As filed with the Securities and Exchange Commission on April 25, 2008
FILE NO. 333-100068
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 7
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ALLSTATE LIFE INSURANCE COMPANY
(Exact Name of Registrant)
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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:
JOCELYN LIU, ESQUIRE
ALLSTATE LIFE INSURANCE COMPANY
3100 SANDERS ROAD SUITE J5B
NORTHBROOK, IL 60062
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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]
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The Allstate Advisor Variable Annuities
(Advisor, Advisor Plus, Advisor Preferred)
Allstate Life Insurance Company
Street Address: 5801 SW 6th Ave., Topeka KS, 66606-0001
Mailing Address: P.O. Box 758566, Topeka, KS 66675-8566
Telephone Number: 1-800-457-7617
Fax Number: 1-785-228-4584
Prospectus dated May 1, 2008
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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 54*
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 funds ("Funds"):
Fidelity(R) Variable Insurance Putnam Variable Trust (Class IB)
Products (Service Class 2)
Van Kampen Life Investment Trust
Franklin Templeton Variable Insurance (Class II)
Products Trust (Class 2)
The Universal Institutional Funds,
Lord Abbett Series Fund, Inc. Inc. (Class I & II)
(Class VC)
Oppenheimer Variable Account Funds
(Service Shares)
* Up to 61 Variable Sub-Accounts may be available depending on the date you
purchased your Contract. Please see page 44-46 for information about Variable
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
May 1, 2008, 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 90 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.
1 PROSPECTUS
IMPORTANT The Securities and Exchange Commission has not approved or disapproved the securities
NOTICES described in this prospectus, nor has it passed on the accuracy or the adequacy of this
prospectus. Anyone who tells you otherwise is committing a federal crime.
The Contracts may be distributed through broker-dealers that have relationships with
banks or other financial institutions or by employees of such banks. However, the
Contracts are not deposits 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.
2 PROSPECTUS
Table of Contents
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Page
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Overview
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Important Terms 4
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Overview of Contracts 6
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The Contracts at a Glance 7
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How the Contracts Work 12
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Expense Table 13
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Financial Information 17
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Contract Features
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The Contracts 17
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Purchases 20
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Contract Value 21
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Investment Alternatives 44
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The Variable Sub-Accounts 44
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The Fixed Account Options 50
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Transfers 54
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Expenses 56
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Access to Your Money 62
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Income Payments 63
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Death Benefits 72
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Page
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Other Information
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More Information 80
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Taxes 83
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Annual Reports and Other Documents 90
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Statement of Additional Information Table of Contents 91
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Appendix A - Allstate Advisor Contract Comparison
Chart 92
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Appendix B - Market Value Adjustment 94
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Appendix C - Calculation of Income Protection Benefit 96
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Appendix D - Withdrawal Adjustment Example - Income
Benefits 97
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Appendix E - Withdrawal Adjustment Example - Death
Benefits 98
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Appendix F - Calculation of Earnings Protection Death
Benefit 99
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Appendix G - Withdrawal Adjustment Example -
TrueReturn Accumulation Benefit 101
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Appendix H - SureIncome Withdrawal Benefit Option
Calculation Examples 102
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Appendix I - SureIncome Plus Withdrawal Benefit
Option Calculation Examples 104
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Appendix J - SureIncome for Life Withdrawal Benefit
Option Calculation Examples 106
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Appendix K - Accumulation Unit Values 110
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3 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 22
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Accumulation Benefit 22
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Accumulation Phase 12
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Accumulation Unit 17
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Accumulation Unit Value 17
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Allstate Life ("We") 79
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Annuitant 8
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Automatic Additions Program 10
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Automatic Portfolio Rebalancing Program 10
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Beneficiary 12
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Benefit Base (for the TrueReturn Accumulation Benefit Option) 8
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Benefit Base (for the SureIncome Withdrawal Benefit Option) 8
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Benefit Base (for the SureIncome Plus Withdrawal Benefit
Option) 8
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Benefit Base (for the SureIncome For Life Withdrawal Benefit
Option) 8
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Benefit Payment (for the SureIncome Withdrawal Benefit
Option) 31
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Benefit Payment (for the SureIncome Plus Withdrawal Benefit
Option) 34
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Benefit Payment (for the SureIncome For Life Withdrawal
Benefit Option) 41
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Benefit Payment Remaining (for the SureIncome Withdrawal
Benefit Option) 30
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Benefit Payment Remaining (for the SureIncome Plus
Withdrawal Benefit Option) 34
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Benefit Payment Remaining (for the SureIncome For Life
Withdrawal Benefit Option) 37
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Benefit Year (for the SureIncome Withdrawal Benefit Option) 30
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Benefit Year (for the SureIncome Plus Withdrawal Benefit
Option) 34
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Benefit Year (for the SureIncome For Life Withdrawal Benefit
Option) 37
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Co-Annuitant 9
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*Contract 17
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Contract Anniversary 8
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Contract Owner ("You") 20
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Contract Value 1
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Contract Year 9
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Credit Enhancement 1
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Dollar Cost Averaging Program 10
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Due Proof of Death 71
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Earnings Protection Death Benefit Option 8
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Enhanced Beneficiary Protection (Annual Increase) Option 8
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Excess of Earnings Withdrawal 74
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Page
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Fixed Account Options 49
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Free Withdrawal Amount 59
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Funds 1
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Guarantee Option 22
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Guarantee Period Accounts 51
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Income Base 9
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Income Plan 62
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Income Protection Benefit Option 9
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In-Force Earnings 74
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In-Force Premium 74
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Investment Alternatives 10
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IRA Contract 9
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Issue Date 12
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Market Value Adjustment 11
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Maximum Anniversary Value 8
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Maximum Anniversary Value (MAV) Death Benefit Option 8
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Payout Phase 12
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Payout Start Date 62
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Portfolios 80
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Qualified Contract 17
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Retirement Income Guarantee Options 69
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Return of Premium Death Benefit 11
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Rider Anniversary 22
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Rider Application Date 8
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Rider Date (for the TrueReturn Accumulation Benefit
Option) 22
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Rider Date (for the SureIncome Withdrawal Benefit Option) 30
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Rider Date (for the SureIncome Plus Withdrawal Benefit
Option) 34
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Rider Date (for the SureIncome For Life Withdrawal Benefit
Option) 38
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Rider Fee (for the TrueReturn Accumulation Benefit Option) 8
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Rider Fee (for the SureIncome Withdrawal Benefit Option) 8
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Rider Fee (for the SureIncome Plus Withdrawal Benefit
Option) 8
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Rider Fee (for the SureIncome For Life Withdrawal Benefit
Option) 8
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Rider Fee Percentage 57
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Rider Maturity Date 22
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Rider Period 8
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Rider Trade-In Option (for the TrueReturn Accumulation
Benefit Option) 29
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Rider Trade-In Option (for the SureIncome Withdrawal
Benefit Option) 33
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Right to Cancel 21
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4 PROSPECTUS
Page
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SEC 55
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Settlement Value 72
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Spousal Protection Benefit (Co-Annuitant) Option 9
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Spousal Protection Benefit (Co-Annuitant) Option for
Custodial Individual Retirements Accounts 9
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Standard Fixed Account Option 50
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SureIncome Covered Life 40
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SureIncome Option Fee 8
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SureIncome Plus Option 8
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SureIncome Plus Option Fee 8
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SureIncome Plus Withdrawal Benefit Option 8
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SureIncome For Life Option 8
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SureIncome For Life Option Fee 8
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SureIncome For Life Withdrawal Benefit Option 8
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SureIncome ROP Death Benefit 11
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SureIncome Withdrawal Benefit Option 30
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Systematic Withdrawal Program 10
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Tax Qualified Contract 85
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Transfer Period Accounts 24
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Trial Examination Period 7
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TrueBalance/SM/ Asset Allocation Program 10
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TrueReturn/SM/ Accumulation Benefit Option 8
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Page
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Valuation Date 20
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Variable Account 79
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Variable Sub-Account 43
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Withdrawal Benefit Factor (for the SureIncome Withdrawal
Benefit Option) 31
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Withdrawal Benefit Factor (For the SureIncome Plus
Withdrawal Benefit Option) 34
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Withdrawal Benefit Factor (for the SureIncome For Life
Withdrawal Benefit Option) 38
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Withdrawal Benefit Payout Phase (for the SureIncome
Withdrawal Benefit Option) 30
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Withdrawal Benefit Payout Phase (for the SureIncome Plus
Withdrawal Benefit Option) 34
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Withdrawal Benefit Payout Phase (for the SureIncome For
Life Withdrawal Benefit Option) 37
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Withdrawal Benefit Payout Start Date (for the SureIncome
Withdrawal Benefit Option) 32
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Withdrawal Benefit Payout Start Date (for the SureIncome
Plus Withdrawal Benefit Option) 36
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Withdrawal Benefit Payout Start Date (for the SureIncome
For Life Withdrawal Benefit Option) 40
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Withdrawal Benefit Option 30
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Withdrawal Benefit Option Fee 58?
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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.
5 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.
+ Some broker/dealers and banks may limit the purchase of optional benefits
and may limit participation in certain programs. Your individual sales
representative will describe any such limitations to you.
* 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.
6 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 We are no longer offering new contracts. 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.
- -------------------------------------------------------------------------------------------------------
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.
7 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 any Withdrawal Benefit Option.
. If you select the SureIncome Option, you would pay an additional annual
fee ("SureIncome Option Fee") of 0.50% 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, a TrueReturn Option or any other
Withdrawal Benefit Option.
. If you select the SureIncome Plus Withdrawal Benefit Option
("SureIncome Plus Option") you would pay an additional annual fee
("SureIncome Plus Option Fee") of 0.65% (up to 1.25% for Options
added in the future) of the Benefit Base on each Contract Anniversary
(see the SureIncome Plus Option Fee section). You may not select the
SureIncome Plus Option together with a Retirement Income Guarantee
Option, a TrueReturn Option or any other Withdrawal Benefit Option.
. If you select the SureIncome For Life Withdrawal Benefit Option
("SureIncome For Life Option") you would pay an additional annual fee
("SureIncome For Life Option Fee") of 0.65% (up to 1.25% for Options
added in the future) of the Benefit Base on each Contract Anniversary
(see the SureIncome For Life Option Fee section). You may not select
the SureIncome For Life Option together with a Retirement Income
Guarantee Option, a TrueReturn Option or any other Withdrawal
Benefit Option.
8 PROSPECTUS
. 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.
. 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 15 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 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 14 for details.
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9 PROSPECTUS
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Investment Alternatives Each Contract offers several investment alternatives including:
. up to 3 Fixed Account Options that credit interest at rates we guarantee,
and
. 54* Variable Sub-Accounts investing in Portfolios offering professional
money management by these investment advisers:
. Fidelity Management & Research Company
. 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 61 Variable Sub-Accounts may be available depending on the
date you purchased your Contract. Please see page 46-50 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
1-800-457-7617.
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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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10 PROSPECTUS
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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.
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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
The SureIncome Plus Option and SureIncome For Life Option also include
a death benefit option, the SureIncome Return of Premium Death Benefit,
("SureIncome ROP Death Benefit").
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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 $100.
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 a
Withdrawal Benefit Option is in effect under your Contract. Your Contract
will terminate if you withdraw all of your Contract Value.
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11 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 66. 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.
[FLOW CHART]
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 1-800-457-7617 if you have any question about how the
Contracts work.
12 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 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.
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 Administrative Total Variable Account
Basic Contract (without any optional benefit) Risk Charge Expense Charge* Annual Expense
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor 1.10% 0.19% 1.29%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Plus 1.40% 0.19% 1.59%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge
Option) 1.40% 0.19% 1.59%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge
Option) 1.50% 0.19% 1.69%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 1.60% 0.19% 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.
MAV Death Benefit Option 0.20%* (up to 0.30% for Options added
Enhanced Beneficiary Protection in the future)
(Annual Increase) Option 0.30%*
Earnings Protection Death Benefit 0.25% (up to 0.35% for Options added
Option (issue age 0-70) in the future)
Earnings Protection Death Benefit 0.40% (up to 0.50% for Options added
Option (issue age 71-79) in 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%.
13 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 Total Variable Account
Protection Death Benefit Option (issue age 71-79) Risk Charge* Expense Charge* Annual Expense
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor 2.00% 0.19% 2.19%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Plus 2.30% 0.19% 2.49%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (5- year Withdrawal Charge
Option) 2.30% 0.19% 2.49%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (3- year Withdrawal Charge
Option) 2.40% 0.19% 2.59%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred (No Withdrawal Charge Option) 2.50% 0.19% 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.
SureIncome Plus Withdrawal Benefit Option Fee
(annual rate as a percentage of Benefit Base on each Contract Anniversary)
SureIncome Plus Withdrawal Benefit Option 0.65%*
-------------------------------------------------------------------
* Up to 1.25% for SureIncome Plus Options added in the future. See "SureIncome
Plus Withdrawal Benefit Option" for details.
SureIncome For Life Withdrawal Benefit Option Fee
(annual rate as a percentage of Benefit Base on each Contract Anniversary)
SureIncome For Life Withdrawal Benefit Option 0.65%*
-------------------------------------------------------------------
* Up to 1.25% for SureIncome For Life Options added in the future. See
"SureIncome For Life Withdrawal Benefit Option" for details.
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.
14 PROSPECTUS
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.
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 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,
and other expenses) 0.35% 1.73%
----------------------------------------------------------------------------
(1)Expenses are shown as a percentage of Portfolio average daily net assets
(before any waiver or reimbursement) as of December 31, 2007 (except as
otherwise noted).
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 the Spousal Protection Benefit (Co-Annuitant) Option; and
.. elected the SureIncome Plus Withdrawal Benefit Option.
15 PROSPECTUS
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 Preferred
(with 5 Year
Allstate Advisor Allstate Advisor Plus Withdrawal Charge Option)
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio Expenses $1,105 $1,964 $2,835 $5,238 $1,263 $2,265 $3,187 $5,481 $1,051 $1,967 $2,720 $5,481
- -------------------------------------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio Expenses $ 964 $1,552 $2,170 $4,021 $1,122 $1,855 $2,531 $4,300 $ 909 $1,558 $2,063 $4,300
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred Allstate Advisor Preferred
(with 3-Year Withdrawal Charge Option) (with No 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 Expenses $1,061 $1,656 $2,766 $5,560 $561 $1,685 $2,812 $5,638
- -------------------------------------------------------------------------------------------------------
Costs Based on Minimum Annual
Portfolio Expenses $ 920 $1,248 $2,112 $4,392 $420 $1,278 $2,161 $4,482
- -------------------------------------------------------------------------------------------------------
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 Preferred
(with 5 Year
Allstate Advisor Allstate Advisor Plus Withdrawal Charge Option)
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio Expenses $510 $1,539 $2,580 $5,238 $541 $1,627 $2,720 $5,481 $541 $1,627 $2,720 $5,481
- -------------------------------------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio Expenses $369 $1,127 $1,915 $4,021 $399 $1,218 $2,063 $4,300 $399 $1,218 $2,063 $4,300
- -------------------------------------------------------------------------------------------------------------------------
Allstate Advisor Preferred Allstate Advisor Preferred
(with 3-Year Withdrawal Charge Option) (with No 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 Expenses $551 $1,656 $2,766 $5,560 $561 $1,685 $2,812 $5,638
- -------------------------------------------------------------------------------------------------------
Costs Based on Minimum Annual
Portfolio Expenses $410 $1,248 $2,112 $4,392 $420 $1,278 $2,161 $4,482
- -------------------------------------------------------------------------------------------------------
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), and the
Spousal Protection Benefit (Co-Annuitant) Option and the SureIncome Plus
Withdrawal Benefit 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.
16 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 lowest and highest available combinations of
Contract charges that affect Accumulation Unit Values for each Contract are
shown in Appendix K of this prospectus. The Statement of Additional Information
contains the Accumulation Unit Values for all other available combinations of
Contract charges that affect Accumulation Unit Values for each Contract.
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 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 age 85. If
you select the SureIncome Plus Withdrawal Benefit Option, the maximum age of
any Contract Owner on the Rider Application Date is age 85. If you select the
SureIncome For Life Withdrawal Benefit Option, the minimum and maximum ages of
the oldest Contract Owner (oldest annuitant if Contract Owner is a non-living
person) on the Rider Application Date are ages 50 and 79, respectively.
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
17 PROSPECTUS
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. Additional
restrictions may apply in the case of Qualified Plans. The maximum age of the
Annuitant on the date we receive the completed application for each Contract is
age 90.
If you select the Enhanced Beneficiary Protection (MAV) Death Benefit 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 age 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 age 85. If you select the SureIncome
Plus Withdrawal Benefit Option, the maximum age of any Annuitant on the Rider
Application Date is age 85. If you select the SureIncome For Life Withdrawal
Benefit Option, the minimum and maximum ages of the oldest annuitant, if the
Contract Owner is a non-living person, on the Rider Application Date are ages
50 and 79, respectively.
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
18 PROSPECTUS
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 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 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
19 PROSPECTUS
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
periodic income payments under your Contract.
Purchases
- --------------------------------------------------------------------------------
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, any additional payments after the initial purchase
payment 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 1-800-457-7617.
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.
20 PROSPECTUS
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.
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 - Class IB 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 - Class IB 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.
21 PROSPECTUS
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 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 Withdrawal Benefit 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 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 - Class IB Sub-Account. You may transfer the
excess amount out of the Putnam VT Money Market - Class IB 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.
22 PROSPECTUS
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 (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
23 PROSPECTUS
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
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, TrueBalanceSM Model
Portfolio Options, and Fidelity VIP Freedom Funds 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 *TrueBalance Conservative Model
Portfolio Option Portfolio Option
*TrueBalance Moderately Conservative *TrueBalance Moderately Conservative
Model Portfolio Option Model Portfolio Option
*Fidelity VIP Freedom Income Fund *TrueBalance Moderate Model Portfolio
Model Portfolio Option Option
*Fidelity VIP Freedom 2010 Fund Model *TrueBalance Moderately Aggressive
Portfolio Option Model Portfolio Option
*TrueBalance Aggressive Model
Portfolio Option
*Fidelity VIP Freedom Income Fund
Model Portfolio Option
*Fidelity VIP Freedom 2010 Fund Model
Portfolio Option
*Fidelity VIP Freedom 2020 Fund Model
Portfolio Option
*Fidelity VIP Freedom 2030 Fund 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. The Fidelity VIP Freedom
Funds Model Portfolio Options are available as Model Portfolio Options under
Guarantee Option 1 and Guarantee Option 2 (Rider Date prior to October 1,
2004). For Guarantee Option 2 (Rider Date on or after October 1, 2004), the
Fidelity VIP Freedom Funds are part of the available Variable Sub-Accounts
listed under Model Portfolio Option 2. Please note that only certain Fidelity
VIP Freedom Funds Model Portfolio Options are available with your TrueReturn
Option as summarized in the table above.
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 selected.
24 PROSPECTUS
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 specific instructions or your allocation for the
previous purchase payment (for Model Portfolio Option 1) or the percentage
allocation for your current Model Portfolio Option (for TrueBalance Model
Portfolio Options) unless you request that the purchase payment (and Credit
Enhancement for Allstate Advisor Plus Contracts) be allocated to the DCA Fixed
Account Option. Purchase payments allocated to the DCA Fixed Account Option
must be $100 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
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
Oppenheimer Core Bond/VA - Service Shares Sub-Account
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
UIF Emerging Markets Debt, Class II Sub-Account/(2)(6)/
UIF U.S. Real Estate, Class II Sub-Account/(2)(6)/
- --------------------------------------------------------------------------------
Category C
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
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 Discovery 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 MidCap/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/(3)/
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Utilities Growth and Income - Class IB Sub-Account/(3)/
Putnam VT Voyager - Class IB Sub-Account
UIF Equity and Income, Class II Sub-Account/(2)(6)/
UIF Global Franchise, Class II Sub-Account/(2)(6)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(6)/
UIF U.S. Mid Cap Value, Class I Sub-Account &
UIF U.S. Mid Cap Value, Class II Sub-Account/(2)(4)(6)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Capital Growth, Class II Sub-Account/(6)/
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
Category D (Variable Sub-Accounts not available under Model Portfolio Option 1)
Fidelity VIP Freedom Income - Service Class 2 Sub-Account
Fidelity VIP Freedom 2010 - Service Class 2 Sub-Account
Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account
Fidelity VIP Freedom 2030 - Service Class 2 Sub-Account
Fidelity VIP Growth Stock - Service Class 2 Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Health Sciences - Class IB Sub-Account/(3)/
Putnam VT New Opportunities - Class IB Sub-Account/(3)/
Putnam VT Vista - Class IB Sub-Account
UIF Capital Growth, Class I Sub-Account/(2)(4)(6)/
UIF Capital Growth, Class II Sub-Account/(2)(4)(6)/
UIF Small Company Growth, Class II Sub-Account/(2)(6)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(5)(6)/
- --------------------------------------------------------------------------------
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.
25 PROSPECTUS
(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)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(3)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 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.*
(4)The UIF Capital Growth, Class II Sub-Account and the UIF U.S. Mid Cap Value,
Class II Sub-Account are offered with Contracts issued on or after May 1,
2004. Generally Contract Owners of Contracts issued prior to May 1, 2004,
may invest only in the UIF Capital Growth, Class I Sub-Account and the UIF
U.S. Mid Cap Value, Class I Sub-Account. Contracts issued prior to May 1,
2004 that participate in certain TrueBalance model portfolios may invest in
UIF Capital Growth, Class II Sub-Account and the UIF U.S. Mid Cap Value,
Class II Sub-Account.
(5)Effective May 1, 2006, the Van Kampen LIT Mid Cap Growth Portfolio, Class II
(formerly called the Van Kampen LIT Aggressive Growth Portfolio, Class II)
was closed to new investments. If you are currently invested in the Variable
Sub-Account that invests in this Portfolio, you may continue your
investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program. Outside of
these automatic transaction programs, additional allocations will not be
allowed.*
(6)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed
its name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging
Markets Debt Portfolio changed its name to UIF Emerging Markets Debt
Portfolio; the Van Kampen UIF U.S. Real Estate Portfolio changed its name to
the UIF U.S. Real Estate Portfolio; the Van Kampen UIF Equity and Income
Portfolio changed its name to the UIF Equity and Income Portfolio; the Van
Kampen UIF U.S. Mid Cap Value Portfolio changed its name to the UIF U.S. Mid
Cap Value Portfolio; the Van Kampen UIF Mid Cap Growth Portfolio changed its
name to the UIF Mid Cap Growth Portfolio; the Van Kampen UIF Global
Franchise Portfolio changed its name to the UIF Global Franchise Portfolio;
the Van Kampen Small Company Growth Portfolio changed its name to the UIF
Small Company Growth Portfolio; the Van Kampen LIT Strategic Growth
Portfolio changed its name to the Van Kampen LIT Capital Growth Portfolio;
and the Van Kampen LIT Aggressive Growth Portfolio changed its name to the
Van Kampen LIT Mid Cap Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If prior to the effective close date,
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 the effective close date, 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 this TrueReturn Option prior to
adding it 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)/:
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
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
UIF Emerging Markets Debt, Class II Sub-Account/(2)(6)/
UIF U.S. Real Estate, Class II Sub-Account/(2)(6)/
- --------------------------------------------------------------------------------
Category C
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
FTVIP Franklin Growth and Income Securities - Class 2 Sub-Account
26 PROSPECTUS
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Franklin Large Cap Growth Securities - Class 2 Sub-Account
FTVIP Mutual Discovery 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 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/(3)/
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Utilities Growth and Income - Class IB Sub-Account/(3)/
UIF Equity and Income, Class II Sub-Account/(2)(6)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(6)/
UIF U.S. Mid Cap Value, Class I Sub-Account & UIF U.S. Mid Cap Value, Class II
Sub-Account/(2)(4)(6)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
Category D
Fidelity VIP Growth Stock - Service Class 2 Sub-Account
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 MidCap/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/(3)/
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account
Putnam VT New Opportunities - Class IB Sub-Account/(3)/
Putnam VT Vista - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
UIF Capital Growth, Class I Sub-Account/(6)/
UIF Capital Growth, Class II Sub-Account/(2)(4)(6)/
UIF Global Franchise, Class II Sub-Account/(2)(6)/
UIF Small Company Growth, Class II Sub-Account/(2)(6)/
Van Kampen LIT Capital Growth, Class II Sub-Account/(6)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(5)(6)/
- --------------------------------------------------------------------------------
The following Variable Sub-Accounts are not available under Model Portfolio
Option 2 (Rider Date Prior to October 1, 2004): Fidelity VIP Freedom Income -
Service Class 2 Sub-Account, Fidelity VIP Freedom 2010 - Service Class 2
Sub-Account, Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account and
Fidelity VIP Freedom 2030 - Service Class 2 Sub-Account. Instead, the Fidelity
VIP Freedom Funds are available as Model Portfolio Options (see table under
Investment Requirements above).
