account, and the Putnam VT Utilities Growth and Income - Class IB
Sub-Account were only offered with Contracts issued prior to October 1, 2004
and closed to new investments effective October 1, 2004. If you add the
TrueReturn Option to your Contract on or after October 1, 2004, you must
transfer any portion of your Contract Value that is allocated to these
Variable Sub-Accounts to any of the remaining Variable Sub-Accounts available
with the TrueReturn Option prior to adding the TrueReturn Option to your
Contract.
2) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares changed
its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have made a
corresponding change to the name of the Variable Sub-Account that invests in
this Portfolio.
CANCELLATION OF THE TRUERETURN OPTION.
You may not cancel the TrueReturn Option or make transfers, changes to your
investment allocations, or changes to the Automatic Portfolio Rebalancing
Program that are inconsistent with the investment restrictions applicable to
your Guarantee Option and/or Model Portfolio Option prior to the 5th Rider
Anniversary. On
27 PROSPECTUS
or after the 5th Rider Anniversary, we will cancel the TrueReturn Option if you
make transfers, changes to your investment allocations, or changes to the
Automatic Portfolio Rebalancing Program that are inconsistent with the
investment restrictions applicable to your Guarantee Option and/or Model
Portfolio Option. We will not cancel the TrueReturn Option or make any changes
to your investment allocations or to the Automatic Portfolio Rebalancing Program
that are inconsistent with the investment restrictions applicable to your
Guarantee Option until we receive notice from you that you wish to cancel the
TrueReturn Option. No Accumulation Benefit will be paid if you cancel the Option
prior to the Rider Maturity Date.
DEATH OF OWNER OR ANNUITANT.
If the Contract Owner or Annuitant dies before the Rider Maturity Date and the
Contract is continued under Option D as described on page 61 of the Death of
Owner or Death of Annuitant provision of your Contract, then the TrueReturn
Option will continue, unless the new Contract Owner elects to cancel this
Option. If the TrueReturn Option is continued, it will remain in effect until
terminated. If the Contract is not continued under Option D, then the TrueReturn
Option will terminate on the date we receive a Complete Request for Settlement
of the Death Proceeds.
RIDER TRADE-IN OPTION.
We offer a "RIDER TRADE-IN OPTION" that allows you to cancel your TrueReturn
Option and immediately add a new TrueReturn Option ("NEW OPTION"), provided all
of the following conditions are met:
.. The trade-in must occur on or after the 5th Rider Anniversary and prior to the
Rider Maturity Date. We reserve the right to extend the date at which time the
trade-in may occur to up to the 10th anniversary of the Rider Date at any time
in our sole discretion. Any change we make will not apply to a TrueReturn
Option that was added to your Contract prior to the implementation date of the
change.
.. The New Option will be made a part of your Contract on the date the existing
TrueReturn Option is cancelled, provided it is cancelled for reasons other
than the termination of your Contract.
.. The New Option must be a TrueReturn Option that we make available for use with
the Rider Trade-In Option.
.. The issue requirements and terms and conditions of the New Option must be met
as of the date the New Option is made a part of your Contract.
For example, if you trade-in your TrueReturn Option:
.. the new Rider Fee will be based on the Rider Fee percentage applicable to a
new TrueReturn Option at the time of trade-in;
.. the Benefit Base for the New Option will be based on the Contract Value as of
the new Rider Date;
.. the AB Factor will be determined by the Rider Periods and Guarantee Options
available with the New Option;
.. the Model Portfolio Options will be determined by the Model Portfolio Options
offered with the Guarantee Options available with the New Option;
.. any waiting period for canceling the New Option will start again on the new
Rider Date;
.. any waiting period for exercising the Rider Trade-In Option will start again
on the new Rider Date; and
.. the terms and conditions of the Rider Trade-In Option will be according to the
requirements of the New Option.
Currently, we are also making the SureIncome Option available at the time of
your first utilization of this TrueReturn Rider Trade-In Option. We may
discontinue offering the SureIncome Option under the Rider Trade-In Option for
new TrueReturn Options added in the future at anytime at our discretion. You may
cancel your TrueReturn Option and immediately add a new SureIncome Option,
provided all of the following conditions are met:
.. The trade-in must occur on or after the 5th Rider Anniversary and prior to the
Rider Maturity Date. We reserve the right to extend the date at which time the
trade-in may occur to up to the 10th anniversary of the Rider Date at any time
in our sole discretion. Any change we make will not apply to a TrueReturn
Option that was added to your Contract prior to the implementation date of the
change.
.. The new SureIncome Option will be made a part of your Contract on the date the
existing TrueReturn Option is cancelled, provided it is cancelled for reasons
other than the termination of your Contract.
.. The new SureIncome Option must be a SureIncome Option that we make available
for use with this Rider Trade-In Option.
.. The issue requirements and terms and conditions of the new SureIncome Option
must be met as of the date the new SureIncome Option is made a part of your
Contract.
You should consult with your sales representative before trading in your
TrueReturn Option.
TERMINATION OF THE TRUERETURN OPTION.
The TrueReturn Option will terminate on the earliest of the following to occur:
.. on the Rider Maturity Date;
.. on the Payout Start Date;
.. on the date your Contract is terminated;
.. on the date the Option is cancelled;
.. on the date we receive a Complete Request for Settlement of the Death
Proceeds; or
28 PROSPECTUS
.. on the date the Option is replaced with a New Option under the Rider Trade-In
Option.
We will not pay an Accumulation Benefit if the TrueReturn Option is terminated
for any reason prior to the Rider Maturity Date.
SUREINCOME WITHDRAWAL BENEFIT OPTION
We offer the SureIncome Withdrawal Benefit Option which is available for an
additional fee. The SureIncome Option provides a guaranteed withdrawal benefit
that gives you the right to take limited partial withdrawals that total an
amount equal to your purchase payments (subject to certain restrictions).
Therefore, regardless of the subsequent fluctuations in the value of your
Contract Value, you are entitled to a Benefit Payment each Benefit Year until
your Benefit Base is exhausted (terms defined below).
The SureIncome Option guarantees an amount up to the "Benefit Payment Remaining"
which will be available for withdrawal from the Contract each "Benefit Year"
until the "Benefit Base" (defined below) is reduced to zero. If the Contract
Value is reduced to zero and the Benefit Base is still greater than zero, we
will distribute an amount equal to the Benefit Base to the Contract owner as
described below under the "Withdrawal Benefit Payout Phase".
For purposes of the SureIncome Option, "withdrawal" means the gross amount of a
withdrawal before any applicable charges such as withdrawal charges, fees, taxes
or adjustments including any applicable Market Value Adjustments and surrender
charges. Under the SureIncome Option, we do not treat a withdrawal that reduces
the Contract Value to less than $1,000 as a withdrawal of the entire Contract
Value.
The "Rider Date" is the date the SureIncome Option was made a part of your
Contract. The initial Benefit Year is the period between the Rider Date and the
first Contract Anniversary after the Rider Date. Each subsequent Benefit Year
will coincide with (the same as) the Contract Year.
The SureIncome Option is available at issue of the Contract, or may be added
later, subject to availability and issue requirements. Currently, you may not
add the SureIncome Option to your Contract after Contract issue without our
prior approval if your Contract Value is greater than $1,000,000 at the time you
choose to add the SureIncome Option. You may have only one SureIncome Option in
effect on your Contract at one time. You may only have one of the following in
effect on your Contract at the same time: a SureIncome Option, a TrueReturn
Option, or a Retirement Income Guarantee Option. The SureIncome Option is only
available if the oldest Contract Owner and oldest Annuitant are age 85 or
younger on the effective date of the Rider (the "Rider Application Date") (The
maximum age may depend on your state). The SureIncome Option is not available to
be added to a Contract categorized as a Tax Sheltered Annuity as defined under
Internal Revenue Code Section 403(b) at this time. We reserve the right to make
the SureIncome Option available to such Contracts on a nondiscriminatory basis
in the future at our discretion. Once added to your Contract, the SureIncome
Option may be cancelled at any time on or after the 5th calendar year
anniversary of the Rider Date by notifying us in writing in a form satisfactory
to us.
The SureIncome Option may not be available in all states. We may discontinue
offering the SureIncome Option at any time to new Contract Owners and to
existing Contract Owners who did not elect the SureIncome Option prior to the
date of discontinuance.
WITHDRAWAL BENEFIT FACTOR
The "Withdrawal Benefit Factor" is used to determine the "Benefit Payment" and
Benefit Payment Remaining. We currently offer a Withdrawal Benefit Factor equal
to 8%. We reserve the right to make other Withdrawal Benefit Factors available
in the future for new SureIncome Options and/or to eliminate the current
Withdrawal Benefit Factor. Once a Withdrawal Benefit Factor has been established
for a SureIncome Option, it cannot be changed after the Rider Date unless that
SureIncome Option is terminated.
BENEFIT PAYMENT AND BENEFIT PAYMENT REMAINING
The Benefit Payment is the amount available at the beginning of each Benefit
Year that you may withdraw during that Benefit Year. The Withdrawal Benefit
Factor and the Benefit Base are used to determine your Benefit Payment. The
Benefit Payment Remaining is the amount remaining after any previous withdrawals
in a Benefit Year that you may withdraw without reducing your Benefit Base by
more than the amount of the withdrawal and without reducing your Benefit Payment
available in future Benefit Years. Please note that any premiums or withdrawals
made on a Contract Anniversary would be applied to the Benefit Year that just
ended on that Contract Anniversary.
The Benefit Payment Remaining is equal to the Benefit Payment at the beginning
of each Benefit Year.
During each Benefit Year the Benefit Payment Remaining will be increased by
purchase payments multiplied by the Withdrawal Benefit Factor (currently 8% for
new SureIncome Options) and reduced by the amount of each withdrawal. The
Benefit Payment Remaining will never be less than zero.
On the Rider Date, the Benefit Payment is equal to the greater of:
.. The Contract Value multiplied by the Withdrawal Benefit Factor (currently 8%
for new SureIncome Options); or
.. The value of the Benefit Payment of the previous Withdrawal Benefit Option
(attached to your
29 PROSPECTUS
Contract) which is being terminated under a rider trade-in option (see "Rider
Trade-In Option" below for more information), if applicable.
After the Rider Date, the Benefit Payment will be increased by purchase payments
multiplied by the Withdrawal Benefit Factor and affected by withdrawals as
follows:
.. If the withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Payment is unchanged.
If the withdrawal is greater than the Benefit Payment Remaining in effect
immediately prior to the withdrawal, the Benefit Payment will be the lesser of:
.. The Benefit Payment immediately prior to the withdrawal; or
.. The Contract Value immediately prior to withdrawal less the amount of the
withdrawal, multiplied by the Withdrawal Benefit Factor.
At our discretion, the Benefit Payment available during a Benefit Year may be
increased on a nondiscriminatory basis and without prior notice in order to
satisfy IRS minimum distribution requirements on the Contract under which this
Option has been elected. We are currently not increasing the Benefit Payment
available to satisfy IRS minimum distribution requirements.
BENEFIT BASE
The Benefit Base is not available as a Contract Value or Settlement Value. The
Benefit Base is used solely to help calculate the Rider Fee, the amount that may
be withdrawn and payments that may be received under the SureIncome Option. On
the Rider Date, the Benefit Base is equal to the Contract Value. After the Rider
Date, the Benefit Base will be increased by purchase payments and decreased by
withdrawals as follows:
.. If the withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Base will be reduced
by the amount of the withdrawal.
If the withdrawal is greater than the Benefit Payment Remaining in effect
immediately prior to the withdrawal, the Benefit Base will be the lesser of:
.. The Contract Value immediately prior to withdrawal less the amount of the
withdrawal; or
.. The Benefit Base immediately prior to withdrawal less the amount of the
withdrawal.
The Benefit Base may also be reduced in other situations as detailed in the
"Owner and Assignment of Payments or Interest" section below.
If the Benefit Base is reduced to zero, this SureIncome Option will terminate.
For numerical examples that illustrate how the values defined under the
SureIncome Option are calculated, see Appendix H.
CONTRACT OWNER AND ASSIGNMENT OF PAYMENTS OR INTEREST
If you change the Contract Owner or assign any payments or interest under this
Contract, as allowed, to any living or non-living person other than your spouse
on or after the first calendar year anniversary of the Rider Date, the Benefit
Base will be recalculated to be the lesser of the Contract Value and the Benefit
Base at the time of assignment.
CONTRACT VALUE
If your Contract Value is reduced to zero due to fees or withdrawals and your
Benefit Base is still greater than zero, your Contract will immediately enter
the Withdrawal Benefit Payout Phase.
Under the SureIncome Option, we currently do not treat a withdrawal that reduces
the Contract Value to less than $1,000 as a withdrawal of the entire Contract
Value. We reserve the right to change this at any time.
WITHDRAWAL BENEFIT PAYOUT PHASE
Under the Withdrawal Benefit Payout Phase, the Accumulation Phase of the
Contract ends and the Contract enters the Payout Phase subject to the following:
The "Withdrawal Benefit Payout Start Date" is the date the Withdrawal Benefit
Payout Phase is entered and the Accumulation Phase of the Contract ends.
No further withdrawals, purchase payments or any other actions associated with
the Accumulation Phase can be made after the Withdrawal Benefit Payout Start
Date.
The Payout Start Date is the first day of the next Benefit Year after the
Withdrawal Benefit Payout Start Date. We reserve the right to allow other Payout
Start Dates to be requested on a nondiscriminatory basis without prior notice.
During the Withdrawal Benefit Payout Phase, we will make scheduled fixed income
payments to the Owner (or new Contract Owner) at the end of each month starting
one month after the Payout Start Date. The amount of each payment will be equal
to the Benefit Payment divided by 12, unless a payment frequency other than
monthly is requested in a form acceptable to us and received by us before the
first payment is made (the amount of each payment will be adjusted accordingly;
i.e. if the payment frequency requested is quarterly, the amount of each payment
will be equal to the Benefit Payment divided by 4). Payments will be made over a
period certain such that total payments made will equal the Benefit Base on the
Payout Start Date; therefore, the final payment may be reduced. If your Contract
is a qualified contract, meaning an individual retirement annuity qualified as
defined under Internal Revenue Code Section 408(b) or a Tax Sheltered Annuity as
defined under Internal Revenue Code Section 403(b), the period certain cannot
exceed that which is required by Internal Revenue Code Section 401(a)(9) and
regulations
30 PROSPECTUS
promulgated thereunder. Therefore, the amount of each payment under this Option
may be larger so that the sum of the payments made over this period equals the
Benefit Base on the Payout Start Date. Additionally, if your Contract is a
qualified contract, we will not permit a change in the payment frequency or
level.
If your Contract is a non-qualified contract, we reserve the right to allow
other payment frequencies or levels to be requested on a nondiscriminatory basis
without prior notice. In no event will we allow more than one change in the
payment frequency or level during a Contract Year.
If the Owner dies before all payments have been made, the remaining payments
will continue to be made to the new Contract Owner as scheduled.
Once all scheduled payments have been paid, the Contract will terminate.
Generally, you may not make withdrawals, purchase payments or any other actions
associated with the Accumulation Phase after the Withdrawal Benefit Payout Start
Date.
EXAMPLE
Beginning of Benefit Year 1*
Contract Value = $100,000
Benefit Base = $100,000
Benefit Payment = $8,000
Benefit Payment Remaining = $8,000
In this example, you can take a Benefit Payment of up to $8,000 in Benefit Year
1. If a withdrawal of $6,000 is taken then the following values would apply:
Contract Value = $94,000 (Assuming that your Contract Value has not been
affected by any other factors)
Benefit Base = $94,000
Benefit Payment = $8,000
Benefit Payment Remaining = $2,000
BEGINNING OF BENEFIT YEAR 2
Contract Value = $70,000 (Assuming that your contract value has declined due to
poor performance)
Benefit Base = $94,000
Benefit Payment = $8,000
Benefit Payment Remaining = $8,000 (resets at the beginning of each benefit
year)
In Benefit Year 2 you have the right to a Benefit Payment of $8,000 and since
you have not taken any withdrawals yet in Benefit Year 2, the Benefit Payment
Remaining would also be $8,000 at the beginning of Benefit Year 2.
*This example assumes an initial Contract Value of $100,000, no additional
purchase payments, a withdrawal benefit factor of 8% and does not take into
account fees or charges.
INVESTMENT REQUIREMENTS
If you add the SureIncome Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest. The
specific requirements are described below in more detail and will be determined
by the Withdrawal Benefit Factor. These requirements may include, but are not
limited to, maximum investment limits on certain Variable Sub-Accounts or on
certain Fixed Account Options, exclusion of certain Variable Sub-Accounts or of
certain Fixed Account Options, required minimum allocations to certain Variable
Sub-Accounts, and restrictions on transfers to or from certain investment
alternatives. We may also require that you use the Automatic Portfolio
Rebalancing Program. We may change the specific requirements that are applicable
at any time in our sole discretion. Any changes we make will not apply to a
SureIncome Option that was made a part of your Contract prior to the
implementation date of the change, except for changes made due to a change in
investment alternatives available under the Contract. This restriction does not
apply to a new Option elected pursuant to the Rider Trade-In Option. We reserve
the right to have requirements unique to specific Withdrawal Benefit Factors if
we make other Withdrawal Benefit Factors available in the future.
When you add the SureIncome Option to your Contract, you must allocate your
entire Contract Value as follows:
1) to the Variable Sub-Accounts; or
2) to the DCA Fixed Account Option and then transfer all purchase payments and
interest to the Variable Sub-Accounts; or
3) to a combination of (1) and (2) above.
For (2) and (3) above, the requirements for the DCA Fixed Account Option must be
met. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information.
You may not allocate any of your Contract Value to the Standard Fixed Account
Option or to the Market Value Adjusted Fixed Account Option. You must transfer
any portion of your Contract Value that is allocated to the Standard Fixed
Account Option or to the Market Value Adjusted Fixed Account Option to the
Variable Sub-Accounts prior to adding the SureIncome Option to your Contract.
Transfers from the Market Value Adjusted Fixed Account Option may be subject to
a Market Value Adjustment. You may allocate any portion of your purchase
payments to the DCA Fixed Account Option on the Rider Date, provided the DCA
Fixed Account Option is available with your Contract and in your state. See the
"Dollar Cost Averaging Fixed Account Option" section of this prospectus for more
information. We use the term "Transfer Period Account" to refer to each purchase
payment allocation made to the DCA Fixed Account Option for a specified term
length. At the expiration of a Transfer Period Account any remaining amounts in
the Transfer Period Account will be transferred to the
31 PROSPECTUS
Variable Sub-Accounts according to your most recent percentage allocation
selections.
Any subsequent purchase payments made to your Contract will be allocated to the
Variable Sub-Accounts according to your specific instructions or your allocation
for the previous purchase payment, unless you request that the purchase payment
be allocated to the DCA Fixed Account Option. Purchase payments allocated to the
DCA Fixed Account Option must be $500 or more. Any withdrawals you request will
reduce your Contract Value invested in each of the investment alternatives on a
pro rata basis in the proportion that your Contract Value in each bears to your
total Contract Value in all Variable Sub-Accounts, unless you request otherwise.
Currently, we have divided the Variable Sub-Accounts into two separate
categories: "Available," and "Excluded." Currently, you may allocate up to 100%
of your Contract Value to the Available Variable Sub-Accounts in any manner you
choose. You may not allocate ANY PORTION of your Contract Value to the Excluded
Variable Sub-Accounts. You may make transfers among any of the Available
Variable Sub-Accounts. However, each transfer you make will count against the 12
transfers you can make each Contract Year without paying a transfer fee.
Currently the Available Variable Sub-Accounts and the Excluded Variable
Sub-Accounts are as follows (1):
Available
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Franklin U.S. Government - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account
Lord Abbett Series - Growth and Income Sub-Account
Lord Abbett Series - Growth Opportunities Sub-Account
Lord Abbett Series - Mid-Cap Value Sub-Account
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account(3)
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares
Sub-Account
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT Income - Class IB Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT Money Market - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
STI Classic Capital Appreciation Sub-Account
STI Classic Growth and Income Sub-Account
STI Classic International Equity Sub-Account
STI Classic Investment Grade Bond Sub-Account
STI Classic Small Cap Value Equity Sub-Account
STI Classic Value Income Stock Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account(2)
Van Kampen UIF Equity and Income, Class II Sub-Account(2)
Van Kampen UIF Global Franchise, Class II Sub-Account(2)
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account(2)
Van Kampen UIF U.S. Real Estate, Class II Sub-Account(2)
EXCLUDED
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Vista - Class IB Sub-Account
STI Classic Mid-Cap Equity Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen UIF Equity Growth, Class II Sub-Account(2)
Van Kampen UIF Small Company Growth, Class II Sub-Account(2)
1) The Putnam VT Health Sciences - Class IB Sub-Account, the Putnam VT New
Opportunities - Class IB Sub-Account, the Putnam VT Research - Class IB
Sub-Account, and the Putnam VT Utilities Growth and Income - Class IB
Sub-Account which were closed to new investments effective October 1, 2004,
are not available with the SureIncome Option. If you add this SureIncome
Option to your Contract on or after January 1, 2005, you must transfer any
portion of your Contract Value that is allocated to these Variable
Sub-Accounts to any of the remaining Variable Sub-Accounts available with the
SureIncome Option prior to adding the SureIncome Option to your Contract.
2) Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares changed
its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have made a
corresponding change to the name of the Variable Sub-Account that invests in
this Portfolio.
CANCELLATION OF THE SUREINCOME OPTION
You may not cancel the SureIncome Option prior to the 5th calendar year
anniversary of the Rider Date. On or after the 5th calendar year anniversary of
the Rider Date you may cancel the rider by notifying us in writing in a form
satisfactory to us. We reserve the right to extend the date at which time the
cancellation may occur to up to the
32 PROSPECTUS
10th calendar year anniversary of the Rider Date at any time in our sole
discretion. Any change we make will not apply to a SureIncome Option that was
added to your Contract prior to the implementation date of the change.
RIDER TRADE-IN OPTION
We offer a "Rider Trade-In Option" that allows you to cancel your SureIncome
Option and immediately add a new Withdrawal Benefit Option ("New SureIncome
Option"). We may also offer other Options ("Other New Options") under the Rider
Trade-In Option. However, you may only select one Option under this Rider
Trade-In Option at the time you cancel your SureIncome Option. Currently, we are
also making the TrueReturn Accumulation Benefit Option available at the time of
your first utilization of this Rider Trade-In Option so that you have the
ability to switch from the SureIncome Option to the TrueReturn Accumulation
Benefit Option. We may discontinue offering the TrueReturn Option under the
Rider Trade-In Option for New SureIncome Options added in the future at anytime
at our discretion.
This Rider Trade-in Option is available provided all of the following conditions
are met:
.. The trade-in must occur on or after the 5th calendar year anniversary of the
Rider Date. We reserve the right to extend the date at which time the trade-in
may occur to up to the 10th calendar year anniversary of the Rider Date at any
time in our sole discretion. Any change we make will not apply to a SureIncome
Option that was added to your Contract prior to the implementation date of the
change.
.. The New Option will be made a part of your Contract on the date the existing
Option is cancelled, provided it is cancelled for reasons other than the
termination of your Contract.
.. The New Option must be an Option that we make available for use with this
Rider Trade-In Option.
.. The issue requirements and terms and conditions of the New Option must be met
as of the date the New Option is made a part of your Contract.
If the New Option is a SureIncome Option, the New Option must provide that the
new Benefit Payment be greater than or equal to your current Benefit Payment as
of the date the Rider Trade-In Option is exercised, if applicable.
You should consult with your sales representative before trading in your
SureIncome Option.
DEATH OF OWNER OR ANNUITANT
If the Owner or Annuitant dies and the Contract is continued under Option D of
the Death of Owner or Death of Annuitant provisions of your Contract, then the
SureIncome Option will continue unless the Contract Owner (or new Contract
Owner) elects to cancel the SureIncome Option. If the SureIncome Option is
continued, it will remain in effect until terminated. If the Contract is not
continued under Option D above, then the SureIncome Option will terminate on the
date we receive a Complete Request for Settlement of the Death Proceeds.
TERMINATION OF THE SUREINCOME OPTION
This SureIncome Option will terminate on the earliest of the following to occur:
.. The Benefit Base is reduced to zero;
.. On the Payout Start Date (except if the Contract enters the Withdrawal Benefit
Payout Phase as defined under the Withdrawal Benefit Payout Phase section);
.. On the date the Contract is terminated;
.. On the date the SureIncome Option is cancelled;
.. On the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. On the date the SureIncome Option is replaced with a New Option under the
Rider Trade-In Option.
33 PROSPECTUS
INVESTMENT ALTERNATIVES: THE VARIABLE SUB-ACCOUNTS
- --------------------------------------------------------------------------------
You may allocate your purchase payments to up to 52* Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.
For more complete information about each Portfolio, including expenses and risks
associated with each Portfolio, please refer to the accompanying prospectuses
for the Funds. You should carefully review the Fund prospectuses before
allocating amounts to the Variable Sub-Accounts.
*Up to four additional Variable Sub-Accounts may be available depending on the
date you purchased your Contract. Please see pages 36-37 for information about
Sub-Account and/or Portfolio liquidations, mergers, closures and name changes.
PORTFOLIO: EACH PORTFOLIO: INVESTMENT ADVISER:
FTVIP Franklin Growth Capital appreciation with
and Income Securities current income as a
Fund - Class 2 secondary goal.
- -------------------------------------------------------
FTVIP Franklin Income To maximize income while Franklin Advisers, Inc.
Securities Fund - Class maintaining prospects for
2 capital appreciation.
- -------------------------------------------------------
FTVIP Franklin Large Capital appreciation
Cap Growth Securities
Fund - Class 2
- -------------------------------------------------------
FTVIP Franklin Small Long-term total return. Franklin Advisory
Cap Value Securities Services, LLC
Fund - Class 2
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Income Franklin Advisers, Inc.
Government Fund - Class
2
------------------------
FTVIP Mutual Shares Capital appreciation with Franklin Mutual
Securities Fund - Class income as a secondary goal Advisers, LLC
2
------------------------
FTVIP Templeton Long-term capital Templeton Asset
Developing Markets appreciation. Management Ltd.
Securities Fund - Class
2
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Long-term capital growth. Templeton Investment
Securities Fund - Class Counsel, LLC
2
- -------------------------------------------------------------------------------
Lord Abbett Series Fund Long-term growth of capital
- - All Value Portfolio and income without excessive
fluctuations in market value
- -------------------------------------------------------
Lord Abbett Series Fund High current income and the
- - Bond-Debenture opportunity for capital
Portfolio appreciation to produce a
high total return
- -------------------------------------------------------Lord, Abbett & Co. LLC
Lord Abbett Series Fund Long-term growth of capital
- - Growth and Income and income without excessive
Portfolio fluctuations in market value
- -------------------------------------------------------
Lord Abbett Series Fund Capital appreciation
- - Growth Opportunities
Portfolio
- -------------------------------------------------------
Lord Abbett Series Fund Capital appreciation through
- - Mid-Cap Value investments, primarily in
Portfolio equity securities, which are
believed to be undervalued
in the marketplace
- -------------------------------------------------------------------------------
34 PROSPECTUS
Oppenheimer Aggressive Capital appreciation by
Growth Fund/VA - investing in ''growth type''
Service Shares companies.
- -------------------------------------------------------
Oppenheimer Balanced A high total investment
Fund/VA - Service return, which includes
Shares current income and capital
appreciation in the value of
its shares.
Oppenheimer Core Bond High level of current
Fund/VA - Service income. As a secondary
Shares/(1)/ objective, the Portfolio
seeks capital appreciation
when consistent with its
primary objective.
------------------------------
Oppenheimer Capital Capital appreciation by
Appreciation Fund/VA - investing in securities of
Service Shares well-known, established
companies.
------------------------------OppenheimerFunds, Inc.
Oppenheimer Global Long-term capital
Securities Fund/VA - appreciation by investing a
Service Shares substantial portion of
assets in securities of
foreign issuers, growth-type
companies, cyclical
industries and special
situations that are
considered to have
appreciation possibilities.
Oppenheimer High Income A high level of current
Fund/VA - Service income from investment in
Shares high-yield fixed-income
securities.
- -------------------------------------------------------
Oppenheimer Main Street High total return (which
Fund(R)/VA - Service includes growth in the value
Shares of its shares as well as
current income) from equity
and debt securities.
Oppenheimer Main Street Capital appreciation.
Small Cap Fund(R)/VA -
Service Shares
- --------------------------------------------------------
Oppenheimer Strategic A high level of current
Bond Fund/VA - Service income principally derived
Shares from interest on debt
securities.
- ------------------------------------------------------------------------------
Putnam VT Global Asset A high level of long-term
Allocation Fund - Class total return consistent with
IB preservation of capital.
- -------------------------------------------------------
Putnam VT Growth and Capital growth and current
Income Fund - Class IB income.
- -------------------------------------------------------
Putnam VT Health Capital appreciation.