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)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(3)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.*
(4)The UIF Capital Growth, Class II Sub-Account and the 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 UIF Capital Growth, Class I Sub-Account and the UIF U.S. Mid Cap
Value, Class I Sub-Account. Contracts issued prior to May 1, 2004 that
participate in certain TrueBalance model portfolios may invest in UIF
Capital Growth, Class II Sub-Account and the UIF U.S. MidCap Value, Class II
Sub-Account.
(5)Effective May 1, 2006, the Van Kampen LIT Mid Cap Growth Portfolio, Class II
(formerly called the Van Kampen LIT Aggressive Growth Portfolio, Class II)
was closed to new investments. If you are currently invested in the Variable
Sub-Account that invests in this Portfolio, you may continue your
investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program. Outside of
these automatic transaction programs, additional allocations will not be
allowed.*
(6)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed
its name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging
Markets Debt Portfolio changed its name to UIF Emerging Markets Debt
Portfolio; the Van Kampen UIF U.S. Real Estate Portfolio changed its name to
the UIF U.S. Real Estate Portfolio; the Van Kampen UIF Equity and Income
Portfolio changed its name to the UIF Equity and Income Portfolio; the Van
Kampen UIF U.S. Mid Cap Value Portfolio changed its name to the UIF U.S. Mid
Cap Value Portfolio; the Van Kampen UIF Mid Cap Growth Portfolio changed its
name to the UIF Mid Cap Growth Portfolio; the Van Kampen UIF Global
Franchise Portfolio changed its name to the UIF Global Franchise Portfolio;
the Van Kampen UIF Small Company Growth Portfolio changed its name to the
UIF Small Company Growth Portfolio; the Van Kampen LIT Strategic Growth
Portfolio changed its name to the Van Kampen LIT Capital Growth Portfolio;
and the Van Kampen LIT Aggressive Growth Portfolio changed its name to the
Van Kampen LIT Mid Cap Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If prior to the effective close date,
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
27 PROSPECTUS
accordance with that program. Outside of these automatic transaction programs,
additional allocations will not be allowed.
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)/:
Model Portfolio Option 2
(Rider Date on or after October 1, 2004)
- --------------------------------------------------------------------------------
Available
- --------------------------------------------------------------------------------
Fidelity VIP Freedom Income - Service Class 2 Sub-Account
Fidelity VIP Freedom 2010 - Service Class 2 Sub-Account
Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account
Fidelity VIP Freedom 2030 - Service Class 2 Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
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 Discovery 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 MidCap/VA - Service Shares Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account
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
UIF Emerging Markets Debt, Class II Sub-Account/(2)(5)/
UIF Equity and Income, Class II Sub-Account/(2)(5)/
UIF Global Franchise, Class II Sub-Account/(2)(5)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(5)/
UIF U.S. Mid Cap Value, Class I Sub-Account & UIF U.S. Mid Cap Value, Class II
Sub-Account/(2)(3)(5)/
UIF U.S. Real Estate, Class II Sub-Account/(2)(5) /
Van Kampen LIT Capital Growth, Class II Sub-Account/(5)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
- --------------------------------------------------------------------------------
Excluded
- --------------------------------------------------------------------------------
Fidelity VIP Growth Stock - Service Class 2 Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Vista - Class IB Sub-Account
UIF Capital Growth, Class I Sub-Account &
UIF Capital Growth, Class II Sub-Account/(2)(3)(5)/
UIF Small Company Growth, Class II Sub-Account/(2)(5)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(4)(5)/
- --------------------------------------------------------------------------------
(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)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(3)The UIF Capital Growth, Class II Sub-Account and the 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 UIF Capital Growth, Class I Sub-Account and the UIF U.S. Mid Cap
Value, Class I Sub-Account. Contracts issued prior to May 1, 2004 that
participate in certain TrueBalance model portfolios may invest in UIF
Capital Growth, Class II Sub-Account and the UIF U.S. MidCap Value, Class II
Sub-Account.
(4)Effective May 1, 2006, the Van Kampen LIT Mid Cap Growth Portfolio, Class II
(formerly called the Van Kampen LIT Aggressive Growth Portfolio, Class II)
was closed to new investments. If you are currently invested in the Variable
Sub-Account that invests in this Portfolio, you may continue your
investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program. Outside of
these automatic transaction programs, additional allocations will not be
allowed.*
(5)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed
its name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging
Markets Debt Portfolio changed its name to UIF Emerging Markets Debt
Portfolio; the Van Kampen UIF U.S. Real Estate Portfolio changed its name to
the UIF U.S. Real Estate Portfolio; the Van Kampen UIF Equity and Income
Portfolio changed its name to the UIF Equity and Income Portfolio; the Van
Kampen UIF U.S. Mid Cap Value Portfolio changed its name to the UIF U.S. Mid
Cap Value Portfolio; the Van Kampen UIF Mid Cap Growth Portfolio changed its
name to the UIF Mid Cap Growth Portfolio; the Van Kampen UIF Global
Franchise Portfolio changed its name to the UIF Global Franchise Portfolio;
the Van Kampen UIF Small Company Growth Portfolio changed its name to the
UIF Small Company Growth Portfolio; the Van Kampen LIT Strategic Growth
Portfolio changed its name to the Van Kampen LIT Capital Growth Portfolio;
and the Van
28 PROSPECTUS
Kampen LIT Aggressive Growth Portfolio changed its name to the Van Kampen LIT
Mid Cap Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If prior to the effective close date,
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 the effective close date, 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 this TrueReturn Option prior to
adding it to your Contract.
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. Failure to comply with the investment requirements for any reason
may result in the cancellation of the TrueReturn Option. 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 requirements
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, as described on page 79 of this
prospectus, 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;
29 PROSPECTUS
.. 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.
We are also making the Withdrawal Benefit Options available at the time of your
first utilization of this TrueReturn Rider Trade-In Option. We may discontinue
offering any of these Withdrawal Benefit Options under the Rider Trade-In
Option with respect to new TrueReturn Options added in the future at anytime at
our discretion. If we do so, TrueReturn Options issued prior to this time will
continue to have a Withdrawal Benefit Option available at the time of the first
utilization of this TrueReturn Rider Trade-In Option. You may cancel your
TrueReturn Option and immediately add a new SureIncome Option, a new SureIncome
Plus Option, or a new SureIncome For Life 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. At our discretion, we reserve the right to extend
the date at which time the trade-in may occur up to the 10th anniversary of
the Rider Date at any time. 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 Withdrawal Benefit 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 Withdrawal Benefit Option must be a Withdrawal Benefit Option that
we make available for use with this Rider Trade-In Option.
.. The issue requirements and terms and conditions of the new Withdrawal
Benefit Option must be met as of the date the new Withdrawal Benefit Option
is made a part of your Contract. Currently, if you select the SureIncome or
SureIncome Plus Withdrawal Benefit Option by utilizing the Rider Trade-In
Option, the maximum age of any Contract Owner or Annuitant on the Rider
Application Date is age 85. For other Withdrawal Benefit Options that may
be selected in the future utilizing the Rider Trade-In Option, issue age
requirements may differ.
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.
Fidelity VIP Freedom Funds Model Portfolio Options.
If you choose one of the Fidelity VIP Freedom Funds Model Portfolio Options or
transfer your entire Contract Value into one of the Fidelity VIP Freedom Funds
Model Portfolio Options we will invest your Contract Value entirely into the
Fidelity VIP Freedom Sub-Account associated with the Fidelity VIP Freedom Funds
Model Portfolio Option you have currently selected. The following table lists
the Fidelity VIP Freedom Sub-Account associated with each Fidelity VIP Freedom
Funds Model Portfolio Option:
Fidelity VIP Freedom Funds Model Fidelity VIP Freedom
Portfolio Options Sub-Account
-----------------------------------------------------------------------------
Fidelity VIP Freedom Income Fund Fidelity VIP Freedom Income - Service
Model Portfolio Option Class 2 Sub-Account
-----------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Fund Model Fidelity VIP Freedom 2010 - Service
Portfolio Option Class 2 Sub-Account
-----------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Fund Model Fidelity VIP Freedom 2020 - Service
Portfolio Option Class 2 Sub-Account
-----------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Fund Model Fidelity VIP Freedom 2030 - Service
Portfolio Option Class 2 Sub-Account
-----------------------------------------------------------------------------
The Fidelity VIP Freedom Funds Model Portfolio Options are available as Model
Portfolio Options under Guarantee Option 1 and Guarantee Option 2 (Rider Date
prior to October 1, 2004). For Guarantee Option 2 (Rider Date on or after
October 1, 2004), the Fidelity VIP Freedom Funds are part of the available
Variable Sub-Accounts listed under Model Portfolio Option 2. Please note only
certain Fidelity VIP Freedom Funds Model Portfolio Options are available with
your TrueReturn Option as summarized in the table under Investment Requirements
above.
30 PROSPECTUS
WITHDRAWAL BENEFIT OPTIONS
"Withdrawal Benefit Options" is used to refer collectively to the SureIncome
Withdrawal Benefit Option, the SureIncome Plus Withdrawal Benefit Option, and
the SureIncome For Life Withdrawal Benefit Option. "Withdrawal Benefit Option"
is used to refer to any one of the Withdrawal Benefit Options.
Some broker-dealers or banks may limit the availability of one or more
Withdrawal Benefit Option. Your individual sales representative will describe
any limitations to you.
SUREINCOME WITHDRAWAL BENEFIT OPTION
We offer the SureIncome Withdrawal Benefit Option ("SureIncome 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
is identical to 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
Withdrawal Benefit Option (SureIncome, SureIncome Plus or SureIncome For Life)
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 Withdrawal Benefit 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.
We may discontinue offering, at any time without prior notice, the SureIncome
Option 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
purchase payments 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
31 PROSPECTUS
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 Contract Value immediately prior to withdrawal less the amount of
the withdrawal, multiplied by the Withdrawal Benefit Factor.
The Benefit Payment Remaining at the time of a withdrawal during a calendar
year will be increased on a nondiscriminatory basis in order to satisfy IRS
minimum distribution requirements on the Contract under which this Option has
been elected. The Benefit Payment Remaining will be increased by the excess of
the IRS minimum distribution required on the Contract as calculated at the end
of the previous calendar year and the Benefit Payment at the end of the
previous calendar year. For the purposes of this calculation, the Benefit
Payment Remaining will not be increased if a Withdrawal Benefit Option was not
attached to this Contract as of the end of the previous calendar year. Note
that any systematic withdrawal programs designed to satisfy IRS minimum
distribution requirements may need to be modified to ensure guarantees under
this Option are not impacted by the withdrawals. This modification may result
in uneven payment amounts throughout the year.
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
"Contract 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.
32 PROSPECTUS
No further withdrawals, purchase payments or any other actions associated with
the Accumulation Phase can be made after the Withdrawal Benefit Payout Start
Date.
Under the Withdrawal Benefit Payout Phase, 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 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. The request must be in a form acceptable to us and
processed 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 less than each of the previous payments. If your
Contract is subject to Internal Revenue Code Section 401(a)(9), the period
certain cannot exceed that which is required by such section and the
regulations promulgated thereunder. Therefore, the amount of each payment under
the SureIncome 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 subject to Internal Revenue Code Section 401(a)(9), we will
not permit a change in the payment frequency or level.
If your Contract is not subject to Internal Revenue Code Section 401(a)(9), we
reserve the right to allow other payment frequencies or levels 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 take any other
actions associated with the Accumulation Phase after the commencement of the
Withdrawal Benefit Payout Start Date.
Investment Requirements
If you add a SureIncome Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest.
These requirements are described in "Investment Requirements (Applicable to All
Withdrawal Benefit Options)" below.
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 such 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 currently offer the SureIncome Option or SureIncome Plus
Withdrawal Benefit Option as New SureIncome Options available under the Rider
Trade-In Option. We may also offer other Options ("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. If we do so, SureIncome Options issued prior to this time
will continue to have a Withdrawal Benefit Option and TrueReturn Option
available at the time of the first utilization of this SureIncome Rider
Trade-In Option.
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 SureIncome Option or any 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 SureIncome Option or any 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 SureIncome
Option or the New Option
33 PROSPECTUS
must be met as of the date any such Option is made a part of your Contract.
Currently, if you select the SureIncome or SureIncome Plus Withdrawal
Benefit Option utilizing the Rider Trade-in Option, the maximum age of any
Contract Owner or Annuitant on the Rider Application Date is age 85. For a
New SureIncome Option or New Option that may be offered and selected in the
future utilizing the Rider Trade-In Option, issue age requirements may
differ.
If the New Option is a New SureIncome Option, it 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.
If the Contract death settlement options are governed by an Endorsement and
such Endorsement allows for the continuation of the Contract upon the death of
the Owner or Annuitant by the spouse, the SureIncome Option will continue
unless the new Owner elects to cancel the SureIncome Option. If the SureIncome
Option is continued, it will remain in effect until terminated pursuant to
Termination of the SureIncome Option below. If the Contract is not continued,
then the SureIncome Option will terminate on the date we received a complete
request for settlement of the Death Proceeds.
Termination of the SureIncome Option
The 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.
SUREINCOME PLUS WITHDRAWAL BENEFIT OPTION
We offer the SureIncome Plus Withdrawal Benefit Option ("SureIncome Plus
Option"), except in a limited number of states where it is not currently
available, for an additional fee. The SureIncome Plus Option provides a
guaranteed withdrawal benefit that gives you the right to take limited partial
withdrawals, which may increase during the first 10 years of the Option, 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
(see defined terms below). The SureIncome Plus Option also provides an
additional death benefit option.
The SureIncome Plus 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".
Prior to the commencement of the Withdrawal Benefit Payout Phase, the
SureIncome Plus Option also provides an additional death benefit option, the
SureIncome Return of Premium Death Benefit ("SureIncome ROP Death Benefit").
This death benefit option is described below under "Death of Owner or
Annuitant" and in the Death Benefits section starting on page 79.
For purposes of the SureIncome Plus 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 Plus 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 Plus 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
is identical to the Contract Year.
The SureIncome Plus 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 Plus 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 Plus Option. Currently, you may have only one
Withdrawal Benefit 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
Withdrawal Benefit Option, a TrueReturn Option, or a
34 PROSPECTUS
Retirement Income Guarantee Option. The SureIncome Plus 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 Plus Option may not 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 Plus Option available to such Contracts on a nondiscriminatory
basis in the future at our discretion. Once added to your Contract, the
SureIncome Plus Option may not be cancelled at any time.
We may discontinue offering the SureIncome Plus Option at any time to new
Contract Owners and to existing Contract Owners who did not elect the
SureIncome Plus 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 Plus Options and/or to eliminate the current
Withdrawal Benefit Factor. Once a Withdrawal Benefit Factor has been
established for a SureIncome Plus Option, it cannot be changed after the Rider
Date.
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 and your SureIncome ROP Death Benefit by more than the amount of
the withdrawal and without reducing your Benefit Payment available in future
Benefit Years. Please note that any purchase payments 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
Plus 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 Plus 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, if applicable. See Rider Trade-In Option, above, under
SureIncome Withdrawal Benefit Option for more information.
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 Contract Value immediately prior to withdrawal less the amount of the
withdrawal, multiplied by the Withdrawal Benefit Factor.
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments (and Credit Enhancements for Allstate Advisor Plus Contracts)
received on the date of this withdrawal, but before the application of any
SureIncome Plus Withdrawal Benefit Option Fee, Spousal Protection Benefit
Option Fee, Spousal Protection Benefit Option for Custodial Individual
Retirement Accounts Fee or Contract Maintenance Charge that may be applicable.
On each of the ten Contract Anniversaries after the Rider Date, the amount of
the Benefit Payment may be increased based upon the maximum anniversary value
of the Contract according to the following calculation. The Benefit Payment
will be recalculated to the greater of:
.. The Benefit Payment following the application of all purchase payments and
withdrawals on that Contract Anniversary; and
.. The Contract Value on that Contract Anniversary, following the application
of all purchase payments, withdrawals, and expenses multiplied by the
Withdrawal Benefit Factor.
The Benefit Payment Remaining at the time of a withdrawal during a calendar
year will be increased on a nondiscriminatory basis in order to satisfy IRS
minimum distribution requirements on the Contract under which this Option has
been elected. The Benefit Payment Remaining will be increased by the excess of
the IRS minimum distribution required on the Contract as
35 PROSPECTUS
calculated at the end of the previous calendar year and the Benefit Payment at
the end of the previous calendar year. For the purposes of this calculation,
the Benefit Payment Remaining will not be increased if a Withdrawal Benefit
Option was not attached to this Contract as of the end of the previous calendar
year. Note that any systematic withdrawal programs designed to satisfy IRS
minimum distribution requirements may need to be modified to ensure guarantees
under this Option are not impacted by the withdrawals. This modification may
result in uneven payment amounts throughout the year.
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 Plus
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 the withdrawal less the amount
of the withdrawal; or
. The Benefit Base immediately prior to the withdrawal less the amount of
the withdrawal.
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments (and Credit Enhancements for Allstate Advisor Plus Contracts)
received on the date of this withdrawal, but before the application of any
SureIncome Plus Withdrawal Benefit Option Fee, Spousal Protection Benefit
Option Fee, Spousal Protection Benefit Option for Custodial Individual
Retirement Accounts Fee or Contract Maintenance Charge that may be applicable.
On each of the ten Contract Anniversaries after the Rider Date, the amount of
the Benefit Base may be increased based upon the maximum anniversary value of
the Contract according to the following calculation. The Benefit Base will be
recalculated to the greater of:
.. The Benefit Base following the application of all purchase payments and
withdrawals on that Contract Anniversary; and
.. The Contract Value on that Contract Anniversary, following the application
of all purchase payments, withdrawals and expenses.
The Benefit Base may also be reduced in other situations as detailed in the
"Contract Owner and Assignment of Payments or Interest" section below.
If the Benefit Base is reduced to zero, this SureIncome Plus Option will
terminate.
For numerical examples that illustrate how the values defined under the
SureIncome Plus Option are calculated, see Appendix I.
Contract Owner and Assignment of Payments or Interest
If you change the Contract Owner or assign any payments or interest under the
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 or 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 Plus 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.
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 of the Contract can be made after the Withdrawal Benefit
Payout Start Date. Since the Accumulation Phase ends at this point, the
SureIncome ROP Death Benefit no longer applies.
Under the Withdrawal Benefit Payout Phase, 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 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 commencement of 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. The request must be in a form
acceptable to us and processed by us before the first payment is made. (The
amount of each
36 PROSPECTUS
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 less than each of the previous payments. If your
Contract is subject to Internal Revenue Code Section 401(a)(9), the period
certain cannot exceed that which is required by such section and the
regulations promulgated thereunder. Therefore, the amount of each payment under
the SureIncome Plus 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 subject to Internal Revenue Code
Section 401(a)(9), we will not permit a change in the payment frequency or
level.
If your Contract is not subject to Internal Revenue Code Section 401(a)(9), we
reserve the right to allow other payment frequencies or levels 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 take any other
actions associated with the Accumulation Phase after the Withdrawal Benefit
Payout Start Date.
Investment Requirements
If you add a SureIncome Plus Option to your Contract, you must adhere to
certain requirements related to the investment alternatives in which you may
invest. These requirements are described in "Investment Requirements
(Applicable to All Withdrawal Benefit Options)" below.
Death of Owner or Annuitant
If the Owner or the 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 Plus Option will continue unless the Contract Owner (or new
Contract Owner) elects to cancel the SureIncome Plus Option. If the SureIncome
Plus Option is continued, it will remain in effect until terminated. If the
Contract is not continued under Option D above, then the SureIncome Plus Option
will terminate on the date we receive a Complete Request for Settlement of the
Death Proceeds.
If the Contract death settlement options are governed by an Endorsement and
such Endorsement allows for the continuation of the Contract upon the death of
the Owner or Annuitant by the spouse, the SureIncome Plus Option will continue
unless the new Owner elects to cancel the SureIncome Plus Option. If the
SureIncome Plus Option is continued, it will remain in effect until terminated
pursuant to Termination of the SureIncome Plus Option below. If the Contract is
not continued, then the SureIncome Plus Option will terminate on the date we
received a complete request for settlement of the Death Proceeds.
The SureIncome Plus Option also makes available the SureIncome ROP Death
Benefit. On the Rider Date, the SureIncome ROP Death Benefit is equal to the
Contract Value. After the Rider Date, the SureIncome ROP Death Benefit will be
increased by purchase payments (and Credit Enhancements in the case of 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 SureIncome ROP Death
Benefit 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 SureIncome ROP Death Benefit will
be the lesser of:
. The Contract Value immediately prior to withdrawal less the amount of
the withdrawal; or
. The SureIncome ROP Death Benefit immediately prior to withdrawal less
the amount of the withdrawal.
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments (and Credit Enhancements in the case of Allstate Advisor Plus
Contracts) received on the date of this withdrawal, but before the application
of any SureIncome Plus Withdrawal Benefit Option Fee, Spousal Protection
Benefit Option Fee, Spousal Protection Benefit Option for Custodial Individual
Retirement Accounts Fee or Contract Maintenance Charge that may be applicable.
For numerical examples that illustrate how the SureIncome ROP Death Benefit
under the SureIncome Plus Option is calculated, see Appendix I.
Refer to the Death Benefits section (page 76) for more details on the
SureIncome ROP Death Benefit.
Termination of the SureIncome Plus Option
The SureIncome Plus 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);
37 PROSPECTUS
.. On the date the Contract is terminated;
.. On the date the SureIncome Plus Option is cancelled as detailed under Death
of Owner or Annuitant above; or
.. On the date we receive a Complete Request for Settlement of the Death
Proceeds.
SUREINCOME FOR LIFE WITHDRAWAL BENEFIT OPTION
We offer the SureIncome For Life Withdrawal Benefit Option ("SureIncome For
Life Option"), except in a limited number of states where it is not currently
available, for an additional fee. The SureIncome For Life Option provides a
guaranteed withdrawal benefit that gives you the right to take limited partial
withdrawals, which may increase during the first 10 years of the Option, as
long as the SureIncome Covered Life is alive, subject to certain restrictions.
Therefore, regardless of subsequent fluctuations in the value of your Contract
Value, you are entitled to a Benefit Payment each Benefit Year until the death
of the SureIncome Covered Life (as defined below), subject to certain
restrictions. The SureIncome For Life Option also provides an additional death
benefit option.
The SureIncome For Life Option guarantees an amount up to the "Benefit Payment
Remaining" which will be available for withdrawal from the Contract each
"Benefit Year" as long as the SureIncome Covered Life is alive, subject to
certain restrictions. The "SureIncome Covered Life" is the oldest Contract
Owner, or the oldest Annuitant if the Contact Owner is a non-living entity, on
the Rider Date. If the Contract Value is reduced to zero and the Benefit
Payment is still greater than zero, we will distribute an amount equal to the
Benefit Payment each year to the Contract Owner as described below under the
"Withdrawal Benefit Payout Phase" as long as the SureIncome Covered Life is
alive. Prior to the commencement of the Withdrawal Benefit Payout Phase, the
SureIncome For Life Option also provides an additional death benefit option,
the SureIncome Return of Premium Death Benefit ("SureIncome ROP Death
Benefit"). This Option is described below under "Death of Owner or Annuitant"
and in the Death Benefits section starting on page 79.
For purposes of the SureIncome For Life 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 For Life 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 For Life 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 is identical to the Contract Year.
The SureIncome For Life 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 For Life 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 For Life Option. Currently, you may have
only one Withdrawal Benefit 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 Withdrawal Benefit Option, a TrueReturn Option, or a Retirement Income
Guarantee Option. The SureIncome For Life Option is only available if the
oldest Contract Owner or the oldest Annuitant, if the Contract Owner is a
non-living entity (i.e., the SureIncome Covered Life) is between the ages of 50
and 79, inclusive, on the effective date of the Rider (the "Rider Application
Date"). (The maximum age may depend on your state.) The SureIncome For Life
Option may not 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 For Life Option available to such Contracts on a
nondiscriminatory basis in the future at our discretion. Once added to your
Contract, the SureIncome For Life Option may not be cancelled at any time.
We may discontinue offering the SureIncome For Life Option at any time to new
Contract Owners and to existing Contract Owners who did not elect the
SureIncome For Life 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. Prior to the earlier of the date of the first
withdrawal after the issuance of the SureIncome For Life Option or the date the
Contract enters the Withdrawal Benefit Payout Phase, the Withdrawal Benefit
Factor used in these determinations may change as shown below. Generally
speaking, during this period the Withdrawal Benefit Factor will increase as the
SureIncome Covered Life grows older. On the earlier of the date of the first
withdrawal after the issuance of the SureIncome for Life Option or the date the
Contract enters the Withdrawal Benefit Payout Phase, the Withdrawal Benefit
Factor will be fixed at the then applicable rate, based on the then current
attained age of the SureIncome Covered Life, and will be used in all subsequent
determinations of Benefit Payments and Benefit Payments Remaining. After this
date the Withdrawal Benefit Factor will not change.
38 PROSPECTUS
We currently offer the following Withdrawal Benefit Factors:
Attained Age of
SureIncome Covered Life Withdrawal Benefit Factor
----------------------- -------------------------
50 - 59 4%
60 - 69 5%
70 + 6%
The Withdrawal Benefit Factors and age ranges applicable to your Contract are
set on the Rider Date. They cannot be changed after the SureIncome For Life
Option has been added to your Contract. We reserve the right to make other
Withdrawal Benefit Factors available in the future for new SureIncome For Life
Options, change the age ranges to which they apply, and/or to eliminate
currently available Withdrawal Benefit Factors.
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 and your SureIncome ROP Death Benefit 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 are 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.
On the Rider Date, the Benefit Payment is equal to the Contract Value
multiplied by the Withdrawal Benefit Factor based on the current attained age
of the SureIncome Covered Life.
After the Rider Date, the Benefit Payment and Benefit Payment Remaining will be
increased by purchase payments (and Credit Enhancements for Allstate Advisor
Plus Contracts) multiplied by the Withdrawal Benefit Factor based on the
current attained age of the SureIncome Covered Life. On the date of the first
withdrawal after the Rider Date the Benefit Payment and Benefit Payment
Remaining will equal the Withdrawal Benefit Factor based on the current
attained age of the SureIncome Covered Life multiplied by the Benefit Base
immediately after application of any purchase payments, but prior to the
withdrawal on that date. The Withdrawal Benefit Factor used in all future
calculations will not change.
After the first withdrawal, the Benefit Payment Remaining will be increased by
purchase payments (and Credit Enhancements for Allstate Advisor Plus Contracts)
multiplied by the Withdrawal Benefit Factor. The Benefit Payment Remaining is
reduced by the amount of any withdrawal. The Benefit Payment Remaining will
never be less than zero.
After the first withdrawal, the Benefit Payment will be increased by purchase
payments (and Credit Enhancements for Allstate Advisor Plus Contracts)
multiplied by the Withdrawal Benefit Factor. The Benefit Payment is affected by
withdrawals as follows:
.. If a withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Payment is
unchanged.
.. If a 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 Benefit Base immediately after the withdrawal multiplied by the
Withdrawal Benefit Factor.
If the Benefit Payment is reduced to zero, the SureIncome For Life Option will
terminate.
On each of the ten Contract Anniversaries after the Rider Date, the amount of
the Benefit Payment may be increased based upon the maximum anniversary value
of the Contract according to the following calculation. The Benefit Payment
will be recalculated to the greater of:
.. The Benefit Payment following application of all purchase payments and
withdrawals on that Contract Anniversary; or
.. The Contract Value on that Contract Anniversary, following the application
of all purchase payments, withdrawals and expenses, multiplied by the
Withdrawal Benefit Factor currently applicable.
The Benefit Payment Remaining at the time of a withdrawal during a calendar
year will be increased on a nondiscriminatory basis in order to satisfy IRS
minimum distribution requirements on the Contract under which this Option has
been elected. The Benefit Payment Remaining will be increased by the excess of
the IRS minimum distribution required on the Contract as calculated at the end
of the previous calendar year and the Benefit Payment at the end of the
previous calendar year. For the purposes of this calculation, the Benefit
Payment Remaining will not be increased if a Withdrawal Benefit Option was not
attached to this Contract as of the end of the previous calendar year. Note
that any systematic withdrawal programs designed to satisfy IRS minimum
distribution requirements may need to be modified to ensure guarantees under
this Option are not impacted by the withdrawals. This modification may result
in uneven payment amounts throughout the year.
39 PROSPECTUS
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 For
Life 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 (this value cannot be less than zero).
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments (and Credit Enhancements for Allstate Advisor Plus Contracts)
received on the date of this withdrawal, but before the application of any
SureIncome For Life Withdrawal Benefit Option Fee, Spousal Protection Benefit
Option Fee, Spousal Protection Benefit Option for Custodial Individual
Retirement Accounts Fee or Contract Maintenance Charge that may be applicable.
On each of the ten Contract Anniversaries after the Rider Date, the amount of
the Benefit Base may be increased based upon the maximum anniversary value of
the Contract according to the following calculation. The Benefit Base will be
recalculated to the greater of:
.. The Benefit Base following the application of all purchase payments and
withdrawals on that Contract Anniversary; and
.. The Contract Value on that Contract Anniversary, following the application
of all purchase payments, withdrawals and expenses.
For numerical examples that illustrate how the values defined under the
SureIncome For Life Option are calculated, see Appendix J.
Contract Value
If your Contract Value is reduced to zero due to fees or withdrawals and your
Benefit Payment is still greater than zero, your Contract will immediately
enter the Withdrawal Benefit Payout Phase. Under the SureIncome For Life
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.
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 of the Contract can be made after the Withdrawal Benefit
Payout Start Date. Since the Accumulation Phase of the Contract ends at this
point, the SureIncome ROP Death Benefit no longer applies.
Under the Withdrawal Benefit Payout Phase, 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 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. The request must be in a form acceptable to us and
processed 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 until the later of the death of the
SureIncome Covered Life or over a period certain based on the total payments
made equaling at least the Benefit Base on the Payout Start Date. If your
Contract is subject to Internal Revenue Code Section 401(a)(9), the period
certain cannot exceed that which is required by such section and the
regulations promulgated thereunder. Therefore, the amount of each payment under
the SureIncome For Life Option may be larger during the period certain 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 subject to Internal
Revenue Code Section 401(a)(9), we will not permit a change in the payment
frequency or level.
If your Contract is not subject to Internal Revenue Code Section 401(a)(9), we
reserve the right to allow other payment frequencies or levels 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.
40 PROSPECTUS
Once all scheduled payments have been paid, the Contract will terminate.
Generally, you may not make withdrawals, purchase payments or take any other
actions associated with the Accumulation Phase after the commencement of the
Withdrawal Benefit Payout Start Date.
Investment Requirements
If you add a SureIncome For Life Option to your Contract, you must adhere to
certain requirements related to the investment alternatives in which you may
invest. These requirements are described in "Investment Requirements
(Applicable to All Withdrawal Benefit Options)" below.
Death of Owner or Annuitant
If the SureIncome Covered Life dies during the Accumulation Phase of the
Contract, the SureIncome For Life Option will terminate on the date of the
SureIncome Covered Life's death. If the Contract Owner or the Annuitant who is
not the SureIncome Covered Life 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 For Life Option will continue unless the Contract Owner (or new
Contract Owner) elects to cancel the SureIncome For Life Option. If the
SureIncome For Life Option is continued, it will remain in effect until
terminated. If the Contract is not continued under Option D, then the
SureIncome For Life Option will terminate on the date we receive a Complete
Request for Settlement of the Death Proceeds.
The SureIncome For Life Option also makes available the SureIncome ROP Death
Benefit. The SureIncome ROP Death Benefit is only available upon the death of
the SureIncome Covered Life. If a Contract Owner, Annuitant or Co-Annuitant who
is not the SureIncome Covered Life dies, the SureIncome ROP Death Benefit is
not applicable. On the Rider Date, the SureIncome ROP Death Benefit is equal to
the Contract Value. After the Rider Date, the SureIncome ROP Death Benefit will
be increased by purchase payments (and Credit Enhancements in the case of
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 SureIncome ROP Death
Benefit 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 SureIncome ROP Death Benefit will
be the lesser of:
. The Contract Value immediately prior to withdrawal less the amount of
the withdrawal; or
. The SureIncome ROP Death Benefit immediately prior to withdrawal less
the amount of the withdrawal.
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments (and Credit Enhancements in the case of Allstate Advisor Plus
Contracts) received on the date of this withdrawal, but before the application
of any SureIncome For Life Withdrawal Benefit Option Fee, Spousal Protection
Benefit Option Fee, Spousal Protection Benefit Option for Custodial Individual
Retirement Accounts Fee or Contract Maintenance Charge applicable.
For numerical examples that illustrate how the SureIncome ROP Death Benefit
under the SureIncome For Life Option is calculated, see Appendix J.
Refer to the Death Benefits section page 66 for more details on the SureIncome
ROP Death Benefit.
Termination of the SureIncome For Life Option
The SureIncome For Life Option will terminate on the earliest of the following
to occur:
.. The Benefit Payment 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 Covered Life is removed from the Contract for
any reason, and is no longer a Contract Owner or Annuitant under the
Contract (if the Covered Life continues as only the Beneficiary, the Option
will terminate);
.. On the date the SureIncome For Life Option is cancelled as detailed under
Death of Owner or Annuitant section above;
.. On the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. On the date the SureIncome Covered Life dies if the SureIncome Covered Life
dies prior to the Payout Start Date.
INVESTMENT REQUIREMENTS (APPLICABLE TO ALL WITHDRAWAL BENEFIT OPTIONS)
If you add a Withdrawal Benefit 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(s). 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
41 PROSPECTUS
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 Withdrawal Benefit 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 SureIncome Option or 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 a Withdrawal Benefit 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 to
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 of this prospectus 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 first made available in
connection with a Withdrawal Benefit Option on May 1, 2005. Any TrueBalance
model portfolios offered under the TrueBalance Asset Allocation Program prior
to May 1, 2005, may not be used in connection with a Withdrawal Benefit 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 a Withdrawal Benefit 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 specific instructions or your allocation for the
previous purchase payment (for Model Portfolio Option 1) or the percentage
allocation for your current Model Portfolio Option (for TrueBalance Model
Portfolio Options) unless you request that the purchase payment (and Credit
Enhancement for Allstate Advisor Plus Contracts) be allocated to the DCA Fixed
Account Option. Purchase payments allocated to the DCA Fixed Account Option
must be $100 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 investment alternatives, 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."
42 PROSPECTUS
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
- --------------------------------------------------------------------------------
Fidelity VIP Freedom Income - Service Class 2 Sub-Account
Fidelity VIP Freedom 2010 - Service Class 2 Sub-Account
Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account
Fidelity VIP Freedom 2030 - Service Class 2 Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
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 Discovery 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 MidCap/VA - Service Shares Sub-Account
Oppenheimer Balanced/VA - Service Shares Sub-Account
Oppenheimer Core Bond/VA - Service Shares Sub-Account
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
UIF Emerging Markets Debt, Class II Sub-Account/(2)(5)/
UIF Equity and Income, Class II Sub-Account/(2)(5)/
UIF Global Franchise, Class II Sub-Account/(2)(5)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(5)/
UIF U.S. Mid Cap Value, Class I Sub-Account &
UIF U.S. Mid Cap Value, Class II Sub-Account/(2)(3)(5)/
UIF U.S. Real Estate, Class II Sub-Account/(2)(5)/
Van Kampen LIT Capital Growth, Class II Sub-Account/(5)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen LIT Money Market, Class II Sub-Account
- --------------------------------------------------------------------------------
Excluded
- --------------------------------------------------------------------------------
Fidelity VIP Growth Stock - Service Class 2 Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Putnam VT Vista - Class IB Sub-Account
UIF Capital Growth, Class I Sub-Account &
UIF Capital Growth, Class II Sub-Account/(2)(3)(5)/
UIF Small Company Growth, Class II Sub-Account/(2)(5)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(4)(5)/
- --------------------------------------------------------------------------------
(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)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(3)The UIF Capital Growth, Class II Sub-Account and the 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 UIF Capital Growth, Class I Sub-Account and the UIF U.S. Mid Cap
Value, Class I Sub-Account. Contracts issued prior to May 1, 2004 that
participate in certain TrueBalance model portfolios may invest in UIF
Capital Growth, Class II Sub-Account and the UIF U.S. MidCap Value, Class II
Sub-Account.
(4)Effective May 1, 2006, the Van Kampen LIT Mid Cap Growth Portfolio, Class II
(formerly called the Van Kampen LIT Aggressive Growth Portfolio, Class II)
was closed to new investments. If you are currently invested in the Variable
Sub-Account that invests in this Portfolio, you may continue your
investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program. Outside of
these automatic transaction programs, additional allocations will not be
allowed.*
(5)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed
its name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging
Markets Debt Portfolio changed its name to UIF Emerging Markets Debt
Portfolio; the Van Kampen UIF U.S. Real Estate Portfolio changed its name to
the UIF U.S. Real Estate Portfolio; the Van Kampen UIF Equity and Income
Portfolio changed its name to the UIF Equity and Income Portfolio; the Van
Kampen UIF U.S. Mid Cap Value Portfolio changed its name to the UIF U.S. Mid
Cap Value Portfolio; the Van Kampen UIF Mid Cap Growth Portfolio changed its
name to the UIF Mid Cap Growth Portfolio; the Van Kampen UIF Global
Franchise Portfolio changed its name to the UIF Global Franchise Portfolio;
the Van Kampen UIF Small Company Growth Portfolio changed its name to the
UIF Small Company Growth Portfolio; the Van Kampen LIT Strategic Growth
Portfolio changed its name to the Van Kampen LIT Capital Growth Portfolio;
and the Van Kampen LIT Aggressive Growth Portfolio changed its name to the
Van Kampen LIT Mid Cap Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If prior to the effective close date,
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
43 PROSPECTUS
transaction programs, additional allocations will not be allowed. If you choose
to add any Withdrawal Benefit Option on or after the effective close date, 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 a Withdrawal Benefit Option prior to adding it to your Contract.
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 that comprise that 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 a
Withdrawal Benefit Option to your Contract.
Investment Alternatives: The Variable Sub-Accounts
- --------------------------------------------------------------------------------
You may allocate your purchase payments to up to 54* 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 prospectuses for the
Funds. We will mail to you a prospectus for each Portfolio related to the
Variable Sub-Accounts to which you allocate your purchase payment.
You should carefully consider the investment objectives, risks, charges and
expenses of the investment alternatives when making an allocation to the
Variable Sub-Accounts. To obtain any or all of the underlying Portfolio
prospectuses, please contact us at 1-800-457-7617 or go to
www.accessallstate.com.
* Up to 61 Variable Sub-Accounts may be available depending on the date you
purchased your Contract. Please see page 50 for information about Sub-Account
and/or Portfolio liquidations, mergers and name changes.
Portfolio: Each Portfolio Seeks: Investment Adviser:
- ---------------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund(R) Portfolio - Long-term capital appreciation
Service Class 2
- ------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - High total return with a secondary objective of
Service Class 2 principal preservation as the fund approaches its
target date and beyond
- ------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - High total return with a secondary objective of Fidelity Management &
Service Class 2 principal preservation as the fund approaches its Research Company
target date and beyond
- ------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - High total return with a secondary objective of
Service Class 2 principal preservation as the fund approaches its
target date and beyond
- ------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - High total return with a secondary objective of
Service Class 2 principal preservation
- ------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - To achieve capital appreciation
Service Class 2
- ------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Investment results that correspond to the total return
Service Class 2 of common stocks publicly traded in the United
States as represented by the Standard & Poor's
500/(SM)/ Index (S&P 500(R))
- ------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Long-term growth of capital
Service Class 2
- ------------------------------------------------------------------------------------------------
44 PROSPECTUS
Portfolio: Each Portfolio Seeks: Investment Adviser:
- -----------------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Capital appreciation with current income as a
Securities Fund - Class 2 secondary goal.
- --------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - To maximize income while maintaining prospects for
Class 2 capital appreciation.
- --------------------------------------------------------------------------------------------------Franklin Advisers, Inc.
FTVIP Franklin Large Cap Growth Capital appreciation
Securities Fund - Class 2
- --------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Long-term capital growth.
Securities Fund - Class 2/(1)/
- --------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Income
Class 2
- --------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income High current income, consistent with preservation of
Securities Fund - Class 2/(1)/ capital, with capital appreciation as a secondary
consideration.
- --------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Long-term total return. Franklin Advisory Services,
Securities Fund - Class 2 LLC
- -----------------------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund Capital appreciation
- Class 2 Franklin Mutual Advisers,
- --------------------------------------------------------------------------------------------------LLC
FTVIP Mutual Shares Securities Fund - Capital appreciation with income as a secondary goal
Class 2
- --------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Long-term capital appreciation. Templeton Asset
Securities Fund - Class 2 Management Ltd.
- -----------------------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund Long-term capital growth. Templeton Investment
- Class 2 Counsel, LLC
- -----------------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Long-term growth of capital and income without
Portfolio excessive fluctuations in market value
- --------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - High current income and the opportunity for capital
Bond-Debenture Portfolio appreciation to produce a high total return Lord, Abbett & Co. LLC
- --------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Long-term growth of capital and income without
Income Portfolio excessive fluctuations in market value
- --------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Capital appreciation
Opportunities Portfolio
- --------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Capital appreciation through investments, primarily
Portfolio in equity securities, which are believed to be
undervalued in the marketplace
- --------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Capital appreciation by investing in "growth type"
Shares companies.
- --------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service A high total investment return, which includes
Shares current income and capital appreciation in the
value of its shares.
- --------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service High level of current income. As a secondary
Shares objective, the Portfolio seeks capital appreciation OppenheimerFunds, Inc.
when consistent with its primary objective.
- --------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Capital appreciation by investing in securities of well-
Fund/VA - Service Shares known, established companies.
- --------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Long-term capital 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 Fund/VA - A high level of current income from investment in
Service Shares high-yield fixed-income securities.
- --------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund(R)/VA - High total return (which includes growth in the value
Service Shares of its shares as well as current income) from equity
and debt securities.
- --------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Capital appreciation.
Fund(R)/VA - Service Shares
- --------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - A high level of current income principally derived
Service Shares from interest on debt securities.
- --------------------------------------------------------------------------------------------------
45 PROSPECTUS
Portfolio: Each Portfolio Seeks: Investment Adviser:
- ---------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of To provide a balanced investment composed of a well
Boston - Class IB diversified portfolio of value stocks and bonds,
which produce both capital growth and current
income.
- ------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund A high level of long-term total return consistent with
- Class IB preservation of capital.
- ------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Capital growth and current income.
Class IB
- ------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class Capital appreciation.
IB/(2)/
- ------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB High current income. Capital growth is a secondary Putnam Investment
goal when consistent with achieving high current Management, LLC
income. ("Putnam Management")
- ------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB High current income consistent with what Putnam
Management believes to be prudent risk.
- ------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Capital appreciation.
Class IB
- ------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB Long-term growth of capital and any increased
income that results from this growth.
- ------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB As high a rate of current income as Putnam
Management believes is consistent with
preservation of capital and maintenance of
liquidity.
- ------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Long-term capital appreciation.
Class IB/(2)/
- ------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB Long-term capital appreciation.
- ------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB/(2)/ Capital appreciation.
- ------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Capital growth and current income.
Fund - Class IB/(2)/
- ------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB Capital appreciation.
- ------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB Capital appreciation.
- ------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class I & Long-term capital appreciation by investing primarily
UIF Capital Growth Portfolio, Class in growth-oriented equity securities of large
II/(5)(6)/ capitalization companies.
- ------------------------------------------------------------------------------------------------
UIF Emerging Markets Debt Portfolio, High total return by investing primarily in fixed
Class II/(6)/ income securities of government and government-
related issuers and, to a lesser extent, of corporate
issuers in emerging market countries. Van Kampen/(4)/
- ------------------------------------------------------------------------------------------------
UIF Equity and Income Portfolio, Class Capital appreciation and current income.
II/(6)/
- ------------------------------------------------------------------------------------------------
UIF Global Franchise Portfolio, Class Long-term capital appreciation.
II/(6)/
- ------------------------------------------------------------------------------------------------
UIF Mid Cap Growth Portfolio, Class Long-term capital growth by investing primarily in
II/(6)/ common stocks and other equity securities.
- ------------------------------------------------------------------------------------------------
UIF Small Company Growth Portfolio, Long-term capital appreciation by investing primarily
Class II/(6)/ in growth-oriented equity securities of small
companies.
- ------------------------------------------------------------------------------------------------
UIF U.S. Mid Cap Value Portfolio, Class Above-average total return over a market cycle of
I & UIF U.S. Mid Cap Value Portfolio, three to five years by investing in common stocks
Class II/(5)(6)/ and other equity securities.
- ------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class Above average current income and long-term capital
II/(6)/ appreciation by investing primarily in equity
securities of companies in the U.S. real estate
industry, including real estate investment trusts.
- ------------------------------------------------------------------------------------------------
46 PROSPECTUS
Portfolio: Each Portfolio Seeks: Investment Adviser:
- --------------------------------------------------------------------------------------------------------------
Van Kampen LIT Capital Growth Capital appreciation. Van Kampen Asset
Portfolio, Class II/(6)/ Management
- -------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio, Capital growth and income through investments in
Class II equity securities, including common stocks,
preferred stocks and securities convertible into
common and preferred stocks.
- -------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Long-term growth of capital and income.
Portfolio, Class II
- -------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Capital growth
Portfolio, Class II/(3)(6)/
- -------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio, Protection of capital and high current income
Class II through investments in money market instruments.
- -------------------------------------------------------------------------------------------
(1) 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 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, additional allocations will not be allowed.
(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 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.
(3) Effective May 1, 2006, the Van Kampen LIT Mid Cap Growth Portfolio, Class
II (formerly called the Van Kampen LIT Aggressive Growth Portfolio, Class II)
is no longer available for new investments. If you are currently invested in
the Variable Sub-Account that invests in this Portfolio you may continue your
investment. If, prior to May 1, 2006, 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
the Variable Sub-Account in accordance with that program. Outside of these
automatic transaction programs, additional allocations will not be allowed.
(4) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5) The Variable Sub-Accounts that invest in the UIF Capital Growth Portfolio,
Class II and the UIF U.S. Mid Cap Value Portfolio, Class II are offered with
Contracts issued on or after May 1, 2004. Contracts issued prior to May 1,
2004, may only invest in the Variable Sub-Accounts that invest in the UIF
Capital Growth Portfolio, Class I and the UIF U.S. Mid Cap Value Portfolio,
Class I. Contracts issued prior to May 1, 2004 that participate in certain
TrueBalance model portfolios may invest in UIF Capital Growth, Class II
Sub-Account and the UIF U.S. MidCap Value, Class II Sub-Account.
(6) Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed
its name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging
Markets Debt Portfolio changed its name to UIF Emerging Markets Debt Portfolio;
the Van Kampen UIF U.S. Real Estate Portfolio changed its name to the UIF U.S.
Real Estate Portfolio; the Van Kampen UIF Equity and Income Portfolio changed
its name to the UIF Equity and Income Portfolio; the Van Kampen UIF U.S. Mid
Cap Value Portfolio changed its name to the UIF U.S. Mid Cap Value Portfolio;
the Van Kampen UIF Mid Cap Growth Portfolio changed its name to the UIF Mid Cap
Growth Portfolio; the Van Kampen UIF Global Franchise Portfolio changed its
name to the UIF Global Franchise Portfolio; the Van Kampen UIF Small Company
Growth Portfolio changed its name to the UIF Small Company Growth Portfolio;
the Van Kampen LIT Strategic Growth Portfolio changed its name to the Van
Kampen LIT Capital Growth Portfolio; and the Van Kampen LIT Aggressive Growth
Portfolio changed its name to the Van Kampen LIT Mid Cap Growth Portfolio.