Sciences Fund - Class
IB/(2)/
- -------------------------------------------------------
Putnam VT High Yield High current income. Capital
Fund - Class IB growth is a secondary goal
when consistent with
achieving high current
income.
- -------------------------------------------------------
Putnam VT Income Fund - High current income
Class IB consistent with what Putnam
Management believes to be
prudent risk. Putnam Investment
- -------------------------------------------------------Management, LLC
Putnam VT International Capital appreciation. ("Putnam Management")
Equity Fund - Class IB
- -------------------------------------------------------
Putnam VT Investors Long-term growth of capital
Fund - Class IB and any increased income
that results from this
growth.
- -------------------------------------------------------
Putnam VT Money Market As high a rate of current
Fund - Class IB income as Putnam Management
believes is consistent with
preservation of capital and
maintenance of liquidity.
- -------------------------------------------------------
Putnam VT New Long-term capital
Opportunities Fund - appreciation.
Class IB/(2)/
- -------------------------------------------------------
Putnam VT New Value Long-term capital
Fund - Class IB appreciation.
- -------------------------------------------------------
Putnam VT Research Fund Capital appreciation.
- - Class IB/(2)/
- -------------------------------------------------------
Putnam VT The George To provide a balanced
Putnam Fund of Boston - investment composed of a
Class IB well diversified portfolio
of value stocks and bonds,
which produce both capital
growth and current income.
Putnam VT Utilities Capital growth and current
Growth and Income Fund income.
- - Class IB/(2)/
- -------------------------------------------------------
Putnam VT Vista Fund - Capital appreciation.
Class IB
- -------------------------------------------------------
Putnam VT Voyager Fund Capital appreciation.
- - Class IB
- -------------------------------------------------------------------------------
35 PROSPECTUS
STI Classic Capital Capital appreciation
Appreciation Fund
- -------------------------------------------------------
STI Classic Growth and Long-term capital
Income Fund appreciation with the
secondary goal of current
income
- -------------------------------------------------------
STI Classic Long-term capital
International Equity appreciation Trusco Capital
Fund Management, Inc.
- -------------------------------------------------------
STI Classic Investment High total return through
Grade Bond Fund current income and capital
appreciation, while
preserving the principal
amount invested
- -------------------------------------------------------
STI Classic Mid-Cap Capital appreciation
Equity Fund
- -------------------------------------------------------
STI Classic Small Cap Capital appreciation with
Value Equity Fund the secondary goal of
current income
- -------------------------------------------------------
STI Classic Value Current income with the
Income Stock Fund secondary goal of capital
appreciation
- -------------------------------------------------------------------------------
Van Kampen LIT Capital growth
Aggressive Growth
Portfolio, Class II
Van Kampen LIT Comstock Capital growth and income
Portfolio, Class II through investments in
equity securities, including
common stocks, preferred
stocks and securities
convertible into common and Van Kampen Asset
preferred stocks. Management
Van Kampen LIT Emerging Capital appreciation.
Growth Portfolio, Class
II
Van Kampen LIT Growth Long-term growth of capital
and Income Portfolio, and income.
Class II
- -------------------------------------------------------
Van Kampen LIT Money Protection of capital and
Market Portfolio, Class high current income through
II investments in money market
instruments. ------------------------
Van Kampen UIF Emerging High total return by
Markets Debt Portfolio, investing primarily in fixed
Class II income securities of
government and
government-related issuers
and, to a lesser extent, of
corporate issuers in
emerging market countries.
Van Kampen UIF Equity Capital appreciation and
and Income Portfolio, current income
Class II
- -------------------------------------------------------
Van Kampen UIF Equity Long-term capital
Growth Portfolio, Class appreciation by investing
II primarily in growth-oriented
equity securities of large
capitalization companies
- ------------------------------------------------------- Van Kampen/(3)/
Van Kampen UIF Small Long-term capital
Company Growth appreciation by investing
Portfolio, Class II primarily in growth-oriented
equity securities of small
companies.
- -------------------------------------------------------
Van Kampen UIF Global Long-term capital
Franchise Portfolio, appreciation
Class II
- -------------------------------------------------------
Van Kampen UIF U.S. Mid Above-average total return
Cap Value Portfolio, over a market cycle of three
Class II to five years by investing
in common stocks and other
equity securities
- -------------------------------------------------------
Van Kampen UIF U.S. Above average current income
Real Estate Portfolio, and long-term capital
Class II appreciation by investing
primarily in equity
securities of companies in
the U.S. real estate
industry, including real
estate investment trusts
- -------------------------------------------------------------------------------
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account are no longer available for new investments. If you are
currently invested in these Variable Sub-Accounts, you may continue your
investment. If, prior to October 1, 2004, you
36 PROSPECTUS
enrolled in one of our automatic transaction programs, such as automatic
additions, portfolio rebalancing, or dollar cost averaging, we will continue
to effect automatic transactions into these Variable Sub-Accounts in
accordance with that program. Outside of these automatic transaction programs,
additional allocations will not be allowed.
(3) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances as Van Kampen.
AMOUNTS YOU ALLOCATE TO VARIABLE SUB-ACCOUNTS MAY GROW IN VALUE, DECLINE IN
VALUE, OR GROW LESS THAN YOU EXPECT, DEPENDING ON THE INVESTMENT PERFORMANCE OF
THE PORTFOLIOS IN WHICH THOSE VARIABLE SUB-ACCOUNTS INVEST. YOU BEAR THE
INVESTMENT RISK THAT THE PORTFOLIOS MIGHT NOT MEET THEIR INVESTMENT OBJECTIVES.
SHARES OF THE PORTFOLIOS ARE NOT DEPOSITS, OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
VARIABLE INSURANCE PORTFOLIOS MIGHT NOT BE MANAGED BY THE SAME PORTFOLIO
MANAGERS WHO MANAGE RETAIL MUTUAL FUNDS WITH SIMILAR NAMES. THESE PORTFOLIOS ARE
LIKELY TO DIFFER FROM SIMILARLY NAMED RETAIL FUNDS IN ASSETS, CASH FLOW, AND TAX
MATTERS. ACCORDINGLY, THE HOLDINGS AND RESULTS OF A VARIABLE INSURANCE PORTFOLIO
CAN BE EXPECTED TO BE HIGHER OR LOWER THAN THE INVESTMENT RESULTS OF A SIMILARLY
NAMED RETAIL MUTUAL FUND.
INVESTMENT ALTERNATIVES: THE FIXED ACCOUNT OPTIONS
- --------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments to the Fixed Account
Options. The Fixed Account Options we offer include the DOLLAR COST AVERAGING
FIXED ACCOUNT OPTION, the STANDARD FIXED ACCOUNT OPTION, and the MARKET VALUE
ADJUSTED FIXED ACCOUNT OPTION. We may offer additional Fixed Account Options in
the future. Some Options are not available in all states. In addition,
Allstate Life may limit the availability of some Fixed Account Options. Please
consult with your representative for current information. The Fixed Account
supports our insurance and annuity obligations. The Fixed Account consists of
our general assets other than those in segregated asset accounts. We have sole
discretion to invest the assets of the Fixed Account, subject to applicable law.
Any money you allocate to the Fixed Account does not entitle you to share in the
investment experience of the Fixed Account.
DOLLAR COST AVERAGING FIXED ACCOUNT OPTION
The Dollar Cost Averaging Fixed Account Option ("DCA Fixed Account Option") is
one of the investment alternatives that you can use to establish a Dollar Cost
Averaging Program, as described on page 42.
This option allows you to allocate purchase payments to the Fixed Account that
will then automatically be transferred, along with interest, in equal monthly
installments to the investment alternatives that you have selected. In the
future, we may offer other installment frequencies in our discretion. Each
purchase payment allocated to the DCA Fixed Account Option must be at least
$500.
At the time you allocate a purchase payment to the DCA Fixed Account Option, you
must specify the term length over which the transfers are to take place. We
use the term "TRANSFER PERIOD ACCOUNT" to refer to each purchase payment
allocation made to the DCA Fixed Account Option for a specified term length. You
establish a new Transfer Period Account each time you allocate a purchase
payment to the DCA Fixed Account Option. We currently offer term lengths from
which you may select for your Transfer Period Account(s), ranging from 3 to 12
months. We may modify or eliminate the term lengths we offer in the future.
Refer to Appendix A for more information.
Your purchase payments will earn interest while in the DCA Fixed Account Option
at the interest rate in effect at the time of the allocation, depending on the
term length chosen for the Transfer Period Account and the type of Contract you
have. The interest rates may also differ from those available for other Fixed
Account Options. The minimum interest rate associated with the DCA Fixed Account
Option is based upon state requirements and the date an application to purchase
a Contract is signed. The minimum interest rate will not change after Contract
issue.
You must transfer all of your money, plus accumulated interest, out of a
Transfer Period Account to other investment alternatives in equal monthly
installments during the term of the Transfer Period Account. We reserve the
right to restrict the investment alternatives available for transfers from any
Transfer Period Account. You may not transfer money from the Transfer Period
Account to any of the Fixed Account Options available under your Contract.The
first transfer will occur on the next Valuation Date after you establish a
Transfer Period Account. If we do not receive an allocation instruction from you
when we receive the purchase payment, we will
37 PROSPECTUS
transfer each installment to the Putnam VT Money Market Variable Sub-Account
until we receive a different allocation instruction. At the expiration of a
Transfer Period Account any remaining amounts in the Transfer Period Account
will be transferred to the Putnam VT Money Market Variable Sub-Account unless
you request a different investment alternative. Transferring Contract Value to
the Putnam VT Money Market Variable Sub-Account in this manner may not be
consistent with the theory of dollar cost averaging described on page 42.
If you discontinue the DCA Fixed Account Option before the expiration of a
Transfer Period Account, we will transfer any remaining amount in the Transfer
Period Account to the Putnam VT Money Market Variable Sub-Account unless you
request a different investment alternative.
You may not transfer money into the DCA Fixed Account Option or add to an
existing Transfer Period Account. You may not use the Automatic Additions
Program to allocate purchase payments to the DCA Fixed Account Option.
The DCA Fixed Account Option currently is not available if you have selected the
ALLSTATE ADVISOR PREFERRED CONTRACT WITH NO WITHDRAWAL CHARGE OPTION.
The DCA Fixed Account Option may not be available in your state. Please check
with your representative for availability.
STANDARD FIXED ACCOUNT OPTION
You may allocate purchase payments or transfer amounts into the Standard Fixed
Account Option. Each such allocation establishes a "GUARANTEE PERIOD ACCOUNT"
within the Standard Fixed Account Option ("Standard Fixed Guarantee Period
Account"), which is defined by the date of the allocation and the length of the
initial interest rate guarantee period ("STANDARD FIXED GUARANTEE PERIOD"). You
may not allocate a purchase payment or transfer to any existing Guarantee Period
Account. Each purchase payment or transfer allocated to a Standard Fixed
Guarantee Period Account must be at least $500.
At the time you allocate a purchase payment or transfer amount to the Standard
Fixed Account Option, you must select the Guarantee Period for that allocation
from among the available Standard Fixed Guarantee Periods. For Allstate Advisor
Contracts, we currently offer Standard Fixed Guarantee Periods of 1, 3, 5 and 7
years in length. For Allstate Advisor Preferred Contracts, we currently are not
offering the Standard Fixed Account Option. Refer to Appendix A for more
information. We may offer other Guarantee Periods in the future. If you allocate
a purchase payment to the Standard Fixed Account Option, but do not select a
Standard Fixed Guarantee Period for the new Standard Fixed Guarantee Period
Account, we will allocate the purchase payment or transfer to a new Standard
Fixed Guarantee Period Account with the same Standard Fixed Guarantee Period as
the Standard Fixed Guarantee Period Account of your most recent purchase payment
or transfer. If we no longer offer that Standard Fixed Guarantee Period, then we
will allocate the purchase payment or transfer to a new Standard Fixed Guarantee
Period Account with the next shortest term currently offered. If you have not
made a prior allocation to a Guarantee Period Account, then we will allocate the
purchase payment or transfer to a new Standard Fixed Guarantee Period Account of
the shortest Standard Fixed Guarantee Period we are offering at that time.
Some Standard Fixed Guarantee Periods are not available in all states. Please
check with your representative for availability.
The amount you allocate to a Standard Fixed Guarantee Period Account will earn
interest at the interest rate in effect for that Standard Fixed Guarantee Period
at the time of the allocation. Interest rates may differ depending on the type
of Contract you have and may also differ from those available for other Fixed
Account Options. The minimum interest rate associated with the Standard Fixed
Account Option is based upon state requirements and the date an application to
purchase a Contract is signed. The minimum interest rate will not change after
Contract issue.
In any Contract Year, the combined amount of withdrawals and transfers from a
Standard Fixed Guarantee Period Account may not exceed 30% of the amount used to
establish that Standard Fixed Guarantee Period Account. This limitation is
waived if you withdraw your entire Contract Value. It is also waived for amounts
in a Standard Fixed Guarantee Period Account during the 30 days following its
renewal date ("30-DAY WINDOW"), described below, and for a single withdrawal
made by your surviving spouse within one year of continuing the Contract after
your death.
Amounts under the 30% limit that are not withdrawn in a Contract Year do not
carry over to subsequent Contract Years.
At the end of a Standard Fixed Guarantee Period and each year thereafter, we
will declare a renewal interest rate that will be guaranteed for 1 year.
Subsequent renewal dates will be on the anniversaries of the first renewal date.
Prior to a renewal date, we will send you a notice that will outline the options
available to you. During the 30-Day Window following the expiration of a
Standard Fixed Guarantee Period Account, the 30% limit for transfers and
withdrawals from that Guarantee Period Account is waived and you may elect to:
.. transfer all or part of the money from the Standard Fixed Guarantee Period
Account to establish a new Guarantee Period Account within the Standard Fixed
Account Option or the Market Value Adjusted Fixed Account Option, if
available; or
38 PROSPECTUS
.. transfer all or part of the money from the Standard Fixed Guarantee Period
Account to other investment alternatives available at the time; or
.. withdraw all or part of the money from the Standard Fixed Guarantee Period
Account. Withdrawal charges and taxes may apply.
Withdrawals taken to satisfy IRS minimum distribution rules will count against
the 30% limit. The 30% limit will be waived for a Contract Year to the extent
that:
.. you have already exceeded the 30% limit and you must still make a withdrawal
during that Contract Year to satisfy IRS minimum distribution rules; or
.. you have not yet exceeded the 30% limit but you must make a withdrawal during
that Contract Year to satisfy IRS minimum distribution rules, and such
withdrawal will put you over the 30% limit.
The money in the Standard Fixed Guarantee Period Account will earn interest at
the declared renewal rate from the renewal date until the date we receive
notification of your election. If we receive notification of your election to
make a transfer or withdrawal from a renewing Standard Fixed Guarantee Period
Account on or before the renewal date, the transfer or withdrawal will be deemed
to have occurred on the renewal date. If we receive notification of your
election to make a transfer or withdrawal from the renewing Standard Fixed
Guarantee Period Account after the renewal date, but before the expiration of
the 30-Day Window, the transfer or withdrawal will be deemed to have occurred on
the day we receive such notice. Any remaining balance not withdrawn or
transferred from the renewing Standard Fixed Guarantee Period Account will
continue to earn interest until the next renewal date at the declared renewal
rate. If we do not receive notification from you within the 30-Day Window, we
will assume that you have elected to renew the Standard Fixed Guarantee Period
Account and the amount in the renewing Standard Fixed Guarantee Period Account
will continue to earn interest at the declared renewal rate until the next
renewal date, and will be subject to all restrictions of the Standard Fixed
Account Option.
The Standard Fixed Account Option currently is not available with the ALLSTATE
ADVISOR PREFERRED CONTRACT.
MARKET VALUE ADJUSTED FIXED ACCOUNT OPTION
You may allocate purchase payments or transfer amounts into the Market Value
Adjusted Fixed Account Option. Each such allocation establishes a Guarantee
Period Account within the Market Value Adjusted Fixed Account Option ("Market
Value Adjusted Fixed Guarantee Period Account"), which is defined by the date of
the allocation and the length of the initial interest rate guarantee period
("MARKET VALUE ADJUSTED FIXED GUARANTEE PERIOD"). You may not allocate a
purchase payment or transfer to any existing Guarantee Period Account. Each
purchase payment or transfer allocated to a Market Value Adjusted Fixed
Guarantee Period Account must be at least $500.
At the time you allocate a purchase payment or transfer amount to the Market
Value Adjusted Fixed Account Option, you must select the Guarantee Period for
that allocation from among the Guarantee Periods available for the Market Value
Adjusted Fixed Account Option ("Market Value Adjusted Fixed Guarantee Periods").
We currently offer Market Value Adjusted Fixed Guarantee Periods of 3, 5, 7, and
10 years. Refer to Appendix A for more information. We may offer other Guarantee
Periods in the future. If you allocate a purchase payment to the Market Value
Adjusted Fixed Account Option, but do not select a Market Value Adjusted Fixed
Guarantee Period for the new Market Value Adjusted Fixed Guarantee Period
Account, we will allocate the purchase payment or transfer to a new Market Value
Adjusted Fixed Guarantee Period Account with the same Market Value Adjusted
Fixed Guarantee Period as the Market Value Adjusted Fixed Guarantee Period
Account of your most recent purchase payment or transfer. If we no longer offer
that Market Value Adjusted Fixed Guarantee Period, then we will allocate the
purchase payment or transfer to a new Market Value Adjusted Fixed Guarantee
Period Account with the next shortest term currently offered. If you have not
made a prior allocation to a Market Value Adjusted Fixed Guarantee Period
Account, then we will allocate the purchase payment or transfer to a new Market
Value Adjusted Fixed Guarantee Period Account of the shortest Market Value
Adjusted Fixed Guarantee Period we are offering at that time. The Market Value
Adjusted Fixed Account Option is not available in all states. Please check with
your representative for availability.
The amount you allocate to a Market Value Adjusted Fixed Guarantee Period
Account will earn interest at the interest rate in effect for that Market Value
Adjusted Fixed Guarantee Period at the time of the allocation. Interest rates
may differ depending on the type of Contract you have and may also differ from
those available for other Fixed Account Options.
Withdrawals and transfers from a Market Value Adjusted Fixed Guarantee Period
Account may be subject to a Market Value Adjustment. A Market Value Adjustment
may also apply to amounts in the Market Value Adjusted Fixed Account Option if
we pay Death Proceeds or if the Payout Start Date begins on a day other than
during the 30-day period after such Market Value Adjusted Fixed Guarantee Period
Account expires ("30-Day MVA Window"). We will not make a Market Value
Adjustment if you make a transfer or withdrawal during the 30-Day MVA Window.
We apply a Market Value Adjustment to reflect changes in interest rates from the
time you first allocate money to a Market Value Adjusted Fixed Guarantee Period
Account to the time the money is taken out of that Market Value Adjusted Fixed
Guarantee Period Account
39 PROSPECTUS
under the circumstances described above. We use the U.S. Treasury Note Constant
Maturity Yields as reported in Federal Reserve Board Statistical Release H.15
("TREASURY RATE") to calculate the Market Value Adjustment. We do so by
comparing the Treasury Rate for a maturity equal to the Market Value Adjusted
Fixed Guarantee Period at the time the Market Value Adjusted Fixed Guarantee
Period Account is established with the Treasury Rate for the same maturity at
the time the money is taken from the Market Value Adjusted Fixed Guarantee
Period Account.
The Market Value Adjustment may be positive or negative, depending on changes in
interest rates. As such, you bear the investment risk associated with changes in
interest rates. If interest rates have increased since the establishment of a
Market Value Adjusted Fixed Guarantee Period Account, the Market Value
Adjustment, together with any applicable withdrawal charges, premium taxes, and
income tax withholdings could reduce the amount you receive upon full withdrawal
from a Market Value Adjusted Fixed Guarantee Period Account to an amount less
than the purchase payment used to establish that Market Value Adjusted Fixed
Guarantee Period Account.
Generally, if at the time you establish a Market Value Adjusted Fixed Guarantee
Period Account, the Treasury Rate for a maturity equal to that Market Value
Adjusted Fixed Guarantee Period is higher than the applicable Treasury Rate at
the time money is to be taken from the Market Value Adjusted Fixed Guarantee
Period Account, the Market Value Adjustment will be positive. Conversely, if at
the time you establish a Market Value Adjusted Fixed Guarantee Period Account,
the applicable Treasury Rate is lower than the applicable Treasury Rate at the
time the money is to be taken from the Market Value Adjusted Fixed Guarantee
Period Account, the Market Value Adjustment will be negative.
For example, assume that you purchase a Contract and allocate part of the
initial purchase payment to the Market Value Adjusted Fixed Account Option to
establish a 5-year Market Value Adjusted Fixed Guarantee Period Account. Assume
that the 5-year Treasury Rate at that time is 4.50%. Next, assume that at the
end of the 3rd year, you withdraw money from the Market Value Adjusted Fixed
Guarantee Period Account. If, at that time, the 5-year Treasury Rate is 4.20%,
then the Market Value Adjustment will be positive. Conversely, if the 5-year
Treasury Rate at that time is 4.80%, then the Market Value Adjustment will be
negative.
The formula used to calculate the Market Value Adjustment and numerical examples
illustrating its application are shown in Appendix B of this prospectus.
At the end of a Market Value Adjusted Fixed Guarantee Period, the Market Value
Adjusted Fixed Guarantee Period Account expires and we will automatically
transfer the money from such Guarantee Period Account to establish a new Market
Value Adjusted Fixed Guarantee Period Account with the same Market Value
Adjusted Fixed Guarantee Period, unless you notify us otherwise. The new Market
Value Adjusted Fixed Guarantee Period Account will be established as of the day
immediately following the expiration date of the expiring Market Value Adjusted
Guarantee Period Account ("New Account Start Date.") If the Market Value
Adjusted Fixed Guarantee Period is no longer being offered, we will establish a
new Market Value Adjusted Fixed Guarantee Period Account with the next shortest
Market Value Adjusted Fixed Guarantee Period available. Prior to the expiration
date, we will send you a notice, which will outline the options available to
you. During the 30-Day MVA Window a Market Value Adjustment will not be applied
to transfers and withdrawals from the expiring Market Value Adjusted Fixed
Guarantee Period Account and you may elect to:
.. transfer all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account to establish a new Guarantee Period Account within
the Standard Fixed Account Option or the Market Value Adjusted Fixed Account
Option, if available; or
.. transfer all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account to other investment alternatives available at the
time; or
.. withdraw all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account. Withdrawal charges and taxes may apply.
The money in the Market Value Adjusted Fixed Guarantee Period Account will earn
interest at the interest rate declared for the new Market Value Adjusted Fixed
Guarantee Period Account from the New Account Start Date until the date we
receive notification of your election. If we receive notification of your
election to make a transfer or withdrawal from an expiring Market Value Adjusted
Fixed Guarantee Period Account on or before the New Account Start Date, the
transfer or withdrawal will be deemed to have occurred on the New Account Start
Date. If we receive notification of your election to make a transfer or
withdrawal from the expiring Market Value Adjusted Fixed Guarantee Period
Account after the New Account Start Date, but before the expiration of the
30-Day MVA Window, the transfer or withdrawal will be deemed to have occurred on
the day we receive such notice. Any remaining balance not withdrawn or
transferred will earn interest for the term of the new Market Value Adjusted
Fixed Guarantee Period Account, at the interest rate declared for such Account.
If we do not receive notification from you within the 30-Day Window, we will
assume that you have elected to transfer the amount in the expiring Market Value
Adjusted Fixed Guarantee Period Account to establish a new Market Value Adjusted
Fixed Guarantee Period Account with the same Market Value Adjusted Fixed
Guarantee Period, and the amount in the new Market Value Adjusted Fixed
Guarantee Period Account will continue to earn interest at the interest rate
declared for the new Market Value Adjusted Fixed Guarantee Period
40 PROSPECTUS
Account, and will be subject to all restrictions of the Market Value Adjusted
Fixed Account Option. If we no longer offer that Market Value Adjusted Fixed
Guarantee Period, the Market Value Adjusted Fixed Guarantee Period for the new
Market Value Adjusted Fixed Guarantee Period Account will be the next shortest
term length we offer for the Market Value Adjusted Fixed Account Option at that
time, and the interest rate will be the rate declared by us at that time for
such term.
INVESTMENT ALTERNATIVES: TRANSFERS
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TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. You may not transfer Contract Value to the DCA Fixed
Account Option or add to an existing Transfer Period Account. You may request
transfers in writing on a form that we provided or by telephone according to the
procedure described below.
You may make up to 12 transfers per Contract Year without charge. A transfer fee
equal to 1.00% of the amount transferred applies to each transfer after the 12th
transfer in any Contract Year. This fee may be changed, but in no event will it
exceed 2.00% of the amount transferred. Multiple transfers on a single Valuation
Date are considered a single transfer for purposes of assessing the transfer
fee. If you added the TrueReturn or SureIncome Option to your Contract, certain
restrictions on transfers apply. See the "TrueReturn/SM/ Accumulation Benefit
Option" and "SureIncome Withdrawal Benefit Option" sections of this prospectus
for more information.
The minimum amount that you may transfer from the Standard Fixed Account Option,
Market Value Adjusted Fixed Account Option or a Variable Sub-Account is $100 or
the total remaining balance in the Standard Fixed Account Option, Market Value
Adjusted Fixed Account Option or the Variable Sub-Account, if less. These
limitations do not apply to the DCA Fixed Account Option. The total amount that
you may transfer or withdraw from a Standard Fixed Guarantee Period Account in a
Contract Year is 30% of the amount used to establish that Guarantee Period
Account. See "Standard Fixed Account Option". The minimum amount that can be
transferred to the Standard Fixed Account Option and the Market Value Adjusted
Fixed Account Option is $500.
We will process transfer requests that we receive before 3:00 p.m. Central Time
on any Valuation Date using the Accumulation Unit Values for that Date. We will
process requests completed after 3:00 p.m. on any Valuation Date using the
Accumulation Unit Values for the next Valuation Date. The Contract permits us to
defer transfers from the Fixed Account Options for up to 6 months from the date
we receive your request. If we decide to postpone transfers from any Fixed
Account Option for 30 days or more, we will pay interest as required by
applicable law. Any interest would be payable from the date we receive the
transfer request to the date we make the transfer.
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. You may make up to 12 transfers per
Contract Year within each Income Plan. You may not convert any portion of your
fixed income payments into variable income payments. You may not make transfers
among Income Plans. You may make transfers from the variable income payments to
the fixed income payments to increase the proportion of your income payments
consisting of fixed income payments, unless you have selected the Income
Protection Benefit Option.
TELEPHONE OR ELECTRONIC TRANSFERS
You may make transfers by telephone by calling 1-800-203-0068. The cut off time
for telephone transfer requests is 3:00 p.m. Central Time. In the event that the
New York Stock Exchange closes early, i.e., before 3:00 p.m. Central Time, or in
the event that the Exchange closes early for a period of time but then reopens
for trading on the same day, we will process telephone transfer requests as of
the close of the Exchange on that particular day. We will not accept telephone
requests received from you at any telephone number other than the number that
appears in this paragraph or received after the close of trading on the
Exchange. If you own the Contract with a joint Contract Owner, unless we receive
contrary instructions, we will accept instructions from either you or the other
Contract Owner.
We may suspend, modify or terminate the telephone transfer privilege, as well as
any other electronic or automated means we previously approved, at any time
without notice.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
MARKET TIMING & EXCESSIVE TRADING
The Contracts are intended for long-term investment. Market timing and excessive
trading can potentially dilute the value of Variable Sub-Accounts and can
disrupt management of a Portfolio and raise its expenses, which
41 PROSPECTUS
can impair Portfolio performance and adversely affect your Contract Value. Our
policy is not to accept knowingly any money intended for the purpose of market
timing or excessive trading. Accordingly, you should not invest in the Contract
if your purpose is to engage in market timing or excessive trading, and you
should refrain from such practices if you currently own a Contract.
We seek to detect market timing or excessive trading activity by reviewing
trading activities. Portfolios also may report suspected market-timing or
excessive trading activity to us. If, in our judgment, we determine that the
transfers are part of a market timing strategy or are otherwise harmful to the
underlying Portfolio, we will impose the trading limitations as described below
under "Trading Limitations." Because there is no universally accepted definition
of what constitutes market timing or excessive trading, we will use our
reasonable judgment based on all of the circumstances.
While we seek to deter market timing and excessive trading in Variable
Sub-Accounts, because our procedures involve the exercise of reasonable
judgment, we may not identify or prevent some market timing or excessive
trading. Moreover, imposition of trading limitations is triggered by the
detection of market timing or excessive trading activity, and the trading
limitations are not applied prior to detection of such trading activity.
Therefore, our policies and procedures do not prevent such trading activity
before it is detected. As a result, some investors may be able to engage in
market timing and excessive trading, while others are prohibited, and the
portfolio may experience the adverse effects of market timing and excessive
trading described above.