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
The TrueBalance asset allocation program ("TrueBalance program") is no longer
offered for new enrollments. If you enrolled in the TrueBalance program prior
to January 31, 2008, you may remain in the program. If you terminate your
enrollment or otherwise transfer your Contract Value out of the program, you
may not re-enroll.
There is no additional charge for the TrueBalance program. 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 invest,
such as the Income Protection Benefit Option, the TrueReturn Accumulation
Benefit
47 PROSPECTUS
Option or a 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 helps you determine whether participating in an asset
allocation program is appropriate for you. You complete a questionnaire to
identify your investment style. Based on your investment style, you select one
asset allocation model portfolio among the available model portfolios which may
range from conservative to aggressive. Your Contract Value is allocated among
the Variable Sub-Accounts according to your selected model portfolio. Not all
Variable Sub-Accounts are available in any one model portfolio, and you must
only allocate your Contract Value to the limited number of Variable
Sub-Accounts available in the model portfolio you select. You should not select
a model portfolio without first consulting with your sales representative.
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.
Allstate Life retained an independent investment management firm ("investment
management firm") to construct the TrueBalance model portfolios. The investment
management firm does not provide advice to Allstate Life's Contract Owners.
Neither Allstate Life nor the investment management firm is acting for any
Contract Owner as a "fiduciary" or as an "investment manager," as such terms
are defined under applicable laws and regulations relating to the Employee
Retirement Income Security Act of 1974 (ERISA).
The investment management firm does not take into account any information about
any Contract Owner or any Contract Owner's assets when creating, providing or
maintaining any TrueBalance model portfolio. Individual Contract Owners should
ultimately rely on their own judgment and/or the judgment of a financial
advisor in making their investment decisions. Neither Allstate Life nor the
investment management firm is responsible for determining the suitability of
the TrueBalance model portfolios for the Contract Owners' purposes.
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 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.
Allstate Life may offer new or revised TrueBalance model portfolios at any
time, and may retain a different investment management firm to create any such
new or revised TrueBalance model portfolios. Allstate Life will not
automatically reallocate your Contract Value allocated to the Variable
Sub-Accounts to match any new or revised model portfolios that are offered. 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 that may be available. 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
48 PROSPECTUS
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 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 a Withdrawal Benefit 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 a Withdrawal Benefit 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 a Withdrawal Benefit 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
49 PROSPECTUS
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 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 59.
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
$100.
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. 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 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 59.
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.
If you have a TrueReturn Option or Withdrawal Benefit Option, at the expiration
of a Transfer Period Account or if you discontinue the DCA Fixed Account Option
any amounts remaining in the Transfer Period Account will be transferred
according to the investment requirements applicable to the Option you selected.
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.
50 PROSPECTUS
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 $100.
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 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
51 PROSPECTUS
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 payment or transfer allocated to a Market Value Adjusted Fixed
Guarantee Period Account must be at least $100.
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 sales 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
52 PROSPECTUS
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 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.
53 PROSPECTUS
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 a Withdrawal Benefit Option
to your Contract, certain restrictions on transfers apply. See the
"TrueReturn/SM/ Accumulation Benefit Option" and "Withdrawal Benefit Options"
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 $100.
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
Investment Alternatives: Transfers
- --------------------------------------------------------------------------------
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 1-800-457-7617. 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.
54 PROSPECTUS
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, require that all future transfer requests be submitted
through U.S. Postal Service First Class Mail thereby refusing to accept
transfer requests via telephone, facsimile, Internet, or overnight delivery, 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 (e.g., International, High Yield,
and Small Cap Variable Sub-Accounts);
.. 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 require that all future transfer requests be
submitted through U.S. Postal Service First Class Mail thereby refusing to
accept transfer requests via telephone, facsimile, Internet, or overnight
delivery. If we determine that a Contract Owner continues to engage in a
pattern of 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) or will restrict that Contract Owner from making future
additions or transfers into the class of Variable Sub-Account(s) if the
Variable Sub-Accounts(s) involved are vulnerable to arbitrage market timing
trading activity (e.g., International, High Yield, and Small Cap Variable
Sub-Accounts).
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
The underlying Portfolios are authorized by SEC regulation to adopt and impose
redemption fees if a Portfolio's Board of Directors determines that such fees
are necessary to minimize or eliminate short-term transfer activity that can
reduce or dilute the value of outstanding shares issued by the Portfolio. The
Portfolio will set the parameters relating to the redemption fee and such
parameters may vary by Portfolio. If a Portfolio elects to adopt and charge
redemption fees, these fees will be passed on to the Contract Owner(s)
responsible for the short-term transfer activity generating the fee.
55 PROSPECTUS
We will administer and collect redemption fees in connection with transfers
between the Variable Sub-Accounts and forward these fees to the Portfolio.
Please consult the Portfolio's prospectus for more complete information
regarding the fees and charges associated with each Portfolio.
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 MidCap/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 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 MidCap/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.
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 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
56 PROSPECTUS
.. 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
(No withdrawal charge option) 1.60%
---------------------------------------
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.
.. 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.
57 PROSPECTUS
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.
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
58 PROSPECTUS
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.
WITHDRAWAL BENEFIT OPTION FEE
We charge separate annual Rider Fees for each of the SureIncome Option (the
"SureIncome Option Fee"), the SureIncome Plus Option (the "SureIncome Plus
Option Fee"), and the SureIncome For Life Option (the "SureIncome For Life
Option Fee"). Collectively, we refer to the SureIncome Option Fee, the
SureIncome Plus Option Fee and the SureIncome For Life Option Fee as the
"Withdrawal Benefit Option Fees". "Withdrawal Benefit Option Fee" is used to
refer to any one of the Withdrawal Benefit Option Fees.
The current annual SureIncome Option Fee is 0.50% of the Benefit Base. The
current annual SureIncome Plus Option Fee and the current annual SureIncome For
Life Option Fee are each 0.65% of the Benefit Base. We reserve the right to
increase any Withdrawal Benefit Option Fee to up to 1.25% of the Benefit Base.
We reserve the right to charge a different Withdrawal Benefit Option Fee for
different Withdrawal Benefit Factors or Withdrawal Benefit Options we may offer
in the future. Once we issue your Withdrawal Benefit Option, we cannot change
the Withdrawal Benefit Option Fee that applies to your Contract. If applicable,
if you elect to exercise the Rider Trade-In Option, the new Withdrawal Benefit
Option Fee will be based on the Withdrawal Benefit Option Fee percentage
applicable to a new Withdrawal Benefit Option available at the time of trade-in.
We deduct the Withdrawal Benefit Option Fees on each Contract Anniversary up to
and including the date you terminate the Option. The Withdrawal Benefit Option
Fees are 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. The Withdrawal Benefit
Option Fee will decrease the number of Accumulation Units in each Variable
Sub-Account. If, at the time the Withdrawal Benefit Option Fee is deducted, the
Withdrawal Benefit Option Fee exceeds the total Contract Value in all Variable
Sub-Accounts, the excess of the Withdrawal Benefit Option Fee over the total
Contract Value in all Variable Sub-Accounts will be waived.
The first Withdrawal Benefit Option Fee will be deducted on the first Contract
Anniversary following the Rider Date. A Withdrawal Benefit Option Fee will be
deducted on each subsequent Contract Anniversary up to and including the date
the Withdrawal Benefit Option is terminated.
For the first Contract Anniversary following the Rider Date, the SureIncome
Option Fee is equal to the number of full 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 on the first Contract Anniversary. For
subsequent Contract Anniversaries, the SureIncome Option Fee is equal to 0.50%
multiplied by the Benefit Base as of that Contract Anniversary.
For the first Contract Anniversary following the Rider Date, the SureIncome
Plus Option Fee and the SureIncome For Life Option Fee are each equal to the
number of full months from the Rider Date to the first Contract Anniversary,
divided by twelve, multiplied by 0.65%, with the result multiplied by the
Benefit Base on the first Contract Anniversary increased by purchase payments
(and Credit Enhancements for Allstate Advisor Plus Contracts) and decreased by
withdrawals, but prior to the Benefit Base being recalculated based on the
Contract Value. For subsequent Contract Anniversaries, the SureIncome Plus
Option Fee and the SureIncome For Life Option Rider Fee are each equal to 0.65%
multiplied by the Benefit Base on that Contract Anniversary increased by
purchase payments (and Credit Enhancements for Allstate Advisor Plus Contracts)
and decreased by withdrawals, but prior to the Benefit Base being recalculated
based on the Contract Value for any of the ten Contract Anniversaries after the
Rider Date. As previously stated, we will deduct Withdrawal Benefit Option Fees
on each Contract Anniversary up to and including the date you terminate the
Option.
If you terminate the SureIncome Option or the SureIncome Plus Option on a date
other than a Contract Anniversary, we will deduct the Withdrawal Benefit Option
Fee unless the termination is on the Payout Start Date or is due to the death
of the Contract Owner or Annuitant. If you terminate the SureIncome For Life
Option on a date other than a Contract Anniversary, we will deduct the
SureIncome For Life Option Fee unless the termination is on the Payout Start
Date or is due to the death of the Contract Owner, Annuitant, or the death of
the SureIncome Covered Life. The Withdrawal Benefit Option Fee will be
pro-rated to cover the period from the last Contract Anniversary to the date of
termination or, if you terminate the Withdrawal Benefit Option during the first
Benefit Year, from the Rider Date to the date of termination. For the
SureIncome Option, the pro-rated SureIncome Option Fee will be
59 PROSPECTUS
equal to the number of full months from the Contract Anniversary to the date of
termination or, if you terminate the SureIncome 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. For the
SureIncome Plus Option and the SureIncome For Life Option, the pro-rated
Withdrawal Benefit Option Fee will be equal to the number of full months from
the Contract Anniversary to the date of termination or, if you terminate the
Withdrawal Benefit 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 0.65%, with the result multiplied by the Benefit Base immediately
prior to the withdrawal or termination. The Withdrawal Benefit Option 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 13. 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 55 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.
60 PROSPECTUS
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 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 Due Proof of confinement no
later than 90 days following the end of your or the Annuitant's confinement at
the long term care facility or hospital, and
3. a physician must have prescribed the confinement and the confinement must
be medically necessary (as defined in the Contract).
"Due Proof " includes, but is not limited to, a letter signed by a physician
stating the dates the Owner or Annuitant was confined, the name and location of
the Long Term Care Facility or Hospital, a statement that the confinement was
medically necessary, and, if released, the date the Owner or Annuitant was
released from the Long Term Care Facility or Hospital.
Terminal Illness Waiver. We will waive the withdrawal charge on any applicable
withdrawal under your Contract if:
1. you or the Annuitant, if the Contract Owner is not a living person, are
diagnosed by a physician as having a terminal illness (as defined in the
Contract) at least 30 days after the Issue Date, and
2. you provide Due Proof of diagnosis to us before or at the time you request
the withdrawal.
"Due Proof " includes, but is not limited to, a letter signed by a physician
stating that the Owner or Annuitant has a Terminal Illness and the date the
Terminal Illness was first diagnosed.
Unemployment Waiver. We will waive the withdrawal charge on one partial or a
full withdrawal taken under your Contract, if you meet the following
requirements:
1. you or the Annuitant, if the Contract Owner is not a living person, become
unemployed at least one year after the Issue Date,
2. you or the Annuitant receive Unemployment Compensation for at least 30
consecutive days as a result of that unemployment, and
3. you or the Annuitant claim this benefit within 180 days of your or the
Annuitant's initial receipt of Unemployment Compensation.
Before we will waive any withdrawal charges, you must give us Due Proof prior
to, or at the time of, the withdrawal request, that you or the Annuitant have
been unemployed and have been granted Unemployment Compensation for at least 30
consecutive days.
"Unemployment Compensation" means unemployment compensation received from a
unit of state or federal government in the U.S. "Due Proof " includes, but is
not limited to, a legible photocopy of an unemployment compensation payment
that meets the above described criteria with regard to dates and a signed
letter from you stating that you or the Annuitant meet the above described
criteria.
You may exercise this benefit once over the term of the Contract. Amounts
withdrawn may be subject to Market Value Adjustments.
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
61 PROSPECTUS
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
prospectuses for the Portfolios. For a summary of Portfolio annual expenses see
page 16. 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
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WITHDRAWALS
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 66.
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 53.
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 a Withdrawal Benefit Option is
currently attached to your Contract. See "Withdrawal Benefit Options" above for
more information. 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 a Withdrawal Benefit
Option is currently attached to your Contract. See "Withdrawal Benefit Options"
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.
62 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 1-800-457-7617 for
more information.
Any systematic withdrawal programs based upon IRS minimum distribution
requirements may be modified to ensure guarantees under any Withdrawal Benefit
Option currently attached to your Contract are not impacted by the withdrawals.
Withdrawals made outside of any systematic withdrawal program based upon IRS
minimum distribution requirements may impact the guarantees provided under any
Withdrawal Benefit Option currently attached to your Contract.
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 a Withdrawal Benefit Option is currently attached to your
Contract. See "Withdrawal Benefit Options" above for more information. 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.
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;
63 PROSPECTUS
.. 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:
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.
64 PROSPECTUS
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. 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 the changes described above once each Contract
Year; on that single occasion you may make either change alone, or both
simultaneously. 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 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.
65 PROSPECTUS
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
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
66 PROSPECTUS
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% of the average daily net Variable Account assets supporting the variable
income payments to which the Income Protection Benefit Option applies. We may
change the amount we charge, but it will not exceed 0.75% of the average daily
net Variable Account assets supporting the variable income payments to which
the Income Protection Benefit Option applies. 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/(1)/:
Unrestricted Variable Sub-Accounts. There is no limit to the amount of assets
supporting your variable income
67 PROSPECTUS
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.
Fidelity VIP Freedom Income - Service Class 2 Sub-Account
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
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.
Fidelity VIP Freedom 2010 - Service Class 2 Sub-Account
Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account
Fidelity VIP Freedom 2030 - Service Class 2 Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
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 Mutual Discovery 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/(5)/
Putnam VT The George Putnam Fund of Boston -Class IB Sub-Account
Putnam VT Utilities Growth and Income - Class IB Sub-Account/(5)/
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
UIF Equity and Income, Class II Sub-Account/(4)(6)/
UIF Capital Growth, Class II Sub-Account (Class I & II)/(2)(4)(6)/
UIF Global Franchise, Class II Sub-Account/(4)(6)/
UIF U.S. Mid Cap Value, Class II Sub-Account (Class I & II)/(2)(4)(6)/
UIF U.S. Real Estate, Class II Sub-Account/(4)(6)/
68 PROSPECTUS
Excluded Variable Sub-Accounts. Currently, none of the following Variable
Sub-Accounts are available to support variable income payments.
Fidelity VIP Growth Stock - Service Class 2 Sub-Account
FTVIP Templeton Developing Markets Securities - Class 2 Sub-Account
Oppenheimer MidCap/VA - Service Shares Sub-Account
Putnam VT Health Sciences - Class IB Sub-Account/(5)/
Putnam VT New Opportunities - Class IB Sub-Account/(5)/
Putnam VT Vista - Class IB Sub-Account
UIF Emerging Markets Debt, Class II Sub-Account/(4)(6)/
UIF Mid Cap Growth, Class II Sub-Account/(4)(6)/
UIF Small Company Growth, Class II Sub-Account/(4)(6)/
Van Kampen LIT Capital Growth, Class II Sub-Account/(6)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(3)(6)/
(1)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-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.*
(2)The UIF Capital Growth, Class II Sub-Account and the 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 UIF Capital Growth, Class I Sub-Account and the UIF U.S. Mid
Cap Value, Class I Sub-Account. Contracts issued prior to May 1, 2004 that
participate in certain TrueBalance model portfolios may invest in UIF
Capital Growth, Class II Sub-Account and the UIF U.S. MidCap Value, Class II
Sub-Account.
(3)Effective May 1, 2006, the Van Kampen LIT Mid Cap Growth Portfolio, Class II
(formerly called the Van Kampen LIT Aggressive Growth Portfolio, Class II)
was closed to new investments. If you are currently invested in the Variable
Sub-Account that invests in this Portfolio, you may continue your
investment.*
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(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 closed to new investments.*
(6)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed
its name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging
Markets Debt Portfolio changed its name to UIF Emerging Markets Debt
Portfolio; the Van Kampen UIF U.S. Real Estate Portfolio changed its name to
the UIF U.S. Real Estate Portfolio; the Van Kampen UIF Equity and Income
Portfolio changed its name to the UIF Equity and Income Portfolio; the Van
Kampen UIF U.S. Mid Cap Value Portfolio changed its name to the UIF U.S. Mid
Cap Value Portfolio; the Van Kampen UIF Mid Cap Growth Portfolio changed its
name to the UIF Mid Cap Growth Portfolio; the Van Kampen UIF Global
Franchise Portfolio changed its name to the UIF Global Franchise Portfolio;
the Van Kampen UIF Small Company Growth Portfolio changed its name to the
UIF Small Company Growth Portfolio; the Van Kampen LIT Strategic Growth
Portfolio changed its name to the Van Kampen LIT Capital Growth Portfolio;
and the Van Kampen LIT Aggressive Growth Portfolio changed its name to the
Van Kampen LIT Mid Cap Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If you choose to add the Income
Protection Benefit Option on or after the effective close date, 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 it to your Contract.
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.
69 PROSPECTUS
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, 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 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 10th 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
70 PROSPECTUS
.. 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 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 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 (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 85th 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 85th 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
71 PROSPECTUS
the most recently calculated RIG 1 Income Base, reduced for the portion of
withdrawals that do not cumulatively exceed 5% (3% in certain states).
On or after the first Contract Anniversary following the 85th 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 (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 85th 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 85th
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.
72 PROSPECTUS
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 SureIncome Plus Option and SureIncome For Life Option also include a death
benefit option, the SureIncome Return of Premium Death Benefit ("SureIncome ROP
Death Benefit.")
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);
.. The Enhanced Beneficiary Protection (Annual Increase) Option (if selected);
or
.. The SureIncome ROP Death Benefit.*
The "Settlement Value" is the amount that would be paid in the event of a full
withdrawal of the Contract Value.
* The SureIncome ROP Death Benefit under the SureIncome For Life Option is only
included in the calculation of the Death Benefit upon the death of the
SureIncome Covered Life. If a Contract Owner, Annuitant or Co-Annuitant who is
not the SureIncome Covered Life dies, the SureIncome ROP Death Benefit is not
applicable.
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 75), 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 80th 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 79, 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 80th birthday of either the
oldest New Contract Owner or the oldest Annuitant, whichever is earlier.
(After the 80th birthday of either the oldest New Contract
73 PROSPECTUS
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 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 80th 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 79, 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 80th birthday of either the
oldest New Contract Owner or the oldest Annuitant, whichever is earlier.
(After the 80th 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.
74 PROSPECTUS
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
.. 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 79 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 79, 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;
75 PROSPECTUS
.. 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 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 - Class IB 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.
76 PROSPECTUS
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 - Class IB 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. 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.
77 PROSPECTUS
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
- - Class IB 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, 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.
.. On or after May 1, 2005, the Option may be added only 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 your 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
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 be only 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
78 PROSPECTUS
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.
.. 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.
.. On or after May 1, 2005, the CSP may be added only 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.
79 PROSPECTUS
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.
More Information
- --------------------------------------------------------------------------------
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.
Effective June 1, 2006, Allstate Life entered into an agreement ("the
Agreement") with Prudential Financial, Inc. and its subsidiary, The Prudential
Insurance Company of America ("PICA") pursuant to which Allstate Life sold,
through a combination of coinsurance and modified coinsurance reinsurance,
substantially all of its variable annuity business. Pursuant to the Agreement
Allstate Life and PICA also have entered into an administrative services
agreement which provides that PICA or an affiliate will administer the Variable
Account and the Contracts after a transition period that may last up to two
years. The benefits and provisions of the Contracts have not been changed by
these transactions and agreements. None of the transactions or agreements have
changed the fact that we are primarily liable to you under your Contract.
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
80 PROSPECTUS
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 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 Financial Industry
Regulatory Authority ("FINRA").
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 FINRA
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 7.5%
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.
81 PROSPECTUS
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. A list of
broker-dealers and banks that Allstate Distributors paid pursuant to such
arrangements is provided in the Statement of Additional Information, which is
available upon request. For a free copy, please write or call us at the address
or telephone number listed on the front page of this prospectus, or go to the
SEC's Web site (http://www.sec.gov).
To the extent permitted by FINRA rules and other applicable laws and
regulations, we may pay or allow other promotional incentives or payments in
the form of cash or non-cash compensation. We may not offer the arrangements to
all broker-dealers and banks and the terms of the arrangement may differ among
broker-dealers and banks.
Individual registered representatives, broker-dealers, banks, and branch
managers within some broker-dealers and banks participating in one of these
compensation arrangements may receive greater compensation for selling the
contract than for selling a different contact that is not eligible for the
compensation arrangement. While we take the compensation into account when
establishing contract charges, any such compensation will be paid by us or
Allstate Distributors and will not result in any additional charge to you. Your
registered representative can provide you with more information about the
compensation arrangements that apply to the sale of the contract.
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 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. Pursuant to the Agreement, we entered into
an administrative services agreement with PICA whereby, after a transition
period that may last up to two years, PICA or an affiliate will provide
administrative services to the Variable Account and the Contracts on our behalf.
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 at least annually. We will also send you
transaction confirmations. 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 or a confirmation. 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
82 PROSPECTUS
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
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.
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
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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 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
84 PROSPECTUS
Contract Owner's death. These requirements are satisfied if any portion of
the Contract Owner's interest that is payable to (or for the benefit of) a
designated Beneficiary is distributed over the life of such Beneficiary (or
over a period not extending beyond the life expectancy of the Beneficiary)
and the distributions begin within 1 year of the Contract Owner's death. If
the Contract Owner's designated Beneficiary is the surviving spouse of the
Contract Owner, the Contract may be continued with the surviving spouse as
the new Contract Owner;
.. if the Contract Owner is a non-natural person, then the Annuitant will be
treated as the Contract Owner for purposes of applying the distribution at
death rules. In addition, a change in the Annuitant on a Contract owned by
a non-natural person will be treated as the death of the Contract Owner.
Taxation of Annuity Death Benefits. Death Benefit amounts are included in
income as follows:
.. if distributed in a lump sum, the amounts are taxed in the same manner as a
total withdrawal, or
.. if distributed under an Income Plan, the amounts are taxed in the same
manner as annuity payments.
Penalty Tax on Premature Distributions. A 10% penalty tax applies to the
taxable amount of any premature distribution from a non-Qualified Contract. The
penalty tax generally applies to any distribution made prior to the date you
attain age 59 1/2. However, no penalty tax is incurred on distributions:
.. made on or after the date the Contract Owner attains age 59 1/2,
.. made as a result of the Contract Owner's death or becoming totally disabled,
.. made in substantially equal periodic payments over the Contract Owner's
life or life expectancy, or over the joint lives or joint life expectancies
of the Contract Owner and the Beneficiary,
.. made under an immediate annuity, or
.. attributable to investment in the Contract before August 14, 1982.
You should consult a competent tax advisor to determine how these exceptions
may apply to your situation.
Substantially Equal Periodic Payments. With respect to non-Qualified Contracts
using substantially equal periodic payments or immediate annuity payments as an
exception to the penalty tax on premature distributions, any additional
withdrawal or other material modification of the payment stream would violate
the requirement that payments must be substantially equal. Failure to meet this
requirement would mean that the income portion of each payment received prior
to the later of 5 years or the Contract Owner's attaining age 59 1/2 would be
subject to a 10% penalty tax unless another exception to the penalty tax
applied. The tax for the year of the modification is increased by the penalty
tax that would have been imposed without the exception, plus interest for the
years in which the exception was used. A material modification does not include
permitted changes described in published IRS rulings. You should consult a
competent tax advisor prior to creating or modifying a substantially equal
periodic payment stream.
Tax Free Exchanges under Internal Revenue Code Section 1035. A 1035 exchange
is a tax-free exchange of a non-Qualified life insurance contract, endowment
contract or annuity contract into a non-Qualified annuity contract. The
contract owner(s) must be the same on the old and new contract. Basis from the
old contract carries over to the new contract so long as we receive that
information from the relinquishing company. If basis information is never
received, we will assume that all exchanged funds represent earnings and will
allocate no cost basis to them.
Partial Exchanges. The IRS has issued a ruling that permits partial exchanges
of annuity contracts. Under this ruling, if you take a withdrawal from a
receiving or relinquishing annuity contract within 24 months of the partial
exchange, then special aggregation rules apply for purposes of determining the
taxable amount of a distribution. The IRS has issued limited guidance on how to
aggregate and report these distributions. The IRS is expected to provide
further guidance; as a result, it is possible that the amount we calculate and
report to the IRS as taxable could be different. Your Contract may not permit
partial exchanges.
Taxation of Ownership Changes. If you transfer a non-Qualified Contract
without full and adequate consideration to a person other than your spouse (or
to a former spouse incident to a divorce), you will be taxed on the difference
between the Contract Value and the investment in the Contract at the time of
transfer. Any assignment or pledge (or agreement to assign or pledge) of the
Contract Value is taxed as a withdrawal of such amount or portion and may also
incur the 10% penalty tax.
Aggregation of Annuity Contracts. The Code requires that all non-Qualified
deferred annuity contracts issued by Allstate Life (or its affiliates) to the
same Contract Owner during any calendar year be aggregated 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. If no election is made or no U.S. taxpayer identification
number is provided 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.
85 PROSPECTUS
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. We
require an original IRS Form W-8BEN at issue to certify the owners' foreign
status. Withholding may be reduced or eliminated if covered by an income tax
treaty between the U.S. and the non-resident alien's country of residence if
the payee provides a U.S. taxpayer identification number on a fully completed
Form W-8BEN. A U.S. taxpayer identification number is a social security number
or an individual taxpayer identification number ("ITIN"). ITINs are issued by
the IRS to non-resident alien individuals who are not eligible to obtain a
social security number. The U.S. does not have a tax treaty with all countries
nor do all tax treaties provide an exclusion or lower withholding rate for
annuities.
TAX QUALIFIED CONTRACTS
The income on tax sheltered annuity (TSA) and IRA investments is tax deferred,
and the income from annuities held by such plans does not receive any
additional tax deferral. You should review the annuity features, including all
benefits and expenses, prior to purchasing an annuity as a TSA or IRA. Tax
Qualified Contracts are contracts purchased as or in connection with:
.. Individual Retirement Annuities (IRAs) under Code Section 408(b);
.. Roth IRAs under Code Section 408A;
.. Simplified Employee Pension (SEP IRA) under Code Section 408(k);
.. Savings Incentive Match Plans for Employees (SIMPLE IRA) under Code
Section 408(p);
.. Tax Sheltered Annuities under Code Section 403(b);
.. Corporate and Self Employed Pension and Profit Sharing Plans under Code
Section 401; and
.. State and Local Government and Tax-Exempt Organization Deferred
Compensation Plans under Code Section 457.
Allstate Life reserves the right to limit the availability of the Contract for
use with any of the retirement plans listed above or to modify the Contract to
conform with tax requirements. If you use the Contract within an employer
sponsored qualified retirement plan, the plan may impose different or
additional conditions or limitations on withdrawals, waiver of charges, death
benefits, Payout Start Dates, income payments, and other Contract features. In
addition, adverse tax consequences may result if Qualified Plan limits on
distributions and other conditions are not met. Please consult your Qualified
Plan administrator for more information. Allstate Life no longer issues
deferred annuities to employer sponsored qualified retirement plans.
The tax rules applicable to participants with tax qualified annuities vary
according to the type of contract and the terms and conditions of the
endorsement. Adverse tax consequences may result from certain transactions such
as excess contributions, premature distributions, and, distributions that do
not conform to specified commencement and minimum distribution rules. Allstate
Life can issue an individual retirement annuity on a rollover or transfer of
proceeds from a decedent's IRA, TSA, or employer sponsored retirement plan
under which the decedent's surviving spouse is the beneficiary. Allstate Life
does not offer an individual retirement annuity that can accept a transfer of
funds for any other, non-spousal, beneficiary of a decedent's IRA, TSA, or
employer sponsored qualified retirement plan.
Please refer to your Endorsement for IRAs or 403(b) plans, if applicable, for
additional information on your death settlement options. In the case of certain
Qualified Plans, the terms of the Qualified Plan Endorsement and the plans may
govern the right to benefits, regardless of the terms of the Contract.
Taxation of Withdrawals from an Individually Owned Tax Qualified Contract. If
you make a partial withdrawal under a Tax Qualified Contract other than a Roth
IRA, the portion of the payment that bears the same ratio to the total payment
that the investment in the Contract (i.e., nondeductible IRA contributions)
bears to the Contract Value, is excluded from your income. We do not keep track
of nondeductible contributions, and generally all tax reporting of
distributions from Tax Qualified Contracts other than Roth IRAs will indicate
that the distribution is fully taxable.
"Qualified distributions" from Roth IRAs are not included in gross income.
"Qualified distributions" are 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).
86 PROSPECTUS
"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. Effective December 31, 2005, the
IRS requires annuity contracts to include the actuarial present value of other
benefits for purposes of calculating the required minimum distribution amount.
These other benefits may include accumulation, income, or death benefits. Not
all income plans offered under the Contract satisfy the requirements for
minimum distributions. Because these distributions are required under the Code
and the method of calculation is complex, please see a competent tax advisor.
The Death Benefit and Tax Qualified Contracts. Pursuant to the Code and IRS
regulations, an IRA (e.g., traditional IRA, Roth IRA, SEP IRA and SIMPLE IRA)
may not invest in life insurance contracts. However, an IRA may provide a death
benefit that equals the greater of the purchase payments or the Contract Value.
The Contract offers a death benefit that in certain circumstances may exceed
the greater of the purchase payments or the Contract Value. We believe that the
Death Benefits offered by your Contract do not constitute life insurance under
these regulations.
It is also possible that certain death benefits that offer enhanced earnings
could be characterized as an incidental death benefit. If the death benefit
were so characterized, this could result in current taxable income to a
Contract Owner. In addition, there are limitations on the amount of incidental
death benefits that may be provided under Qualified Plans, such as in
connection with a TSA or employer sponsored qualified retirement plan.
Allstate Life reserves the right to limit the availability of the Contract for
use with any of the Qualified Plans listed above.
Penalty Tax on Premature Distributions from Tax Qualified Contracts. A 10%
penalty tax applies to the taxable amount of any premature distribution from a
Tax Qualified Contract. The penalty tax generally applies to any distribution
made prior to the date you attain age 59 1/2. However, no penalty tax is
incurred on distributions:
.. made on or after the date the Contract Owner attains age 59 1/2,
.. made as a result of the Contract Owner's death or total disability,
.. made in substantially equal periodic payments over the Contract Owner's
life or life expectancy, or over the joint lives or joint life expectancies
of the Contract Owner and the Beneficiary,
.. made after separation from service after age 55 (does not apply to IRAs),
.. made pursuant to an IRS levy,
.. made for certain medical expenses,
.. made to pay for health insurance premiums while unemployed (applies only
for IRAs),
.. made for qualified higher education expenses (applies only for IRAs)
.. made for a first time home purchase (up to a $10,000 lifetime limit and
applies only for IRAs), and
.. from an IRA or attributable to elective deferrals under a 401(k) plan,
403(b) annuity, or certain similar arrangements made to individuals who
(because of their being members of a reserve component) are ordered or
called to active duty after Sept. 11, 2001, and before Dec. 31, 2007, for a
period of more than 179 days or for an indefinite period; and made during
the period beginning on the date of the order or call to duty and ending at
the close of the active duty period.
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
87 PROSPECTUS
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 the required 10% of the taxable amount. 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. We
require an original IRS Form W-8BEN at issue to certify the owners' foreign
status. Withholding may be reduced or eliminated if covered by an income tax
treaty between the U.S. and the non-resident alien's country of residence if
the payee provides a U.S. taxpayer identification number on a fully completed
Form W-8BEN. A U.S. taxpayer identification number is a social security number
or an individual taxpayer identification number ("ITIN"). ITINs are issued by
the IRS to non-resident alien individuals who are not eligible to obtain a
social security number. The U.S. does not have a tax treaty with all countries
nor do all tax treaties provide an exclusion or lower withholding rate for
annuities.
Charitable IRA Distributions. The Pension Protection Act of 2006 Included a
charitable giving incentive permitting tax-free IRA distributions for
charitable purposes.
For distributions in tax years beginning after 2005 and before 2008, the Act
provides an exclusion from gross income, up to $100,000, for otherwise taxable
IRA distributions from a traditional or Roth IRA that are qualified charitable
distributions. To constitute a qualified charitable distribution, the
distribution must be made (1) directly by the IRA trustee to a certain
qualified charitable organizations and (2) on or after the date the IRA owner
attains age 70 1/2. Distributions that are excluded from income under this
provision are not taken into account in determining the individual's deduction,
if any, for charitable contributions.
The IRS has indicated that an IRA trustee is not responsible for determining
whether a distribution to a charity is one that satisfies the requirements for
the new income tax exclusion added by the Pension Protection Act. As a result
the general rules for reporting IRA distributions apply.
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. For distributions after 2007, the Pension Protection Act of 2006
allows distributions from qualified retirement plans including tax sheltered
annuities and governmental Section 457 plans to be rolled over directly into a
Roth IRA, subject to the usual rules that apply to conversions from a
traditional IRA into a Roth IRA. The income portion of a conversion or rollover
distribution is taxable currently, but is exempted from the 10% penalty tax on
premature distributions. An individual with adjusted gross income (AGI) of
$100,000 or more won't be able to rollover amounts from an eligible retirement
plan into a Roth IRA. Please note, however, that the $100,000 AGI limit will be
eliminated for tax years beginning after December 31, 2009. Effective
January 1, 2005, the IRS requires conversions of annuity contracts to include
the actuarial present value of other benefits for purposes of valuing the
taxable amount of the conversion.
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
88 PROSPECTUS
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.
If you have a contract issued as an IRA under Code Section 408(b) and request
to change the ownership to an IRA custodian permitted under Section 408, we
will treat a request to change ownership from an individual to a custodian as
an indirect rollover. We will send a Form 1099R to report the distribution and
the custodian should issue a Form 5498 for the contract value contribution.
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. SIMPLE IRA plans must include the provisions of
the Economic Growth and Tax Relief Reconciliation Act of 2007 (EGTRRA) to avoid
adverse tax consequences. If your current SIMPLE IRA plan uses IRS Model Form
5304-SIMPLE with a revision date of March 2002 or later, then your plan is up
to date. If your plan has a revision date prior to March 2002, please consult
with your tax or legal advisor to determine the action you need to take in
order to comply with this requirement.
To determine if you are eligible to contribute to any of the above listed IRAs
(traditional, Roth, SEP, or SIMPLE), please refer to IRS Publication 590 and
your competent tax advisor.
Tax Sheltered Annuities. Code Section 403(b) provides tax-deferred retirement
savings plans for employees of certain non-profit and educational
organizations. Under Section 403(b), any contract used for a 403(b) plan must
provide that distributions attributable to salary reduction contributions made
after 12/31/88, and all earnings on salary reduction contributions, may be made
only on or after the date the employee:
.. attains age 59 1/2,
.. severs employment,
.. dies,
.. becomes disabled, or
.. incurs a hardship (earnings on salary reduction contributions may not be
distributed on account of hardship).
These limitations do not apply to withdrawals where Allstate Life is directed
to transfer some or all of the Contract Value to another 403(b) plan.
Generally, we do not accept funds in 403(b) contracts that are subject to the
Employee Retirement Income Security Act of 1974 (ERISA).
Corporate and Self-Employed Pension and Profit Sharing Plans.
Section 401(a) of the Code permits corporate employers to establish various
types of tax favored retirement plans for employees. Self-employed individuals
may establish tax favored retirement plans for themselves and their employees
(commonly referred to as "H.R.10" or "Keogh"). Such retirement plans may permit
the purchase of annuity contracts. Allstate Life no longer issues annuity
contracts to employer sponsored qualified retirement plans.
There are two owner types for contracts intended to qualify under
Section 401(a): a qualified plan fiduciary or an annuitant owner.
89 PROSPECTUS
.. A qualified plan fiduciary exists when a qualified plan trust that is
intended to qualify under Section 401(a) of the Code is the owner. The
qualified plan trust must have its own tax identification number and a
named trustee acting as a fiduciary on behalf of the plan. The annuitant
should be the person for whose benefit the contract was purchased.
.. An annuitant owner exists when the tax identification number of the owner
and annuitant are the same, or the annuity contract is not owned by a
qualified plan trust. The annuitant should be the person for whose benefit
the contract was purchased.
If a qualified plan fiduciary is the owner of the contract, the qualified plan
must be the beneficiary so that death benefits from the annuity are distributed
in accordance with the terms of the qualified plan. Annuitant owned contracts
require that the beneficiary be the annuitant's spouse (if applicable), which
is consistent with the required IRS language for qualified plans under
Section 401(a). A completed Annuitant Owned Qualified Plan Designation of
Beneficiary form is required in order to change the beneficiary of an annuitant
owned Qualified Plan contract.
State and Local Government and Tax-Exempt Organization Deferred Compensation
Plans. Section 457 of the Code permits employees of state and local
governments and tax-exempt organizations to defer a portion of their
compensation without paying current taxes. The employees must be participants
in an eligible deferred compensation plan. In eligible governmental plans, all
assets and income must be held in a trust/ custodial account/annuity contract
for the exclusive benefit of the participants and their beneficiaries. To the
extent the Contracts are used in connection with a non-governmental eligible
plan, employees are considered general creditors of the employer and the
employer as owner of the Contract has the sole right to the proceeds of the
Contract. Under eligible 457 plans, contributions made for the benefit of the
employees will not be includible in the employees' gross income until
distributed from the plan. Allstate Life no longer issues annuity contracts to
employer sponsored qualified retirement plans.
Annual Reports and Other Documents
- --------------------------------------------------------------------------------
Allstate Life's Annual Report on Form 10-K for the year ended December 31,
2007, 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 Securities Exchange Act of 1934 are also incorporated herein by
reference, which means that they also legally become a part of this prospectus.
Statements in this prospectus, or in documents that we file later with the SEC
and that legally become a part of this prospectus, may change or supersede
statements in other documents that are legally part of this prospectus.
Accordingly, only the statement that is changed or replaced will legally be a
part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q electronically on the SEC's
"EDGAR" system using the identifying number CIK No. 0000352736. The SEC
maintains a Web site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
SEC. The address of the site is http://www.sec.gov. You also can view these
materials at the SEC's Public Reference Room at 100 F Street NE, Room 1580,
Washington, DC 20549-2001. For more information on the operations of 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 758565, Topeka, KS 66675-8565 or 1-800-457-7617.
90 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.
91 PROSPECTUS
Appendix A
Allstate Advisor Contract Comparison Chart
- --------------------------------------------------------------------------------
Advisor Preferred
Feature Advisor Advisor Plus -------------------------------------------------
5-year Withdrawal 3-year Withdrawal No Withdrawal
Charge Option Charge Option Charge Option
- - - - -------------------------------------------------
up to 5% depending
on issue age and
amount of purchase
Credit Enhancement None payments None None None
- ------------------------------------------------------------------------------------------------------------
Mortality and
Expense
Risk Charge
(Base Contract) 1.10% 1.40% 1.40% 1.50% 1.60%
- ------------------------------------------------------------------------------------------------------------
Withdrawal Charge
(% of purchase 8.5/ 8.5/ 8.5/ 7.5/
payment) 7/ 7/ 6/ 5/ 4/ 3/ 2 6.5/ 5.5/ 4/2.5 7/ 6/ 5/ 4/ 3 7/ 6/ 5 None
- ------------------------------------------------------------------------------------------------------------
Confinement, Confinement, Confinement, Confinement,
Withdrawal Charge Terminal Illness, Terminal Illness, Terminal Illness, Terminal Illness,
Waivers Unemployment Unemployment Unemployment Unemployment N/A
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 Advisor Plus -------------------------------------------------
5-Year 3-Year
Withdrawal Charge Withdrawal Charge No Withdrawal
Option Option Charge Option
- - - - -------------------------------------------------
3 to 6-month 3 to 6-month 3 to 6-month 3 to 6-month N/A
Transfer Periods -----------------------------------------------------------------------------
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 Preferred
Advisor AdvisorPlus -----------------------------------------------------
5-Year 3-Year No
Withdrawal Charge Withdrawal Charge Withdrawal Charge
Option Option Option
- -------------------- - -----------------------------------------------------
1-year N/A N/A N/A N/A
--------------------------------------------------------------------------------------------------------
3-year* N/A N/A N/A N/A
Guarantee Periods --------------------------------------------------------------------------------------------------------
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.
92 PROSPECTUS
MVA Fixed Account Option (not available in all states)**
- --------------------------------------------------------------------------------------------
Advisor Preferred
Advisor Advisor Plus -----------------------------------------------------
5-Year 3-Year No
Withdrawal Charge Withdrawal Charge Withdrawal Charge
Option Option Option
- - - - -----------------------------------------------------
3-year 3-year 3-year 3-year 3-year
--------------------------------------------------------------------------
5-year 5-year 5-year 5-year 5-year
Guarantee Periods --------------------------------------------------------------------------
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.
93 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 Board Statistical Release H.15. If such yields cease to be
available in Federal Reserve Board Statistical 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
Purchase Payment: $10,000 allocated to a Market Value Adjusted
Fixed Guarantee 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/ =
End of Contract Year 3: $11,411.66
Step 2: Calculate the Free Withdrawal = .15 X $10,000 = $1500
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 received = $11,411.66 - $510 + $10.27 =
by Contract owner as a result of $10,911.93
full withdrawal at the end of
Contract Year 3:
94 PROSPECTUS
Example 2: (Assumes Rising Interest Rates)
Step 1: Calculate Contract Value at = $10,000.00 X (1.045)/3/ =
End of Contract Year 3: $11,411.66
Step 2: Calculate the Free Withdrawal = .15 X $10,000 = $1500
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 = 4.80%
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 = $11,411.66 - $510 - $112.98 =
by Contract owner as a result of $10,788.68
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.
95 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 Date: 65
----------------------------------------------------------------
Sex of Annuitant: male
----------------------------------------------------------------
Income Plan selected: 1
----------------------------------------------------------------
Payment frequency: monthly
----------------------------------------------------------------
Amount applied to variable income payments under the
Income Plan: $100,000.00
----------------------------------------------------------------
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 payment: 85% of the initial variable a mount income 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.
96 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 Advisor
Type of Contract Transaction Value After Anniversary 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.
- --------------------------------------------------------------------------------------------------------------
Maximum Anniversary Value Income Benefit
- --------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a)
- --------------------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b)
- --------------------------------------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal (c)
- --------------------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c)
- --------------------------------------------------------------------------------------------------------------
Adjusted Income Benefit
- --------------------------------------------------------------------------------------------------------------
5 % Roll-Up Value Income Benefit**
- --------------------------------------------------------------------------------------------------------------
Total Partial Withdrawal Amount (a)
- --------------------------------------------------------------------------------------------------------------
STEP I - Dollar For Dollar Portion
- --------------------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b)
- --------------------------------------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal (assumes 181
days worth of interest on $52,500 and $54,600, respectively) (c)
- --------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (Corridor = 5% of Roll-Up Value on 1/1/04) (d)
- --------------------------------------------------------------------------------------------------------------
Dollar for Dollar Withdrawal Adjustment (discounted for a half year's worth of interest) (e)=(d) * 1.05^ -0.5
- --------------------------------------------------------------------------------------------------------------
Contract Value After Step 1 (b')=(b) - (d)
- --------------------------------------------------------------------------------------------------------------
Adjusted Income Benefit After Step 1 (c')=(c) - (e)
- --------------------------------------------------------------------------------------------------------------
STEP 2 - Proportional Portion
- --------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a')=(a) - (d)
- --------------------------------------------------------------------------------------------------------------
Proportional Adjustment (a')/(b')*(c')
- --------------------------------------------------------------------------------------------------------------
Contract Value After Step 2 (b') - (a')
- --------------------------------------------------------------------------------------------------------------
Adjusted Income Benefit After Step 2
- --------------------------------------------------------------------------------------------------------------
Advisor and Preferred Plus
- ----------------------------------------------------------------------------------------------------------------------
Maximum Anniversary Value Income Benefit
- ----------------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount $15,000 $15,000
- ----------------------------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal $60,000 $60,000
- ----------------------------------------------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal $55,000 $55,000
- ----------------------------------------------------------------------------------------------------------------------
Withdrawal Adjustment $13,750 $13,750
- ----------------------------------------------------------------------------------------------------------------------
Adjusted Income Benefit $41,250 $41,250
- ----------------------------------------------------------------------------------------------------------------------
5 % Roll-Up Value Income Benefit**
- ----------------------------------------------------------------------------------------------------------------------
Total Partial Withdrawal Amount $15,000 $15,000
- ----------------------------------------------------------------------------------------------------------------------
STEP I - Dollar For Dollar Portion
- ----------------------------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal $60,000 $60,000
- ----------------------------------------------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal (assumes 181
days worth of interest on $52,500 and $54,600, respectively) $53,786 $55,937
- ----------------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (Corridor = 5% of Roll-Up Value on 1/1/04) $2,625 $2,730
- ----------------------------------------------------------------------------------------------------------------------
Dollar for Dollar Withdrawal Adjustment (discounted for a half year's worth of interest) $2,562 $2,664
- ----------------------------------------------------------------------------------------------------------------------
Contract Value After Step 1 $57,375 $57,270
- ----------------------------------------------------------------------------------------------------------------------
Adjusted Income Benefit After Step 1 $51,224 $53,273
- ----------------------------------------------------------------------------------------------------------------------
STEP 2 - Proportional Portion
- ----------------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount $12,375 $12,270
- ----------------------------------------------------------------------------------------------------------------------
Proportional Adjustment $11,048 $11,414
- ----------------------------------------------------------------------------------------------------------------------
Contract Value After Step 2 $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.
97 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
- ----------------------------------------------------------------------------------------------------------------------------
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 Partial Withdrawal (c) $50,000
- ----------------------------------------------------------------------------------------------------------------------------
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 Partial Withdrawal (c) $55,000
- ----------------------------------------------------------------------------------------------------------------------------
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 on $52,500 and $54,600, respectively) (c) $53,786
- ----------------------------------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,446
- ----------------------------------------------------------------------------------------------------------------------------
Adjusted Death Benefit $40,339
- ----------------------------------------------------------------------------------------------------------------------------
Plus
- -----------------------------------------------------------------------------------------------
Purchase Payment Value Death Benefit
- -----------------------------------------------------------------------------------------------
Partial Withdrawal Amount $15,000
- -----------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal $60,000
- -----------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal $52,000
- -----------------------------------------------------------------------------------------------
Withdrawal Adjustment $13,000
- -----------------------------------------------------------------------------------------------
Adjusted Death Benefit $39,000
- -----------------------------------------------------------------------------------------------
MAV Death Benefit
- -----------------------------------------------------------------------------------------------
Partial Withdrawal Amount $15,000
- -----------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal $60,000
- -----------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal $55,000
- -----------------------------------------------------------------------------------------------
Withdrawal Adjustment $13,750
- -----------------------------------------------------------------------------------------------
Adjusted Death Benefit $41,250
- -----------------------------------------------------------------------------------------------
Enhanced Beneficiary Protection (Annual Increase) Benefit**
- -----------------------------------------------------------------------------------------------
Partial Withdrawal Amount $15,000
- -----------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal $60,000
- -----------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal (assumes 181 days
worth of interest on $52,500 and $54,600, respectively) $55,937
- -----------------------------------------------------------------------------------------------
Withdrawal Adjustment $13,984
- -----------------------------------------------------------------------------------------------
Adjusted Death Benefit $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.