TRADING LIMITATIONS
We reserve the right to limit transfers among the investment alternatives in any
Contract year, or to refuse any transfer request, if:
.. we believe, in our sole discretion, that certain trading practices, such as
excessive trading, by, or on behalf of, one or more Contract Owners, or a
specific transfer request or group of transfer requests, may have a
detrimental effect on the Accumulation Unit Values of any Variable Sub-Account
or on the share prices of the corresponding Portfolio or otherwise would be to
the disadvantage of other Contract Owners; or
.. we are informed by one or more of the Portfolios that they intend to restrict
the purchase, exchange, or redemption of Portfolio shares because of excessive
trading or because they believe that a specific transfer or group of transfers
would have a detrimental effect on the prices of Portfolio shares.
In making the determination that trading activity constitutes market timing or
excessive trading, we will consider, among other things:
.. the total dollar amount being transferred, both in the aggregate and in the
transfer request;
.. the number of transfers you make over a period of time and/or the period of
time between transfers (note: one set of transfers to and from a Variable
Sub-Account in a short period of time can constitute market timing);
.. whether your transfers follow a pattern that appears designed to take
advantage of short term market fluctuations, particularly within certain
Variable Sub-Account underlying Portfolios that we have identified as being
susceptible to market timing activities;
.. whether the manager of the underlying Portfolio has indicated that the
transfers interfere with Portfolio management or otherwise adversely impact
the Portfolio; and
.. the investment objectives and/or size of the Variable Sub-Account underlying
Portfolio.
We seek to apply these trading limitations uniformly. However, because these
determinations involve the exercise of discretion, it is possible that we may
not detect some market timing or excessive trading activity. As a result, it is
possible that some investors may be able to engage in market timing or excessive
trading activity, while others are prohibited, and the Portfolio may experience
the adverse effects of market timing and excessive trading described above.
If we determine that a Contract Owner has engaged in market timing or excessive
trading activity, we will restrict that Contract Owner from making future
additions or transfers into the impacted Variable Sub-Account(s). If we
determine that a Contract Owner has engaged in a pattern of market timing or
excessive trading activity involving multiple Variable Sub-Accounts, we will
also require that all future transfer requests be submitted through regular U.S.
mail thereby refusing to accept transfer requests via telephone, facsimile,
Internet, or overnight delivery.
In our sole discretion, we may revise our Trading Limitations at any time as
necessary to better deter or minimize market timing and excessive trading or to
comply with regulatory requirements.
SHORT TERM TRADING FEES
We reserve the right to assess short-term trading fees in connection with
transfers from Variable Sub-Accounts that occur within a certain number of days
following the date of allocation to the Variable Sub-Accounts. Such fees may
vary by Variable Sub-Account, but will only apply to those Variable Sub-Accounts
corresponding to underlying mutual funds that assess such fees.
DOLLAR COST AVERAGING PROGRAM
Through our Dollar Cost Averaging Program, you may automatically transfer a
fixed dollar amount on a regular basis from any Variable Sub-Account or any
Fixed Account Option to any of the other Variable Sub-
42 PROSPECTUS
Accounts. You may not use the Dollar Cost Averaging Program to transfer amounts
to the Fixed Account Options. This program is available only during the
Accumulation Phase.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market. Call or write us for instructions on how to enroll.
AUTOMATIC PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. Money you
allocate to the Fixed Account will not be included in the rebalancing.
We will rebalance your account quarterly, semi-annually, or annually. We will
measure these periods according to your instructions. We will transfer amounts
among the Variable Sub-Accounts to achieve the percentage allocations you
specify. You can change your allocations at any time by contacting us in writing
or by telephone. The new allocation will be effective with the first rebalancing
that occurs after we receive your written or telephone request. We are not
responsible for rebalancing that occurs prior to receipt of proper notice of
your request.
Example:
Assume that you want your initial purchase payment split among 2 Variable
Sub-Accounts. You want 40% to be in the Putnam VT Income Variable Sub-Account
and 60% to be in the Oppenheimer Aggressive Growth Variable Sub-Account. Over
the next 2 months the bond market does very well while the stock market
performs poorly. At the end of the first quarter, the Putnam VT Income
Variable Sub-Account now represents 50% of your holdings because of its
increase in value. If you choose to have your holdings in a Contract or
Contracts rebalanced quarterly, on the first day of the next quarter we would
sell some of your units in the Putnam VT Income Variable Sub-Account for the
appropriate Contract(s) and use the money to buy more units in the Oppenheimer
Aggressive Growth Variable Sub-Account so that the percentage allocations
would again be 40% and 60% respectively.
The transfers made under the program do not count towards the 12 transfers you
can make without paying a transfer fee, and are not subject to a transfer fee.
Portfolio rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Contract Value allocated to the better performing segments.
EXPENSES
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As a Contract Owner, you will bear, directly or indirectly, the charges and
expenses described below.
CONTRACT MAINTENANCE CHARGE
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$30 contract maintenance charge from your assets invested in the Putnam VT Money
Market Variable Sub-Account. If there are insufficient assets in that Variable
Sub-Account, we will deduct the balance of the charge proportionally from the
other Variable Sub-Accounts. We also will deduct this charge if you withdraw
your entire Contract Value, unless your Contract qualifies for a waiver. During
the Payout Phase, we will deduct the charge proportionately from each income
payment.
The charge is to compensate us for the cost of administering the Contracts and
the Variable Account. Maintenance costs include expenses we incur in billing and
collecting purchase payments; keeping records; processing death claims, cash
withdrawals, and policy changes; proxy statements; calculating Accumulation Unit
Values and income payments; and issuing reports to Contract Owners and
regulatory agencies. We cannot increase the charge. We will waive this charge:
.. for the remaining term of the Contract once your total purchase payments to
the Contract equal $50,000 or more; or
.. for a Contract Anniversary, if on that date, your entire Contract Value is
allocated to the Fixed Account Options, or after the Payout Start Date, if all
income payments are fixed income payments.
We also reserve the right to waive this charge if you own more than one Contract
and the Contracts meet certain minimum dollar amount requirements. In addition,
we reserve the right to waive this charge for all Contracts.
ADMINISTRATIVE EXPENSE CHARGE
We deduct an administrative expense charge daily at an annual rate of 0.19% of
the average daily net assets you have invested in the Variable Sub-Accounts. We
intend this charge to cover actual administrative expenses that
43 PROSPECTUS
exceed the revenues from the contract maintenance charge. There is no necessary
relationship between the amount of administrative charge imposed on a given
Contract and the amount of expenses that may be attributed to that Contract. We
assess this charge each day during the Accumulation Phase and the Payout Phase.
We may increase this charge for Contracts issued in the future, but in no event
will it exceed 0.35%. We guarantee that after your Contract is issued we will
not increase this charge for your Contract.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily from the net assets you have
invested in the Variable Sub-Accounts. We assess mortality and expense risk
charges during the Accumulation and Payout Phases of the Contract, except as
noted below. The annual mortality and expense risk charge for the Contracts
without any optional benefit are as follows:
ALLSTATE ADVISOR 1.10%
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ALLSTATE ADVISOR PREFERRED
(5-YEAR WITHDRAWAL CHARGE OPTION) 1.40%
- ---------------------------------------------------
ALLSTATE ADVISOR PREFERRED
(3-YEAR WITHDRAWAL CHARGE OPTION) 1.50%
- ---------------------------------------------------
ALLSTATE ADVISOR PREFERRED 1.60%
(NO WITHDRAWAL CHARGE OPTION)
- ---------------------------------------------------
The mortality and expense risk charge is for all the insurance benefits
available with your Contract (including our guarantee of annuity rates and the
death benefits), for certain expenses of the Contract, and for assuming the risk
(expense risk) that the current charges will not be sufficient in the future to
cover the cost of administering the Contract. If the charges under the Contract
are not sufficient, then we will bear the loss. We charge an additional amount
for the optional benefits to compensate us for the additional risk that we
accept by providing these options.
You will pay additional mortality and expense risk charges if you add any
optional benefits to your Contract. The additional mortality and expense risk
charge you pay will depend upon which of the options you select:
.. MAV Death Benefit Option: The current mortality and expense risk charge for
this option is 0.20%. This charge may be increased, but will never exceed
0.30%. We guarantee that we will not increase the mortality and expense risk
charge for this option after you have added it to your Contract. We deduct the
charge for this option only during the Accumulation Phase.
.. Enhanced Beneficiary Protection (Annual Increase) Option: The current
mortality and expense risk charge for this option is 0.30%. This charge will
never exceed 0.30%. We guarantee that we will not increase the mortality and
expense risk charge for this option after you have added it to your Contract.
We deduct the charge for this option only during the Accumulation Phase.
.. Earnings Protection Death Benefit Option: The current mortality and expense
risk charge for this option is:
. 0.25% (maximum of 0.35%) if the oldest Contract Owner and oldest Annuitant
are age 70 or younger on the Rider Application Date;
. 0.40% (maximum of 0.50%) if the oldest Contract Owner or oldest Annuitant
is age 71 or older and both are age 79 or younger on the Rider Application
Date.
The charges may be increased but they will never exceed the maximum charges
shown above. We guarantee that we will not increase the mortality and expense
risk charge for this option after you have added it to your Contract. However,
if your spouse elects to continue the Contract in the event of your death and if
he or she elects to continue the Earnings Protection Death Benefit Option, the
charge will be based on the ages of the oldest new Contract Owner and the oldest
Annuitant at the time the Contract is continued. Refer to the Death Benefit
Payments provision in this prospectus for more information. We deduct the
charge for this option only during the Accumulation Phase.
.. Income Protection Benefit Option: The current mortality and expense risk
charge for this option is 0.50%. This charge may be increased, but will never
exceed 0.75%. We guarantee that we will not increase the mortality and expense
risk charge for this option after you have added it to your Contract. The
charge will be deducted only during the Payout Phase.
TRUERETURN/SM/ ACCUMULATION BENEFIT OPTION FEE
We charge a separate annual Rider Fee for the TrueReturn Option. The current
annual Rider Fee is 0.50% of the Benefit Base. We deduct the Rider Fee on each
Contract Anniversary during the Rider Period or until you terminate the Option,
if earlier. We reserve the right to increase the Rider Fee to up to 1.25%. We
currently charge the same Rider Fee regardless of the Rider Period and Guarantee
Option you select, however we reserve the right to charge different fees for
different Rider Periods and Guarantee Options in the future. However, once we
issue your Option, we cannot change the Rider Fee that applies to your Contract.
If you elect to exercise the Rider Trade-In Option, the new Rider Fee will be
based on the Rider Fee percentage applicable to a new TrueReturn Option at the
time of trade-in.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro rata
basis in the proportion that your value in each Variable Sub-Account bears to
your total value in all Variable Sub-Accounts. Rider Fees will decrease the
number of Accumulation Units in each Variable Sub-Account. If you terminate this
Option prior
44 PROSPECTUS
to the Rider Maturity Date on a date other than a Contract Anniversary, we will
deduct an entire Rider Fee from your Contract Value on the date the Option is
terminated. However, if the Option is terminated due to death of the Contract
Owner or Annuitant, we will not charge a Rider Fee unless the date we receive a
Complete Request for Settlement of the Death Proceeds is also a Contract
Anniversary. If the Option is terminated on the Payout Start Date, we will not
charge a Rider Fee unless the Payout Start Date is also a Contract Anniversary.
Additionally, if you elect to exercise the Rider Trade-In Option and cancel the
Option on a date other than a Contract Anniversary, we will not deduct a Rider
Fee on the date the Option is terminated. Refer to the "TrueReturn/SM/
Accumulation Benefit Option" section of this prospectus for more information.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FEE AND SPOUSAL PROTECTION
BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL RETIREMENT ACCOUNTS FEE
We charge a separate annual Rider Fee for both the Spousal Protection Benefit
(Co-Annuitant) Option and Spousal Protection Benefit (Co-Annuitant) Option for
Custodial Individual Retirement Accounts. The current annual Rider Fee is 0.10%
of the Contract Value for either Option. This applies to all new Options added
on or after January 1, 2005. For Options added prior to January 1, 2005, there
is no charge associated with the Options. We deduct the Rider Fee on each
Contract Anniversary up to and including the date you terminate the Option. We
reserve the right to increase the annual Rider Fee to up to 0.15% of the
Contract Value. We reserve the right to charge different Rider Fees for new
Spousal Protection Benefit (Co-Annuitant) Options and/ or new Spousal Protection
Benefit (Co-Annuitant) Options for Custodial Individual Retirement Accounts we
offer in the future. Once we issue your Option, we cannot change the Rider Fee
that applies to your Contract.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro-rata
basis in the proportion that your value in each Variable Sub-Account bears to
your total value in all Variable Sub-Accounts. Rider Fees will decrease the
number of Accumulation Units in each Variable Sub-Account. If, at the time the
Rider Fee is deducted, the Rider Fee exceeds the total value in all Variable
Sub-Accounts, the excess of the Rider Fee over the total value in all Variable
Sub-Accounts will be waived.
The first Rider Fee will be deducted on the first Contract Anniversary following
the Rider Date. A Rider Fee will be deducted on each subsequent Contract
Anniversary up to and including the date the Option is terminated. We will not
charge a Rider Fee on the date the Option is terminated, on a date other than
the Contract Anniversary, if the Option is terminated on the Payout Start Date
or due to death of the Contract Owner or Annuitant.
For the first Contract Anniversary following the Rider Date, the Rider Fee is
equal to the number of months from the Rider Date to the first Contract
Anniversary, divided by twelve, multiplied by 0.10%, with the result multiplied
by the Contract Value as of the first Contract Anniversary. For subsequent
Contract Anniversaries, the Rider Fee is equal to 0.10% multiplied by the
Contract Value as of that Contract Anniversary. If you terminate this Option on
a date other than a Contract Anniversary, we will deduct a Rider Fee. The Rider
Fee will be pro-rated to cover the period from the last Contract Anniversary to
the date of termination, or if you terminate this Option during the first
Benefit Year, from the Rider Date to the date of termination. The pro-rated
Rider Fee will be equal to the number of full months from the Contract
Anniversary to the date of termination, or if you terminate this Option during
the first Contract Year after adding the Option, the number of full months from
the Rider Date to the date of termination, divided by twelve, multiplied by
0.10%, with the result multiplied by the Contract Value immediately prior to the
termination.
RETIREMENT INCOME GUARANTEE OPTION FEE
We discontinued offering the Retirement Income Guarantee Options as of January
1, 2004. Fees described below apply to Contract Owners who selected an Option
prior to January 1, 2004. We impose a separate annual Rider Fee for RIG 1 and
RIG 2. The annual Rider Fee for RIG 1 is 0.40% of the Income Base on each
Contract Anniversary. The annual Rider Fee for RIG 2 is 0.55% of the Income Base
on each Contract Anniversary. See "Retirement Income Guarantee Options" for
details.
We deduct the Rider Fees only from the Variable Sub-Account(s) on a pro-rata
basis. For the initial Contract Anniversary after the Rider Date, we will deduct
a fee pro rated to cover the period from the Rider Date to the Contract
Anniversary. In the case of a full withdrawal of the Contract Value on any date
other than the Contract Anniversary, we will deduct from the amount paid upon
withdrawal the Rider Fee multiplied by the appropriate Income Base immediately
prior to the withdrawal pro rated to cover the period the Option was in effect
during the current Contract Year. We will not deduct the Rider Fee during the
Payout Phase.
SUREINCOME WITHDRAWAL BENEFIT OPTION FEE
We charge a separate annual Rider Fee for the SureIncome Option ("SureIncome
Option Fee" or "Rider Fee"). The current annual Rider Fee is 0.50% of the
Benefit Base. We deduct the Rider Fee on each Contract Anniversary up to and
including the date you terminate the Option. We reserve the right to increase
the Rider Fee to up to 1.25% of the Benefit Base. We reserve the right to charge
different Rider Fees for different Withdrawal Benefit Factors we may offer in
the future. Once we issue your SureIncome Option,
45 PROSPECTUS
we cannot change the Rider Fee that applies to your Contract. If you elect to
exercise the Rider Trade-In Option, the new Rider Fee will be based on the Rider
Fee percentage applicable to a new SureIncome Option at the time of trade-in.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro-rata
basis in the proportion that your Contract Value in each Variable Sub-Account
bears to your total Contract Value in all Variable Sub-Accounts. Rider Fees will
decrease the number of Accumulation Units in each Variable Sub-Account. If, at
the time the Rider Fee is deducted, the Rider Fee exceeds the total Contract
Value in all Variable Sub-Accounts, the excess of the Rider Fee over the total
Contract Value in all Variable Sub-Accounts will be waived.
The first Rider Fee will be deducted on the first Contract Anniversary following
the Rider Date. A Rider Fee will be deducted on each subsequent Contract
Anniversary up to and including the date the SureIncome Option is terminated.
For the first Contract Anniversary following the Rider Date, the Rider Fee is
equal to the number of months from the Rider Date to the first Contract
Anniversary, divided by twelve, multiplied by 0.50%, with the result multiplied
by the Benefit Base as of the first Contract Anniversary. For subsequent
Contract Anniversaries, the Rider Fee is equal to the 0.50% multiplied by the
Benefit Base as of that Contract Anniversary.
If you terminate this SureIncome Option on a date other than a Contract
Anniversary, we will deduct a Rider Fee unless the termination is on the Payout
Start Date or is due to the death of the Contract Owner or Annuitant. The Rider
Fee will be pro-rated to cover the period from the last Contract Anniversary to
the date of termination or, if you terminate the SureIncome Option during the
first Benefit Year, from the Rider Date to the date of termination. The
pro-rated Rider Fee will be equal to the number of full months from the Contract
Anniversary to the date of termination or, if you terminate this Option during
the first Benefit Year, the number of full months from the Rider Date to the
date of termination, divided by twelve, multiplied by 0.50%, with the result
multiplied by the Benefit Base immediately prior to the withdrawal or
termination. The Rider Fee will be waived during the Withdrawal Benefit Payout
Phase.
TRANSFER FEE
We impose a fee upon transfers in excess of 12 during any Contract Year. The
current fee is equal to 1.00% of the dollar amount transferred. This fee may be
increased, but in no event will it exceed 2.00% of the dollar amount
transferred. We will not charge a transfer fee on transfers that are part of a
Dollar Cost Averaging Program or Automatic Portfolio Rebalancing Program.
WITHDRAWAL CHARGE
We may assess a withdrawal charge from the purchase payment(s) you withdraw. The
amount of the charge will depend on the number of years that have elapsed since
we received the purchase payment being withdrawn. A schedule showing the
withdrawal charges applicable to each Contract appears on page 11. If you make a
withdrawal before the Payout Start Date, we will apply the withdrawal charge
percentage in effect on the date of the withdrawal, or the withdrawal charge
percentage in effect on the following day, whichever is lower.
Withdrawals also may be subject to tax penalties or income tax. You should
consult with your tax counsel or other tax advisor regarding any withdrawals.
Withdrawals from the Market Value Adjusted Fixed Account Option may be subject
to a market value adjustment. Refer to page 39 for more information on market
value adjustments.
FREE WITHDRAWAL AMOUNT
You can withdraw up to the Free Withdrawal Amount each Contract Year without
paying the withdrawal charge. The Free Withdrawal Amount for a Contract Year is
equal to 15% of all purchase payments that are subject to a withdrawal charge as
of the beginning of that Contract Year, plus 15% of the purchase payments added
to the Contract during the Contract Year. The withdrawal charge applicable to
Contracts owned by Charitable Remainder Trusts is described below.
Purchase payments no longer subject to a withdrawal charge will not be used to
determine the Free Withdrawal Amount for a Contract Year, nor will they be
assessed a withdrawal charge, if withdrawn. The Free Withdrawal Amount is not
available in the Payout Phase.
You may withdraw up to the Free Withdrawal Amount in each Contract Year it is
available without paying a withdrawal charge; however, the amount withdrawn may
be subject to a Market Value Adjustment or applicable taxes. If you do not
withdraw the entire Free Withdrawal Amount in a Contract Year, any remaining
portion may not be carried forward to increase the Free Withdrawal Amount in a
later Contract Year.
For purposes of assessing the withdrawal charge, we will treat withdrawals as
coming from the oldest purchase payments first as follows:
1) Purchase payments that no longer are subject to withdrawal charges;
2) Free Withdrawal Amount (if available);
3) Remaining purchase payments subject to withdrawal charges, beginning with the
oldest purchase payment;
4) Any earnings not previously withdrawn.
However, for federal income tax purposes, earnings are considered to come out
first, which means that you will pay taxes on the earnings portion of your
withdrawal.
46 PROSPECTUS
If the Contract Owner is a Charitable Remainder Trust, the Free Withdrawal
Amount in a Contract Year is equal to the greater of:
.. The Free Withdrawal Amount described above; or
.. Earnings as of the beginning of the Contract Year that have not been
previously withdrawn.
For purposes of assessing the withdrawal charge for a Charitable Remainder
Trust-Owned Contract, we will treat withdrawals as coming from the earnings
first and then the oldest purchase payments as follows:
1) Earnings not previously withdrawn;
2) Purchase payments that are no longer subject to withdrawal charges;
3) Free Withdrawal Amount in excess of earnings;
4) Purchase payments subject to withdrawal charges, beginning with the oldest
purchase payment.
If you have selected the ALLSTATE ADVISOR PREFERRED CONTRACT WITH NO WITHDRAWAL
CHARGE OPTION, there are no withdrawal charges applicable and, therefore, no
Free Withdrawal Amount. Amounts withdrawn may be subject to a Market Value
Adjustment or applicable taxes.
ALL CONTRACTS
We do not apply a withdrawal charge in the following situations:
.. the death of the Contract Owner or Annuitant (unless the Settlement Value is
used);
.. withdrawals taken to satisfy IRS minimum distribution rules for the Contract;
or
.. withdrawals that qualify for one of the waivers described below.
We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts. To the extent that the withdrawal charge does not cover all sales
commissions and other promotional or distribution expenses, we may use any of
our corporate assets, including potential profit which may arise from the
mortality and expense risk charge or any other charges or fee described above,
to make up any difference.
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. 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 written proof of the stay no later
than 90 days following the end of your or the Annuitant's stay at the long term
care facility or hospital, and
3. a physician must have prescribed the stay and the stay must be medically
necessary (as defined in the Contract).
TERMINAL ILLNESS WAIVER. We will waive the withdrawal charge on any applicable
withdrawal taken 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 adequate proof of diagnosis to us before or at the time you
request the withdrawal.
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,
2. you or the Annuitant receive Unemployment Compensation (as defined in the
Contract) for at least 30 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.
These waivers do not apply under the ALLSTATE ADVISOR PREFERRED CONTRACT WITH NO
WITHDRAWAL CHARGE OPTION.
47 PROSPECTUS
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 some time 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 each
investment alternative in the proportion that the Contract Value in the
investment alternative bears to the total Contract Value.
DEDUCTION FOR SEPARATE ACCOUNT INCOME TAXES
We are not currently maintaining a provision for taxes. In the future, however,
we may establish a provision for taxes if we determine, in our sole discretion,
that we will incur a tax as a result of the operation of the Variable Account.
We will deduct for any taxes we incur as a result of the operation of the
Variable Account, whether or not we previously made a provision for taxes and
whether or not it was sufficient. Our status under the Internal Revenue Code is
briefly described in the "Taxes" section of this prospectus.
OTHER EXPENSES
Each Portfolio deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are held
by the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectuses for the Portfolios. For a summary of Portfolio annual
expenses, see page 11-18. We may receive compensation from the investment
advisers, administrators or distributors, or their affiliates, of the Portfolios
in connection with the administrative, distribution (12b-1) or other services we
provide to the Portfolios.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals also are available under limited circumstances on
or after the Payout Start Date. See "Income Plans" on page 49.
The amount payable upon withdrawal is the Contract Value (or portion thereof)
next computed after we receive the request for a withdrawal at our home office,
adjusted by any applicable Market Value Adjustment, less any applicable
withdrawal charges, income tax withholding, penalty tax, contract maintenance
charge, Rider Fee, and any premium taxes. We will pay withdrawals from the
Variable Account within 7 days of receipt of the request, subject to
postponement in certain circumstances. You can withdraw money from the Variable
Account or the Fixed Account Option(s) available under your Contract. To
complete a partial withdrawal from the Variable Account, we will cancel
Accumulation Units in an amount equal to the withdrawal and any applicable
charges, fees and taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored.
In general, you must withdraw at least $50 at a time.
Withdrawals from the Standard Fixed Account Option may be subject to a
restriction. See "Standard Fixed Account Options" on page 37.
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 penalty tax. If any withdrawal reduces
your Contract Value to less than $1,000, we will treat the request as a
withdrawal of the entire Contract Value unless the SureIncome Withdrawal Benefit
Option is currently attached to your Contract. If you request a total
withdrawal, we may require that you return your Contract to us. Your Contract
will terminate if you withdraw all of your Contract Value, subject to certain
exceptions if the SureIncome Withdrawal Benefit Option is currently attached to
your Contract. See "SureIncome Withdrawal Benefit Option" for more details. We
will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, less withdrawal and other charges and taxes.
48 PROSPECTUS
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1. The New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted,
2. An emergency exists as defined by the SEC, or
3. The SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Option(s)
available under your Contract for up to 6 months or shorter period if required
by law. If we delay payment or transfer for 30 days or more, we will pay
interest as required by law.
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. Please consult your sales representative or call us at 1-800-203-0068 for
more information.
Depending on fluctuations in the value of the Variable Sub-Accounts and the
value of the Fixed Account Options, systematic withdrawals may reduce or even
exhaust the Contract Value. Income taxes may apply to systematic withdrawals.
Please consult your tax advisor before taking any withdrawal.
We will make systematic withdrawal payments to you or your designated payee. At
our discretion, 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.
MINIMUM CONTRACT VALUE
If your request for a partial withdrawal would reduce your Contract Value to
less than $1,000, we may treat it as a request to withdraw your entire Contract
Value, unless the SureIncome Withdrawal Benefit Option is currently attached to
your Contract. 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. If we terminate your Contract, we will distribute to
you its Contract Value, adjusted by any applicable Market Value Adjustment, less
withdrawal and other charges and applicable taxes.
INCOME PAYMENTS
- --------------------------------------------------------------------------------
PAYOUT START DATE
The Payout Start Date is the day that we apply your Contract Value adjusted by
any applicable Market Value Adjustment and less applicable taxes to an Income
Plan. The first income payment must occur at least 30 days after the Issue Date.
The Payout Start Date may be no later than:
.. the Annuitant's 99th 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 payments made on a scheduled basis to you or to
another person designated by you. You may select more than one Income Plan. If
you choose more than one Income Plan, you must specify what proportions of your
Contract Value, adjusted by any Market Value Adjustment and less any applicable
taxes, should be allocated to each such Income Plan. For tax reporting purposes,
your cost basis and any gain on the Contract will be allocated proportionally to
each Income Plan you select based on the proportion of your Contract Value
applied to each such Income Plan. We reserve the right to limit the number of
Income Plans that you may select. If you choose to add the Income Protection
Benefit Option, certain restrictions may apply as described under "Income
Protection Benefit Option," below. If you do not select an Income Plan, we will
make income payments in accordance with Income Plan 1 with a Guaranteed Payment
Period of 10 years. If any Contract Owner dies during the Payout Phase, 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" section of this prospectus. Any remaining income payments
will be paid to the new Contract Owner as scheduled. Income payments to
Beneficiaries may be subject to restrictions established by the Contract Owner.
After the Payout Start Date, you may not make withdrawals (except as described
below) or change your choice of Income Plan.
Currently seven Income Plans are available. Depending on the Income Plan(s) you
choose, you may receive:
.. fixed income payments;
.. variable income payments; or
.. a combination of the two.
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 basis 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 seven Income Plans are:
49 PROSPECTUS
INCOME PLAN 1 - LIFE INCOME WITH 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 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 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 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. You may elect a reduced survivor plan of 50%, 66% or 75%
of the payment amount. If you do not elect a reduced survivor amount, the
payments will remain at 100%. If you elect a reduced survivor payment plan, the
amount of each income payment initially will be higher but a reduction will take
place at the later of 1) the death of an Annuitant; or 2) at the end of the
guaranteed payment period.
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 prior to 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. We will
deduct the mortality and expense risk charge from the assets of the Variable
Sub-Account supporting this Income Plan even though we may not bear any
mortality risk. You may make withdrawals, change the length of the guaranteed
payment period, or change the frequency of income payments under Income Plan 3.
See "Modifying Payments" and "Payout Withdrawals" below for more details.
INCOME PLAN 4 -LIFE INCOME WITH CASH REFUND. Under this plan, we make periodic
income payments until the death of the Annuitant. If the death of the Annuitant
occurs before the total amount applied to an Income Plan is paid out, we will
pay a lump sum payment of the remaining amount. Payments under this plan are
available only as fixed income payments.
INCOME PLAN 5 -JOINT LIFE INCOME WITH CASH REFUND. Under this plan, we make
periodic income payments until the deaths of both the Annuitant and joint
Annuitant. If the deaths of both the Annuitant and joint Annuitant occur before
the total amount applied to an Income Plan is paid out, we will pay a lump sum
payment of the remaining amount. Currently, a reduced survivor plan is not
available. Payments under this plan are available only as fixed income payments.