98 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 death = $0
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 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
99 PROSPECTUS
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.
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).
100 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 Withdrawal (c) $50,000 $52,000
- -----------------------------------------------------------------------------------------------
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.
101 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).
102 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).
103 PROSPECTUS
Appendix I - SureIncome Plus 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 Plus Option at issue.
Your Benefit Base is $100,000, which is your initial purchase payment of
$100,000.
Your SureIncome ROP Death Benefit 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 SureIncome ROP Death Benefit is increased to $140,000, which is your prior
SureIncome ROP Death Benefit ($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 SureIncome ROP Death Benefit is reduced to $92,000, which is your prior
SureIncome ROP Death Benefit ($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, the SureIncome ROP Death Benefit
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 SureIncome ROP Death Benefit 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 SureIncome ROP Death Benefit is reduced to $55,000, determined by the
following calculation: the lesser of ($60,000 - $5,000) and ($92,000 - $5,000)
= $55,000.
104 PROSPECTUS
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 SureIncome ROP Death Benefit is increased to $95,000, which is your prior
SureIncome ROP Death Benefit ($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).
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 SureIncome ROP Death Benefit is reduced to $91,800, which is your prior
SureIncome ROP Death Benefit ($95,000) less your withdrawal ($3,200).
The Benefit Payment is unchanged, because the amount withdrawn does not exceed
the Benefit Payment Remaining, 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).
Example 8: Assume Example 1 is continued and on the first Contract Anniversary
the Contract Value prior to deduction of annual fees is $160,000.
The SureIncome Plus Option Fee is $650, which is 0.65% X the Benefit Base
($100,000) prior to updating the Benefit Base based on the Contract Value on
the Contract Anniversary.
The final Contract Value is $159,350, which the Contract Value on the Contract
Anniversary after deduction of annual fees (assume SureIncome Plus Option Fee
is the only annual fee applicable).
The Benefit Base is increased to $159,350, which is the greater of your current
Benefit Base ($100,000) and the final Contract Value on the Contract
Anniversary ($159,350).
The SureIncome ROP Death Benefit remains $100,000.
The Benefit Payment is increased to $12,748, which is the greater of your
current Benefit Payment ($8,000) and 8% X the final Contract Value on the
Contract Anniversary ($159,350).
The Benefit Payment Remaining is updated to $12,748, which is the Benefit
Payment on the Contract Anniversary.
Example 9: Assume Example 8 is continued, no withdrawals or purchase payments
are applied during the second Contract Year and on the second Contract
Anniversary the Contract Value prior to deduction of annual fees is $60,000.
The SureIncome Plus Option Fee is $1,035.78, which is 0.65% X the Benefit Base
($159,350) prior to updating the Benefit Base based on the Contract Value on
the Contract Anniversary.
The final Contract Value is $58,964.22, which the Contract Value on the
Contract Anniversary after deduction of annual fees (assume SureIncome Plus
Option Fee is the only annual fee applicable).
The Benefit Base remains $159,350, which is the greater of your current Benefit
Base ($159,350) and the final Contract Value on the Contract Anniversary
($58,964.22).
The SureIncome ROP Death Benefit remains $100,000.
The Benefit Payment is remains $12,748, which is the greater of your current
Benefit Payment $12,748 and 8% X the final Contract Value on the Contract
Anniversary ($58,964.22).
The Benefit Payment Remaining is updated to $12,748, which is the Benefit
Payment on the Contract Anniversary.
105 PROSPECTUS
Appendix J - SureIncome For Life Withdrawal Benefit Option Calculation Examples
- --------------------------------------------------------------------------------
Example 1: Assume you purchase an Allstate Advisor contract with $100,000
initial purchase payment, are attained age 55 at issue, and add the SureIncome
For Life Option at issue (you are the SureIncome Covered Life).
Your Benefit Base is $100,000, which is your initial purchase payment of
$100,000.
Your SureIncome ROP Death Benefit is $100,000, which is your initial purchase
payment of $100,000.
Your Benefit Payment is $4,000, which is 4% of your initial purchase payment.
Your Benefit Payment Remaining for this Benefit Year is $4,000, which is equal
to your Benefit Payment at the beginning of this Benefit Year.
Note: The Benefit Payment remains $4,000 until you turn age 60 (as long as the
Contract Value on any of the prior Contract Anniversaries have not caused any
of the guarantees under the Option to be updated). At that point, if no
withdrawals have been taken, your Benefit Payment & Benefit Payment Remaining
are updated to 5% X current Benefit Base ($5,000 = 5% X $100,000, assuming your
Benefit Base is still $100,000).
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 SureIncome ROP Death Benefit is increased to $140,000, which is your prior
SureIncome ROP Death Benefit ($100,000) plus your additional purchase payment
($40,000).
The Benefit Payment is increased to $5,600, which is your prior Benefit Payment
($4,000) plus 4% of your additional purchase payment ($40,000).
The Benefit Payment Remaining is increased to $5,600, which is your prior
Benefit Payment Remaining ($4,000) plus 4% of your additional purchase payment
($40,000).
Note: The Benefit Payment remains $5,600 until you turn age 60 (for the
purposes of this example it is assumed the maximum anniversary value on any of
the prior Contract Anniversaries has not increased the Benefit Payment). At
that point, if no withdrawals have been taken, your Benefit Payment & Benefit
Payment Remaining are updated to 5% X current Benefit Base ($7,000 = 5% X
$140,000, assuming your Benefit Base is still $140,000).
Example 3a: Assume Example 1 is continued and the first withdrawal, equal to
$4,000, is made during the first Benefit Year.
The Benefit Base is reduced to $96,000, which is your prior Benefit Base
($100,000) less your withdrawal ($4,000).
The SureIncome ROP Death Benefit is reduced to $96,000, which is your prior
SureIncome ROP Death Benefit ($100,000) less your withdrawal ($4,000).
The Benefit Payment is unchanged and remains $4,000.
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($4,000) less your
withdrawal ($4,000).
Note: The Withdrawal Benefit Factor is locked at 4% because the age at first
withdrawal is age 55.
Example 3b: Assume Example 1 is continued and the first withdrawal, equal to
$5,000, is made during the sixth Benefit Year and you have attained age 60
(assume the Contract Values have not increased any SureIncome For Life Option
guarantees on any prior Contract Anniversaries).
The Benefit Base is reduced to $95,000, which is your prior Benefit Base
($100,000) less your withdrawal ($5,000).
The SureIncome ROP Death Benefit is reduced to $95,000, which is your prior
SureIncome ROP Death Benefit ($100,000) less your withdrawal ($5,000).
Because the first withdrawal occurs at attained age 60, the Benefit Payment and
Benefit Payment Remaining prior to the withdrawal are updated to 5% X current
Benefit Base (5% X $100,000 = $5,000).
The Benefit Payment remains $5,000 after withdrawal.
106 PROSPECTUS
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($5,000) less your
withdrawal ($5,000).
Note: The Withdrawal Benefit Factor is locked at 5% because the age at first
withdrawal is age 60.
Example 3c: Assume Example 1 is continued and the first withdrawal, equal to
$6,000, is made during the sixteenth Benefit Year and you have attained age 70
(assume the Contract Values have not increased any SureIncome For Life Option
guarantees on any prior Contract Anniversaries).
The Benefit Base is reduced to $94,000, which is your prior Benefit Base
($100,000) less your withdrawal ($6,000).
The SureIncome ROP Death Benefit is reduced to $94,000, which is your prior
SureIncome ROP Death Benefit ($100,000) less your withdrawal ($6,000).
Because the first withdrawal occurs at attained age 70, the Benefit Payment and
Benefit Payment Remaining prior to the withdrawal are updated to 6% X current
Benefit Base (6% X $100,000 = $6,000).
The Benefit Payment remains $6,000 after withdrawal.
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($6,000) less your
withdrawal ($6,000).
Note: The Withdrawal Benefit Factor is locked at 6% because the age at first
withdrawal is age 70.
Example 4a: 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, the SureIncome ROP Death Benefit
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 SureIncome ROP Death Benefit 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 is reduced to $3,000, determined by the following
calculation: the lesser of ($4,000) and (4% X $75,000) = $3,000.
There is no Benefit Payment Remaining because the withdrawal has reduced it to
$0.
Note: The Withdrawal Benefit Factor is locked at 4% because the age at first
withdrawal is age 55.
Example 4b: Assume Example 1 is continued and a withdrawal of $25,000 is made
during the sixth Benefit Year (assume the Contract Values have not increased
any SureIncome For Life Option guarantees on any prior Contract Anniversaries).
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, the SureIncome ROP Death Benefit 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 SureIncome ROP Death Benefit is reduced to $75,000, determined by the
following calculation: the lesser of ($130,000 - $25,000) and ($100,000 -
$25,000) = $75,000.
Because the first withdrawal occurs at attained age 60, the Benefit Payment and
Benefit Payment Remaining prior to the withdrawal are updated to 5% X current
Benefit Base prior to the withdrawal (5% X $100,000 = $5,000).
The Benefit Payment is reduced to $3,750, determined by the following
calculation: the lesser of ($5,000) and (5% X $75,000) = $3,750.
There is no Benefit Payment Remaining because the withdrawal has reduced it to
$0.
Note: The Withdrawal Benefit Factor is locked at 5% because the age at first
withdrawal is age 60.
Example 5: Assume Example 3a 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.
107 PROSPECTUS
The Benefit Base is reduced to $55,000, determined by the following
calculation: the lesser of ($60,000 - $5,000) and ($96,000 - $5,000) = $55,000.
The SureIncome ROP Death Benefit is reduced to $55,000, determined by the
following calculation: the lesser of ($60,000 - $5,000) and ($96,000 - $5,000)
= $55,000.
The Benefit Payment is reduced to $2,200, determined by the following formula:
the lesser of ($4,000) and (4% X $55,000) = $2,200.
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 SureIncome ROP Death Benefit is increased to $95,000, which is your prior
SureIncome ROP Death Benefit ($55,000) plus your additional purchase payment
($40,000).
The Benefit Payment is increased to $3,800, which is your prior Benefit Payment
($2,200) plus 4% of your additional purchase payment ($40,000).
The Benefit Payment Remaining is increased to $1,600, which is your Benefit
Payment Remaining prior to your additional purchase payment ($0) plus 4% of
your additional purchase payment ($40,000).
Example 7: Assume Example 6 is continued and an additional withdrawal of $1,600
is taken in the same year (the first Benefit Year).
The Benefit Base is reduced to $93,400, which is your prior Benefit Base
($95,000) less your withdrawal ($1,600).
The SureIncome ROP Death Benefit is reduced to $93,400, which is your prior
SureIncome ROP Death Benefit ($95,000) less your withdrawal ($1,600).
The Benefit Payment is unchanged and remains $3,800.
The Benefit Payment Remaining is reduced to $0, which is your Benefit Payment
Remaining prior to your withdrawal ($1,600) less your withdrawal ($1,600).
Example 8: Assume Example 1 is continued and on the first Contract Anniversary
the Contract Value prior to deduction of annual fees is $160,000.
The SureIncome For Life Option Fee is $650, which is 0.65% X the Benefit Base
($100,000) prior to updating the Benefit Base based on the Contract Value on
the Contract Anniversary.
The final Contract Value is $159,350, which the Contract Value on the Contract
Anniversary after deduction of annual fees (assume SureIncome For Life Option
Fee is the only annual fee applicable).
The Benefit Base is increased to $159,350, which is the greater of your current
Benefit Base ($100,000) and the final Contract Value on the Contract
Anniversary ($159,350).
The SureIncome ROP Death Benefit remains $100,000.
The Benefit Payment is increased to $6,374, which is the greater of your
current Benefit Payment ($4,000) and 4% of the final Contract Value on the
Contract Anniversary ($159,350).
The Benefit Payment Remaining is updated to $6,374, which is the Benefit
Payment on the Contract Anniversary.
Note: The Benefit Payment remains $6,374 until you turn age 60 (as long as the
Contract Values on any of the prior Contract Anniversaries have not caused any
of the guarantees under the Option to be updated). At that point, if no
withdrawals have been taken, your Benefit Payment and Benefit Payment Remaining
are updated to 5% X current Benefit Base ($7,967.50 = 5% X $159,350, assuming
your Benefit Base is still $159,350).
Example 9: Assume Example 8 is continued, no withdrawals or purchase payments
are applied during the second Contract Year and on the second Contract
Anniversary the Contract Value prior to deduction of annual fees is $60,000.
The SureIncome For Life Option Fee is $1,035.78, which is 0.65% X the Benefit
Base ($159,350) prior to updating for the Benefit Base based on the Contract
Value on the Contract Anniversary.
The final Contract Value is $58,964.22, which the Contract Value on the
Contract Anniversary after deduction of annual fees (assume SureIncome For Life
Option Fee is the only annual fee applicable).
108 PROSPECTUS
The Benefit Base is remains $159,350, which is the greater of your current
Benefit Base ($159,350) and the final Contract Value on the Contract
Anniversary ($58,964.22).
The SureIncome ROP Death Benefit remains $100,000.
The Benefit Payment is remains $6,374, which is the greater of your current
Benefit Payment $6,374 and 4% X the final Contract Value on the Contract
Anniversary ($58,964.22).
The Benefit Payment Remaining is updated to $6,374, which is the Benefit
Payment on the Contract Anniversary.
109 PROSPECTUS
Appendix K - Accumulation Unit Values
- --------------------------------------------------------------------------------
Appendix K 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 of Contract charges that affect Accumulation Unit Values for each
Contract. Please contract us at 1-800-457-7617 to obtain a copy of the
Statement of Additional Information.
The names of the following Sub-Accounts changed since December 31, 2007. The
names shown in the tables of Accumulation Units correspond to the name of the
Sub-Account as of December 31, 2007:
Sub-Account Name as of December 31,
2007
(as appears in the following tables
of Accumulation Unit Values) Sub-Account Name as of May 1, 2008
-----------------------------------------------------------------------------
Van Kampen UIF Equity Growth
Portfolio, Class II UIF Equity Growth Portfolio, Class II
Van Kampen UIF Emerging Markets Debt UIF Emerging Markets Debt Portfolio,
Portfolio, Class II Class II
Van Kampen UIF U.S. Real Estate,
Class II UIF U.S. Real Estate, Class II
Van Kampen UIF Equity and Income,
Class II UIF Equity and Income, Class II
Van Kampen UIF U.S. Mid Cap Value, UIF U.S. Mid Cap Value, Classes I and
Classes I and II II
Van Kampen UIF U.S. Mid Cap Growth,
Class II UIF U.S. Mid Cap Growth, Class II
Van Kampen UIF Global Franchise,
Class II UIF Global Franchise, Class II
Van Kampen UIF Small Company Growth,
Class II UIF Small Company Growth, Class II
Van Kampen LIT Strategic Growth, Van Kampen LIT Capital Growth, Class
Class II II
Van Kampen LIT Aggressive Growth, Van Kampen LIT Mid Cap Growth, Class
Class II II
-----------------------------------------------------------------------------
Allstate Advisor Contracts: Accumulation Unit Value and Number of Accumulation
Units Outstanding for Each Variable Sub-Account Since Contracts Were First
Offered* (Basic Contract)
Mortality & Expense = 1.1
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -----------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.291
Accumulation Unit Value, End of Period - - - - $ 10.291 $ 11.915
Number of Units Outstanding, End of Period - - - - 516,451 1,004,070
- -----------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.483
Accumulation Unit Value, End of Period - - - - $ 10.483 $ 11.218
Number of Units Outstanding, End of Period - - - - 24,455 70,102
- -----------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.513
Accumulation Unit Value, End of Period - - - - $ 10.513 $ 11.411
Number of Units Outstanding, End of Period - - - - 54,334 128,871
- -----------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.522
Accumulation Unit Value, End of Period - - - - $ 10.522 $ 11.536
Number of Units Outstanding, End of Period - - - - 14,031 28,063
- -----------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.373
Accumulation Unit Value, End of Period - - - - $ 10.373 $ 10.845
Number of Units Outstanding, End of Period - - - - 16,899 48,727
- -----------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.766
Accumulation Unit Value, End of Period - - - - $ 9.766 $ 11.790
Number of Units Outstanding, End of Period - - - - 19,226 53,608
- -----------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.846
Accumulation Unit Value, End of Period - - - - $ 10.846 $ 11.260
Number of Units Outstanding, End of Period - - - - 45,567 270,300
- -----------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.899
Accumulation Unit Value, End of Period - - - - $ 9.899 $ 11.269
Number of Units Outstanding, End of Period - - - - 102,347 251,766
- -----------------------------------------------------------------------------------------------
110 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.860 $ 13.475 $ 14.713 $ 15.034 $ 17.328
Accumulation Unit Value, End of Period $10.860 $ 13.475 $ 14.713 $ 15.034 $ 17.328 $ 16.469
Number of Units Outstanding, End of Period 4,339 576,019 1,237,251 1,509,644 1,376,859 1,236,047
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.263 $ 11.297 $ 13.185
Accumulation Unit Value, End of Period - - $ 11.263 $ 11.297 $ 13.185 $ 13.503
Number of Units Outstanding, End of Period - - 550,454 2,186,987 3,300,784 4,027,508
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.533 $ 10.508 $ 11.503
Accumulation Unit Value, End of Period - - $ 10.533 $ 10.508 $ 11.503 $ 12.061
Number of Units Outstanding, End of Period - - 43,535 812,179 1,735,490 2,114,492
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund -
Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.545 $ 15.641 $ 17.211 $ 17.803 $ 19.101
Accumulation Unit Value, End of Period $11.545 $ 15.641 $ 17.211 $ 17.803 $ 19.101 $ 20.973
Number of Units Outstanding, End of Period 882 21,349 21,824 21,130 20,318 17,140
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 11.235 $ 14.653 $ 17.899 $ 19.217 $ 22.191
Accumulation Unit Value, End of Period $11.235 $ 14.653 $ 17.899 $ 19.217 $ 22.191 $ 21.382
Number of Units Outstanding, End of Period 2,864 211,298 454,938 704,731 787,501 728,134
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.274 $ 10.385 $ 10.664
Accumulation Unit Value, End of Period - - $ 10.274 $ 10.385 $ 10.664 $ 11.221
Number of Units Outstanding, End of Period - - 268,158 454,107 553,564 643,995
- ------------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 11.041
Accumulation Unit Value, End of Period - - - - $ 11.041 $ 12.189
Number of Units Outstanding, End of Period - - - - 179,990 443,786
- ------------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.333 $ 12.765 $ 14.192 $ 15.488 $ 18.099
Accumulation Unit Value, End of Period $10.333 $ 12.765 $ 14.192 $ 15.488 $ 18.099 $ 18.486
Number of Units Outstanding, End of Period 6,303 442,689 1,161,162 1,757,967 2,186,968 2,266,150
- ------------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 11.243 $ 16.979 $ 20.902 $ 26.292 $ 33.244
Accumulation Unit Value, End of Period $11.243 $ 16.979 $ 20.902 $ 26.292 $ 33.244 $ 42.259
Number of Units Outstanding, End of Period 112 43,987 127,960 215,039 254,473 259,442
- ------------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.484 $ 13.683 $ 16.009 $ 17.410 $ 20.872
Accumulation Unit Value, End of Period $10.484 $ 13.683 $ 16.009 $ 17.410 $ 20.872 $ 23.785
Number of Units Outstanding, End of Period 1,995 141,338 352,761 841,251 1,384,661 1,600,147
- ------------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund -
Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.730 $ 12.969 $ 14.688 $ 14.052 $ 15.643
Accumulation Unit Value, End of Period $10.730 $ 12.969 $ 14.688 $ 14.052 $ 15.643 $ 17.139
Number of Units Outstanding, End of Period 1,065 27,419 28,702 29,443 24,121 24,104
- ------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.920 $ 11.529 $ 13.047
Accumulation Unit Value, End of Period - - $ 10.920 $ 11.529 $ 13.047 $ 13.743
Number of Units Outstanding, End of Period - - 15,276 148,760 258,059 281,424
- ------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.370 $ 10.371 $ 11.192
Accumulation Unit Value, End of Period - - $ 10.370 $ 10.371 $ 11.192 $ 11.731
Number of Units Outstanding, End of Period - - 81,198 533,540 959,024 1,203,223
- ------------------------------------------------------------------------------------------------------------------
111 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.904 $ 11.114 $ 12.866
Accumulation Unit Value, End of Period - - $ 10.904 $ 11.114 $ 12.866 $ 13.135
Number of Units Outstanding, End of Period - - 142,509 674,689 977,874 1,131,948
- ------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities
Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.153 $ 11.518 $ 12.268
Accumulation Unit Value, End of Period - - $ 11.153 $ 11.518 $ 12.268 $ 14.685
Number of Units Outstanding, End of Period - - 16,581 103,190 307,914 401,093
- ------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.136 $ 11.896 $ 13.179
Accumulation Unit Value, End of Period - - $ 11.136 $ 11.896 $ 13.179 $ 13.084
Number of Units Outstanding, End of Period - - 136,025 867,902 1,058,446 1,096,947
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.069 $ 12.468 $ 14.698 $ 16.248 $ 16.472
Accumulation Unit Value, End of Period $10.069 $ 12.468 $ 14.698 $ 16.248 $ 16.472 $ 17.240
Number of Units Outstanding, End of Period 1,697 147,767 230,665 310,149 334,836 269,795
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.706 $ 13.176 $ 14.280 $ 14.614 $ 15.992
Accumulation Unit Value, End of Period $10.706 $ 13.176 $ 14.280 $ 14.614 $ 15.992 $ 16.335
Number of Units Outstanding, End of Period 2,115 259,159 562,275 694,753 687,270 626,947
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.118 $ 10.221 $ 10.587
Accumulation Unit Value, End of Period - - $ 10.118 $ 10.221 $ 10.587 $ 10.877
Number of Units Outstanding, End of Period - - 16,015 198,046 1,022,486 1,758,893
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service
Shares
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 12.323 $ 12.968 $ 13.424 $ 14.269
Accumulation Unit Value, End of Period - $ 12.323 $ 12.968 $ 13.424 $ 14.269 $ 16.036
Number of Units Outstanding, End of Period - 250,178 723,531 1,303,079 1,418,096 1,252,093
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service
Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.157 $ 14.323 $ 16.808 $ 18.924 $ 21.924
Accumulation Unit Value, End of Period $10.157 $ 14.323 $ 16.808 $ 18.924 $ 21.924 $ 22.956
Number of Units Outstanding, End of Period 45 200,904 384,682 533,061 560,411 551,050
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.670 $ 13.039 $ 13.995 $ 14.092 $ 15.194
Accumulation Unit Value, End of Period $10.670 $ 13.039 $ 13.995 $ 14.092 $ 15.194 $ 14.926
Number of Units Outstanding, End of Period 1,293 199,763 512,385 642,887 651,221 646,720
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.186 $ 12.713 $ 13.696 $ 14.296 $ 16.195
Accumulation Unit Value, End of Period $10.186 $ 12.713 $ 13.696 $ 14.296 $ 16.195 $ 16.649
Number of Units Outstanding, End of Period 4,827 432,829 752,941 1,271,750 1,689,212 1,682,353
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service
Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.363 $ 14.755 $ 17.358 $ 18.799 $ 21.278
Accumulation Unit Value, End of Period $10.363 $ 14.755 $ 17.358 $ 18.799 $ 21.278 $ 20.709
Number of Units Outstanding, End of Period 944 156,683 294,993 490,871 570,415 531,717
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.560 $ 12.213 $ 13.072 $ 13.224 $ 13.998
Accumulation Unit Value, End of Period $10.560 $ 12.213 $ 13.072 $ 13.224 $ 13.998 $ 15.136
Number of Units Outstanding, End of Period 10,218 432,449 1,265,037 2,210,765 2,542,348 2,521,268
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.397 $ 12.510 $ 13.473 $ 14.227 $ 15.850
Accumulation Unit Value, End of Period $10.397 $ 12.510 $ 13.473 $ 14.227 $ 15.850 $ 16.104
Number of Units Outstanding, End of Period 46 27,406 100,508 225,972 289,761 302,756
- ------------------------------------------------------------------------------------------------------------------
112 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.807 $ 13.589 $ 14.904 $ 15.482 $ 17.714
Accumulation Unit Value, End of Period $10.807 $ 13.589 $ 14.904 $ 15.482 $ 17.714 $ 16.428
Number of Units Outstanding, End of Period 10,128 581,918 872,350 894,861 859,159 786,066
- ----------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 9.732 $ 11.373 $ 12.026 $ 13.438 $ 13.636
Accumulation Unit Value, End of Period $ 9.732 $ 11.373 $ 12.026 $ 13.438 $ 13.636 $ 13.378
Number of Units Outstanding, End of Period 4,020 87,288 143,322 121,045 106,651 90,746
- ----------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.750 $ 13.428 $ 14.652 $ 14.911 $ 16.269
Accumulation Unit Value, End of Period $10.750 $ 13.428 $ 14.652 $ 14.911 $ 16.269 $ 16.506
Number of Units Outstanding, End of Period 2,077 238,535 421,723 615,143 729,961 684,787
- ----------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.194 $ 10.507 $ 10.832 $ 10.945 $ 11.292
Accumulation Unit Value, End of Period $10.194 $ 10.507 $ 10.832 $ 10.945 $ 11.292 $ 11.728
Number of Units Outstanding, End of Period 10,364 486,154 887,522 1,526,481 2,193,099 2,340,081
- ----------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.613 $ 13.465 $ 15.444 $ 17.105 $ 21.566
Accumulation Unit Value, End of Period $10.613 $ 13.465 $ 15.444 $ 17.105 $ 21.566 $ 23.067
Number of Units Outstanding, End of Period 3,753 172,681 250,483 336,711 486,115 661,099
- ----------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.416 $ 13.072 $ 14.535 $ 15.611 $ 17.558
Accumulation Unit Value, End of Period $10.416 $ 13.072 $ 14.535 $ 15.611 $ 17.558 $ 16.435
Number of Units Outstanding, End of Period 3,968 94,549 111,067 170,882 226,431 231,530
- ----------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 9.993 $ 9.914 $ 9.851 $ 9.970 $ 10.274
Accumulation Unit Value, End of Period $ 9.993 $ 9.914 $ 9.851 $ 9.970 $ 10.274 $ 10.626
Number of Units Outstanding, End of Period 5,773 239,378 611,958 1,639,066 3,059,102 2,741,531
- ----------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.388 $ 13.580 $ 14.787 $ 16.056 $ 17.206
Accumulation Unit Value, End of Period $10.388 $ 13.580 $ 14.787 $ 16.056 $ 17.206 $ 17.958
Number of Units Outstanding, End of Period 2,917 115,558 110,548 99,940 86,751 73,981
- ----------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 11.214 $ 14.664 $ 16.708 $ 17.465 $ 20.001
Accumulation Unit Value, End of Period $11.214 $ 14.664 $ 16.708 $ 17.465 $ 20.001 $ 18.777
Number of Units Outstanding, End of Period 114 77,578 251,024 540,431 692,321 765,754
- ----------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.651 $ 13.177 $ 13.990 $ 14.502 $ 15.935
Accumulation Unit Value, End of Period $10.651 $ 13.177 $ 13.990 $ 14.502 $ 15.935 $ 15.817
Number of Units Outstanding, End of Period 5 56,293 84,821 82,817 78,283 64,794
- ----------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston -
Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.524 $ 12.158 $ 12.986 $ 13.332 $ 14.729
Accumulation Unit Value, End of Period $10.524 $ 12.158 $ 12.986 $ 13.332 $ 14.729 $ 14.677
Number of Units Outstanding, End of Period 6,824 384,959 698,080 897,148 1,002,203 940,566
- ----------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund -
Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.480 $ 14.145 $ 16.978 $ 18.197 $ 22.819
Accumulation Unit Value, End of Period $11.480 $ 14.145 $ 16.978 $ 18.197 $ 22.819 $ 27.015
Number of Units Outstanding, End of Period 377 50,148 84,872 74,344 58,275 46,926
- ----------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.381 $ 13.646 $ 15.976 $ 17.687 $ 18.411
Accumulation Unit Value, End of Period $10.381 $ 13.646 $ 15.976 $ 17.687 $ 18.411 $ 18.865
Number of Units Outstanding, End of Period 2,612 97,780 138,680 165,471 161,338 145,788
- ----------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.118 $ 12.475 $ 12.934 $ 13.494 $ 14.045
Accumulation Unit Value, End of Period $10.118 $ 12.475 $ 12.934 $ 13.494 $ 14.045 $ 14.628
Number of Units Outstanding, End of Period 8,458 496,984 797,854 889,274 777,631 651,974
- ----------------------------------------------------------------------------------------------------------
113 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio -
Class II (3)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.153 $ 12.233 $ 12.670
Accumulation Unit Value, End of Period - - $ 11.153 $ 12.233 $ 12.670 $ 14.706
Number of Units Outstanding, End of Period - - 148,068 145,429 126,259 101,130
- -------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.366 $ 11.681 $ 13.381
Accumulation Unit Value, End of Period - - $ 11.366 $ 11.681 $ 13.381 $ 12.900
Number of Units Outstanding, End of Period - - 214,722 1,023,815 1,184,603 1,155,302
- -------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 9.418 $ 11.811 $ 12.448 $ 13.227 $ 13.399
Accumulation Unit Value, End of Period $ 9.418 $ 11.811 $ 12.448 $ 13.227 $ 13.399 $ 15.427
Number of Units Outstanding, End of Period 62 128,295 253,189 318,205 325,314 267,235
- -------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 10.662 $ 13.437 $ 15.137 $ 16.394 $ 18.769
Accumulation Unit Value, End of Period $10.662 $ 13.437 $ 15.137 $ 16.394 $ 18.769 $ 18.993
Number of Units Outstanding, End of Period 3,897 400,708 755,669 1,052,880 1,148,378 1,130,145
- -------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.000 $ 9.925 $ 10.036 $ 10.319
Accumulation Unit Value, End of Period - $ 10.000 $ 9.925 $ 10.036 $ 10.319 $ 10.640
Number of Units Outstanding, End of Period - 0 437,391 679,120 805,399 838,651
- -------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio -
Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.069 $ 13.960 $ 15.169 $ 16.791 $ 18.365
Accumulation Unit Value, End of Period $11.069 $ 13.960 $ 15.169 $ 16.791 $ 18.365 $ 19.286
Number of Units Outstanding, End of Period 33 23,912 159,393 269,922 347,798 364,955
- -------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio -
Class II (4)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.989 $ 11.648 $ 12.945
Accumulation Unit Value, End of Period - - $ 10.989 $ 11.648 $ 12.945 $ 13.206
Number of Units Outstanding, End of Period - - 202,603 888,555 950,381 1,069,714
- -------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.785 $ 12.319 $ 12.660
Accumulation Unit Value, End of Period - - $ 10.785 $ 12.319 $ 12.660 $ 15.233
Number of Units Outstanding, End of Period - - 242,720 220,659 194,105 144,366
- -------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.760 $ 12.265 $ 12.569
Accumulation Unit Value, End of Period - - $ 10.760 $ 12.265 $ 12.569 $ 15.094
Number of Units Outstanding, End of Period - - 76,401 144,014 151,518 140,241
- -------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.000 $ 11.131 $ 12.304 $ 14.758
Accumulation Unit Value, End of Period - $ 10.000 $ 11.131 $ 12.304 $ 14.758 $ 15.992
Number of Units Outstanding, End of Period - 0 130,721 391,691 650,901 703,140
- -------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.853
Accumulation Unit Value, End of Period - - - - $ 9.853 $ 11.924
Number of Units Outstanding, End of Period - - - - 356,563 563,913
- -------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio -
Class II (4)
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 13.621 $ 15.993 $ 17.821 $ 19.674
Accumulation Unit Value, End of Period - $ 13.621 $ 15.993 $ 17.821 $ 19.674 $ 19.994
Number of Units Outstanding, End of Period - 49,008 76,697 119,544 125,802 118,154
- -------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio -
Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.330 $ 12.560 $ 14.965
Accumulation Unit Value, End of Period - - $ 11.330 $ 12.560 $ 14.965 $ 15.930
Number of Units Outstanding, End of Period - - 226,309 209,221 194,883 208,857
- -------------------------------------------------------------------------------------------------------------------
114 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.323 $ 12.535 $ 14.926
Accumulation Unit Value, End of Period - - $ 11.323 $ 12.535 $ 14.926 $ 15.873
Number of Units Outstanding, End of Period - - 123,762 227,659 352,246 433,653
- ------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.710 $ 14.601 $ 19.611 $ 22.602 $ 30.715
Accumulation Unit Value, End of Period $10.710 $ 14.601 $ 19.611 $ 22.602 $ 30.715 $ 25.080
Number of Units Outstanding, End of Period 4,083 143,509 7,395 584,676 637,273 650,191
- ------------------------------------------------------------------------------------------------------------------
* 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, and the Fidelity VIP Contrafund - Service Class 2
Sub-Account, Fidelity VIP Freedom 2010 - Service Class 2 Sub-Account,
Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account, Fidelity VIP Freedom
2030 - Service Class 2 Sub-Account, Fidelity VIP Freedom Income - Service
Class 2 Sub-Account, Fidelity VIP Growth Stock - Service Class 2 Sub-Account,
Fidelity VIP Index 500 - Service Class 2 Sub-Account, Fidelity VIP Mid Cap -
Service Class 2 Sub-Account, FTVIP Mutual Discovery Securities - Class 2
Sub-Account and Van Kampen UIF Mid Cap Growth, Class II Sub-Account, which
were first offered under the Contracts on May 1, 2006. 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 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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
115 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))
Mortality & Expense = 2
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.228
Accumulation Unit Value, End of Period - - - - $10.228 $11.733
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.419
Accumulation Unit Value, End of Period - - - - $10.419 $11.048
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.448
Accumulation Unit Value, End of Period - - - - $10.448 $11.237
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.457
Accumulation Unit Value, End of Period - - - - $10.457 $11.360
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.310
Accumulation Unit Value, End of Period - - - - $10.310 $10.679
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.706
Accumulation Unit Value, End of Period - - - - $ 9.706 $11.610
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.779
Accumulation Unit Value, End of Period - - - - $10.779 $11.088
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.838
Accumulation Unit Value, End of Period - - - - $ 9.838 $11.097
Number of Units Outstanding, End of Period - - - - 709 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.698 $13.341 $14.434 $14.615 $16.691
Accumulation Unit Value, End of Period - $13.341 $14.434 $14.615 $16.691 $15.718
Number of Units Outstanding, End of Period - 3,763 5,784 5,058 4,637 4,538
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.194 $11.126 $12.868
Accumulation Unit Value, End of Period - - $11.194 $11.126 $12.868 $13.057
Number of Units Outstanding, End of Period - - 119 1,886 1,638 1,622
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.509 $10.389 $11.269
Accumulation Unit Value, End of Period - - $10.509 $10.389 $11.269 $11.708
Number of Units Outstanding, End of Period - - 60 1,272 1,792 1,763
- -------------------------------------------------------------------------------------------------------
116 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small - Mid Cap Growth Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.821 $15.485 $16.884 $17.306 $18.400
Accumulation Unit Value, End of Period - $15.485 $16.884 $17.306 $18.400 $20.018
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.039 $14.507 $17.559 $18.682 $21.377
Accumulation Unit Value, End of Period - $14.507 $17.559 $18.682 $21.377 $20.408
Number of Units Outstanding, End of Period - 7,052 4,525 3,877 3,743 3,681
- ----------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.211 $10.228 $10.406
Accumulation Unit Value, End of Period - - $10.211 $10.228 $10.406 $10.850
Number of Units Outstanding, End of Period - - 518 1,905 1,858 1,879
- ----------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.974
Accumulation Unit Value, End of Period - - - - $10.974 $12.004
Number of Units Outstanding, End of Period - - - - 0 0
- ----------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.599 $12.638 $13.923 $15.057 $17.435
Accumulation Unit Value, End of Period - $12.638 $13.923 $15.057 $17.435 $17.644
Number of Units Outstanding, End of Period - 12,747 12,480 13,367 12,578 12,151
- ----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.674 $16.810 $20.505 $25.559 $32.024
Accumulation Unit Value, End of Period - $16.810 $20.505 $25.559 $32.024 $40.334
Number of Units Outstanding, End of Period - 0 0 282 282 281
- ----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.377 $13.547 $15.705 $16.925 $20.105
Accumulation Unit Value, End of Period - $13.547 $15.705 $16.925 $20.105 $22.702
Number of Units Outstanding, End of Period - 285 580 1,448 1,415 1,379
- ----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.583 $12.839 $14.409 $13.660 $15.069
Accumulation Unit Value, End of Period - $12.839 $14.409 $13.660 $15.069 $16.358
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.895 $11.398 $12.782
Accumulation Unit Value, End of Period - - $10.895 $11.398 $12.782 $13.341
Number of Units Outstanding, End of Period - - 58 692 693 673
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.347 $10.253 $10.965
Accumulation Unit Value, End of Period - - $10.347 $10.253 $10.965 $11.387
Number of Units Outstanding, End of Period - - 0 260 516 513
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.880 $10.988 $12.604
Accumulation Unit Value, End of Period - - $10.880 $10.988 $12.604 $12.750
Number of Units Outstanding, End of Period - - 1,259 1,565 1,490 2,366
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.127 $11.388 $12.018
Accumulation Unit Value, End of Period - - $11.127 $11.388 $12.018 $14.255
Number of Units Outstanding, End of Period - - 0 27 0 603
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.110 $11.761 $12.912
Accumulation Unit Value, End of Period - - $11.110 $11.761 $12.912 $12.701
Number of Units Outstanding, End of Period - - 1,275 1,271 1,298 1,209
- ----------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.337 $12.344 $14.419 $15.795 $15.867
Accumulation Unit Value, End of Period - $12.344 $14.419 $15.795 $15.867 $16.455
Number of Units Outstanding, End of Period - 678 677 834 832 831
- ----------------------------------------------------------------------------------------------------------------
117 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.104 $13.045 $14.009 $14.206 $15.405
Accumulation Unit Value, End of Period - $13.045 $14.009 $14.206 $15.405 $15.591
Number of Units Outstanding, End of Period - 973 3,172 3,195 3,150 3,216
- -------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $10.000 $10.095 $10.105 $10.371
Accumulation Unit Value, End of Period - - $10.095 $10.105 $10.371 $10.558
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.000 $12.248 $12.772 $13.100 $13.799
Accumulation Unit Value, End of Period - $12.248 $12.772 $13.100 $13.799 $15.365
Number of Units Outstanding, End of Period - 33 1,597 838 978 957
- -------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.079 $14.181 $16.489 $18.397 $21.119
Accumulation Unit Value, End of Period - $14.181 $16.489 $18.397 $21.119 $21.910
Number of Units Outstanding, End of Period - 237 227 575 571 738
- -------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.727 $12.909 $13.729 $13.698 $14.636
Accumulation Unit Value, End of Period - $12.909 $13.729 $13.698 $14.636 $14.246
Number of Units Outstanding, End of Period - 1,353 4,420 4,804 4,537 4,579
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.460 $12.586 $13.437 $13.898 $15.601
Accumulation Unit Value, End of Period - $12.586 $13.437 $13.898 $15.601 $15.890
Number of Units Outstanding, End of Period - 2,396 4,635 5,645 5,949 5,788
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.710 $14.608 $17.029 $18.275 $20.496
Accumulation Unit Value, End of Period - $14.608 $17.029 $18.275 $20.496 $19.766
Number of Units Outstanding, End of Period - 2,493 1,308 1,603 1,193 1,204
- -------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.243 $12.091 $12.824 $12.855 $13.484
Accumulation Unit Value, End of Period - $12.091 $12.824 $12.855 $13.484 $14.446
Number of Units Outstanding, End of Period - 4,270 8,589 10,133 10,777 10,148
- -------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.748 $12.385 $13.218 $13.831 $15.268
Accumulation Unit Value, End of Period - $12.385 $13.218 $13.831 $15.268 $15.371
Number of Units Outstanding, End of Period - 0 116 2,636 2,800 2,792
- -------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.989 $13.454 $14.621 $15.050 $17.064
Accumulation Unit Value, End of Period - $13.454 $14.621 $15.050 $17.064 $15.680
Number of Units Outstanding, End of Period - 1,648 1,792 2,221 2,310 2,411
- -------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.230 $11.260 $11.798 $13.063 $13.135
Accumulation Unit Value, End of Period - $11.260 $11.798 $13.063 $13.135 $12.769
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.861 $13.294 $14.374 $14.495 $15.671
Accumulation Unit Value, End of Period - $13.294 $14.374 $14.495 $15.671 $15.754
Number of Units Outstanding, End of Period - 1,125 4,411 3,459 3,201 3,211
- -------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.352 $10.403 $10.626 $10.639 $10.877
Accumulation Unit Value, End of Period - $10.403 $10.626 $10.639 $10.877 $11.194
Number of Units Outstanding, End of Period - 2,859 10,273 11,645 12,594 12,384
- -------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.571 $13.331 $15.151 $16.628 $20.774
Accumulation Unit Value, End of Period - $13.331 $15.151 $16.628 $20.774 $22.016
Number of Units Outstanding, End of Period - 3,933 1,561 1,446 1,480 1,750
- -------------------------------------------------------------------------------------------------------
118 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.688 $12.942 $14.259 $15.176 $16.913
Accumulation Unit Value, End of Period - $12.942 $14.259 $15.176 $16.913 $15.686
Number of Units Outstanding, End of Period - 417 3,302 2,975 2,889 2,800
- ------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period - $9.93 3 $ 9.815 $ 9.664 $ 9.692 $ 9.897
Accumulation Unit Value, End of Period - $ 9.815 $ 9.664 $ 9.692 $ 9.897 $10.142
Number of Units Outstanding, End of Period - 158 7,242 8,142 9,943 8,870
- ------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.975 $13.445 $14.506 $15.609 $16.574
Accumulation Unit Value, End of Period - $13.445 $14.506 $15.609 $16.574 $17.140
Number of Units Outstanding, End of Period - 196 489 82 80 76
- ------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.317 $14.518 $16.391 $16.978 $19.267
Accumulation Unit Value, End of Period - $14.518 $16.391 $16.978 $19.267 $17.922
Number of Units Outstanding, End of Period - 107 948 905 1,051 1,086
- ------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.837 $13.046 $13.725 $14.098 $15.350
Accumulation Unit Value, End of Period - $13.046 $13.725 $14.098 $15.350 $15.096
Number of Units Outstanding, End of Period - 124 580 619 639 661
- ------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period - $10.678 $12.037 $12.740 $12.960 $14.188
Accumulation Unit Value, End of Period - $12.037 $12.740 $12.960 $14.188 $14.008
Number of Units Outstanding, End of Period - 4,283 5,947 4,812 4,957 5,071
- ------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $11.642 $14.004 $16.656 $17.690 $21.981
Accumulation Unit Value, End of Period - $14.004 $16.656 $17.690 $21.981 $25.785
Number of Units Outstanding, End of Period - 118 265 261 253 223
- ------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.794 $13.510 $15.673 $17.194 $17.735
Accumulation Unit Value, End of Period - $13.510 $15.673 $17.194 $17.735 $18.005
Number of Units Outstanding, End of Period - 434 969 524 528 523
- ------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.574 $12.351 $12.688 $13.118 $13.529
Accumulation Unit Value, End of Period - $12.351 $12.688 $13.118 $13.529 $13.961
Number of Units Outstanding, End of Period - 5,778 2,080 2,864 3,165 3,139
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.084 $12.047 $12.364
Accumulation Unit Value, End of Period - - $11.084 $12.047 $12.364 $14.220
Number of Units Outstanding, End of Period - - 1,694 1,655 1,701 1,542
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $10.000 $11.297 $11.505 $13.059
Accumulation Unit Value, End of Period - - $11.297 $11.505 $13.059 $12.474
Number of Units Outstanding, End of Period - - 0 232 434 1,335
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 9.925 $11.693 $12.212 $12.858 $12.907
Accumulation Unit Value, End of Period - $11.693 $12.212 $12.858 $12.907 $14.724
Number of Units Outstanding, End of Period - 1,278 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.775 $13.304 $14.850 $15.937 $18.080
Accumulation Unit Value, End of Period - $13.304 $14.850 $15.937 $18.080 $18.128
Number of Units Outstanding, End of Period - 1,395 1,131 849 980 1,006
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $ 9.835 $ 9.854 $10.040
Accumulation Unit Value, End of Period - $10.000 $ 9.835 $ 9.854 $10.040 $10.257
Number of Units Outstanding, End of Period - 0 4,172 3,349 2,852 2,651
- ------------------------------------------------------------------------------------------------------
119 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $12.285 $13.821 $14.881 $16.322 $17.691
Accumulation Unit Value, End of Period - $13.821 $14.881 $16.322 $17.691 $18.407
Number of Units Outstanding, End of Period - 0 1,477 1,382 1,351 1,247
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.922 $11.472 $12.633
Accumulation Unit Value, End of Period - - $10.922 $11.472 $12.633 $12.770
Number of Units Outstanding, End of Period - - 0 222 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.719 $12.133 $12.355
Accumulation Unit Value, End of Period - - $10.719 $12.133 $12.355 $14.730
Number of Units Outstanding, End of Period - - 388 407 443 430
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.694 $12.080 $12.266
Accumulation Unit Value, End of Period - - $10.694 $12.080 $12.266 $14.595
Number of Units Outstanding, End of Period - - 1,255 1,700 1,083 864
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $11.030 $12.081 $14.359
Accumulation Unit Value, End of Period - $10.000 $11.030 $12.081 $14.359 $15.417
Number of Units Outstanding, End of Period - 0 0 0 475 475
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.793
Accumulation Unit Value, End of Period - - - - $ 9.793 $11.743
Number of Units Outstanding, End of Period - - - - 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $13.538 $15.751 $17.392 $19.025
Accumulation Unit Value, End of Period - $13.538 $15.751 $17.392 $19.025 $19.158
Number of Units Outstanding, End of Period - 1,345 1,461 1,402 1,359 1,371
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.260 $12.370 $14.605
Accumulation Unit Value, End of Period - - $11.260 $12.370 $14.605 $15.404
Number of Units Outstanding, End of Period - - 1,108 1,052 952 928
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.254 $12.345 $14.566
Accumulation Unit Value, End of Period - - $11.254 $12.345 $14.566 $15.348
Number of Units Outstanding, End of Period - - 1,042 1,564 1,463 1,384
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $11.376 $14.455 $19.239 $21.972 $29.588
Accumulation Unit Value, End of Period - $14.455 $19.239 $21.972 $29.588 $23.938
Number of Units Outstanding, End of Period - 1,499 2,484 2,279 1,822 2,051
- ----------------------------------------------------------------------------------------------------------
* 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,
and the Fidelity VIP Contrafund - Service Class 2 Sub-Account, Fidelity VIP
Freedom 2010 - Service Class 2 Sub-Account, Fidelity VIP Freedom 2020 -
Service Class 2 Sub-Account, Fidelity VIP Freedom 2030 - Service Class 2
Sub-Account, Fidelity VIP Freedom Income - Service Class 2 Sub-Account,
Fidelity VIP Growth Stock - Service Class 2 Sub-Account, Fidelity VIP Index
500 - Service Class 2 Sub-Account, Fidelity VIP Mid Cap - Service Class 2
Sub-Account, FTVIP Mutual Discovery Securities - Class 2 Sub-Account and Van
Kampen UIF Mid Cap Growth, Class II Sub-Account, which were first offered
under the Contracts on May 1, 2006. 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 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,
120 PROSPECTUS
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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