INCOME PLAN 6 -LIFE INCOME WITH INSTALLMENT REFUND. Under this plan, we make
periodic income payments until the later of (1) the death of the Annuitant, or
(2) the total amount paid out under the annuity is equal to the total amount
applied to the Income Plan. If the death of the Annuitant occurs before the
total amount applied to an Income Plan is paid out, we will continue to make
payments in the same manner until any remaining payments are paid out. Payments
under this plan are available only as fixed income payments.
INCOME PLAN 7 - JOINT LIFE INCOME WITH INSTALLMENT REFUND. Under this plan, we
make periodic income payments until the later of (1) the deaths of both the
Annuitant and joint Annuitant, or (2) the total amount paid out under the
annuity is equal to the total amount applied to the Income Plan. If the deaths
of both the Annuitant and joint Annuitant occur before the total amount applied
to an Income Plan is paid out, we will continue to make payments in the same
manner until any remaining payments are paid out. Currently, a reduced survivor
plan is not available. Payments under this plan are available only as fixed
income payments.
If you choose an Income Plan with payments that continue for the life of the
Annuitant or joint Annuitant, we may require proof of age and sex of the
Annuitant or joint Annuitant before starting income payments, and proof that the
Annuitant or joint Annuitant is alive before we make each payment. Please note
that under Income Plans 1 and 2, if you do not select a Guaranteed Payment
Period, it is possible that the payee could receive only one income payment if
the Annuitant and any joint Annuitant both die before the second income payment,
or only two income payments if they die before the third income payment, and so
on.
The length of any Guaranteed Payment Period under your selected Income Plan
generally will affect the dollar amounts of each income payment. As a general
rule, longer Guarantee Payment 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 guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a specified Guaranteed Payment Period.
50 PROSPECTUS
MODIFYING PAYMENTS
After the Payout Start Date, you may make the following changes under Income
Plan 3:
.. You may request to modify the length of the Guaranteed Payment Period.
Currently, we allow you to make this change once each Contract Year. We
reserve the right to change this practice at any time without prior notice. If
you elect to change the length of the Guaranteed Payment Period, the new
Guaranteed Payment Period must be within the original minimum and maximum
period you would have been permitted to select on the Payout Start Date.
However, the maximum payment period permitted will be shortened by the period
elapsed since the original Guaranteed Payment Period began. If you change the
length of your Guaranteed Payment Period, we will compute the present value of
your remaining payments, using the same assumptions we would use if you were
terminating the income payments, as described in Payout Withdrawal. We will
then adjust the remaining payments to equal what that value would support
based on those same assumptions and based on the revised Guaranteed Payment
Period.
.. You may request to change the frequency of your payments. We currently allow
you to make this change once each Contract Year. We reserve the right to
change this practice at any time without prior notice.
Changes to either the frequency of payments or length of the Guaranteed Payment
Period will result in a change to the payment amount and may change the amount
of each payment that is taxable to you.
Modifying payments of this Contract may not be allowed under qualified plans. In
order to satisfy required minimum distributions ("RMD") under current Treasury
regulations, once income payments have begun over a Guaranteed Payment Period,
the Guaranteed Payment Period may not be changed even if the new period is
shorter than the maximum permitted. Please consult with a competent tax advisor
prior to making a request to modify payments if your contract is subject to RMD
requirements.
Any change to either the frequency of payments or length of a Guaranteed Payment
Period will take effect on the next payment date after we accept the requested
change.
PAYOUT WITHDRAWAL
You may terminate all or a portion of the income payments being made under
Income Plan 3 at any time and withdraw their present value ("withdrawal value"),
subject to a Payout Withdrawal Charge, by writing to us ("Payout Withdrawal").
For variable income payments, the withdrawal value is equal to the present value
of the variable income payments being terminated, calculated using a discount
rate equal to the assumed investment rate that was used in determining the
initial variable payment. For fixed income payments, the withdrawal value is
equal to the present value of the fixed income payments being terminated,
calculated using a discount rate equal to the applicable current interest rate
(this may be the initial interest rate in some states). The applicable current
interest rate is the rate we are using on the date we receive your Payout
Withdrawal request to determine income payments for a new annuitization with a
payment period equal to the remaining payment period of the income payments
being terminated.
A Payout Withdrawal must be a least $50. If any Payout Withdrawal reduces the
value of the remaining income payments to an amount not sufficient to provide an
initial payment of at least $20, we reserve the right to terminate the Contract
and pay you the present value of the remaining income payments in a lump sum. If
you withdraw the entire value of the remaining income payments, the Contract
will terminate.
You must specify the investment alternative(s) from which you wish to make a
Payout Withdrawal. If you withdraw a portion of the value of your remaining
income payments, the payment period will remain unchanged and your remaining
payment amounts will be reduced proportionately.
PAYOUT WITHDRAWAL CHARGE
To determine the Payout Withdrawal Charge, we assume that purchase payments are
withdrawn first, beginning with the oldest payment. When an amount equal to all
purchase payments has been withdrawn, additional withdrawals will not be
assessed a Payout Withdrawal Charge.
Payout Withdrawals will be subject to a Payout Withdrawal Charge for each
Contract as follows:
Number of Complete Years Since We Received the Purchase Payment Being Withdrawn/Applicable Charge:
Contract: 0 1 2 3 4 5 6 7 7+
- ------------------------------------------------------------------------------------------------------------------------------------
Allstate Advisor 7% 7% 6% 5% 4% 3% 2% 0% 0%
Allstate Advisor
Preferred with:
5-Year Withdrawal
Charge Option 7% 6% 5% 4% 3% 0%
3-Year Withdrawal
Charge Option 7% 6% 5% 0%
No Withdrawal Charge
Option None
51 PROSPECTUS
ADDITIONAL INFORMATION. We may make other Income Plans available. You may
obtain information about them by writing or calling us. On the Payout Start
Date, you must specify the portion of the Contract Value to be applied to
variable income payments and the portion to be applied to fixed income payments.
For the portion of your Contract Value to be applied to variable income
payments, you must also specify the Variable Sub-Accounts on which to base the
variable income payments as well as the allocation among those Variable
Sub-Accounts. If you do not choose how the Contract Value is to be applied, then
the portion of the Contract Value in the Variable Account on the Payout Start
Date will be applied to variable income payments, according to the Variable
Sub-Account allocations as of the Payout Start Date, and the remainder of the
Contract Value will be applied to fixed income payments.
We will apply your Contract Value, adjusted by any applicable Market Value
Adjustment, less applicable taxes to your Income Plan(s) on the Payout Start
Date. We can make income payments in monthly, quarterly, semi-annual or annual
installments, as you select. If the Contract Value is less than $2,000 when it
is applied to the Income Plan(s) you choose, or not enough to provide an initial
payment of at least $20, when it is applied to the Income Plan(s) you choose,
and state law permits, we may:
.. terminate the Contract and pay you the Contract Value, adjusted by any
applicable Market Value Adjustment and less any applicable taxes, in a lump
sum instead of the periodic payments you have chosen, or
.. reduce the frequency of your payments so that each payment will be at least
$20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by (a) company mortality experience or (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments, which may
be more or less than your total purchase payments because (a) variable income
payments vary with the investment results of the underlying Portfolios; and (b)
under some of the Income Plans, we make income payments only so long as an
Annuitant is alive or any applicable Guaranteed Payment Period has not yet
expired.
In calculating the amount of the periodic payments in the annuity tables in the
Contracts, we used an assumed investment rate ("AIR", also known as benchmark
rate) of 3%. Currently, you may choose either a 6%, 5%, or 3% AIR per year. If
you select the Income Protection Benefit Option, however, the 3% AIR must apply.
The 6% and 5% AIR may not be available in all states (check with your
representative for availability). Currently, if you do not choose one, the 5%
AIR will automatically apply (except in states in which the 5% AIR is not
available; in those states, the 3% AIR will automatically apply). You may not
change the AIR after you have selected an Income Plan.
We reserve the right to offer other assumed investment rates. If the actual net
investment return of the Variable Sub-Accounts you choose is less than the AIR,
then the dollar amount of your variable income payments will decrease. The
dollar amount of your variable income payments will increase, however, if the
actual net investment return exceeds the AIR. The dollar amount of the variable
income payments stays level if the net investment return equals the AIR. With a
higher AIR, your initial income payment will be larger than with a lower AIR.
While income payments continue to be made, however, this disparity will become
smaller and, if the payments have continued long enough, each payment will be
smaller than if you had initially chosen a lower AIR.
Please refer to the Statement of Additional Information for more detailed
information as to how we determine variable income payments.
You may also elect a variable income payment stream consisting of level monthly,
quarterly or semi-annual payments. If you elect to receive level monthly,
quarterly or semi-annual payments, the payments must be recalculated annually.
You may only elect to receive level payments at or before the Payout Start Date.
If you have elected level payments for an Income Plan(s), you may not make any
variable to fixed payment transfers within such Income Plan(s). We will
determine the amount of each annual payment as described above, place this
amount in our general account, and then distribute it in level monthly,
quarterly or semi-annual payments. The sum of the level payments will exceed the
annual calculated amount because of an interest rate factor we use, which may
vary from year to year, but will not be less than 2% per year. We do not allow
withdrawals of the annual amount unless you make a full or partial withdrawal
request of the remaining payments under Income Plan 3. Withdrawals will be
assessed a payout withdrawal charge, if applicable. If the Annuitant dies while
you are receiving level payments, you will not be entitled to receive any
remaining level payments for that year (unless the Annuitant dies before the end
of the Guaranteed Payment Period). For example, if you have selected Income Plan
1 with no Guaranteed Payment Period and the Annuitant dies during the year, the
Beneficiary will not be entitled to receive the remaining level payments for
that year.
INCOME PROTECTION BENEFIT OPTION
We offer an Income Protection Benefit Option, which may be added to your
Contract on the Payout Start Date for an additional mortality and expense risk
charge if you have selected variable income payments subject to the following
conditions:
52 PROSPECTUS
.. The Annuitant and joint Annuitant, if applicable, must be age 75 or younger on
the Payout Start Date.
.. You must choose Income Plan 1 or 2, and the Guaranteed Payment Period must be
for at least 120 months, unless the Internal Revenue Service requires a
different payment period.
.. You may apply the Income Protection Benefit Option to more than one Income
Plan.
.. The AIR must be 3% for the Income Plan(s) to which you wish to apply this
benefit.
.. You may only add the Income Protection Benefit Option on the Payout Start Date
and, once added, the option cannot be cancelled.
.. You may not convert variable income payments to fixed income payments.
You may not add the Income Protection Benefit Option without our prior approval
if your Contract Value is greater then $1,000,000 at the time you choose to add
the Income Protection Benefit Option.
If you select the Income Protection Benefit Option, we guarantee that your
variable income payments under each of the Income Plans to which the option is
applied will never be less that 85% of the initial variable amount income value
("Income Protection Benefit"), as calculated on the Payout Start Date under such
Income Plans, unless you have elected a reduced survivor payment plan under
Income Plan 2. If you have elected a reduced survivor plan, we guarantee that
your variable income payments to which the option is applied will never be less
than 85% of the initial variable amount income value prior to the later of 1)
the death of Annuitant; or 2) the end of the guarantee payment period. On or
after the later of these events, we guarantee that your variable income payments
will never be less than 85% of the initial variable amount income value
multiplied by the percentage you elected for your reduced survivor plan. See
Appendix C for numerical examples that illustrate how the Income Protection
Benefit is calculated.
If you add the Income Protection Benefit Option to your Contract, the mortality
and expense risk charge during the Payout Phase will be increased. The charge
for the Income Protection Benefit Option will apply only to the Income Plan(s)
to which the option has been applied. Currently, the charge for this option is
0.50%. We may change the amount we charge, but it will not exceed 0.75%. Once
the option is issued, we will not increase what we charge you for the benefit.
In order to ensure that we achieve adequate investment diversification ("INCOME
PROTECTION DIVERSIFICATION REQUIREMENT"), we reserve the right, in our sole
discretion, to impose limitations on the investment alternatives in which you
may invest during the Payout Phase with respect to the assets supporting the
variable income payments to which the Income Protection Benefit Option applies.
These limitations may include, but are not limited to, maximum investment limits
on certain Variable Sub-Accounts, exclusion of certain Variable Sub-Accounts,
required minimum allocations to certain Variable Sub-Accounts, and/or the
required use of Automatic Portfolio Rebalancing.
To achieve our Income Protection Diversification Requirement, we have divided
the Variable Sub-Accounts into three separate categories: "unrestricted,"
"restricted" and "excluded." Currently, we require that you allocate between 30%
to 100% of the assets supporting your variable income payments to the
unrestricted Variable Sub-Accounts in any manner you choose. You may allocate up
to 70% of the assets supporting your variable income payments to the restricted
Variable Sub-Accounts. You may not, however, allocate more than 20% of the
assets supporting your variable income payments to any one of the restricted
Variable Sub-Accounts. You may not allocate ANY PORTION of the assets supporting
your variable income payments to the excluded Variable Sub-Accounts.
In the following three tables, we list our current Income Protection
Diversification Requirement:
UNRESTRICTED VARIABLE SUB-ACCOUNTS. There is no limit to the amount of assets
supporting your variable income payments that you may allocate to any one or
more of the following Variable Sub-Accounts. Currently, we require that you
allocate AT LEAST 30% of the assets supporting your variable income payments to
this category.
FTVIP Franklin U.S. Government - Class 2 Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account*
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
Putnam VT Income - Class IB Sub-Account
Putnam VT Money Market - Class IB Sub-Account
STI Classic Investment Grade Bond Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
*Effective April 29, 2005, the Oppenheimer Bond Fund/ VA-Service Shares changed
its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have made a
corresponding change to the name of the Variable Sub-Account that invests in
this Portfolio.
RESTRICTED VARIABLE SUB-ACCOUNTS. You may allocate up to 70% of the amount of
assets supporting your variable income payments to the following Variable
Sub-Accounts. Currently, you may not allocate more than 20% of the amount of
assets supporting your variable income payments to any one of the restricted
Variable Sub-Accounts.
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
53 PROSPECTUS
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Lord Abbett Series - All Value Sub-Account
Lord Abbett Series - Bond-Debenture Sub-Account
Lord Abbett Series - Growth and Income Sub-Account
Lord Abbett Series - Growth Opportunities Sub-Account
Lord Abbett Series - Mid-Cap Value Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Oppenheimer High Income/VA - Service Shares Sub-Account
Oppenheimer Main Street(R)/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares Sub-Account
Putnam VT Global Asset Allocation - Class IB Sub-Account
Putnam VT Growth and Income - Class IB Sub-Account
Putnam VT High Yield - Class IB Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Research - Class IB Sub-Account**
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Utilities Growth and Income - Class IB Sub-Account**
Putnam VT Voyager - Class IB Sub-Account
STI Classic Capital Appreciation Sub-Account
STI Classic Growth and Income Sub-Account
STI Classic International Equity Sub-Account
STI Classic Mid-Cap Equity Sub-Account
STI Classic Small Cap Value Equity Sub-Account
STI Classic Value Income Stock Sub-Account
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen UIF Equity and Income, Class II Sub-Account***
Van Kampen UIF Equity Growth, Class II Sub-Account***
Van Kampen UIF Global Franchise, Class II Sub-Account***
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account***
Van Kampen UIF U.S. Real Estate, Class II Sub-Account***
** Effective October 1, 2004, the Putnam VT Research - Class IB Sub-Account, and
the Putnam VT Utilities Growth and Income - Class IB Sub-Account closed to new
investments. If you choose to add the Income Protection Benefit Option on or
after October 1, 2004, you must transfer any portion of your Contract Value that
is allocated to these Variable Sub-Accounts to any of the remaining Variable
Sub-Accounts available with the Income Protection Benefit Option prior to adding
the Income Protection Benefit Option to your Contract.
***Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
EXCLUDED VARIABLE SUB-ACCOUNTS. Currently, none of the following Variable
Sub-Accounts are available to support variable income payments.
FTVIP Templeton Developing Markets Securities - Class 2 Sub-Account
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
Putnam VT Health Sciences - Class IB Sub-Account****
Putnam VT New Opportunities - Class IB Sub-Account****
Putnam VT Vista - Class IB Sub-Account
Van Kampen LIT Aggressive Growth, Class II Sub-Account
Van Kampen LIT Emerging Growth, Class II Sub-Account
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account*****
Van Kampen UIF Small Company Growth, Class II Sub-Account*****
54 PROSPECTUS
**** Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account and the Putnam VT New Opportunities - Class IB Sub-Account closed to
new investments.
*****Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
You must use quarterly Automatic Portfolio Rebalancing to meet our Income
Protection Diversification Requirement. On the date of each rebalancing, we will
reallocate the amount of the assets supporting your variable income payments
according to the rebalancing percentages you have selected, subject to the then
current restrictions and exclusions in effect. We expect that the restrictions
and exclusions for each category will change from time to time. Any change in
these restrictions and exclusions will become effective no later than the next
regularly scheduled rebalancing of your Variable Sub-Account choices on or
immediately after the date of change.
The Income Protection Diversification Requirement is based on a model. We may
use a model developed and maintained by us or we may elect to use a model
developed or provided by an independent third party. We will notify you at least
30 days before we make any change to our Income Protection Diversification
Requirement.
We may determine which Variable Sub-Accounts are eligible for each category or
we may elect to follow the recommendations of an independent third party. We may
at any time make new determinations as to which Variable Sub-Accounts are
unrestricted, restricted or excluded. We may do so for a variety of reasons
including, but not limited to, a change in the investment objectives or policies
of a Portfolio, or the failure, in our sole determination, of such Portfolio to
invest in accordance with its stated investment objective or policies.
Transfers made for purposes of meeting the Income Protection Diversification
Requirement will not count towards the number of free transfers you may make
each Contract Year. See "Investment Alternatives: Transfers," above, for
additional information.
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. The guaranteed income payment amounts will
change if the frequency of payments or the length of the payment period changes.
We calculate the fixed income payments by:
.. adjusting the portion of the Contract Value in any Fixed Account Option on the
Payout Start Date by any applicable Market Value Adjustment;
.. deducting any applicable taxes; and
.. applying the resulting amount to the greater of (a) the appropriate income
payment factor for the selected Income Plan from the Income Payment Table in
your Contract or (b) such other income payment factor as we are offering on
the Payout Start Date.
We may defer your request to make a withdrawal from fixed income payments for a
period of up to 6 months or whatever shorter time state law may require. If we
defer 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.
RETIREMENT INCOME GUARANTEE OPTIONS
Effective January 1, 2004, we ceased offering the Retirement Income Guarantee
Options ("RIG 1" and "RIG 2"). If you added a Retirement Income Guarantee Option
to your Contract prior to January 1, 2004, your Option will continue to apply to
your Contract. Also, effective January 1, 2004, we discontinued the Trade-In
Program. If you previously elected a RIG Option, you may cancel your RIG 1 or
RIG 2 Option during the 60-day period following your next 3rd Contract
Anniversary after January 1, 2004. If you do not cancel the Option during this
60-day period, you will not be permitted to cancel it later. Please check with
your sales representative for details.
The following describes the Retirement Income Guarantee Options for Contract
Owners who elected the Option prior to January 1, 2004.
We refer to the issue date of the option as the "RIDER DATE." You may add only
one Retirement Income Guarantee Option to your Contract. The oldest Contract
Owner and oldest Annuitant must be age 75 or younger on the Rider Application
Date. Once you add a rider to your Contract, it may not be cancelled except that
Contract Owners may elect to cancel a RIG 1 or RIG 2 Option during the 60-day
period following the next 3rd Contract Anniversary after January 1, 2004 as
described above. The options may not be available in all states.
WE RESERVE THE RIGHT TO IMPOSE LIMITATIONS ON THE INVESTMENT ALTERNATIVES IN
WHICH YOU MAY INVEST AS A CONDITION OF THESE OPTIONS. THESE RESTRICTIONS MAY
INCLUDE, BUT ARE NOT LIMITED TO, MAXIMUM INVESTMENT LIMITS ON CERTAIN INVESTMENT
ALTERNATIVES, EXCLUSION OF CERTAIN INVESTMENT ALTERNATIVES, REQUIRED MINIMUM
ALLOCATIONS TO CERTAIN VARIABLE SUB-ACCOUNTS AND/OR THE AUTOMATIC PORTFOLIO
REBALANCING. CURRENTLY, NO SUCH RESTRICTIONS ARE BEING IMPOSED.
For each option, an "INCOME BASE" is calculated, which is used only for the
purpose of calculating the "GUARANTEED RETIREMENT INCOME BENEFIT" and the
appropriate "RIDER FEE," all defined below. The Income Base does not provide a
Contract Value or guarantee performance of any investment option. The Income
Base for RIG 1 and RIG 2 are described in more detail below.
You may apply the Income Base less applicable taxes to an Income Plan on the
Payout Start Date and receive the
55 PROSPECTUS
Guaranteed Retirement Income Benefit if all of the following conditions are
satisfied:
.. The Payout Start Date must be on or after the 10/th/ Contract Anniversary of
the Rider Date.
.. The Payout Start Date must occur during the 30-day period following a Contract
Anniversary.
.. The oldest Annuitant must be age 99 or younger as of the Payout Start Date.
.. You must select Fixed Amount Income Payments only.
.. You must select Income Plan 1 or 2, with a Guaranteed Payment Period of at
least:
. 120 months, if the youngest Annuitant is age 80 or younger as of the Payout
Start Date; or
. 60 months, if the youngest Annuitant is older than age 80 as of the Payout
Start Date.
The "GUARANTEED RETIREMENT INCOME BENEFIT" is determined by applying the Income
Base, less any applicable taxes, to the appropriate monthly income payment
factor shown in the Income Payment Tables in your Contract for the selected
Income Plan.
If a different payment frequency (quarterly, semi-annual, or annual) or
different Income Plan is selected, an income payment factor for the selected
payment frequency and Income Plan is determined on the same mortality and
interest rate basis as the Income Payment Tables shown in your Contract.
On the Payout Start Date, the income payments for the selected Income Plan will
be the greater of:
.. The Guaranteed Retirement Income Benefit; or
.. For fixed income payments, the Contract Value, adjusted by any applicable
Market Value Adjustment, less any applicable taxes is applied to the greater
of: the appropriate income payment factor for the selected Income Plan from
the income payment tables in your Contract, or an income payment factor for
the selected Income Plan that we are offering on the Payout Start Date.
We assess an annual Rider Fee if you selected one of the Retirement Income
Guarantee Options. The Rider Fee is deducted on each Contract Anniversary on a
pro rata basis from each of the Variable Sub-Accounts in which your Contract
Value is invested on that date. The Rider Fee will decrease the number of
Accumulation Units in each Variable Sub-Account. The Rider Fee is deducted only
during the Accumulation Phase of the Contract. For the first Contract
Anniversary following the Rider Date, the Rider Fee will be prorated to cover
the period between the Rider Date and the first Contract Anniversary after the
Rider Date. In the case of a full withdrawal of the Contract Value, the Rider
Fee is prorated to cover the period between the Contract Anniversary immediately
prior to the withdrawal and the date of the withdrawal.
The Rider Fee for RIG 1 is 0.40% of the Income Base on each Contract
Anniversary. The Rider Fee for the RIG 2 is 0.55% of the Income Base on each
Contract Anniversary.
These options will terminate and the corresponding Rider Fee will cease on the
earliest of the following to occur:
.. The date the Contract is terminated;
.. If the Contract is not continued in the Accumulation Phase under either the
Death of Owner or Death of Annuitant provisions of the Contract. The option
will terminate on the date we determine the Death Proceeds;
.. The Payout Start Date; or
.. If you elect to cancel your RIG 1 or RIG 2 Option during the 60-day period
following the next 3rd Contract Anniversary after January 1, 2004, (since we
discontinued offering the Trade-In Program as of that date).
Otherwise, the options may not be terminated or cancelled.
CALCULATION OF INCOME BASE.
On the Rider Date, the "RIG 1 INCOME BASE" is equal to the Contract Value. The
RIG 1 Income Base, plus purchase payments made after the Rider Date and less RIG
1 withdrawal adjustments for withdrawals made after the Rider Date, will
accumulate interest on a daily basis at a rate equivalent to 5% per year,
subject to the "CAP" defined below. This accumulation will continue until the
first Contract Anniversary following the 85/th/ birthday of the oldest Contract
Owner or oldest Annuitant, whichever occurs first. After the 5% interest
accumulation ends, the RIG 1 Income Base will continue to be increased by
purchase payments and reduced by RIG 1 withdrawal adjustments for withdrawals
until the option terminates. The "RIG 1 WITHDRAWAL ADJUSTMENT" is defined below.
The RIG 1 Income Base will not exceed a CAP equal to:
.. 200% of the Contract Value as of the Rider Date; plus
.. 200% of purchase payments made after the Rider Date, but excluding any
purchase payments made in the 12-month period immediately prior to the Payout
Start Date; minus
.. RIG 1 Withdrawal Adjustments for any withdrawals made after the Rider Date.
RIG 1 WITHDRAWAL ADJUSTMENT. Prior to the first Contract Anniversary following
the 85/th/ birthday of the oldest Contract Owner or oldest Annuitant, whichever
is earlier, the withdrawal adjustment is as follows:
.. In each Contract Year, for the portion of withdrawals that do not cumulatively
exceed 5% of the RIG 1 Income Base as of the beginning of the Contract Year
(or as of the Rider Date for the first Contract Year in
56 PROSPECTUS
which RIG1 is added), the withdrawal adjustment is equal to the amount
withdrawn (or portion thereof) multiplied by a discount factor. The
discount factor is calculated using a 5% annual interest rate and the portion
of the Contract Year between the withdrawal date and the end of the Contract
Year. This withdrawal adjustment has the effect of reducing the RIG 1
Income Base at the end of the Contract Year by the actual amount of the
withdrawal. In other words, for purposes of calculating the RIG 1 Income
Base, the withdrawal is treated as if it occurred at the end of the Contract
Year.
.. In each Contract Year, for the portion of withdrawals that cumulatively exceed
5% of the RIG 1 Income Base as of the beginning of the Contract Year (or as of
the Rider Date for the first Contract Year in which RIG1 is added), the
withdrawal adjustment is equal to the withdrawal amount (or portion thereof),
divided by the Contract Value immediately prior to the withdrawal and reduced
for the portion of withdrawals that does not cumulatively exceed 5%, and the
result multiplied by the most recently calculated RIG 1 Income Base, reduced
for the portion of withdrawals that does not cumulatively exceed 5%.
On or after the first Contract Anniversary following the 85/th/ birthday of the
oldest Contract Owner or the Annuitant, all withdrawal adjustments are equal to
the withdrawal amount, divided by the Contract Value immediately prior to the
withdrawal, and the result multiplied by the most recently calculated RIG 1
Income Base.
See Appendix D for numerical examples that illustrate how the RIG 1 Withdrawal
Adjustment is applied.
The "RIG 2 INCOME BASE" is defined as the greater of "INCOME BASE A" or "INCOME
BASE B."
"INCOME BASE A" and its corresponding Withdrawal Adjustment are calculated in
the same manner as the RIG 1 Income Base and RIG 1 Withdrawal Adjustment.
On the Rider Date, "INCOME BASE B" is equal to the Contract Value. After the
Rider Date and prior to the Payout Start Date, Income Base B is recalculated
each time a purchase payment or withdrawal is made as well as on each Contract
Anniversary as follows:
.. Each time a purchase payment is made, Income Base B is increased by the amount
of the purchase payment.
.. Each time a withdrawal is made, Income Base B is reduced by a proportional
withdrawal adjustment, defined as the withdrawal amount divided by the
Contract Value immediately prior to the withdrawal, and the result multiplied
by the most recently calculated Income Base B.
.. On each Contract Anniversary until the first Contract Anniversary following
the 85/th/ birthday of the oldest Contract Owner or oldest Annuitant,
whichever occurs first, Income Base B is equal to the greater of the Contract
Value on that date or the most recently calculated Income Base B.
If no purchase payments or withdrawals are made after the Rider Date, Income
Base B will be equal to the greatest of the Contract Value on the Rider Date and
the Contract Values on each subsequent Contract Anniversary until the earlier of
the Payout Start Date or the Contract Anniversary following the 85/th/ birthday
of the oldest Contact Owner or oldest Annuitant, whichever occurs first.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain 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
applicable 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 BENEFITS
- --------------------------------------------------------------------------------
DEATH PROCEEDS
Under certain conditions, described below, we will pay Death Proceeds for this
Contract on the death of the Contract Owner, Annuitant, or Co-Annuitant if the
death occurs prior to the Payout Start Date. If the Owner or Annuitant 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" for more
information.
We will determine the value of the Death Proceeds as of the end of the Valuation
Date during which we receive the first Complete Request for Settlement (the next
Valuation Date, if we receive the request after 3:00 p.m. Central Time). In
order to be considered a "COMPLETE REQUEST FOR SETTLEMENT," a claim for
distribution of the Death Proceeds must include "DUE PROOF OF DEATH" in any of
the following forms of documentation:
.. A certified copy of the 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.
57 PROSPECTUS
"DEATH PROCEEDS" are determined based on when we receive a Complete Request for
Settlement:
.. If we receive a Complete Request for Settlement within 180 days of the death
of the Contract Owner, Annuitant, or Co-Annuitant, as applicable, the Death
Proceeds is equal to the "DEATH BENEFIT."
.. If we receive a Complete Request for Settlement more than 180 days after the
death of the Contract Owner, Annuitant, or Co-Annuitant, as applicable, the
Death Proceeds are equal to the greater of the Contract Value or Settlement
Value. We reserve the right to waive or extend, in a nondiscriminatory manner,
the 180-day period in which the Death Proceeds will equal the Death Benefit.
Where there are multiple beneficiaries, we will only value the death benefit at
the time the first beneficiary submits the necessary documentation in good
order. Any death benefit amounts attributable to any beneficiary which remain in
the Variable Sub-Accounts are subject to investment risk.
DEATH BENEFIT OPTIONS
In addition to the ROP Death Benefit included in your Contract, we offer the
following death benefit options which may be added to your Contract:
.. MAV Death Benefit Option
.. Enhanced Beneficiary Protection (Annual Increase) Option
.. Earnings Protection Death Benefit Option
The amount of the Death Benefit depends on which death benefit option(s) you
select. Not all death benefit options are available in all states.
You may select any combination of death benefit options on the Issue Date of
your Contract or at a later date, subject to state availability and issue age
restrictions. You may not add any death benefit option(s) to your Contract after
Contract issue without our prior approval if your Contract Value is greater than
$1,000,000 at the time you choose to add the death benefit option(s).
The "DEATH BENEFIT" is equal to the Earnings Protection Death Benefit (if
selected) plus the greatest of:
.. The Contract Value;
.. The Settlement Value;
.. The ROP Death Benefit;
.. The MAV Death Benefit Option (if selected); or
.. The Enhanced Beneficiary Protection (Annual Increase) Option (if selected).
The "Settlement Value" is the amount that would be paid in the event of a full
withdrawal of the Contract Value.
The "ROP DEATH BENEFIT" is equal to the sum of all purchase payments, reduced by
a proportional withdrawal adjustment for each withdrawal. The withdrawal
adjustment is equal to the withdrawal amount divided by the Contract Value
immediately prior to the withdrawal, and the result is multiplied by:
The sum of all purchase payments made prior to the withdrawal, less any prior
withdrawal adjustments.
MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT OPTION.
The "MAV DEATH BENEFIT OPTION" is only available if the oldest Contract Owner
and oldest Annuitant are age 79 or younger on the Rider Application Date. There
is an additional mortality and expense risk charge for this death benefit
option, currently equal to 0.20%. We may change what we charge for this death
benefit option, but it will never exceed 0.30%. Once added to your Contract, we
guarantee that we will not increase the mortality and expense risk charge you
pay for this death benefit option.
On the date we issue the rider for this benefit ("Rider Date"), the MAV DEATH
BENEFIT is equal to the Contract Value. After the Rider Date and prior to the
date we determine the Death Proceeds (see "Death Proceeds" on page 57), the MAV
Death Benefit is recalculated each time a purchase payment or withdrawal is made
as well as on each Contract Anniversary as follows:
.. Each time a purchase payment is made, the MAV Death Benefit is increased by
the amount of the purchase payment.
.. Each time a withdrawal is made, the MAV Death Benefit is reduced by a
proportional withdrawal adjustment, defined as the withdrawal amount divided
by the Contract Value immediately prior to the withdrawal, and the result
multiplied by the most recently calculated MAV Death Benefit.
.. On each Contract Anniversary until the first Contract Anniversary following
the 80/TH/ birthday of the oldest Contract Owner or oldest Annuitant,
whichever occurs first, the MAV Death Benefit is recalculated as the greater
of the Contract Value on that date or the most recently calculated MAV Death
Benefit.
If no purchase payments or withdrawals are made after the Rider Date, the MAV
Death Benefit will be equal to the greatest of the Contract Value on the Rider
Date and the Contract Values on each subsequent Contract Anniversary after the
Rider Date, but before the date we determine the Death Proceeds. If, upon death
of the Contract Owner, the Contract is continued under Option D as described on
page 61, and if the oldest New Contract Owner and the oldest Annuitant are age
80 or younger on the date we determine the Death Proceeds, then the MAV Death
Benefit Option will continue. The MAV Death Benefit will continue to be
recalculated for purchase payments, withdrawals, and on each Contract
Anniversary after the date we determine the Death Proceeds until the earlier of:
.. The first Contract Anniversary following the 80/th/ birthday of either the
oldest New Contract Owner or
58 PROSPECTUS
the oldest Annuitant, whichever is earlier. (After the 80/th/ birthday of
either the oldest New Contract Owner or the oldest Annuitant, whichever is
earlier, the MAV Death Benefit will be recalculated only for purchase payments
and withdrawals); or
.. The date we next determine the Death Proceeds.
ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION.
The Enhanced Beneficiary Protection (Annual Increase) Option is only available
if the oldest Contract Owner and oldest Annuitant are age 79 or younger on the
Rider Application Date. There is an additional mortality and expense risk charge
for this death benefit option, currently equal to 0.30%. We may change what we
charge for this death benefit option, but it will never exceed 0.30%. Once added
to your Contract, we guarantee that we will not increase the mortality and
expense risk charge you pay for this death benefit option.
On the date we issue the rider for this benefit ("Rider Date"), the Enhanced
Beneficiary Protection (Annual Increase) Benefit is equal to the Contract Value.
The Enhanced Beneficiary Protection (Annual Increase) Benefit, plus purchase
payments made after the Rider Date and less withdrawal adjustments for
withdrawals made after the Rider Date, will accumulate interest on a daily basis
at a rate equivalent to 5% per year, subject to the "CAP" defined below. This
accumulation will continue until the earlier of:
(a) the first Contract Anniversary following the 80/th/ birthday of the oldest
Contract Owner or oldest Annuitant, whichever occurs first; or
(b) the date we determine the Death Proceeds.
After the 5% interest accumulation ends, the Enhanced Beneficiary Protection
(Annual Increase) Benefit will continue to be increased by purchase payments and
reduced by withdrawal adjustments for withdrawals until the death benefit option
terminates. The withdrawal adjustment is a proportional adjustment, defined as
the withdrawal amount divided by the Contract Value immediately prior to the
withdrawal, and the result multiplied by the amount of the Enhanced Beneficiary
Protection (Annual Increase) Benefit immediately prior to the withdrawal.
The Enhanced Beneficiary Protection (Annual Increase) Benefit CAP is equal to:
.. 200% of the Contract Value as of the Rider Date; plus
.. 200% of purchase payments made after the Rider Date, but excluding any
purchase payments made in the 12-month period immediately prior to the death
of the Contract Owner or the Annuitant; minus
.. Withdrawal adjustments for any withdrawals made after the Rider Date. Refer to
Appendix E for withdrawal adjustment examples.
If, upon death of the Contract Owner, the Contract is continued under Option D
as described on page 61, and if the oldest New Contract Owner and the oldest
Annuitant are age 80 or younger on the date we determine the Death Proceeds,
then the Enhanced Beneficiary Protection (Annual Increase) Option will continue.
The amount of the Enhanced Beneficiary Protection (Annual Increase) Benefit as
of the date we determine the Death Proceeds, plus subsequent purchase payments,
less withdrawal adjustments for any subsequent withdrawals, will accumulate
daily at a rate equivalent to 5% per year from the date we determine the Death
Proceeds, until the earlier of:
.. The first Contract Anniversary following the 80/th/ birthday of either the
oldest New Contract Owner or the oldest Annuitant, whichever is earlier.
(After the 80/th/ birthday of either the oldest New Owner or the oldest
Annuitant, whichever is earlier, the Enhanced Beneficiary Protection (Annual
Increase) Benefit will be recalculated only for purchase payments and
withdrawals; or
.. The date we next determine the Death Proceeds.
EARNINGS PROTECTION DEATH BENEFIT OPTION.
The "EARNINGS PROTECTION DEATH BENEFIT OPTION" is only available if the oldest
Contract Owner and oldest Annuitant are age 79 or younger on the Rider
Application Date. There is an additional mortality and expense risk charge for
this death benefit option, currently equal to:
.. 0.25%, if the oldest Contract Owner and oldest Annuitant are age 70 or younger
on the Rider Application Date; and
.. 0.40%, if the oldest Contract Owner or oldest Annuitant is over age 70 and all
are age 79 or younger on the Rider Application Date.
We may change what we charge for this death benefit option, but it will never
exceed 0.35% for issue ages 0-70 and 0.50% for issue ages 71-79. Once added to
your Contract, we guarantee that we will not increase the mortality and expense
risk charge you pay for this death benefit option. However, if your spouse
elects to continue the Contract in the event of your death and if he or she
elects to continue the Earnings Protection Death Benefit Option, the mortality
and expense risk charge for the death benefit option will be based on the ages
of the oldest new Contract Owner and the oldest Annuitant at the time the
Contract is continued.
If the oldest Contract Owner and oldest Annuitant are age 70 or younger on the
Rider Application Date, the EARNINGS PROTECTION DEATH BENEFIT is equal to the
lesser of:
.. 100% of "IN-FORCE PREMIUM" (excluding purchase payments made after the date we
issue the rider for this benefit ("Rider Date") and during the twelve-month
period immediately prior to the death of the Contract Owner or Annuitant); or
59 PROSPECTUS
.. 40% of "IN-FORCE EARNINGS"
calculated as of the date we determine the Death Proceeds.
If the oldest Contract Owner or oldest Annuitant is over age 70 and all are age
79 or younger on the Rider Application Date, the EARNINGS PROTECTION DEATH
BENEFIT is equal to the lesser of:
.. 50% of "IN-FORCE PREMIUM" (excluding purchase payments made after the Rider
Date and during the twelve-month period immediately prior to the death of the
Contract Owner or Annuitant); or
.. 25% of "IN-FORCE EARNINGS"
calculated as of the date we determine the Death Proceeds.
IN-FORCE EARNINGS are equal to the current Contract Value less In-Force Premium.
If this quantity is negative, then In-Force Earnings are equal to zero.
IN-FORCE PREMIUM is equal to the Contract Value on the Rider Date, plus the sum
of all purchase payments made after the Rider Date, less the sum of all
"EXCESS-OF-EARNINGS WITHDRAWALS" made after the Rider Date.
An EXCESS-OF-EARNINGS WITHDRAWAL is equal to the excess, if any, of the amount
of the withdrawal over the amount of the In-Force Earnings immediately prior to
the withdrawal.
Refer to Appendix F for numerical examples that illustrate how the Earnings
Protection Death Benefit Option is calculated.
If, upon death of the Contract Owner, the Contract is continued under Option D
as described on page 61 below, and if the oldest new Owner and the oldest
Annuitant are younger than age 80 on the date we determine the Death Proceeds,
then this death benefit option will continue unless the New Contract Owner
elects to terminate the death benefit option. If the death benefit option is
continued, the following will apply as of the date we determine the Death
Proceeds upon continuation:
.. The Rider Date will be changed to the date we determine the Death Proceeds;
.. The In-Force Premium is equal to the Contract Value as of the new Rider Date
plus all purchase payments made after the Rider Date, less the sum of all the
Excess-of-Earnings Withdrawals made after the Rider Date;
.. The Earnings Protection Death Benefit after the new Rider Date will be
determined as described above, but using the ages of the oldest new Contract
Owner and the oldest Annuitant as of the new Rider Date.
.. The mortality and expense risk charge, for this rider, will be determined as
described above, but using the ages of the oldest new Contract Owner and the
oldest Annuitant as of the new Rider Date.
If either the Contract Owner's or the Annuitant's age is misstated, the Earnings
Protection Death Benefit and the mortality and expense risk charge for this
death benefit option will be calculated according to the corrected age as of the
Rider Date. Your Contract Value will be adjusted to reflect the mortality and
expense risk charge for this death benefit option that should have been assessed
based on the corrected age.
ALL OPTIONS.
WE RESERVE THE RIGHT TO IMPOSE LIMITATIONS ON THE INVESTMENT ALTERNATIVES IN
WHICH YOU MAY INVEST AS A CONDITION OF THESE OPTIONS. THESE RESTRICTIONS MAY
INCLUDE, BUT ARE NOT LIMITED TO, MAXIMUM INVESTMENT LIMITS ON CERTAIN INVESTMENT
ALTERNATIVES, EXCLUSION OF CERTAIN INVESTMENT ALTERNATIVES, REQUIRED MINIMUM
ALLOCATIONS TO CERTAIN VARIABLE SUB-ACCOUNTS AND/OR THE REQUIRED USE OF
AUTOMATIC PORTFOLIO REBALANCING. CURRENTLY, NO SUCH RESTRICTIONS ARE BEING
IMPOSED.
These death benefit options will terminate and the corresponding Rider Fee will
cease on the earliest of the following to occur:
.. the date the Contract is terminated;
.. if, upon the death of the Contract Owner, the Contract is continued under
Option D as described in the Death of Owner section on page 61, and either the
oldest New Owner or the oldest Annuitant is older than age 80 (age 80 or older
for the Earnings Protection Death Benefit Option) on the date we determine the
Death Proceeds. The death benefit option will terminate on the date we
determine the Death Proceeds;
.. if the Contract is not continued in the Accumulation Phase under either the
Death of Owner or Death of Annuitant provisions of the Contract. The death
benefit option will terminate on the date we determine the Death Proceeds;
.. on the date the Contract Owner (if the current Contract Owner is a living
person) is changed for any reason other than death unless the New Contract
Owner is a trust and the Annuitant is the current Contract Owner;
.. on the date the Contract Owner (if the current Contract Owner is a non-living
person) is changed for any reason unless the New Contract Owner is a
non-living person or is the current Annuitant; or
.. the Payout Start Date.
Notwithstanding the preceding, in the event of the Contract Owner's death, if
the Contract Owner's spouse elects to continue the Contract (as permitted in the
Death of Owner provision below) he or she may terminate the Earnings Protection
Death Benefit at that time.
60 PROSPECTUS
DEATH BENEFIT PAYMENTS
DEATH OF CONTRACT OWNER
If a Contract Owner dies prior to the Payout Start Date, then the surviving
Contract Owners will be "NEW CONTRACT OWNERS". If there are no surviving
Contract Owners, then subject to any restrictions previously placed upon them,
the Beneficiaries will be the New Contract Owners.
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, subject
to any restrictions previously placed upon the New Contract Owner. 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 following Category 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.
NEW CONTRACT OWNER CATEGORIES
CATEGORY 1. If your spouse (or Annuitant's spouse in the case of a grantor
trust-owned Contract) is the sole New Contract Owner of the entire Contract,
your spouse must choose from among the death settlement Options A, B, C, D, or E
described below. If he or she does not choose one of these Options, then Option
D will apply.
CATEGORY 2. If the New Contract Owner is a living person who is not your spouse
(or Annuitant's spouse in the case of a grantor trust-owned Contract), or there
is more than one New Contract Owner, all of whom are living persons, each New
Contract Owner must choose from among the death settlement Options A, B, C, or E
described below. If a New Contract Owner does not choose one of these Options,
then Option C will apply for that New Contract Owner.
CATEGORY 3. If there are one or more New Contract Owner(s) and at least one of
the New Contract Owners is a non-living person such as a corporation or a trust,
all New Contract Owners are considered to be non-living persons for purposes of
the death settlement options. Each New Contract Owner must choose death
settlement Option A or C described below. If a New Contract Owner does not
choose one of these Options, then Option C will apply for that New Contract
Owner.
The death settlement options we currently offer are:
OPTION A. The New Contract Owner may elect to receive the Death Proceeds in a
lump sum.
OPTION B. The New Contract Owner may elect to apply the Death Proceeds to one
of the Income Plans described above. Such income payments must begin within one
year of the date of death and must be payable:
.. Over the life of the New Contract Owner; or
.. For a guaranteed payment period of at least 5 years (60 months), but not to
exceed the life expectancy of the New Contract Owner; or
.. Over the life of the New Contract Owner with a guaranteed payment period of at
least 5 years (60 months), but not to exceed the life expectancy of the New
Contract Owner.
OPTION C. The New Contract Owner may elect to receive the Contract Value
payable within 5 years of the date of death. The Contract Value, as of the date
we receive the first Complete Request for Settlement, will be reset to equal the
Death Proceeds as of that date. Any excess amount of the Death Proceeds over the
Contract Value on that date will be allocated to the Putnam VT Money Market
Variable Sub-Account unless the New Contract Owner provides other allocation
instructions.
The New Contract Owner may not make any additional purchase payments under this
option. Withdrawal charges will be waived for any withdrawals made during the
5-year period after the date of death; however, amounts withdrawn may be subject
to Market Value Adjustments. The New Contract Owner may exercise all rights set
forth in the Transfers provision.
If the New Contract Owner dies before the Contract Value is completely
withdrawn, the New Contract Owner's Beneficiary(ies) will receive the greater of
the remaining Settlement Value or the remaining Contract Value within 5 years of
the date of the original Contract Owner's death.
OPTION D. The New Contract Owner may elect to continue the Contract in the
Accumulation Phase. If the Contract Owner was also the Annuitant, then the New
Contract Owner will be the new Annuitant. This Option may only be exercised once
per Contract. The Contract Value, as of the date we receive the first Complete
Request for Settlement, will be reset to equal the Death Proceeds as of that
date.
Unless otherwise instructed by the continuing spouse, the excess, if any, of the
Death Proceeds over the Contract Value will be allocated to the Sub-Accounts of
the Variable Account. This excess will be allocated in proportion to your
Contract Value in those Sub-Accounts as of the end of the Valuation Date that we
receive the complete request for settlement except that any portion of this
excess attributable to the Fixed Account Options will be allocated to the Putnam
VT Money Market Variable Sub-Account.
Within 30 days after the date we determine the Death Proceeds, the New Contract
Owner may make a one-time transfer of all or a portion of the excess of the
Death
61 PROSPECTUS
Proceeds, if any, into any combination of Variable Sub-Accounts, the Standard
Fixed Account and the Market Value Adjusted Fixed Account without incurring a
transfer fee provided the investment alternative is available with the Contract
at that time. Any such transfer does not count as one of the free transfers
allowed each Contract Year and is subject to any minimum allocation amount
specified in this Contract.
The New Contract Owner 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 and a 10% tax
penalty if the New Contract Owner is under age 59 1/2.
OPTION E. Effective July 1, 2005, for Nonqualified Contracts, the New Contract
Owner may elect to make withdrawals at least annually of amounts equal to the
"ANNUAL REQUIRED DISTRIBUTION" calculated for each calendar year. The first such
withdrawal must occur within:
.. One year of the date of death;
.. The same calendar year as the date we receive the first Complete Request for
Settlement; and
.. One withdrawal frequency.
The New Contract Owner must select the withdrawal frequency (monthly, quarterly,
semi-annual, or annual). Once this option is elected and frequency of
withdrawals is chosen, they cannot be changed by the New Contract Owner and
become irrevocable.
In the calendar year in which the Death Proceeds are determined, the ANNUAL
REQUIRED DISTRIBUTION is equal to the Contract Value on the date of the first
distribution divided by the "Life Expectancy" of the New Contract Owner, and the
result multiplied by a fraction that represents the portion of the calendar year
remaining after the date of the first distribution. (The Contract Value, as of
the date we receive the Complete Request for Settlement, will be reset to equal
the Death Proceeds as of that date. The Contract Value on the date of the first
distribution may be more or less than the Contract Value as of the date we
receive the Complete Request for Settlement.) The Life Expectancy in that
calendar year is equal to the life expectancy value from IRS Tables, based on
the age of the New Contract Owner as of his or her birthday in the same calendar
year.
In any subsequent calendar year, the Annual Required Distribution is equal to
the Contract Value as of December 31 of the prior year divided by the remaining
Life Expectancy of the New Contract Owner. In each calendar year after the
calendar year in which the first distribution occurred, the Life Expectancy of
the New Contract Owner is the Life Expectancy calculated in the previous
calendar year minus one (1) year. If the Life Expectancy is less than one (1),
the Annual Required Distribution is equal to the Contract Value.
If the New Contract Owner dies before the Contract Value is completely
withdrawn, the scheduled withdrawals will continue to be paid to the New
Contract Owner's Beneficiary(ies). The Contract Value invested in the Variable
Sub-Accounts will be subject to investment risk until it is withdrawn.
We reserve the right to offer additional death settlement options.
DEATH OF ANNUITANT
If the Annuitant dies prior to the Payout Start Date, then the surviving
Contract Owners will have the Options available to the New Contract Owner,
determined by the applicable following category in which the New Contract Owner
is defined, unless:
.. The Annuitant was also the Contract Owner, in which case the Death of Owner
provisions above apply; or
.. The Contract Owner is a grantor trust not established by a business, in which
case the Beneficiary(ies) will be deemed the New Contract Owners and the Death
of Contract Owner provisions above will apply.
SURVIVING CONTRACT OWNER CATEGORIES
CATEGORY 1. If the Contract Owner is a living person, prior to the Annuitant's
death, the Contract Owner must choose from among the death settlement Options A,
B, or D described below. If the Contract Owner does not choose one of these
Options, then Option D will apply.
CATEGORY 2. If the Contract Owner is a non-living person such as a corporation
or a trust, the Contract Owner must choose from death settlement Options A or C
described below. If the Contract Owner does not choose one of these Options,
then Option C will apply.
The death settlement options we currently offer are:
OPTION A. The Contract Owner may elect to receive the Death Proceeds in a lump
sum.
OPTION B. The Contract Owner may elect to apply the Death Proceeds to one of
the Income Plans described above. Such income payments must begin within one
year of the date of death.
OPTION C. The Contract Owner may elect to receive the Contract Value payable
within 5 years of the date of death. The Contract Value, as of the date we
receive the first Complete Request for Settlement, will be reset to equal the
Death Proceeds as of that date. Any excess amount of the Death Proceeds over the
Contract Value on that date will be allocated to the Putnam VT Money Market
Variable Sub-Account unless the Contract Owner provides other allocation
instructions.
The Contract Owner may not make any additional purchase payments under this
option. Withdrawal charges will be waived for any withdrawals made during the
5-year period after the date of death; however,
62 PROSPECTUS
amounts withdrawn may be subject to Market Value Adjustments. The Contract Owner
may exercise all rights set forth in the Transfers provision.
OPTION D. The Contract Owner may elect to continue the Contract and the
youngest Contract Owner will become the new Annuitant. The Contract Value of the
continued Contract will not be adjusted to equal the Death Proceeds.
We reserve the right to offer additional death settlement options.
QUALIFIED CONTRACTS
The death settlement options for qualified plans, including IRAs, may be
different to conform with the individual tax requirements of each type of
qualified 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.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION AND DEATH OF CO-ANNUITANT
We offer a Spousal Protection Benefit (Co-Annuitant) Option that may be added to
your Contract subject to the following conditions:
.. The individually owned Contract must be either a traditional, Roth, or
Simplified Employee Pension IRA.
.. The Contract Owner's spouse must be the sole Primary Beneficiary of the
Contract and will be the named Co-Annuitant.
.. The Contract Owner must be age 90 or younger on the Rider Application Date;
and the Co-Annuitant must be age 79 or younger on the Rider Application Date.
.. The option may be added at Contract issue or anytime after Contract issue
through April 30, 2005. On or after May 1, 2005, the option may only be added
when we issue the Contract or within 6 months of the Contract Owner's
marriage. We may require proof of marriage in a form satisfactory to us.
Currently, you may not add the Option to your Contract without our prior
approval if you Contract Value is greater than $1,000,000 at the time you
choose to add the Option.
Under the Spousal Protection Benefit Option, the Co-Annuitant will be considered
to be an Annuitant under the Contract during the Accumulation Phase except that
the "Death of Annuitant" provision does not apply on the death of the
Co-Annuitant, and that the latest Payout Start Date will be based solely on the
Contract Owner's age.
You may change the Co-Annuitant to a new spouse only if you provide proof of
remarriage in a form satisfactory to us. Once we accept a change, the change
will take effect on the date you signed the request. Each change is subject to
any payment we make or other action we take before we accept it. At any time,
there may only be one Co-Annuitant under your Contract.
There is an annual Rider Fee of 0.10% of the Contract Value for new Options
added on or after January 1, 2005. For Options added prior to this date, there
is no charge for this Option. We reserve the right to assess an annual Rider Fee
not to exceed 0.15% for Options added in the future. Once this Option is added
to your Contract, we guarantee that we will not increase what we charge you for
this Option. For Contracts purchased on or after January 1, 2005, we may
discontinue offering the Spousal Protection Benefit (Co-Annuitant) Option at any
time prior to the time you elect to receive it.
The option will terminate upon the date termination is accepted by us or will
terminate on the earliest of the following occurrences:
.. upon the death of the Co-Annuitant (as of the date we determine the Death
Proceeds);
.. upon the death of the Contract Owner (as of the date we determine the Death
Proceeds);
.. on the date the Contract is terminated;
.. on the Payout Start Date; or
.. on the date you change the beneficiary of the Contract and the change is
accepted by us;
.. for options added on or after January 1, 2005, the Owner may terminate the
option upon the divorce of the Owner and the Co-Annuitant by providing written
notice and proof of divorce in a form satisfactory to us;
.. for options added prior to January 1, 2005, the Owner may terminate this
option at anytime by written notice in a form satisfactory to us.
Once terminated, a new Spousal Protection Benefit (Co-Annuitant) Option cannot
be added to the Contract unless the last option attached to the Contract was
terminated due to divorce or a change of beneficiary.
DEATH OF CO-ANNUITANT. If the Co-Annuitant dies prior to the Payout Start Date,
subject to the following conditions, the Contract will be continued according to
Option D under the "Death of Owner" provision of your Contract:
.. The Co-Annuitant must have been your legal spouse on the date of his or her
death; and
.. Option D of the "Death of Owner" provision of your Contract has not previously
been exercised.
The Contract may only be continued once under Option D under the "Death of
Owner" provision. For a description of Option D, see the "Death of Owner"
section of this prospectus.
63 PROSPECTUS
Note: For Contracts that have already been issued the Spousal Protection Benefit
(Co-Annuitant) Option for Custodial Individual Retirement Accounts, this section
replaces the Spousal Protection Benefit (Co-Annuitant) Option for Custodial
Individual Retirement Accounts and Death of Co-Annuitant section.
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FOR CUSTODIAL INDIVIDUAL
RETIREMENT ACCOUNTS AND DEATH OF CO-ANNUITANT
We offer a Spousal Protection Benefit (Co-Annuitant) Option for certain
Custodial Individual Retirement Accounts established under Code Section 408(a)
that may be added to your Contract. CSP may not be available in all states. CSP
is subject to the following conditions ("CSP Conditions"):
.. The beneficially owned Contract must be a Custodial traditional IRA, Custodial
Roth IRA, or a Custodial Simplified Employee Pension IRA.
.. The Annuitant must be the beneficial owner of the Custodial traditional IRA,
Custodial Roth IRA, or Custodial Simplified Employee Pension IRA.
.. The Co-Annuitant must be the legal spouse of the Annuitant. Only one
Co-Annuitant may be named.
.. The Co-Annuitant must be the sole beneficiary of the Custodial traditional
IRA, Custodial Roth IRA, or the Custodial Simplified Employee Pension IRA.
.. The Annuitant must be age 90 or younger on the CSP Application Date.
.. The Co-Annuitant must be age 79 or younger on the CSP Application Date.
.. The CSP may be added at Contract issue or anytime after Contract issue through
April 30, 2005. On or after May 1, 2005, the CSP may only be added when we
issue the Contract or within 6 months of the beneficial owner's marriage. We
may require proof of marriage in a form satisfactory to us. Currently, you may
not add the CSP to your Contract without our prior approval if your Contract
Value is greater than $1,000,000 at the time you choose to add the Option.
.. We have made no payments under any Income Plan.
.. There is an annual Rider Fee of 0.10% of the Contract Value for new Options
added on or after January 1, 2005. For Options added prior to this date, there
is no charge for this Option. We reserve the right to increase the annual
Rider Fee to up to 0.15% of the Contract Value.
Under CSP, the Co-Annuitant will be considered to be an Annuitant under the
Contract during the Accumulation Phase except that:
.. The Co-Annuitant will not be considered to be an Annuitant for purposes of
determining the Payout Start Date.
.. The "Death of Annuitant" provision of the Contract does not apply on the death
of the Co-Annuitant.
.. The Co-Annuitant is not considered the beneficial owner of the Custodial
traditional IRA, Custodial Roth IRA, or the Custodial Simplified Employee
Pension IRA.
You may change the Co-Annuitant to a new spouse only if you provide proof of
remarriage in a form satisfactory to us. Once we accept a change, the change
will take effect on the date you signed the request. Each change is subject to
any payment we make or other action we take before we accept it. At any time,
there may only be one Co-Annuitant under your Contract.
For Spousal Protection Benefit (Co-Annuitant) Options for Custodial Individual
Retirement Accounts added on or after January 1, 2005, there is an annual Rider
Fee of 0.10% of the Contract Value for this Option. For Options added prior to
this date, there is no charge for this Option. We reserve the right to assess an
annual Rider Fee not to exceed 0.15% for Options added in the future. Once this
Option is added to your Contract, we guarantee that we will not increase what we
charge you for this Option. For Contracts issued on or after January 1, 2005, we
may discontinue offering the Spousal Protection Benefit (Co-Annuitant) Option
for Custodial Individual Retirement Accounts at any time to new Contract Owners
and to existing Contract Owners who did not elect the Option prior to the date
of discontinuance.
The Owner may terminate CSP upon the divorce of the Annuitant and the
Co-Annuitant by providing written notice and proof of divorce in a form
satisfactory to us. The Owner may also terminate CSP upon a change in the
beneficiary of the IRA by providing written notice and proof of the change in a
form satisfactory to us. CSP will terminate upon the date termination is
accepted by us or on the earliest of the following occurrences:
.. On the date CSP is terminated as described above; or
.. Upon the death of the Annuitant; or
.. Upon the death of the Co-Annuitant; or
.. On the date the Contract is terminated; or
.. On the Payout Start Date.
Once terminated, a new CSP cannot be added to the Contract unless the last
option attached to the Contract was terminated due to divorce or change of
beneficiary of the IRA.
DEATH OF CO-ANNUITANT. This section applies if:
.. The CSP Conditions are met.
.. The Annuitant was, at the time of the Co-Annuitant's death, the beneficial
owner of the Custodial traditional IRA, Custodial Roth IRA, or Custodial
Simplified Employee Pension IRA.
.. We have received proof satisfactory to us that the Co-Annuitant has died.
.. The Co-Annuitant was, at the time of the Co-Annuitant's death, the sole
beneficiary of the
64 PROSPECTUS
Custodial traditional IRA, Custodial Roth IRA, or Custodial Simplified
Employee Pension IRA, and
.. the Co-Annuitant was, at the time of the Co-Annuitant's death, the legal
spouse of the Annuitant.
If this section applies and if the Co-Annuitant dies prior to the Payout Start
Date, then, subject to the following conditions, the Contract may be continued
according to Option D under the "Death of Owner" provisions under the same terms
and conditions that would apply if the Co-Annuitant were the Owner of the
Contract before death and the sole new Owner of the Contract were the Annuitant
provided that:
.. The Co-Annuitant was the legal spouse of the Annuitant on the date of
Annuitant's death.
.. The Owner does not thereafter name a new Co-Annuitant; and
.. The Owner of the Custodial traditional IRA, Custodial Roth IRA, or Custodial
Simplified Employee Pension IRA remains the Custodian; and
.. The Contract may only be continued once.
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.
VARIABLE ACCOUNT
Allstate Life established the Allstate Financial Advisors Separate Account I in
1999. We have registered the Variable Account with the SEC as a unit investment
trust. The SEC does not supervise the management of the Variable Account or
Allstate Life.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under Illinois law. That means we account for the Variable
Account's income, gains and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Allstate Life.
The Variable Account currently consists of multiple Variable Sub-Accounts. Each
Variable Sub-Account offered under this Contract invests in a corresponding
Portfolio. We may add new Variable Sub-Accounts or eliminate one or more of
them, if we believe marketing, tax, or investment conditions so warrant. We do
not guarantee the investment performance of the Variable Account, its
Sub-Accounts or the Portfolios. We may use the Variable Account to fund our
other annuity contracts. We will account separately for each type of annuity
contract funded by the Variable Account.
THE PORTFOLIOS
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolios at their net asset value.
VOTING PRIVILEGES. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Portfolios that we
hold directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract Owners entitled to give such
instructions.
As a general rule, before the Payout Start Date, the Contract Owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Portfolio as of the record
date of the meeting. After the Payout Start Date the person receiving income
payments has the voting interest. The payee's number of votes will be determined
by dividing the reserve for such Contract allocated to the applicable
Sub-Account by the net asset value per share of the corresponding Portfolio. The
votes decrease as income payments are made and as the reserves for the Contract
decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion. We will apply voting instructions to
abstain on any item to be voted upon on a pro-rata basis to reduce the votes
eligible to be cast.
We reserve the right to vote Portfolio shares as we see fit without regard to
voting instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for
65 PROSPECTUS
that action in the next semi-annual financial report we send to you.
CHANGES IN PORTFOLIOS. If the shares of any of the Portfolios are no longer
available for investment by the Variable Account or if, in our judgment, further
investment in such shares is no longer desirable in view of the purposes of the
Contract, we may eliminate that Portfolio and substitute shares of another
eligible investment fund. Any substitution of securities will comply with the
requirements of the Investment Company Act of 1940. We also may add new Variable
Sub-Accounts that invest in additional underlying funds. We will notify you in
advance of any change.
CONFLICTS OF INTEREST. Certain of the Portfolios sell their shares to separate
accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the same Portfolio. The board of directors/trustees of these Portfolios monitors
for possible conflicts among separate accounts buying shares of the Portfolios.
Conflicts could develop for a variety of reasons. For example, differences in
treatment under tax and other laws or the failure by a separate account to
comply with such laws could cause a conflict. To eliminate a conflict, the
Portfolio's board of directors/trustees may require a separate account to
withdraw its participation in a Portfolio. A Portfolio's net asset value could
decrease if it had to sell investment securities to pay redemption proceeds to a
separate account withdrawing because of a conflict.
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.
For Allstate Advisor Contracts issued to employees of Allstate Life and certain
other eligible organizations, and in lieu of Allstate Life paying any
commissions on sales of those Contracts, the Contract Owner will receive a
credit of 6% of the amount of each purchase payment that will be applied to each
purchase payment. Allstate Life will allocate this credit in the same allocation
as your most recent instruction. If you exercise your Right to Cancel your
Contract as described in this prospectus, we will return to you the amount you
would have received had there been no credit. Unless we are required by law to
return your purchase payments, this amount also will include any charges
deducted that reduced your Contract Value prior to cancellation, plus any
investment gain on
66 PROSPECTUS
the credit. The credit may not be available in all states. We do not consider
the credit to be an "investment in the contract" for income tax purposes.
ADMINISTRATION. We have primary responsibility for all administration of the
Contracts and the Variable Account.
We provide the following administrative services, among others:
.. issuance of the Contracts;
.. maintenance of Contract Owner records;
.. Contract Owner services;
.. calculation of unit values;
.. maintenance of the Variable Account; and
.. preparation of Contract Owner reports.
We will send you Contract statements and transaction confirmations at least
annually. 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 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 will
make the adjustment as of the date that we receive notice of the potential
error.
We will also 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
Foley & Lardner LLP, Washington, D.C., has advised Allstate Life on certain
federal securities law matters. All matters of Illinois law pertaining to the
Contracts, including the validity of the Contracts and Allstate Life's right to
issue such Contracts under Illinois insurance law, have been passed upon by
Michael J. Velotta, General Counsel of Allstate Life.
67 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. Since the Variable Account is not an entity separate from Allstate
Life, and its operations form a part of Allstate Life, it will not be taxed
separately. Investment income and realized capital gains of the Variable Account
are automatically applied to increase reserves under the Contract. Under
existing federal income tax law, Allstate Life believes that the Variable
Account investment income and capital gains will not be taxed to the extent that
such income and gains are applied to increase the reserves under the Contract.
Accordingly, Allstate Life does not anticipate that it will incur any federal
income tax liability attributable to the Variable Account, and therefore
Allstate Life does not intend to make provisions for any such taxes. If Allstate
Life is taxed on investment income or capital gains of the Variable Account,
then Allstate Life may impose a charge against the Variable Account in order to
make provision for such taxes.
TAXATION OF VARIABLE 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,
.. the investments of the Variable Account are "adequately diversified" according
to Treasury Department regulations, and
.. Allstate Life is considered the owner of the Variable Account assets for
federal income tax purposes.
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
beneficiary. A trust named beneficiary, 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.
DIVERSIFICATION REQUIREMENTS. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the Contract owner during the taxable
year. Although Allstate Life does not have control over the Portfolios or their
investments, we expect the Portfolios to meet the diversification requirements.
OWNERSHIP TREATMENT. The IRS has stated that a contract owner will be
considered the owner of separate account assets if he possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. At the time the diversification regulations were issued, the
Treasury Department announced that the regulations do not provide guidance
concerning circumstances in which investor control of the separate account
investments may cause a Contract owner to be treated as the owner of the
separate account. The Treasury Department also stated that future
68 PROSPECTUS
guidance would be issued regarding the extent that owners could direct
sub-account investments without being treated as owners of the underlying assets
of the separate account.
Your rights under the Contract are different than those described by the IRS in
private and published rulings in which it found that Contract owners were not
owners of separate account assets. For example, if your contract offers more
than twenty (20) investment alternatives you have the choice to allocate
premiums and contract values among a broader selection of investment
alternatives than described in such rulings. You may be able to transfer among
investment alternatives more frequently than in such rulings. These differences
could result in you being treated as the owner of the Variable Account. If this
occurs, income and gain from the Variable Account assets would be includible in
your gross income. Allstate Life does not know what standards will be set forth
in any regulations or rulings which the Treasury Department may issue. It is
possible that future standards announced by the Treasury Department could
adversely affect the tax treatment of your Contract. We reserve the right to
modify the Contract as necessary to attempt to prevent you from being considered
the federal tax owner of the assets of the Variable Account. However, we make no
guarantee that such modification to the Contract will be successful.
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 full withdrawal
under a Non-Qualified Contract, the amount received will be taxable only to the
extent it exceeds the investment in the Contract.
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. If you elect variable annuity payments, the amount
excluded from taxable income is determined by dividing the investment in the
Contract by the total number of expected payments. The annuity payments will be
fully taxable after the total amount of the investment in the Contract is
excluded using these ratios. If any variable payment is less than the excludable
amount you should contact a competent tax advisor to determine how to report any
unrecovered investment. 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.
TAXATION OF LEVEL MONTHLY VARIABLE ANNUITY PAYMENTS. You may have an option to
elect a variable income payment stream consisting of level monthly payments that
are recalculated annually. Although we will report your levelized payments to
the IRS in the year distributed, it is possible the IRS could determine that
receipt of the first monthly payout of each annual amount is constructive
receipt of the entire annual amount. If the IRS were to take this position, the
taxable amount of your levelized payments would be accelerated to the time of
the first monthly payout and reported in the tax year in which the first monthly
payout is received.
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.
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:
69 PROSPECTUS
.. 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 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
70 PROSPECTUS
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 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
71 PROSPECTUS
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 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
72 PROSPECTUS
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.
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).
73 PROSPECTUS
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).
ANNUAL REPORTS AND OTHER DOCUMENTS
- --------------------------------------------------------------------------------
Allstate Life's Annual Report on Form 10-K for the year ended December 31, 2004
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 450 Fifth Street, N.W., Washington, D.C.
20549. For more information on the operations of 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).
74 PROSPECTUS
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Additions, Deletions, or Substitutions of Investments
- --------------------------------------------------------------------------------
The Contracts
- --------------------------------------------------------------------------------
Calculation of Accumulation Unit Values
- --------------------------------------------------------------------------------
Calculation of Variable Income Payments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
General Matters
- --------------------------------------------------------------------------------
Experts
- --------------------------------------------------------------------------------
Financial Statements
- --------------------------------------------------------------------------------
Appendix A-Accumulation Unit Values
- --------------------------------------------------------------------------------
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.
75 PROSPECTUS
APPENDIX A
CONTRACT COMPARISON CHART
FEATURE ADVISOR ADVISOR PREFERRED
- --------------------------------------------------------------------------------------------------------------
5-YEAR WITHDRAWAL 3-YEAR WITHDRAWAL NO WITHDRAWAL
CHARGE OPTION CHARGE OPTION CHARGE OPTION
- --------------------------------------------------------------------------------------------------------------
Mortality and Expense
Risk Charge 1.10% 1.40% 1.50% 1.60%
(Base Contract)
- --------------------------------------------------------------------------------------------------------------
Withdrawal Charge 7/ 6/ 5/ 4/ 3 7/ 6/ 5 None
(% of purchase payment) 7/ 7/ 6/ 5/ 4/ 3/ 2
- --------------------------------------------------------------------------------------------------------------
Withdrawal Charge Confinement, Terminal Confinement, Terminal Confinement, Terminal N/A
Waivers Illness, Unemployment Illness, Unemployment Illness, Unemployment
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fixed Account Options available depend on the type of Contract you have
purchased and the state in which your Contract was issued. The following tables
summarize the availability of the Fixed Account Options in general. Please check
with your representative for specific details for your state.
DCA FIXED ACCOUNT OPTION
- ----------------------------------------------------------------------------------------
Advisor Preferred
------------------------------------------------------
Advisor 5-YEAR 3-YEAR NO WITHDRAWAL
WITHDRAWAL CHARGE WITHDRAWAL CHARGE CHARGE OPTION
- ---------------------------------- OPTION OPTION
------------------------------------------------------
TRANSFER PERIODS 3 to 6 month 3 to 6 month 3 to 6 month N/A
----------------------------------------------------------------------
- ------------------ 7 to 7 to 12 month 7 to 12 month N/A
12 month
----------------------------------------------------------------------
STANDARD FIXED ACCOUNT OPTION (SOME OPTIONS NOT AVAILABLE IN ALL STATES)
- --------------------------------------------------------------------------------------------
Advisor Advisor Preferred
---------------------------------------------------------
5-YEAR 3-YEAR NO
WITHDRAWAL CHARGE WITHDRAWAL CHARGE WITHDRAWAL CHARGE
---------------- OPTION OPTION OPTION
---------------------------------------------------------
GUARANTEE PERIODS 1-year N/A N/A N/A
- --------------------------------------------------------------------------------------------
3-year* N/A N/A N/A
-------------------------------------------------------------------------
5-year* N/A N/A N/A
-------------------------------------------------------------------------
7-year* N/A N/A N/A
-------------------------------------------------------------------------
MVA FIXED ACCOUNT OPTION (NOT AVAILABLE IN ALL STATES)**
- --------------------------------------------------------------------------------------------
Advisor Advisor Preferred
---------------------------------------------------------
5-YEAR 3-YEAR NO
WITHDRAWAL CHARGE WITHDRAWAL CHARGE WITHDRAWAL CHARGE
---------------- OPTION OPTION OPTION
---------------------------------------------------------
GUARANTEE PERIODS 3-year 3-year 3-year 3-year
- --------------------------------------------------------------------------------------------
5-year 5-year 5-year 5-year
-------------------------------------------------------------------------
7-year 7-year 7-year 7-year
-------------------------------------------------------------------------
10-year 10-year 10-year 10-year
-------------------------------------------------------------------------
* Available only in states in which the MVA Fixed Account Option is not offered.
** Not available in states in which the 3-, 5-, or 7-year Standard Fixed Account
Options are offered.
76 PROSPECTUS
APPENDIX B - MARKET VALUE ADJUSTMENT
- --------------------------------------------------------------------------------
The Market Value Adjustment is based on the following:
I = the Treasury Rate for a maturity equal to the term length of the
Guarantee Period Account for the week preceding the establishment of
the Market Value Adjusted Fixed Guarantee Period Account;
J = the Treasury Rate for a maturity equal to the term length of the
Market Value Adjusted Fixed Guarantee Period Account for the week
preceding the date amounts are transferred or withdrawn from the
Market Value Adjusted Fixed Guarantee Period Account, the date we
determine the Death Proceeds, or the Payout Start Date, as the case
may be ("Market Value Adjustment Date").
N = the number of whole and partial years from the Market Value
Adjustment Date to the expiration of the term length of the Market
Value Adjusted Fixed Guarantee Period Account.
Treasury Rate means the U.S. Treasury Note Constant Maturity yield as reported
in Federal Reserve Bulletin Release H.15. If such yields cease 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
To determine the Market Value Adjustment, we will multiply the Market Value
Adjustment factor by the amount transferred, withdrawn, paid as Death Proceeds,
or applied to an Income Plan from a Market Value Adjusted Fixed Guarantee Period
Account at any time other than during the 30 day period after such Guarantee
Period Account expires. NOTE: These examples assume that premium taxes are not
applicable.
EXAMPLES OF MARKET VALUE ADJUSTMENT
$10,000 allocated to a Market Value Adjusted Fixed Guarantee
Purchase Payment: Period Account
Guarantee Period: 5 years
Interest Rate: 4.50%
Full Withdrawal: End of Contract Year 3
Contract: Allstate Advisor*
EXAMPLE 1: (ASSUMES DECLINING INTEREST RATES)
Step 1: Calculate Contract Value at = $10,000.00 X (1.045) /3/ = $11,411.66
End of Contract Year 3:
Step 2: Calculate the Free =.15 X $10,000 = $1500
Withdrawal Amount:
Step 3: Calculate the Withdrawal =.06 X ($10,000 - $1,500) = $510
Charge:
Step 4: Calculate the Market Value I = 4.50%
Adjustment: J = 4.20%
730 DAYS
N = -------- = 2
365 DAYS
Market Value Adjustment Factor: .9 X [I -
(J + .0025)] X N
= .9 X [.045 - (.042 + .0025)] X 2 = .0009
Market Value Adjustment = Market Value
Adjustment Factor X Amount
Subject To Market Value Adjustment:
= .0009 X $11,411.66 = $10.27
Step 5: Calculate the amount = $11,411.66 - $510 + $10.27 = $10,911.93
received by Contract owner as a
result of full withdrawal at the
end of Contract Year 3:
77 PROSPECTUS
EXAMPLE 2: (ASSUMES RISING INTEREST RATES)
Step 1: Calculate Contract Value at End of Contract Year 3: = $10,000.00 X (1.045) /3/ = $11,411.66
Step 2: Calculate The Free Withdrawal Amount: = .15 X $10,000 = $1,500
Step 3: Calculate the Withdrawal Charge: = 0.06 X ($10,000 - $1,500) = $510
Step 4: Calculate the Market Value Adjustment: I = 4.50%
J = 4.80%
730 DAYS
N = ----------- = 2
365 DAYS
Market Value Adjustment Factor: .9 X [I - (J + .0025)] X N
= .9 X [(.045 - (.048 + .0025)] X (2) = -.0099
Market Value Adjustment = Market Value Adjustment Factor X
Amount Subject To Market Value Adjustment:
= -.0099 X $11,411.66 = -$112.98
Step 5: Calculate the amount received by Contract owner as a = $11,411.66 - $510 - $112.98 = $10,788.68
result of full withdrawal at the end of Contract Year 3:
*These examples assume the election of the ALLSTATE ADVISOR CONTRACT for the
purpose of illustrating the Market Value Adjustment calculation. The amounts
would be different under the ALLSTATE ADVISOR PREFERRED CONTRACT, which has
different expenses and withdrawal charges.
78 PROSPECTUS
APPENDIX C
EXAMPLE OF CALCULATION OF INCOME PROTECTION BENEFIT
- --------------------------------------------------------------------------------
Appendix C illustrates how we calculate the amount guaranteed under the Income
Protection Benefit Option. Please remember that you are looking at an example
only. Please also remember that the Income Protection Benefit Option may only be
added to Income Plans 1 and/or 2, and only to those Income Plans for which you
have selected variable income payments.
To illustrate the calculation of the amount guaranteed under the Income
Protection Benefit Option, we assume the following:
Adjusted age of Annuitant on the Payout Start 65
Date:
- -------------------------------------------------------------------------------
Sex of Annuitant: male
- -------------------------------------------------------------------------------
Income Plan selected: 1
- -------------------------------------------------------------------------------
Payment frequency: monthly
- -------------------------------------------------------------------------------
Amount applied to variable income payments under $100,000.00
the Income Plan:
- -------------------------------------------------------------------------------
The example assumes that the withdrawal charge period has expired for all
purchase payments. In accordance with the terms of the Contract, the following
additional assumptions apply:
Assumed investment rate: 3%
- -------------------------------------------------------------------------------
Guaranteed minimum variable income 85% of the initial variable amount income
payment: value
- -------------------------------------------------------------------------------
STEP 1 - CALCULATION OF THE INITIAL VARIABLE AMOUNT INCOME VALUE:
Using the assumptions stated above, the initial monthly income payment is $5.49
per $1,000 applied to variable income payments under Income Plan 1. Therefore,
the initial variable amount income value = $100,000 X $5.49/1000 = $549.00.
STEP 2 - CALCULATION OF THE AMOUNT GUARANTEED UNDER THE INCOME PROTECTION
BENEFIT OPTION:
guaranteed minimum variable income payment = 85% X initial variable amount
income value = 85% X $549.00 = $466.65.
STEP 3 - ILLUSTRATION OF THE EFFECT OF THE MINIMUM PAYMENT GUARANTEE UNDER THE
INCOME PROTECTION BENEFIT OPTION:
If in any month your variable income payments would fall below the amount
guaranteed under the Income Protection Benefit Option, your payment for that
month will equal the guaranteed minimum variable income payment. For example,
you would receive $466.65 even if the amount of your monthly income payment
would have been less than that as a result of declining investment experience.
On the other hand, if your monthly income payment is greater than the minimum
guaranteed $466.65, you would receive the greater amount.
79 PROSPECTUS
APPENDIX D
WITHDRAWAL ADJUSTMENT EXAMPLE - INCOME BENEFITS*
- --------------------------------------------------------------------------------
Issue Date: January 1, 2003
Initial Purchase Payment: $50,000
Income Benefit Amount
Beginning Contract Maximum
Type of Contract Transaction Value After Anniversary 5%
Date Occurrence Value Amount Occurrence Value Roll-Up Value
- -----------------------------------------------------------------------------------------------------------------------------------
1/1/04 Contract Anniversary $55,000 _ $55,000 $55,000 $52,500
- -----------------------------------------------------------------------------------------------------------------------------------
7/1/04 Partial Withdrawal $60,000 $15,000 $45,000 $41,250 $40,176
- -----------------------------------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted income benefits in the example
above. Please note that the withdrawal adjustment reduces the Maximum
Anniversary Value by the same proportion as the withdrawal reduces the Contract
Value. The withdrawal adjustment reduces the 5% Roll-Up Value part
dollar-for-dollar and part proportionally.
MAXIMUM ANNIVERSARY VALUE INCOME BENEFIT
- -------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial (b) $60,000
Withdrawal
- -------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior (c) $55,000
to Partial Withdrawal
- -------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,750
- -------------------------------------------------------------------------------
Adjusted Income Benefit $41,250
- -------------------------------------------------------------------------------
5% ROLL-UP VALUE INCOME BENEFIT**
- -------------------------------------------------------------------------------
Total Partial Withdrawal Amount (a) $15,000
- -------------------------------------------------------------------------------
STEP I - DOLLAR FOR DOLLAR PORTION
- -------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial (b) $60,000
Withdrawal
- -------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior
to Partial Withdrawal (assumes 181 days worth of (c) $53,786
interest on $52,500)
- -------------------------------------------------------------------------------
Partial Withdrawal Amount (Corridor = 5% of (d) $ 2,625
Roll-Up Value on 1/1/04)
- -------------------------------------------------------------------------------
Dollar for Dollar Withdrawal Adjustment (e)=(d)*1.05^-0.5 $ 2,562
(discounted for a half year's worth of interest)
- -------------------------------------------------------------------------------
Contract Value After Step 1 (b')=(b)-(d) $57,375
- -------------------------------------------------------------------------------
Adjusted Income Benefit After Step 1 (c')=(c)-(e) $51,224
- -------------------------------------------------------------------------------
STEP 2 - PROPORTIONAL PORTION
- -------------------------------------------------------------------------------
Partial Withdrawal Amount (a')=(a)-(d) $12,375
- -------------------------------------------------------------------------------
Proportional Adjustment (a')/(b')*(c') $11,048
- -------------------------------------------------------------------------------
Contract Value After Step 2 (b')-(a') $45,000
- -------------------------------------------------------------------------------
Adjusted Income Benefit After Step 2 $40,176
- -------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values and Maximum Anniversary
Value for all Contracts, net of applicable fees and charges. Actual income
benefit amounts will differ due to the different fees and charges under each
Contract. Please remember that you are looking at an example and that your
investment performance may be greater or lower than the figures shown.
80 PROSPECTUS
APPENDIX E
WITHDRAWAL ADJUSTMENT EXAMPLE - DEATH BENEFITS*
- --------------------------------------------------------------------------------
Issue Date: January 1, 2005
Initial Purchase Payment: $50,000
Death Benefit Amount
----------------------------------------
Beginning Contract Maximum
Type of Contract Transaction Value After Purchase Anniversary Enhanced
Date Occurrence Value Amount Occurrence Payment Value Value Beneficiary
- ------------------------------------------------------------------------------------------------------------------------ Value
------------
1/1/06 Contract Anniversary $55,000 _ $55,000 $50,000 $55,000 $52,500
- ------------------------------------------------------------------------------------------------------------------------------------
7/1/06 Partial Withdrawal $60,000 $15,000 $45,000 $37,500 $41,250 $40,339
- ------------------------------------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted death benefits in the example
above. Please note that the withdrawal reduces the Purchase Payment Value, the
Maximum Anniversary Value, and the Enhanced Beneficiary Value by the same
proportion as the withdrawal reduces the Contract Value.
PURCHASE PAYMENT VALUE DEATH BENEFIT
- -----------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -----------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- -----------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to (c) $50,000
Partial Withdrawal
- -----------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $12,500
- -----------------------------------------------------------------------------------
Adjusted Death Benefit $37,500
- -----------------------------------------------------------------------------------
MAV DEATH BENEFIT
- -----------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -----------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- -----------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to (c) $55,000
Partial Withdrawal
- -----------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,750
- -----------------------------------------------------------------------------------
Adjusted Death Benefit $41,250
- -----------------------------------------------------------------------------------
ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE)
BENEFIT
- -----------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- -----------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- -----------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to
Partial Withdrawal (assumes 181 days worth of interest (c) $53,786
on $52,500)
- -----------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,446
- -----------------------------------------------------------------------------------
Adjusted Death Benefit $40,339
- -----------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values and Maximum Anniversary
Value for all Contracts, net of applicable fees and charges. Actual death
benefit amounts will differ due to the different fees and charges under each
Contract. Please remember that you are looking at an example and that your
investment performance may be greater or lower than the figures shown.
81 PROSPECTUS
APPENDIX F
CALCULATION OF EARNINGS PROTECTION DEATH BENEFIT*
- --------------------------------------------------------------------------------
The following are examples of the Earnings Protection Death Benefit Option. For
illustrative purposes, the examples assume Earnings in each case. Please
remember that you are looking at examples and that your investment performance
may be greater or lower than the figures shown.
EXAMPLE 1: ELECTED WHEN CONTRACT WAS ISSUED WITHOUT ANY SUBSEQUENT ADDITIONS OR
WITHDRAWALS
In this example, assume that the oldest Contract Owner is age 55 on the Rider
Application Date and elects the Earnings Protection Death Benefit Option when
the Contract is issued. The Contract Owner makes an initial purchase payment of
$100,000. After four years, the Contract Owner dies. On the date Allstate Life
receives a Complete Request for Settlement, the Contract Value is $125,000.
Prior to his death, the Contract Owner did not make any additional purchase
payments or take any withdrawals.
Excess of Earnings Withdrawals = $0
Purchase Payments in the 12 months prior to = $0
death
In-Force Premium = $100,000
($100,000 + $0 - $0)
In-Force Earnings = $25,000
($125,000 - $100,000)
EARNINGS PROTECTION DEATH BENEFIT** = 40 % * $25,000 = $10,000
Since 40% of In-Force Earnings is less than 100% of the In-Force Premium
(excluding purchase payments in the 12 months prior to death), the In-Force
Earnings are used to compute the Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
will differ due to the different fees and charges under each Contract.
**If the oldest Contract Owner or Annuitant had been over age 70, and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($6,250.00).
EXAMPLE 2: ELECTED WHEN CONTRACT WAS ISSUED WITH SUBSEQUENT WITHDRAWALS
In this example, assume the same facts as above, except that the Contract Owner
has taken a withdrawal of $10,000 during the second year of the Contract.
Immediately prior to the withdrawal, the Contract Value is $105,000. Here,
$5,000 of the withdrawal is in excess of the In-Force Earnings at the time of
the withdrawal. The Contract Value on the date Allstate Life receives a Complete
Request for Settlement will be assumed to be $114,000.
Excess of Earnings Withdrawals = $5,000
($10,000-$5,000)
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $95,000
($100,000+$0-$5,000)
In-Force Earnings = $19,000
($114,000-$95,000)
EARNINGS PROTECTION DEATH BENEFIT** = 40%*$19,000=$7,600
Since 40% of In-Force Earnings is less than 100% of the In-Force Premium
(excluding purchase payments in the 12 months prior to death), the In-Force
Earnings are used to compute the Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
will differ due to the different fees and charges under each Contract.
**If the oldest Contract Owner or Annuitant had been over age 70, and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($4,750.00).
82 PROSPECTUS
EXAMPLE 3: ELECTED AFTER CONTRACT WAS ISSUED WITH SUBSEQUENT ADDITIONS AND
WITHDRAWALS
This example is intended to illustrate the effect of adding the Earnings
Protection Death Benefit Option after the Contract has been issued and the
effect of later purchase payments. In this example, assume that the oldest
Contract Owner is age 72 on the Rider Application Date. At the time the Contract
is issued, the Contract Owner makes a purchase payment of $100,000. After two
years pass, the Contract Owner elects to add the Earnings Protection Death
Benefit Option. On the date this Rider is added, the Contract Value is $110,000.
Two years later, the Contract Owner withdraws $50,000. Immediately prior to the
withdrawal, the Contract Value is $130,000. Another two years later, the
Contract Owner makes an additional purchase payment of $40,000. Immediately
after the additional purchase payment, the Contract Value is $130,000. Two years
later, the Contract Owner dies with a Contract Value of $140,000 on the date
Allstate Life receives a Complete Request for Settlement.
Excess of Earnings Withdrawals = $30,000
($50,000-$20,000)
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $120,000
($110,000+$40,000-$30,000)
In-Force Earnings = $20,000
($140,000-$120,000)
EARNINGS PROTECTION DEATH BENEFIT** = 25%*$20,000=$5,000
In this example, In-Force Premium is equal to the Contract Value on Rider
Application Date plus the additional purchase payment and minus the
Excess-of-Earnings Withdrawal.
Since 25% of In-Force Earnings is less than 50% of the In-Force Premium
(excluding purchase payments in the 12 months prior to death), the In-Force
Earnings are used to compute the Earnings Protection Death Benefit amount.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit amounts
will differ due to the different fees and charges under each Contract.
**If the oldest Contract Owner or Annuitant had been age 70 or younger on the
Rider Application Date, the Earnings Protection Death Benefit would be 40% of
the In-Force Earnings ($8,000.00).
EXAMPLE 4: SPOUSAL CONTINUATION
This example is intended to illustrate the effect of a surviving spouse electing
to continue the Contract upon the death of the Contract Owner on a Contract with
the Earnings Protection Death Benefit Option. In this example, assume that the
oldest Contract Owner is age 60 at the time the Contract is purchased (with the
Earnings Protection Death Benefit Option and Maximum Anniversary Death Benefit
Option) with a $100,000 purchase payment. Five years later the Contract Owner
dies and the surviving spouse elects to continue the Contract. The Contract
Value and Maximum Anniversary Value at this time are $150,000 and $160,000,
respectively.
Excess of Earnings Withdrawals = $0
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $100,000
($100,000+$0-$0)
In-Force Earnings = $50,000
($150,000-$100,000)
EARNINGS PROTECTION DEATH BENEFIT** = 40%*$50,000=$20,000
Contract Value = $150,000
Death Benefit = $160,000
Earnings Protection Death Benefit = $20,000
Continuing Contract Value = $180,000
($160,000+$20,000)
Since 40% of In-Force Earnings is less than 100% of the In-Force Premium
(excluding purchase payments in the 12 months prior to death), the In-Force
Earnings are used to compute the Earnings Protection Death Benefit amount.
Assume the surviving spouse is age 72 when the Contract is continued. At this
time, the surviving spouse has the option to continue the Earnings Protection
Death Benefit Option at an additional mortality and expense risk charge of 0.40%
and with an In-Force Premium amount equal to the Contract Value and the Rider
Date reset to the date the Contract is
83 PROSPECTUS
continued. If this selection is made, the Earnings Protection Death Benefit will
be equal to the lesser of 25% of the In-Force Earnings and 50% of In-Force
Premium. Otherwise, the surviving spouse may elect to terminate the Earnings
Protection Death Benefit Option at the time of continuation.
* For purposes of illustrating the calculation of Earnings Protection Death
Benefit Option, the example assumes the same hypothetical Contract Values and
Maximum Anniversary Values for all Contracts, net of applicable fees and
charges. Actual death benefit amounts will differ due to the different fees and
charges under each Contract.
**If the oldest Contract Owner or Annuitant had been over age 70, and both were
age 79 or younger on the Rider Application Date, the Earnings Protection Death
Benefit would be 25% of the In-Force Earnings ($12,500.00).
84 PROSPECTUS
APPENDIX G - WITHDRAWAL ADJUSTMENT EXAMPLE - TRUERETURN ACCUMULATION BENEFIT*
- --------------------------------------------------------------------------------
RIDER DATE: JANUARY 2, 2005
INITIAL PURCHASE PAYMENT: $50,000
INITIAL BENEFIT BASE: $50,000
Type of Beginning Contract Transaction Contract Value
Date Occurrence Value Amount After Occurrence Benefit Base
- ----------------------------------------------------------------------------------------------------------------------
1/2/06 $55,000 - $55,000 $50,000
Contract Anniversary
- ----------------------------------------------------------------------------------------------------------------------
7/2/06 Partial Withdrawal $60,000 $15,000 $45,000 $37,500
- ----------------------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted Benefit Bases in the example
above. Please note the withdrawal reduces the Benefit Base by the same
proportion as the withdrawal reduces the Contract Value.
BENEFIT BASE
- --------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- --------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- --------------------------------------------------------------------------------
Value of Benefit Base Immediately Prior to Partial (c) $50,000
Withdrawal
- --------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $12,500
- --------------------------------------------------------------------------------
Adjusted Benefit Base $37,500
- --------------------------------------------------------------------------------
*For the purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values, net of applicable fees
and charges for all Contracts. Actual Contract Values will differ due to the
different fees and charges under each Contract. Please remember that you are
looking at an example and that your investment performance may be greater or
lower than the figures shown.
85 PROSPECTUS
APPENDIX H - SUREINCOME WITHDRAWAL BENEFIT OPTION CALCULATION EXAMPLES
- --------------------------------------------------------------------------------
Example 1: Assume you purchase an Allstate Advisor contract with a $100,000
- ----------
initial purchase payment and add the SureIncome Option at issue.
Your Benefit Base is $100,000, which is your initial purchase payment of
$100,000.
Your Benefit Payment is $8,000, which is 8% of your initial purchase payment.
Your Benefit Payment Remaining for this Benefit Year is $8,000, which is equal
to your Benefit Payment at the beginning of this Benefit Year.
Example 2: Assume Example 1 is continued and an additional purchase payment of
- ----------
40,000 is made in the first Benefit Year.
The Benefit Base is increased to $140,000, which is your prior Benefit Base
($100,000) plus your additional purchase payment ($40,000).
The Benefit Payment is increased to $11,200, which is your prior Benefit Payment
($8,000) plus 8% of your additional purchase payment ($40,000).
The Benefit Payment Remaining is increased to $11,200, which is your Benefit
Payment Remaining prior to your additional purchase payment ($8,000) plus 8% of
your additional purchase payment ($40,000).
Example 3: Assume Example 1 is continued and a withdrawal of $8,000 is made
- ----------
during the first Benefit Year.
The Benefit Base is reduced to $92,000, which is your prior Benefit Base
($100,000) less your withdrawal ($8,000).
The Benefit Payment is unchanged and remains $8,000.
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($8,000) less your withdrawal
($8,000).
Example 4: Assume example 1 is continued and a withdrawal of $25,000 is made
- ----------
during the first Benefit Year. Assume the Contract Value prior to the withdrawal
was $130,000. Because the $25,000 withdrawal is larger than the Benefit Payment
Remaining, the Benefit Base and Benefit Payment will be recalculated according
to applicable formulas.
The Benefit Base is reduced to $75,000, determined by the following calculation:
the lesser of ($130,000 - $25,000) and ($100,000 - $25,000)=$75,000.
The Benefit Payment remains $8,000, determined by the following calculation: the
lesser of ($8,000) and (8% x ($130,000-$25,000))=$8,000
There is no Benefit Payment Remaining because the withdrawal has reduced it to
$0.
Example 5: Assume example 3 is continued and an additional withdrawal of $5,000
- ----------
is taken in the same year (the first Benefit Year). Assume the Contract Value
prior to the additional withdrawal was $60,000. Because the $5,000 withdrawal is
larger than the Benefit Payment Remaining ($0), the Benefit Base and Benefit
Payment will be recalculated according to applicable formulas.
The Benefit Base is reduced to $55,000, determined by the following calculation:
the lesser of ($60,000 - $5,000) and ($92,000 - $5,000)=$55,000.
The Benefit Payment is reduced to $4,400, determined by the following formula:
the lesser of ($8,000) and ((8% x ($60,000-$5,000))=$4,400.
The Benefit Payment Remaining is unchanged at $0.
Example 6: Assume example 5 is continued and an additional Purchase Payment of
- ----------
40,000 is made in the same year (the first Benefit Year).
The Benefit Base is increased to $95,000, which is your prior Benefit Base
($55,000) plus your additional purchase payment ($40,000).
The Benefit Payment is increased to $7,600, which is your prior Benefit Payment
($4,400) plus 8% of your additional purchase payment ($40,000).
86 PROSPECTUS
The Benefit Payment Remaining is increased to $3,200, which is your Benefit
Payment Remaining prior to your additional purchase payment ($0) plus 8% of your
additional purchase payment ($40,000).
Example 7: Assume example 6 is continued and an additional withdrawal of $3,200
- ----------
is taken in the same year (the first Benefit Year).
The Benefit Base is reduced to $91,800, which is your prior Benefit Base
($95,000) less your withdrawal ($3,200).
The Benefit Payment is unchanged and remains $7,600.
The Benefit Payment Remaining is reduced to $0, which is your Benefit Payment
Remaining prior to your withdrawal ($3,200) less your withdrawal ($3,200).
87 PROSPECTUS
APPENDIX I - ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
Appendix I presents the Accumulation Unit Values and number of Accumulation
Units outstanding for each Variable Sub-Account since the Variable Sub-Accounts
were first offered under the Contracts. This Appendix includes Accumulation Unit
Values representing the highest and lowest available combinations of Contract
charges that affect Accumulation Unit Values for each Contract. The Statement of
Additional Information, which is available upon request without charge, contains
the Accumulation Unit Values for all other available combinations for each
Contract. Please contract us at 1-800-203-0068 to obtain a copy of the Statement
of Additional Information.
ALLSTATE ADVISOR CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION
UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST
OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
STI Classic Capital Appreciation Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.749
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.749 $ 11.327
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,073 11,497
- -------------------------------------------------------------------------------
STI Classic Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.356
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.356 $ 12.813
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,346 14,479
- -------------------------------------------------------------------------------
STI Classic International Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.267
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.267 $ 14.451
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 42 326
- -------------------------------------------------------------------------------
STI Classic Investment Grade Bond Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.026
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.026 $ 10.309
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,147 11,884
- -------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.438
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.438 $ 13.189
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 5,312 8,657
- -------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 12.233
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.233 $ 14.996
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,982 12,820
- -------------------------------------------------------------------------------
STI Classic Value Income Stock Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 11.262
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.262 $ 12.818
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,813
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.851 $ 13.475
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.475 $ 14.713
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 19,258 91,878
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 11.263
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 36,695
- -------------------------------------------------------------------------------
88 PROSPECTUS
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.533
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 19,883
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.508 $ 14.653
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.653 $ 17.899
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,008 30,266
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.274
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 26,530
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.428 $ 12.765
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.765 $ 14.192
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 11,247 93,951
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $13.323 $ 16.979
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $16.979 $ 20.902
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 384 4,722
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.618 $ 13.683
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.683 $ 16.009
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,281 22,173
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.920
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 2,505
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.370
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 10,261
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.904
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 8,652
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 11.153
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 9,878
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 11.136
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 7,818
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.282 $ 12.468
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.468 $ 14.698
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,972 14,766
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.053 $ 13.176
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.176 $ 14.280
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 7,178 53,108
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account/(1)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.118
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 2,979
- -------------------------------------------------------------------------------
89 PROSPECTUS
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.115 $ 12.323
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.323 $ 12.968
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 13,298 39,477
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.823 $ 14.323
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.323 $ 16.808
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,710 15,213
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.246 $ 13.039
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.039 $ 13.995
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,104 36,988
- -------------------------------------------------------------------------------
Oppenheimer Main Street/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.504 $ 12.713
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.713 $ 13.696
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,075 77,828
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.695 $ 14.755
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.755 $ 17.358
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,464 28,649
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.496 $ 12.213
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.213 $ 13.072
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,834 101,918
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.631 $ 12.510
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.510 $ 13.473
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 90 758
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.266 $ 13.589
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.589 $ 14.904
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,429 5,716
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.035 $ 11.373
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.373 $ 12.026
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 173 2,926
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.454 $ 13.428
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.428 $ 14.652
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 350 14,873
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.514 $ 10.507
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.507 $ 10.832
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,742 19,067
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.502 $ 13.465
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.465 $ 15.444
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 135 1,836
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.838 $ 13.072
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.072 $ 14.535
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 329 1,359
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 9.956 $ 9.914
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.914 $ 9.851
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,651 34,280
- -------------------------------------------------------------------------------
90 PROSPECTUS
Putnam VT New Opportunities - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.478 $ 13.580
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.580 $ 14.787
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 726 3,714
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.840 $ 14.664
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.664 $ 16.708
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,459
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.091 $ 13.177
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.177 $ 13.990
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,430
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.490 $ 12.158
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.158 $ 12.986
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 752 15,384
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.769 $ 14.145
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.145 $ 16.978
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 187 1,374
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.550 $ 13.646
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.646 $ 15.976
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 400 2,022
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.661 $ 12.475
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.475 $ 12.934
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,962 16,384
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 11.153
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 3,279
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 11.366
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 25,133
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.136 $ 11.811
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.811 $ 12.448
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,236 12,034
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.891 $ 13.437
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.437 $ 15.137
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,729 18,865
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 9.925
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 73,330
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.736 $ 13.960
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.960 $ 15.169
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 107 14,258
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.989
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 12,926
- -------------------------------------------------------------------------------
91 PROSPECTUS
Van Kampen UIF Equity Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 10.760
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 480
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 11.131
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 4,885
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.125 $ 13.621
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.621 $ 15.993
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 43 3,787
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $ 10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $ 11.323
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 22,127
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.657 $ 14.601
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.601 $ 19.611
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 114 27,144
- -------------------------------------------------------------------------------
* The Contracts and all of the Variable Sub-Accounts were first offered under
the Contracts on July 15, 2003, except for the following Variable
Sub-Accounts: Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Account which were first offered
under the Contracts on December 31, 2003; FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account,
Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT
Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account and Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account which were first offered
under the Contracts on May 1, 2004; FTVIP Franklin Large Cap Growth
Securities - Class 2 Sub-Account, Lord Abbett Series - All Value Sub-Account,
Lord Abbett Series - Bond-Debenture Sub-Account, Lord Abbett Series - Growth
and Income Sub-Account, Lord Abbett Series - Growth Opportunities
Sub-Account, Lord Abbett Series - Mid-Cap Value Sub-Account and Oppenheimer
Core Bond/VA - Service Shares Sub-Account (formerly Oppenheimer Bond/VA)
which were first offered under the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a Mortality and Expense Risk
Charge of 1.10% and Administrative Expense Charge of 0.19%.
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have
made a corresponding change in the name of the Variable Sub-Account that
invests in that Portfolio.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account Portfolios are no longer available for new investments.
If you are currently invested in the Variable Sub-accounts that invest in
these Portfolios you may continue your investment. If, prior to October 1,
2004, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
92 PROSPECTUS
ALLSTATE ADVISOR CONTRACTS: ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION
UNITS OUTSTANDING FOR EACH VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST
OFFERED* (WITH THE MAV DEATH BENEFIT OPTION, THE ENHANCED BENEFICIARY PROTECTION
(ANNUAL INCREASE) OPTION AND THE EARNINGS PROTECTION DEATH BENEFIT OPTION (AGE
71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
STI Classic Capital Appreciation Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.704
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.704 $11.176
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.308
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.308 $12.643
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic International Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.215
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.215 $14.259
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Investment Grade Bond Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.983
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.983 $10.172
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.390
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.390 $13.014
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.181
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.181 $14.796
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0
- -------------------------------------------------------------------------------
STI Classic Value Income Stock Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.215
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.215 $12.647
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.784 $13.341
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.341 $14.434
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.194
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.509
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.436 $14.507
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.507 $17.559
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
93 PROSPECTUS
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.211
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.363 $12.638
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.638 $13.923
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $13.247 $16.810
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $16.810 $20.505
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.551 $13.547
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.547 $15.705
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.895
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- 0
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.347
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.880
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.127
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.110
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.212 $12.344
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.344 $14.419
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.984 $13.045
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.045 $14.009
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account/(1)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.095
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.095 $12.248
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.248 $12.772
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.756 $14.181
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.181 $16.489
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
94 PROSPECTUS
Oppenheimer High Income/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.176 $12.909
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.909 $13.729
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.438 $12.586
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.586 $13.437
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.622 $14.608
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.608 $17.029
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.431 $12.091
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.091 $12.824
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.565 $12.385
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.385 $13.218
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.196 $13.454
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.454 $14.621
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.972 $11.260
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.260 $11.798
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.383 $13.294
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.294 $14.374
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.453 $10.403
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.403 $10.626
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.436 $13.331
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.331 $15.151
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.770 $12.942
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.942 $14.259
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 9.899 $ 9.815
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.815 $ 9.664
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.407 $13.445
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.445 $14.506
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.767 $14.518
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.518 $16.391
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
95 PROSPECTUS
Putnam VT Research - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.022 $13.046
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.046 $13.725
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.424 $12.037
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.037 $12.740
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.696 $14.004
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.004 $16.656
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.478 $13.510
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.510 $15.673
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.594 $12.351
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.351 $12.688
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.084
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.297
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.072 $11.693
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.693 $12.212
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.823 $13.304
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.304 $14.850
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 9.835
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.664 $13.821
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.821 $14.881
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.922
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.694
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $11.030
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
96 PROSPECTUS
Van Kampen UIF Small Company Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.103 $13.538
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.538 $15.751
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.254
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.584 $14.455
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.455 $19.239
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
* The Contracts and all of the Variable Sub-Accounts were first offered under
the Contracts on July 15, 2003, except for the following Variable
Sub-Accounts: Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Account which were first offered
under the Contracts on December 31, 2003; FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account,
Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT
Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account and Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account which were first offered
under the Contracts on May 1, 2004; FTVIP Franklin Large Cap Growth
Securities - Class 2 Sub-Account, Lord Abbett Series - All Value Sub-Account,
Lord Abbett Series - Bond-Debenture Sub-Account, Lord Abbett Series - Growth
and Income Sub-Account, Lord Abbett Series - Growth Opportunities
Sub-Account, Lord Abbett Series - Mid-Cap Value Sub-Account and Oppenheimer
Core Bond/VA - Service Shares Sub-Account (formerly Oppenheimer Bond/VA)
which were first offered under the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a Mortality and Expense Risk
Charge of 2.00% and Administrative Expense Charge of 0.19%.
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have
made a corresponding change in the name of the Variable Sub-Account that
invests in that Portfolio.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account Portfolios are no longer available for new investments.
If you are currently invested in the Variable Sub-accounts that invest in
these Portfolios you may continue your investment. If, prior to October 1,
2004, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
97 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH 5 YEAR WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
STI Classic Capital Appreciation Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.734
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.734 $11.277
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,938 13,882
- -------------------------------------------------------------------------------
STI Classic Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.341
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.341 $12.756
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 507 12,800
- -------------------------------------------------------------------------------
STI Classic International Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.249
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.249 $14.387
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 638
- -------------------------------------------------------------------------------
STI Classic Investment Grade Bond Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.012
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.012 $10.263
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 6,566
- -------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.422
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.422 $13.131
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,708
- -------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.215
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.215 $14.929
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 734 6,053
- -------------------------------------------------------------------------------
STI Classic Value Income Stock Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.247
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.247 $12.761
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 9,125
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.825 $13.425
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.425 14.614
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,690 18,565
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.240
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 224
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.525
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 388
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.479 $14.599
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.599 $17.778
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 557 2,528
- -------------------------------------------------------------------------------
98 PROSPECTUS
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.253
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.402 $12.718
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.718 $14.097
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 6,143 22,288
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $13.293 $16.917
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $16.917 $20.762
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 37 164
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.591 $13.633
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.633 $15.902
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,488 6,270
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.912
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.363
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.896
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.144
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.127
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 471
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.254 $12.422
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.422 $14.600
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 146 525
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.026 $13.128
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.128 $14.184
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 130 1,256
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account/(1)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.110
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.109 $12.298
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.298 $12.903
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 154 1,320
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.797 $14.270
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.270 $16.695
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,014 4,200
- -------------------------------------------------------------------------------
99 PROSPECTUS
Oppenheimer High Income/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.219 $12.991
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.991 $13.901
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 91 8,566
- -------------------------------------------------------------------------------
Oppenheimer Main Street/VA - Service Shares
Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.478 $12.666
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.666 $13.604
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,343 16,760
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.666 $14.701
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.701 $17.242
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,342 4,241
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.470 $12.168
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.168 $12.984
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,645 16,170
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.605 $12.464
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.464 $13.383
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.239 $13.539
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.539 $14.804
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,410
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.010 $11.331
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.331 $11.945
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 284 4,700
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.426 $13.378
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.378 $14.554
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 63 2,312
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.490 $10.469
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.469 $10.759
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 1,134
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.475 $13.416
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.416 $15.341
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 550
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.811 $13.024
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.024 $14.437
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,390 2,334
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 9.934 $ 9.878
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.878 $ 9.785
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 9,403
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.450 $13.530
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.530 $14.687
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 460 2,148
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.811 $14.610
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.610 $16.596
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
100 PROSPECTUS
Putnam VT Research - Class IB Sub-Account/(3)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.064 $13.126
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.128 $13.896
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 6,467
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.464 $12.113
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.113 $12.899
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,559 2,503
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.740 $14.093
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.093 $16.864
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 189 4,857
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.521 $13.596
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.596 $15.869
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 710 1,167
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.635 $12.429
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.429 $12.847
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,969 3,768
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.130
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.343
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.111 $11.767
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.767 $12.365
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 1,047
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.864 $13.388
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.388 $15.035
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 615
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 9.895
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 12,369
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.708 $13.908
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.908 $15.067
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,517
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.967
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,674
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.738
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $11.098
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
101 PROSPECTUS
Van Kampen UIF Small Company Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.118 $13.593
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.593 $15.912
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 604
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.300
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,625
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.628 $14.547
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.547 $19.479
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 617 7,305
- -------------------------------------------------------------------------------
* The Contracts and all of the Variable Sub-Accounts were first offered under
the Contracts on July 15, 2003, except for the following Variable
Sub-Accounts: Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Account which were first offered
under the Contracts on December 31, 2003; FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account,
Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT
Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account and Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account which were first offered
under the Contracts on May 1, 2004; FTVIP Franklin Large Cap Growth
Securities - Class 2 Sub-Account, Lord Abbett Series - All Value Sub-Account,
Lord Abbett Series - Bond-Debenture Sub-Account, Lord Abbett Series - Growth
and Income Sub-Account, Lord Abbett Series - Growth Opportunities
Sub-Account, Lord Abbett Series - Mid-Cap Value Sub-Account and Oppenheimer
Core Bond/VA - Service Shares Sub-Account (formerly Oppenheimer Bond/VA)
which were first offered under the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a Mortality and Expense Risk
Charge of 1.40% and Administrative Expense Charge of 0.19%.
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have
made a corresponding change in the name of the Variable Sub-Account that
invests in that Portfolio.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account Portfolios are no longer available for new investments.
If you are currently invested in the Variable Sub-accounts that invest in
these Portfolios you may continue your investment. If, prior to October 1,
2004, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
102 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH 5 YEAR WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (WITH THE MAV DEATH
BENEFIT OPTION, THE ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION AND
THE EARNINGS PROTECTION DEATH BENEFIT OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
STI Classic Capital Appreciation Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.689
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.689 $11.126
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.292
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.292 $12.586
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic International Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.197
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.197 $14.195
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Investment Grade Bond Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.969
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.969 $10.126
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.374
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.374 12.956
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.164
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.164 $14.730
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Value Income Stock Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.199
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.199 $12.590
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.757 $13.292
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.292 $14.336
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.171
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.501
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
103 PROSPECTUS
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.408 $14.453
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.453 $17.440
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.190
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.337 $12.591
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.591 $13.829
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $13.217 $16.748
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $16.748 $20.367
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.525 $13.497
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.497 $15.599
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.887
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.339
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.871
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.119
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.102
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.184 $12.298
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.298 $14.322
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.957 $12.997
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.997 $13.914
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account/(1)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.087
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.088 $12.222
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.222 $12.707
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
104 PROSPECTUS
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.729 $14.128
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.128 $16.377
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.149 $12.861
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.861 $13.636
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.412 $12.540
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.540 $13.346
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.594 $14.554
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.554 $16.914
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.404 $12.046
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.046 $12.737
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.538 $12.339
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.339 $13.128
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.168 $13.404
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.404 $14.522
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.947 $11.218
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.218 $11.718
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.355 $13.245
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.245 $14.277
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.429 $10.364
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.364 $10.554
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.410 $13.282
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.282 $15.049
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.743 $12.894
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.894 $14.163
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 9.877 $ 9.779
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.779 $ 9.598
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.378 $13.395
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.395 $14.408
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
105 PROSPECTUS
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.738 $14.464
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.464 $16.280
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.995 $12.997
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.997 $13.632
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.398 $11.992
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.992 $12.654
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.667 $13.952
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.952 $16.543
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.449 $13.460
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.460 $15.567
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.568 $12.305
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.305 $12.603
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.062
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.274
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.047 $11.650
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.650 $12.129
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.796 $13.254
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.254 $14.749
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 9.805
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.635 $13.770
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.770 $14.780
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.900
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.672
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
106 PROSPECTUS
Van Kampen UIF Global Franchise, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $10.996
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.095 $13.510
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.510 $15.670
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.231
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.556 $14.402
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.402 $19.109
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
* The Contracts and all of the Variable Sub-Accounts were first offered under
the Contracts on July 15, 2003, except for the following Variable
Sub-Accounts: Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Account which were first offered
under the Contracts on December 31, 2003; FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account,
Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT
Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account and Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account which were first offered
under the Contracts on May 1, 2004; FTVIP Franklin Large Cap Growth
Securities - Class 2 Sub-Account, Lord Abbett Series - All Value Sub-Account,
Lord Abbett Series - Bond-Debenture Sub-Account, Lord Abbett Series - Growth
and Income Sub-Account, Lord Abbett Series - Growth Opportunities
Sub-Account, Lord Abbett Series - Mid-Cap Value Sub-Account and Oppenheimer
Core Bond/VA - Service Shares Sub-Account (formerly Oppenheimer Bond/VA)
which were first offered under the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a Mortality and Expense Risk
Charge of 2.30% and Administrative Expense Charge of 0.19%.
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have
made a corresponding change in the name of the Variable Sub-Account that
invests in that Portfolio.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account Portfolios are no longer available for new investments.
If you are currently invested in the Variable Sub-accounts that invest in
these Portfolios you may continue your investment. If, prior to October 1,
2004, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
107 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH 3 YEAR WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
STI Classic Capital Appreciation Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.729
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.729 $11.260
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 345
- -------------------------------------------------------------------------------
STI Classic Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.335
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.335 $12.737
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 9,787
- -------------------------------------------------------------------------------
STI Classic International Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.244
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.244 $14.365
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Investment Grade Bond Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.007
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.007 $10.248
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,826 28,443
- -------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.417
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.417 $13.111
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,002 2,436
- -------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.210
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.210 $14.907
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 5,082
- -------------------------------------------------------------------------------
STI Classic Value Income Stock Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.241
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.241 $12.742
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 7,210
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.816 $13.409
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.409 $14.582
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,844 50,264
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.233
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 8,142
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.523
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 268
- -------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.470 $14.581
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.581 $17.739
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 175 6,512
- -------------------------------------------------------------------------------
108 PROSPECTUS
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.246
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 10,347
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.394 $12.703
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.703 $14.065
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 10,654 69,739
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $13.283 $16.896
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $16.896 $20.715
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 1,296
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.583 $13.616
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.616 $15.866
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,050 19,680
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.909
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 84
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.360
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.893
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,191
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.141
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 84
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.124
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 42
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.245 $12.406
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.406 $14.567
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 2,522
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.017 $13.112
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.112 $14.152
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 358 16,508
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account/(1)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.108
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 3,605
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.106 $12.289
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.289 $12.881
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,612 17,974
- -------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.788 $14.253
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.253 $16.657
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 100 6,058
- -------------------------------------------------------------------------------
109 PROSPECTUS
Oppenheimer High Income/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.209 $12.975
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.975 $13.869
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 4,529 53,683
- -------------------------------------------------------------------------------
Oppenheimer Main Street/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.469 $12.650
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.650 $13.574
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 9,551 80,356
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.657 $14.682
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.682 $17.203
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 3,631 13,562
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.462 $12.153
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.153 $12.955
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 395 47,218
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.596 $12.448
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.448 $13.353
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 206 1,622
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.229 $13.522
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.522 $14.771
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 132 2,313
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.002 $11.317
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.317 $11.919
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.417 $13.362
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.362 $14.521
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 118 4,251
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.482 $10.456
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.456 $10.735
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 10,116
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.467 $13.399
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.399 $15.306
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 273 837
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.802 $13.008
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.008 $14.405
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 9.926 $ 9.865
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.865 $ 9.763
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 14,631
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.440 $13.513
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.513 $14.654
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 246
- -------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.801 $14.592
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.592 $16.559
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 1,381
- -------------------------------------------------------------------------------
110 PROSPECTUS
Putnam VT Research - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.055 $13.112
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.112 $13.865
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 3,194
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.455 $12.098
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.098 $12.870
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 832 3,226
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.730 $14.075
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.075 $16.826
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 914
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.512 $13.579
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.579 $15.833
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 126 436
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.626 $12.414
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.414 $12.818
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 138 1,441
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.122
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.336
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 5,119
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.102 $11.753
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.753 $12.337
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 109 2,529
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.855 $13.371
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.371 $15.002
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 6,865
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 9.885
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 93,600
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.698 $13.891
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.891 $15.033
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 257 16,793
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.959
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 1,625
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.731
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $11.086
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 1,593
- -------------------------------------------------------------------------------
111 PROSPECTUS
Van Kampen UIF Small Company Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.115 $13.584
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.584 $15.885
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 1,988
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.292
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 5,920
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.618 $14.529
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.529 $19.436
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 244 29,798
- -------------------------------------------------------------------------------
* The Contracts and all of the Variable Sub-Accounts were first offered under
the Contracts on July 15, 2003, except for the following Variable
Sub-Accounts: Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Account which were first offered
under the Contracts on December 31, 2003; FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account,
Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT
Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account and Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account which were first offered
under the Contracts on May 1, 2004; FTVIP Franklin Large Cap Growth
Securities - Class 2 Sub-Account, Lord Abbett Series - All Value Sub-Account,
Lord Abbett Series - Bond-Debenture Sub-Account, Lord Abbett Series - Growth
and Income Sub-Account, Lord Abbett Series - Growth Opportunities
Sub-Account, Lord Abbett Series - Mid-Cap Value Sub-Account and Oppenheimer
Core Bond/VA - Service Shares Sub-Account (formerly Oppenheimer Bond/VA)
which were first offered under the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a Mortality and Expense Risk
Charge of 1.50% and Administrative Expense Charge of 0.19%.
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have
made a corresponding change in the name of the Variable Sub-Account that
invests in that Portfolio.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account Portfolios are no longer available for new investments.
If you are currently invested in the Variable Sub-accounts that invest in
these Portfolios you may continue your investment. If, prior to October 1,
2004, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
112 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH 3 YEAR WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (WITH THE MAV DEATH
BENEFIT OPTION, THE ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION AND
THE EARNINGS PROTECTION DEATH BENEFIT OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
STI Classic Capital Appreciation Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.684
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.684 $11.110
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.287
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.287 $12.567
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic International Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.192
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.192 $14.173
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Investment Grade Bond Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.965
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.965 $10.111
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.368
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.368 $12.936
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.158
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.158 $14.708
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Value Income Stock Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.194
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.194 $12.572
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.748 $13.275
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.275 $14.304
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.164
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.499
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
113 PROSPECTUS
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.398 $14.435
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.435 $17.401
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.183
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.328 $12.576
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.576 $13.797
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $13.207 $16.727
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $16.727 $20.321
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.516 $13.480
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.480 $15.564
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.884
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.336
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.868
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.116
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.099
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.175 $12.283
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.283 $14.289
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.948 $12.981
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.981 $13.883
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account/(1)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.084
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.086 $12.214
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.214 $12.685
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
114 PROSPECTUS
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.720 $14.111
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.111 $16.340
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.139 $12.845
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.845 $13.605
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.403 $12.524
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.524 $13.315
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.584 $14.536
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.536 $16.875
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.396 $12.031
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.031 $12.708
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.529 $12.324
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.324 $13.098
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.159 $13.387
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.387 $14.490
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.939 $11.204
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.204 $11.691
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.345 $13.228
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.228 $14.244
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.421 $10.351
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.351 $10.530
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.401 $13.265
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.265 $15.015
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.734 $12.878
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.878 $14.131
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 9.869 $ 9.767
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.767 $ 9.576
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.369 $13.378
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.378 $14.375
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
115 PROSPECTUS
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.728 $14.446
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.446 $16.244
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.985 $12.981
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.981 $13.601
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.389 $11.978
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.978 $12.625
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.657 $13.935
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.935 $16.506
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.440 $13.443
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.443 $15.532
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.559 $12.290
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.290 $12.574
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.054
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.266
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.038 $11.635
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.635 $12.102
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.787 $13.238
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.238 $14.716
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 9.794
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.625 $13.752
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.752 $14.746
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.892
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.665
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
116 PROSPECTUS
Van Kampen UIF Global Franchise, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $10.985
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.093 $13.501
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.501 $15.644
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.223
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.546 $14.384
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.384 $19.066
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
* The Contracts and all of the Variable Sub-Accounts were first offered under
the Contracts on July 15, 2003, except for the following Variable
Sub-Accounts: Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Account which were first offered
under the Contracts on December 31, 2003; FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account,
Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT
Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account and Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account which were first offered
under the Contracts on May 1, 2004; FTVIP Franklin Large Cap Growth
Securities - Class 2 Sub-Account, Lord Abbett Series - All Value Sub-Account,
Lord Abbett Series - Bond-Debenture Sub-Account, Lord Abbett Series - Growth
and Income Sub-Account, Lord Abbett Series - Growth Opportunities
Sub-Account, Lord Abbett Series - Mid-Cap Value Sub-Account and Oppenheimer
Core Bond/VA - Service Shares Sub-Account (formerly Oppenheimer Bond/VA)
which were first offered under the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a Mortality and Expense Risk
Charge of 2.40% and Administrative Expense Charge of 0.19%.
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have
made a corresponding change in the name of the Variable Sub-Account that
invests in that Portfolio.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account Portfolios are no longer available for new investments.
If you are currently invested in the Variable Sub-accounts that invest in
these Portfolios you may continue your investment. If, prior to October 1,
2004, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
117 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH NO WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (BASIC CONTRACT)
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- --------------------------------------------------------------------------------------------------
SUB-ACCOUNTS
- --------------------------------------------------------------------------------------------------
STI Classic Capital Appreciation Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.724
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.724 $11.243
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
STI Classic Growth and Income Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.330
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.330 $12.718
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
STI Classic International Equity Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.238
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.238 $14.344
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
STI Classic Investment Grade Bond Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.002
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.002 $10.233
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 635 635
- --------------------------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.411
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.411 $13.092
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.204
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.204 $14.885
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
STI Classic Value Income Stock Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.236
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.236 $12.723
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 136 134
- --------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.807 $13.392
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.392 $14.549
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,531 2,399
- --------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.225
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.520
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities - Class 2 Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.460 $14.563
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.563 $17.699
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 569 535
- --------------------------------------------------------------------------------------------------
118 PROSPECTUS
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.239
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.385 $12.687
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.687 $14.034
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 2,239 2,274
- --------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class 2 Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $13.273 $16.875
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $16.875 $20.668
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 8,772
- --------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.574 $13.599
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.599 $15.830
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 298 399
- --------------------------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.906
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.357
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.891
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.139
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.122
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.236 $12.391
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.391 $14.534
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.008 $13.095
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.095 $14.121
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 424 516
- --------------------------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account/(1)/
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.105
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.104 $12.281
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.281 $12.859
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Oppenheimer Global Securities/VA - Service Shares Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.779 $14.235
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.235 $16.620
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 109 103
- --------------------------------------------------------------------------------------------------
119 PROSPECTUS
Oppenheimer High Income/VA - Service Shares Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.200 $12.959
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.959 $13.838
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 412 333
- --------------------------------------------------------------------------------------------------
Oppenheimer Main Street/VA - Service Shares Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.460 $12.635
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.635 $13.543
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,009 1,089
- --------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap/VA - Service Shares Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.647 $14.664
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.664 $17.164
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 252 232
- --------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.453 $12.138
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.138 $12.926
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 731 920
- --------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.587 $12.433
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.433 $13.323
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.220 1$3.506
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.506 $14.738
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 1,510 1,415
- --------------------------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account/(2)/
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.993 $11.303
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.303 $11.892
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.407 $13.345
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.345 $14.488
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.474 $10.443
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.443 $10.711
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 292 304
- --------------------------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.458 $13.383
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.383 $15.272
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.793 $12.992
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.992 $14.373
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 9.919 $ 9.853
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.853 $ 9.741
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account/(2)/
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.431 $13.497
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.497 $14.621
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT New Value - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.792 $14.574
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.574 $16.522
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
120 PROSPECTUS
Putnam VT Research - Class IB Sub-Account/(2)/
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.046 $13.096
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.096 $13.834
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.446 $12.084
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.084 $12.841
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB Sub-Account/(2)/
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.720 $14.058
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.058 $16.789
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.502 $13.562
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.562 $15.798
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 855 800
- --------------------------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.617 $12.398
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.398 $12.789
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 255 260
- --------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.115
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.328
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.094 $11.738
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.738 $12.309
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.846 $13.355
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.355 $14.968
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 9.875
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.688 $13.874
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.874 $14.999
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.952
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.723
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $11.075
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- --------------------------------------------------------------------------------------------------
121 PROSPECTUS
Van Kampen UIF Small Company Growth, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.113 $13.575
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.575 $15.858
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 292 274
- --------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.284
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- --------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.609 $14.511
- --------------------------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.511 $19.392
- --------------------------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 152 85
- --------------------------------------------------------------------------------------------------
* The Contracts and all of the Variable Sub-Accounts were first offered under
the Contracts on July 15, 2003, except for the following Variable
Sub-Accounts: Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Account which were first offered
under the Contracts on December 31, 2003; FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account,
Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT
Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account and Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account which were first offered
under the Contracts on May 1, 2004; FTVIP Franklin Large Cap Growth
Securities - Class 2 Sub-Account, Lord Abbett Series - All Value Sub-Account,
Lord Abbett Series - Bond-Debenture Sub-Account, Lord Abbett Series - Growth
and Income Sub-Account, Lord Abbett Series - Growth Opportunities
Sub-Account, Lord Abbett Series - Mid-Cap Value Sub-Account and Oppenheimer
Core Bond/VA - Service Shares Sub-Account (formerly Oppenheimer Bond/VA)
which were first offered under the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a Mortality and Expense Risk
Charge of 1.60% and Administrative Expense Charge of 0.19%.
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have
made a corresponding change in the name of the Variable Sub-Account that
invests in that Portfolio.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account Portfolios are no longer available for new investments.
If you are currently invested in the Variable Sub-accounts that invest in
these Portfolios you may continue your investment. If, prior to October 1,
2004, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
122 PROSPECTUS
ALLSTATE ADVISOR PREFERRED CONTRACTS WITH NO WITHDRAWAL CHARGE OPTION:
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT SINCE CONTRACTS WERE FIRST OFFERED* (WITH THE MAV DEATH
BENEFIT OPTION, THE ENHANCED BENEFICIARY PROTECTION (ANNUAL INCREASE) OPTION AND
THE EARNINGS PROTECTION DEATH BENEFIT OPTION (AGE 71-79))
- --------------------------------------------------------------------------------
For the Years Beginning January 1* and Ending December 31, 2003 2004
- -------------------------------------------------------------------------------
SUB-ACCOUNTS
- -------------------------------------------------------------------------------
STI Classic Capital Appreciation Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.679
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.679 $11.093
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.282
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.282 $12.548
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic International Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.186
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.186 $14.152
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Investment Grade Bond Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $ 9.960
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.960 $10.096
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Mid-Cap Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.363
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.363 $12.917
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Small Cap Value Equity Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $12.152
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.152 $14.686
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
STI Classic Value Income Stock Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $11.188
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.188 $12.553
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.739 $13.259
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.259 $14.271
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin Income Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.156
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.496
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
123 PROSPECTUS
FTVIP Franklin Small Cap Value Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.389 $14.417
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.417 $17.361
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Franklin U.S. Government - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.176
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
FTVIP Mutual Shares Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.319 $12.560
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.560 $13.766
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities - Class 2
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $13.197 $16.706
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $16.706 $20.275
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.507 $13.463
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.463 $15.528
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Lord Abbett Series - All Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.881
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Bond-Debenture Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.334
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth and Income Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.866
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Growth Opportunities Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.113
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Lord Abbett Series - Mid-Cap Value Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.096
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.165 $12.267
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.267 $14.257
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Balanced/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.939 $12.964
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.964 $13.851
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Core Bond/VA - Service Shares Sub-Account/(1)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.082
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Oppenheimer Capital Appreciation/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.083 $12.206
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.206 $12.663
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
124 PROSPECTUS
Oppenheimer Global Securities/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.711 $14.093
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.093 $16.303
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer High Income/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.130 $12.829
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.829 $13.574
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.395 $12.508
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.508 $13.285
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap/VA - Service Shares
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.574 $14.518
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.518 $16.837
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond/VA - Service Shares Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.387 $12.016
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.016 $12.679
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Global Asset Allocation - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.521 $12.309
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.309 $13.069
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Growth and Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.150 $13.370
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.370 $14.457
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Health Sciences - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.930 $11.190
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.190 $11.665
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT High Yield - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.336 $13.212
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.212 $14.212
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Income - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.413 $10.338
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.338 $10.506
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT International Equity - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.392 $13.249
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.249 $14.981
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Investors - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.725 $12.862
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.862 $14.098
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Money Market - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $ 9.862 $ 9.755
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $ 9.755 $ 9.555
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT New Opportunities - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.359 $13.362
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.362 $14.343
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
125 PROSPECTUS
Putnam VT New Value - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.718 $14.429
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.429 $16.207
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Research - Class IB Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.976 $12.965
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.965 $13.570
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.381 $11.963
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.963 $12.596
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income - Class IB
Sub-Account/(2)/
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.647 $13.918
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.918 $16.469
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Vista - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.430 $13.427
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.427 $15.497
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Putnam VT Voyager - Class IB Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.550 $12.274
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $12.274 $12.545
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.047
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Comstock, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.258
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen LIT Emerging Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.030 $11.621
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $11.621 $12.075
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Growth and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $11.778 $13.221
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.221 $14.683
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen LIT Money Market, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $ 9.784
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.615 $13.735
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.735 $14.713
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity and Income, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.885
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF Equity Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $10.657
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
126 PROSPECTUS
Van Kampen UIF Global Franchise, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $10.000 $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $10.000 $10.974
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.090 $13.492
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $13.492 $15.617
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period -- $10.000
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period -- $11.215
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period -- 0
- -------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate, Class II Sub-Account
- -------------------------------------------------------------------------------
Accumulation Unit Value, Beginning of Period $12.536 $14.366
- -------------------------------------------------------------------------------
Accumulation Unit Value, End of Period $14.366 $19.022
- -------------------------------------------------------------------------------
Number of Units Outstanding, End of Period 0 0
- -------------------------------------------------------------------------------
* The Contracts and all of the Variable Sub-Accounts were first offered under
the Contracts on July 15, 2003, except for the following Variable
Sub-Accounts: Van Kampen LIT Money Market, Class II Sub-Account and Van
Kampen UIF Global Franchise, Class II Sub-Account which were first offered
under the Contracts on December 31, 2003; FTVIP Franklin Income Securities -
Class 2 Sub-Account, FTVIP Franklin U.S. Government - Class 2 Sub-Account,
Van Kampen LIT Aggressive Growth, Class II Sub-Account, Van Kampen LIT
Comstock, Class II Sub-Account, Van Kampen UIF Equity and Income, Class II
Sub-Account, Van Kampen UIF Equity Growth, Class II Sub-Account and Van
Kampen UIF U.S. Mid Cap Value, Class II Sub-Account which were first offered
under the Contracts on May 1, 2004; FTVIP Franklin Large Cap Growth
Securities - Class 2 Sub-Account, Lord Abbett Series - All Value Sub-Account,
Lord Abbett Series - Bond-Debenture Sub-Account, Lord Abbett Series - Growth
and Income Sub-Account, Lord Abbett Series - Growth Opportunities
Sub-Account, Lord Abbett Series - Mid-Cap Value Sub-Account and Oppenheimer
Core Bond/VA - Service Shares Sub-Account (formerly Oppenheimer Bond/VA)
which were first offered under the Contracts on October 1, 2004. The
Accumulation Unit Values in this table reflect a Mortality and Expense Risk
Charge of 2.50% and Administrative Expense Charge of 0.19%.
(1) Effective April 29, 2005, the Oppenheimer Bond Fund/VA-Service Shares
changed its name to Oppenheimer Core Bond Fund/VA - Service Shares. We have
made a corresponding change in the name of the Variable Sub-Account that
invests in that Portfolio.
(2) Effective October 1, 2004, the Putnam VT Health Sciences - Class IB
Sub-Account, Putnam VT New Opportunities - Class IB Sub-Account, Putnam VT
Research - Class IB Sub-Account and the Putnam VT Utilities Growth and Income
- Class IB Sub-Account Portfolios are no longer available for new investments.
If you are currently invested in the Variable Sub-accounts that invest in
these Portfolios you may continue your investment. If, prior to October 1,
2004, you enrolled in one of our automatic transaction programs, such as
automatic additions, portfolio rebalancing, or dollar cost averaging, we will
continue to effect automatic transactions into these Variable Sub-accounts in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
127 PROSPECTUS
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registrant anticipates that it will incur the following approximate expenses in
connection with the issuance and distribution of the securities to be
registered:
Registration fees...................$23,000
(previously registered)
Cost of printing and engraving......$343,000
Legal fees..........................$40,000
Accounting fees.....................$10,000
Mailing fees........................$27,900
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.
Exhibit No. Description
(1)(a) 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.)
(1)(b) Form of General Agency Agreement between Northbrook Life Insurance
Company and Dean Witter Reynolds Inc. (Northbrook Life Insurance Company was
merged into Allstate Life Insurance Company effective January 1, 2003)
(Incorporated herein by reference to Post-Effective Amendment No. 13 to the Form
N-4 Registration Statement of Northbrook Variable Annuity Account II (File No.
033-35412) dated December 31, 1996.)
(1)(c) Underwriting Agreement among Northbrook Life Insurance Company,
Northbrook Variable Annuity Account II and Dean Witter Reynolds Inc. (Northbrook
Life Insurance Company was merged into Allstate Life Insurance Company effective
January 1, 2003) (Incorporated herein by reference to Post-Effective Amendment
No. 13 to the Form N-4 Registration Statement of Northbrook Variable Annuity
Account II (File No. 033-35412) dated December 31, 1996.)
(2) None
(4) (a) Form of Allstate Advisor Variable Annuity Contract ("Allstate Advisor"
or "Morgan Stanley Variable Annuity") (Incorporated herein by reference to
Post-Effective Amendment No. 11 to the Form N-4 Registration Statement of
Allstate Life Insurance Company Separate Account A (File No. 333-72017) dated
June 10, 2002.)
(4)(b) Form of Allstate Advisor Plus Variable Annuity Contract ("Allstate
Advisor Plus") (Incorporated herein by reference to Post-Effective Amendment No.
8 to the Form N-4 Registration Statement of Allstate Life Insurance Company
Separate Account A (File No. 333-96115) dated June 10, 2002.)
(4)(c) Form of Allstate Advisor Preferred Variable Annuity Contract ("Allstate
Advisor Preferred" or "Morgan Stanley Variable Annuity - L Share") (Incorporated
herein by reference to Post-Effective Amendment No. 7 to the Form N-4
Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-31288) dated June 10, 2002.)
(4)(d) Form of Enhanced Beneficiary Protection Rider A--Annual Increase
(Allstate Advisor, Morgan Stanley Variable Annuity, Allstate Advisor Preferred
and Morgan Stanley Variable Annuity - L Share) (Incorporated herein by reference
to Post-Effective Amendment No. 11 to the Form N-4 Registration Statement of
Allstate Life Insurance Company Separate Account A (File No. 333-72017) dated
June 10, 2002.)
(4)(e) Form of Enhanced Beneficiary Protection Rider A--Annual Increase
(Allstate Advisor Plus) (Incorporated herein by reference to Post-Effective
Amendment No. 8 to the Form N-4 Registration Statement of Allstate Life
Insurance Company Separate Account A (File No. 333-96115) dated June 10, 2002.)
(4)(f) Form of Enhanced Beneficiary Protection Rider B--Maximum Anniversary
Value (Allstate Advisor, Morgan Stanley Variable Annuity, Allstate Advisor
Preferred and Morgan Stanley Variable Annuity - L Share) (Incorporated herein by
reference to Post-Effective Amendment No. 11 to the Form N-4 Registration
Statement of Allstate Life Insurance Company Separate Account A (File No.
333-72017) dated June 10, 2002.)
(4)(g) Form of Enhanced Beneficiary Protection Rider B--Maximum Anniversary
Value (Allstate Advisor Plus) (Incorporated herein by reference to
Post-Effective Amendment No. 8 to the Form N-4 Registration Statement of
Allstate Life Insurance Company Separate Account A (File No. 333-96115) dated
June 10, 2002.)
(4)(h) Form of Earnings Protection Death Benefit Rider (all Contracts)
(Incorporated herein by reference to Post-Effective Amendment No. 11 to the Form
N-4 Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-72017) dated June 10, 2002.)
(4)(i) Form of Retirement Income Guarantee Rider 1 (Allstate Advisor, Morgan
Stanley Variable Annuity, Allstate Advisor Preferred and Morgan Stanley Variable
Annuity - L Share) (Incorporated herein by reference to Post-Effective Amendment
No. 11 to Form N-4 Registration Statement of Allstate Life Insurance Company
Separate Account A (File No. 333-72017) dated June 10, 2002.)
(4)(j) Form of Retirement Income Guarantee Rider 1 (Allstate Advisor Plus)
(Incorporated herein by reference to Post-Effective Amendment No. 8 to the Form
N-4 Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-96115) dated June 10, 2002.)
(4)(k) Form of Retirement Income Guarantee Rider 2 (Allstate Advisor, Morgan
Stanley Variable Annuity, Allstate Advisor Preferred and Morgan Stanley Variable
Annuity - L Share) (Incorporated herein by reference to Post-Effective Amendment
No. 11 to the Form N-4 Registration Statement of Allstate Life Insurance Company
Separate Account A (File No. 333-72017) dated June 10, 2002.)
(4)(l) Form of Retirement Income Guarantee Rider 2 (Allstate Advisor Plus)
(Incorporated herein by reference to Post-Effective Amendment No. 8 to the Form
N-4 Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-96115) dated June 10, 2002.)
(4)(m) Form of Income Protection Benefit Rider (all Contracts) (Incorporated
herein by reference to Post-Effective Amendment No. 11 to the Form N-4
Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-72017) dated June 10, 2002.)
(4)(n) Form of Spousal Protection Benefit Rider (all Contracts) (Incorporated
herein by reference to Post-Effective Amendment No. 11 to the Form N-4
Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-72017) dated June 10, 2002.)
(4)(o) Form of Amendatory Endorsement for Charitable Remainder Trust (all
Contracts) (Incorporated herein by reference to Post-Effective Amendment No. 11
to the Form N-4 Registration Statement of Allstate Life Insurance Company
Separate Account A (File No. 333-72017) dated June 10, 2002.)
(4)(p) Form of Amendatory Endorsement for Grantor Trust (all Contracts)
(Incorporated herein by reference to Post-Effective Amendment No. 11 to the Form
N-4 Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-72017) dated June 10, 2002.)
(4)(q) Form of Amendatory Endorsement for Waiver of Charges (all Contracts)
(Incorporated herein by reference to Post-Effective Amendment No. 11 to the Form
N-4 Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-72017) dated June 10, 2002.)
(4)(r) Form of Amendatory Endorsement for Employees (Allstate Advisor)
(Incorporated herein by reference to Post-Effective Amendment No. 11 to the Form
N-4 Registration Statement of Allstate Life Insurance Company Separate Account A
(File No. 333-72017) dated June 10, 2002.)
(4)(s) Form of Withdrawal Charge Option Rider 1 (Incorporated herein by
reference to the initial filing of Allstate Financial Advisors Separate Account
I Form N-4 Registration Statement(File No. 333-102934) dated February 3 ,2003.)
(4)(t) Form of Withdrawal Charge Option Rider 2 (Incorporated herein by
reference to the initial filing of Allstate Financial Advisors Separate Account
I Form N-4 Registration Statement(File No. 333-102934) dated February 3 ,2003.)
(4)(u) Form of Retirement Income Guarantee Rider 2 (Plus) (Incorporated herein
by reference to the Initial Filing of Form N-4 Registration Statement (File No.
333-102934) dated February 3, 2003.)
(4)(v) Form of Income Protection Benefit Rider (Incorporated herein by reference
to the Initial Filing of Form N-4 Registration Statement (File No. 333-102934)
dated February 3, 2003.)
(4)(w) Form of Spousal Protection Benefit Rider (Incorporated herein by
reference to the Initial Filing of Form N-4 Registration Statement (File No.
333-102934) dated February 3, 2003.)
(4)(x) Form of Amendatory Endorsement for Charitable Remainder Trust
(Incorporated herein by reference to the Initial Filing of Form N-4 Registration
Statement (File No. 333-102934) dated February 3, 2003.)
(4)(y) Form of Amendatory Endorsement for Grantor Trust (Incorporated herein by
reference to the Initial Filing of Form N-4 Registration Statement (File No.
333-102934)dated February 3, 2003.)
(4)(z) Form of Amendatory Endorsement for Waiver of Charges (Incorporated herein
by reference to the Initial Filing of Form N-4 Registration Statement(File No.
333-102934) dated February 3, 2003.)
(4)(aa) Form of Amendatory Endorsement for Employees (Incorporated herein by
reference to the Initial Filing of Form N-4 Registration Statement (File No.
333-102934)dated February 3, 2003.)
(4)(ab) Form of TrueReturn Accumulation Benefit Rider (Incorporated herein by
reference to Post-Effective Amendment No. 16 to the Form N-4 Registration
Statement of Allstate Life Insurance Company Separate Account A (File No.
333-72017) dated August 19,2003.)
(4)(ac) Form of TrueReturn Accumulation Benefit Rider (for all Contracts)(
Incorporated herein by reference to Post-Effective Amendment No. 2 of Form N-4
Registration Statement (File No. 333-102934) dated December 19, 2003.)
(4)(ad) Form of SureIncome Benefit Rider (Incorporated herein by reference to
Post-Effective Amendment No.5 of Form N-4 Registration Statement (File No.
333-102934) dated December 29, 2004.)
(4)(ae) Form of Spousal Protection Benefit Rider (Incorporated herein by
reference to Post-Effective Amendment No. 5 of Form N-4 Registration Statement
(File No. 333-102934) dated December 29, 2004.)
(4)(af) Form of Custodial Spousal Protection Benefit Rider (Incorporated herein
by reference to Post-Effective Amendment No. 5 of Form N-4 Registration
Statement (File No. 333-102934) dated December 29, 2004.)
(5)(a) Opinion and Consent of General Counsel re: Legality (Previously filed in
the initial Form S-3 Registration Statement (File No. 333-100068) dated
September 25, 2003.)
(5)(b) Opinion and Consent of General Counsel re: Legality (Previously filed in
Post-Effective Amendment No.1 to this Form S-3 Registration Statement of
Allstate Life Insurance Company (File No. 333-100068) dated April 18, 2003.)
(5)(c) Opinion and Consent of General Counsel re: Legality (Previously filed in
Post-Effective Amendment No. 2 to this Form S-3 Registration Statement (File No.
333-100068) dated April 14, 2004.)
(5)(d) Opinion and Consent of General Counsel re: Legality filed herewith.
(8) None
(11) None
(12) None
(15) None
(23)(a) Consent of Independent Registered Public Accounting Firm filed herewith.
(23)(b) Consent of Foley & Lardner, LLP filed herewith.
(24)(a) Powers of Attorney for Thomas J. Wilson, II, Michael J. Velotta, David
A. Bird, Edward M. Liddy, John C. Lounds, Robert W. Pike, Samuel H. Pilch, Eric
A. Simonson, Kevin R. Slawin and Casey J. Sylla (Previously filed in the initial
Form S-3 Registration Statement (File No. 333-100068) dated
September 25, 2003.)
(24)(b) Power of Attorney for Danny L. Hale (Previously filed in Post-Effective
Amendment No.1 to this Form S-3 Registration Statement of Allstate Life
Insurance Company (File No. 333-100068) dated April 18, 2003.)
(24)(c) Powers of Attorney for John C. Pintozzi and Douglas C. Welch filed
herewith.
(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; and 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.
(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)
or 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this 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 25th day of April, 2005.
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
and on the 25th day of April, 2005.
*/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
*/ROBERT W. PIKE Director
- ------------------------
Robert W, Pike
*/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
Casey J. Sylla Officer)
/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)(d) Opinion and Consent of General Counsel
(23)(a) Consent of Independent Registered Public Accounting Firm
(23)(b) Consent of Foley & Lardner, LLP filed herewith.
(24)(c) Powers of Attorney for John C. Pintozzi and Douglas C. Welch
(99) Experts