121 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)
Mortality & Expense = 1.4
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.270
Accumulation Unit Value, End of Period - - - - $ 10.270 $ 11.854
Number of Units Outstanding, End of Period - - - - 283,913 439,032
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.462
Accumulation Unit Value, End of Period - - - - $ 10.462 $ 11.161
Number of Units Outstanding, End of Period - - - - 4,820 4,337
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.491
Accumulation Unit Value, End of Period - - - - $ 10.491 $ 11.353
Number of Units Outstanding, End of Period - - - - 3,082 24,445
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.500
Accumulation Unit Value, End of Period - - - - $ 10.500 $ 11.477
Number of Units Outstanding, End of Period - - - - 11,481 15,501
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.352
Accumulation Unit Value, End of Period - - - - $ 10.352 $ 10.789
Number of Units Outstanding, End of Period - - - - 519 26,730
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.746
Accumulation Unit Value, End of Period - - - - $ 9.746 $ 11.730
Number of Units Outstanding, End of Period - - - - 5,960 9,721
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.824
Accumulation Unit Value, End of Period - - - - $ 10.824 $ 11.203
Number of Units Outstanding, End of Period - - - - 20,407 123,148
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.879
Accumulation Unit Value, End of Period - - - - $ 9.879 $ 11.212
Number of Units Outstanding, End of Period - - - - 86,590 104,391
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.853 $ 13.425 $ 14.614 $ 14.888 $ 17.107
Accumulation Unit Value, End of Period $10.853 $ 13.425 $ 14.614 $ 14.888 $ 17.107 $ 16.210
Number of Units Outstanding, End of Period 903 204,532 239,720 216,067 540,890 496,501
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.240 $ 11.240 $ 13.079
Accumulation Unit Value, End of Period - - $ 11.240 $ 11.240 $ 13.079 $ 13.354
Number of Units Outstanding, End of Period - - 20,529 107,691 1,218,293 1,368,496
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.525 $ 10.468 $ 11.425
Accumulation Unit Value, End of Period - - $ 10.525 $ 10.468 $ 11.425 $ 11.943
Number of Units Outstanding, End of Period - - 5,010 53,966 762,291 867,606
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund -
Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.538 $ 15.583 $ 17.095 $ 17.630 $ 18.858
Accumulation Unit Value, End of Period $11.538 $ 15.583 $ 17.095 $ 17.630 $ 18.858 $ 20.643
Number of Units Outstanding, End of Period 290 12,058 23,996 21,758 10,502 7,403
- ------------------------------------------------------------------------------------------------------------------
122 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 11.228 $ 14.599 $ 17.778 $ 19.031 $ 21.909
Accumulation Unit Value, End of Period $11.228 $ 14.599 $ 17.778 $ 19.031 $ 21.909 $ 21.046
Number of Units Outstanding, End of Period 1,221 109,873 78,714 91,305 293,264 271,427
- ----------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.253 $ 10.333 $ 10.577
Accumulation Unit Value, End of Period - - $ 10.253 $ 10.333 $ 10.577 $ 11.096
Number of Units Outstanding, End of Period - - 9,294 19,913 187,553 248,011
- ----------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 11.019
Accumulation Unit Value, End of Period - - - - $ 11.019 $ 12.127
Number of Units Outstanding, End of Period - - - - 119,365 189,293
- ----------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.327 $ 12.718 $ 14.097 $ 15.338 $ 17.869
Accumulation Unit Value, End of Period $10.327 $ 12.718 $ 14.097 $ 15.338 $ 17.869 $ 18.195
Number of Units Outstanding, End of Period 4,512 203,839 154,189 187,550 682,906 703,665
- ----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 11.236 $ 16.917 $ 20.762 $ 26.037 $ 32.822
Accumulation Unit Value, End of Period $11.236 $ 16.917 $ 20.762 $ 26.037 $ 32.822 $ 41.594
Number of Units Outstanding, End of Period 101 58,107 14,136 17,133 112,374 130,198
- ----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.477 $ 13.633 $ 15.902 $ 17.241 $ 20.606
Accumulation Unit Value, End of Period $10.477 $ 13.633 $ 15.902 $ 17.241 $ 20.606 $ 23.411
Number of Units Outstanding, End of Period 1,484 79,873 59,175 93,972 530,191 597,641
- ----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.723 $ 12.921 $ 14.589 $ 13.916 $ 15.444
Accumulation Unit Value, End of Period $10.723 $ 12.921 $ 14.589 $ 13.916 $ 15.444 $ 16.870
Number of Units Outstanding, End of Period 0 3,305 8,097 7,980 3,331 3,277
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.912 $ 11.485 $ 12.958
Accumulation Unit Value, End of Period - - $ 10.912 $ 11.485 $ 12.958 $ 13.608
Number of Units Outstanding, End of Period - - 5,559 7,084 137,579 130,324
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.363 $ 10.332 $ 11.116
Accumulation Unit Value, End of Period - - $ 10.363 $ 10.332 $ 11.116 $ 11.615
Number of Units Outstanding, End of Period - - 5,743 42,214 348,673 442,802
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.896 $ 11.072 $ 12.778
Accumulation Unit Value, End of Period - - $ 10.896 $ 11.072 $ 12.778 $ 13.006
Number of Units Outstanding, End of Period - - 1,993 40,840 435,257 437,477
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.144 $ 11.475 $ 12.184
Accumulation Unit Value, End of Period - - $ 11.144 $ 11.475 $ 12.184 $ 14.541
Number of Units Outstanding, End of Period - - 268 7,646 104,562 150,622
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.127 $ 11.851 $ 13.090
Accumulation Unit Value, End of Period - - $ 11.127 $ 11.851 $ 13.090 $ 12.955
Number of Units Outstanding, End of Period - - 1,679 48,962 439,310 414,136
- ----------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.063 $ 12.422 $ 14.600 $ 16.090 $ 16.263
Accumulation Unit Value, End of Period $10.063 $ 12.422 $ 14.600 $ 16.090 $ 16.263 $ 16.969
Number of Units Outstanding, End of Period 6 43,239 24,359 27,814 59,133 58,286
- ----------------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.699 $ 13.128 $ 14.184 $ 14.472 $ 15.789
Accumulation Unit Value, End of Period $10.699 $ 13.128 $ 14.184 $ 14.472 $ 15.789 $ 16.078
Number of Units Outstanding, End of Period 381 118,638 99,388 112,333 286,137 289,544
- ----------------------------------------------------------------------------------------------------------------
123 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.110 $ 10.182 $ 10.515
Accumulation Unit Value, End of Period - - $ 10.110 $ 10.182 $ 10.515 $ 10.770
Number of Units Outstanding, End of Period - - 18 6,577 416,500 725,278
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service
Shares
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 12.298 $ 12.903 $ 13.316 $ 14.111
Accumulation Unit Value, End of Period - $ 12.298 $ 12.903 $ 13.316 $ 14.111 $ 15.810
Number of Units Outstanding, End of Period - 127,891 60,080 80,633 831,237 733,219
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.150 $ 14.270 $ 16.695 $ 18.740 $ 21.645
Accumulation Unit Value, End of Period $10.150 $ 14.270 $ 16.695 $ 18.740 $ 21.645 $ 22.595
Number of Units Outstanding, End of Period 1,468 71,158 79,066 73,144 182,436 161,936
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.663 $ 12.991 $ 13.901 $ 13.955 $ 15.000
Accumulation Unit Value, End of Period $10.663 $ 12.991 $ 13.901 $ 13.955 $ 15.000 $ 14.691
Number of Units Outstanding, End of Period 2,578 158,346 108,252 102,339 226,400 214,333
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.179 $ 12.666 $ 13.604 $ 14.157 $ 15.989
Accumulation Unit Value, End of Period $10.179 $ 12.666 $ 13.604 $ 14.157 $ 15.989 $ 16.387
Number of Units Outstanding, End of Period 776 331,015 209,165 230,257 723,778 716,425
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service
Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.356 $ 14.701 $ 17.242 $ 18.617 $ 21.007
Accumulation Unit Value, End of Period $10.356 $ 14.701 $ 17.242 $ 18.617 $ 21.007 $ 20.384
Number of Units Outstanding, End of Period 1,102 95,842 57,383 65,352 277,326 252,656
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.553 $ 12.168 $ 12.984 $ 13.095 $ 13.820
Accumulation Unit Value, End of Period $10.553 $ 12.168 $ 12.984 $ 13.095 $ 13.820 $ 14.898
Number of Units Outstanding, End of Period 2,732 218,046 182,539 227,958 936,505 898,573
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.390 $ 12.464 $ 13.383 $ 14.089 $ 15.649
Accumulation Unit Value, End of Period $10.390 $ 12.464 $ 13.383 $ 14.089 $ 15.649 $ 15.851
Number of Units Outstanding, End of Period 4 31,401 29,830 40,883 130,113 142,847
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.800 $ 13.539 $ 14.804 $ 15.331 $ 17.489
Accumulation Unit Value, End of Period $10.800 $ 13.539 $ 14.804 $ 15.331 $ 17.489 $ 16.170
Number of Units Outstanding, End of Period 3,560 241,997 172,124 162,143 266,435 244,115
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 9.726 $ 11.331 $ 11.945 $ 13.308 $ 13.462
Accumulation Unit Value, End of Period $ 9.726 $ 11.331 $ 11.945 $ 13.308 $ 13.462 $ 13.168
Number of Units Outstanding, End of Period 1,736 43,250 54,726 49,402 40,028 38,972
- ---------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.743 $ 13.378 $ 14.554 $ 14.766 $ 16.062
Accumulation Unit Value, End of Period $10.743 $ 13.378 $ 14.554 $ 14.766 $ 16.062 $ 16.246
Number of Units Outstanding, End of Period 475 120,256 48,270 57,946 300,762 292,179
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.187 $ 10.469 $ 10.759 $ 10.838 $ 11.149
Accumulation Unit Value, End of Period $10.187 $ 10.469 $ 10.759 $ 10.838 $ 11.149 $ 11.544
Number of Units Outstanding, End of Period 5,609 263,037 201,668 232,164 1,001,618 1,052,702
- ---------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.606 $ 13.416 $ 15.341 $ 16.939 $ 21.291
Accumulation Unit Value, End of Period $10.606 $ 13.416 $ 15.341 $ 16.939 $ 21.291 $ 22.704
Number of Units Outstanding, End of Period 683 57,398 79,696 90,776 244,922 205,176
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.409 $ 13.024 $ 14.437 $ 15.460 $ 17.334
Accumulation Unit Value, End of Period $10.409 $ 13.024 $ 14.437 $ 15.460 $ 17.334 $ 16.176
Number of Units Outstanding, End of Period 302 46,132 19,447 25,617 114,672 92,519
- ---------------------------------------------------------------------------------------------------------------
124 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 9.987 $ 9.878 $ 9.785 $ 9.873 $ 10.144
Accumulation Unit Value, End of Period $ 9.987 $ 9.878 $ 9.785 $ 9.873 $ 10.144 $ 10.459
Number of Units Outstanding, End of Period 5,174 199,617 78,052 106,156 1,326,605 1,230,632
- ------------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.381 $ 13.530 $ 14.687 $ 15.900 $ 16.987
Accumulation Unit Value, End of Period $10.381 $ 13.530 $ 14.687 $ 15.900 $ 16.987 $ 17.675
Number of Units Outstanding, End of Period 0 57,917 29,678 28,046 56,689 53,275
- ------------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 11.206 $ 14.610 $ 16.596 $ 17.296 $ 19.747
Accumulation Unit Value, End of Period $11.206 $ 14.610 $ 16.596 $ 17.296 $ 19.747 $ 18.481
Number of Units Outstanding, End of Period 1,048 58,917 47,472 78,202 342,022 367,814
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.644 $ 13.128 $ 13.896 $ 14.361 $ 15.733
Accumulation Unit Value, End of Period $10.644 $ 13.128 $ 13.896 $ 14.361 $ 15.733 $ 15.568
Number of Units Outstanding, End of Period 66 38,525 25,803 22,777 17,578 16,380
- ------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.517 $ 12.113 $ 12.899 $ 13.202 $ 14.542
Accumulation Unit Value, End of Period $10.517 $ 12.113 $ 12.899 $ 13.202 $ 14.542 $ 14.446
Number of Units Outstanding, End of Period 4,392 147,503 131,257 148,439 234,261 206,764
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.472 $ 14.093 $ 16.864 $ 18.020 $ 22.529
Accumulation Unit Value, End of Period $11.472 $ 14.093 $ 16.864 $ 18.020 $ 22.529 $ 26.590
Number of Units Outstanding, End of Period 0 14 7,591 6,607 37,029 34,126
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.374 $ 13.596 $ 15.869 $ 17.515 $ 18.177
Accumulation Unit Value, End of Period $10.374 $ 13.596 $ 15.869 $ 17.515 $ 18.177 $ 18.568
Number of Units Outstanding, End of Period 66 32,814 37,929 34,660 43,154 38,321
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.111 $ 12.429 $ 12.847 $ 13.363 $ 13.866
Accumulation Unit Value, End of Period $10.111 $ 12.429 $ 12.847 $ 13.363 $ 13.866 $ 14.398
Number of Units Outstanding, End of Period 2,714 204,603 232,660 220,448 183,695 171,556
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.130 $ 12.171 $ 12.567
Accumulation Unit Value, End of Period - - $ 11.130 $ 12.171 $ 12.567 $ 14.543
Number of Units Outstanding, End of Period - - 46,225 43,238 40,593 31,988
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.343 $ 11.622 $ 13.273
Accumulation Unit Value, End of Period - - $ 11.343 $ 11.622 $ 13.273 $ 12.757
Number of Units Outstanding, End of Period - - 14,269 47,730 633,111 537,385
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 9.412 $ 11.767 $ 12.365 $ 13.098 $ 13.229
Accumulation Unit Value, End of Period $ 9.412 $ 11.767 $ 12.365 $ 13.098 $ 13.229 $ 15.184
Number of Units Outstanding, End of Period 226 49,664 54,076 53,013 171,720 151,568
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 10.655 $ 13.388 $ 15.035 $ 16.235 $ 18.530
Accumulation Unit Value, End of Period $10.655 $ 13.388 $ 15.035 $ 16.235 $ 18.530 $ 18.694
Number of Units Outstanding, End of Period 3,194 152,359 119,515 127,047 443,130 418,529
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.000 $ 9.895 $ 9.975 $ 10.226
Accumulation Unit Value, End of Period - $ 10.000 $ 9.895 $ 9.975 $ 10.226 $ 10.511
Number of Units Outstanding, End of Period - 0 66,137 118,151 302,731 398,400
- ------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio -
Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.062 $ 13.908 $ 15.067 $ 16.627 $ 18.131
Accumulation Unit Value, End of Period $11.062 $ 13.908 $ 15.067 $ 16.627 $ 18.131 $ 18.983
Number of Units Outstanding, End of Period 0 21,280 16,192 18,091 100,034 96,018
- ------------------------------------------------------------------------------------------------------------------
125 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.967 $ 11.589 $ 12.840
Accumulation Unit Value, End of Period - - $10.967 $11.589 $ 12.840 $ 13.060
Number of Units Outstanding, End of Period - - 16,162 29,002 280,682 347,010
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.763 $ 12.257 $ 12.558
Accumulation Unit Value, End of Period - - $10.763 $12.257 $ 12.558 $ 15.064
Number of Units Outstanding, End of Period - - 24,252 26,735 173,605 150,677
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.738 $ 12.203 $ 12.468
Accumulation Unit Value, End of Period - - $10.738 $12.203 $ 12.468 $ 14.926
Number of Units Outstanding, End of Period - - 9,011 10,641 124,471 106,403
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $11.098 $ 12.230 $ 14.625
Accumulation Unit Value, End of Period - $10.000 $11.098 $12.230 $ 14.625 $ 15.798
Number of Units Outstanding, End of Period - 0 14,221 27,462 272,665 294,419
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.833
Accumulation Unit Value, End of Period - - - - $ 9.833 $ 11.864
Number of Units Outstanding, End of Period - - - - 92,016 215,863
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $13.593 $15.912 $ 17.677 $ 19.456
Accumulation Unit Value, End of Period - $13.593 $15.912 $17.677 $ 19.456 $ 19.712
Number of Units Outstanding, End of Period - 20,071 19,130 17,888 35,605 38,349
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.306 $ 12.497 $ 14.844
Accumulation Unit Value, End of Period - - $11.306 $12.497 $ 14.844 $ 15.753
Number of Units Outstanding, End of Period - - 58,610 51,537 112,320 100,885
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.300 $ 12.472 $ 14.805
Accumulation Unit Value, End of Period - - $11.300 $12.472 $ 14.805 $ 15.697
Number of Units Outstanding, End of Period - - 14,404 20,338 114,995 163,770
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $10.703 $14.547 $19.479 $ 22.382 $ 30.325
Accumulation Unit Value, End of Period $10.703 $14.547 $19.479 $22.382 $ 30.325 $ 24.686
Number of Units Outstanding, End of Period 1,077 58,906 58,603 68,172 181,974 156,400
- ---------------------------------------------------------------------------------------------------------------
* 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,
and the Fidelity VIP Contrafund - Service Class 2 Sub-Account, Fidelity VIP
Freedom 2010 - Service Class 2 Sub-Account, Fidelity VIP Freedom 2020 -
Service Class 2 Sub-Account, Fidelity VIP Freedom 2030 - Service Class 2
Sub-Account, Fidelity VIP Freedom Income - Service Class 2 Sub-Account,
Fidelity VIP Growth Stock - Service Class 2 Sub-Account, Fidelity VIP Index
500 - Service Class 2 Sub-Account, Fidelity VIP Mid Cap - Service Class 2
Sub-Account, FTVIP Mutual Discovery Securities - Class 2 Sub-Account and Van
Kampen UIF Mid Cap Growth, Class II Sub-Account, which were first offered
under the Contracts on May 1, 2006. 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 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.
(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-Accounts are no longer available
126 PROSPECTUS
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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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 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))
Mortality & Expense = 2.3
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.207
Accumulation Unit Value, End of Period - - - - $10.207 $11.673
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.397
Accumulation Unit Value, End of Period - - - - $10.397 $10.991
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.427
Accumulation Unit Value, End of Period - - - - $10.427 $11.179
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.436
Accumulation Unit Value, End of Period - - - - $10.436 $11.302
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.289
Accumulation Unit Value, End of Period - - - - $10.289 $10.624
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.686
Accumulation Unit Value, End of Period - - - - $ 9.686 $11.551
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.757
Accumulation Unit Value, End of Period - - - - $10.757 $11.031
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.818
Accumulation Unit Value, End of Period - - - - $ 9.818 $11.040
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.680 $13.292 $14.336 $14.472 $16.477
Accumulation Unit Value, End of Period - $13.292 $14.336 $14.472 $16.477 $15.469
Number of Units Outstanding, End of Period - 794 1,584 1,014 963 1,185
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.171 $11.069 $12.763
Accumulation Unit Value, End of Period - - $11.171 $11.069 $12.763 $12.911
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.501 $10.349 $11.192
Accumulation Unit Value, End of Period - - $10.501 $10.349 $11.192 $11.592
Number of Units Outstanding, End of Period - - 0 7,469 6,505 6,371
- -------------------------------------------------------------------------------------------------------
128 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.801 $15.428 $16.770 $17.137 $18.164
Accumulation Unit Value, End of Period - $15.428 $16.770 $17.137 $18.164 $19.700
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.021 $14.453 $17.440 $18.498 $21.102
Accumulation Unit Value, End of Period - $14.453 $17.440 $18.498 $21.102 $20.084
Number of Units Outstanding, End of Period - 5,633 5,461 5,412 4,871 4,745
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.190 $10.176 $10.322
Accumulation Unit Value, End of Period - - $10.190 $10.176 $10.322 $10.728
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.951
Accumulation Unit Value, End of Period - - - - $10.951 $11.942
Number of Units Outstanding, End of Period - - - - 0 200
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.581 $12.591 $13.829 $14.909 $17.211
Accumulation Unit Value, End of Period - $12.591 $13.829 $14.909 $17.211 $17.364
Number of Units Outstanding, End of Period - 0 404 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.655 $16.748 $20.367 $25.309 $31.613
Accumulation Unit Value, End of Period - $16.748 $20.367 $25.309 $31.613 $39.694
Number of Units Outstanding, End of Period - 0 274 241 34 98
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.359 $13.497 $15.599 $16.759 $19.847
Accumulation Unit Value, End of Period - $13.497 $15.599 $16.759 $19.847 $22.342
Number of Units Outstanding, End of Period - 785 785 3,619 3,197 3,034
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.563 $12.792 $14.312 $13.526 $14.875
Accumulation Unit Value, End of Period - $12.792 $14.312 $13.526 $14.875 $16.099
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.887 $11.355 $12.694
Accumulation Unit Value, End of Period - - $10.887 $11.355 $12.694 $13.208
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.339 $10.214 $10.890
Accumulation Unit Value, End of Period - - $10.339 $10.214 $10.890 $11.274
Number of Units Outstanding, End of Period - - 0 3,358 3,659 3,579
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.871 $10.946 $12.518
Accumulation Unit Value, End of Period - - $10.871 $10.946 $12.518 $12.624
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.119 $11.344 $11.936
Accumulation Unit Value, End of Period - - $11.119 $11.344 $11.936 $14.114
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.102 $11.716 $12.823
Accumulation Unit Value, End of Period - - $11.102 $11.716 $12.823 $12.574
Number of Units Outstanding, End of Period - - 0 4,347 3,504 3,802
- --------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.319 $12.298 $14.322 $15.640 $15.664
Accumulation Unit Value, End of Period - $12.298 $14.322 $15.640 $15.664 $16.193
Number of Units Outstanding, End of Period - 4,939 4,736 4,663 4,465 4,277
- --------------------------------------------------------------------------------------------------------------
129 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.085 $12.997 $13.914 $14.067 $15.207
Accumulation Unit Value, End of Period - $12.997 $13.914 $14.067 $15.207 $15.343
Number of Units Outstanding, End of Period - 0 468 468 469 460
- -------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $10.000 $10.087 $10.066 $10.300
Accumulation Unit Value, End of Period - - $10.087 $10.066 $10.300 $10.453
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.000 $12.222 $12.707 $12.994 $13.644
Accumulation Unit Value, End of Period - $12.222 $12.707 $12.994 $13.644 $15.146
Number of Units Outstanding, End of Period - 0 1,319 3,573 3,427 3,202
- -------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.062 $14.128 $16.377 $18.216 $20.848
Accumulation Unit Value, End of Period - $14.128 $16.377 $18.216 $20.848 $21.563
Number of Units Outstanding, End of Period - 0 0 152 140 138
- -------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.708 $12.861 $13.636 $13.564 $14.448
Accumulation Unit Value, End of Period - $12.861 $13.636 $13.564 $14.448 $14.020
Number of Units Outstanding, End of Period - 3,096 3,274 3,612 3,461 3,340
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.442 $12.540 $13.346 $13.761 $15.400
Accumulation Unit Value, End of Period - $12.540 $13.346 $13.761 $15.400 $15.638
Number of Units Outstanding, End of Period - 2,031 1,958 8,119 6,907 6,790
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.692 $14.554 $16.914 $18.096 $20.234
Accumulation Unit Value, End of Period - $14.554 $16.914 $18.096 $20.234 $19.452
Number of Units Outstanding, End of Period - 715 1,046 2,028 1,714 1,740
- -------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.224 $12.046 $12.737 $12.729 $13.310
Accumulation Unit Value, End of Period - $12.046 $12.737 $12.729 $13.310 $14.217
Number of Units Outstanding, End of Period - 4,565 6,173 7,837 8,414 7,968
- -------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.730 $12.339 $13.128 $13.695 $15.072
Accumulation Unit Value, End of Period - $12.339 $13.128 $13.695 $15.072 $15.127
Number of Units Outstanding, End of Period - 0 0 750 736 726
- -------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.971 $13.404 $14.522 $14.902 $16.845
Accumulation Unit Value, End of Period - $13.404 $14.522 $14.902 $16.845 $15.431
Number of Units Outstanding, End of Period - 263 212 179 148 132
- -------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.213 $11.218 $11.718 $12.935 $12.966
Accumulation Unit Value, End of Period - $11.218 $11.718 $12.935 $12.966 $12.566
Number of Units Outstanding, End of Period - 116 96 80 65 53
- -------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.841 $13.245 $14.277 $14.353 $15.470
Accumulation Unit Value, End of Period - $13.245 $14.277 $14.353 $15.470 $15.504
Number of Units Outstanding, End of Period - 0 391 397 387 405
- -------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.335 $10.364 $10.554 $10.535 $10.738
Accumulation Unit Value, End of Period - $10.364 $10.554 $10.535 $10.738 $11.016
Number of Units Outstanding, End of Period - 1,290 2,104 7,068 7,270 7,160
- -------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.554 $13.282 $15.049 $16.465 $20.507
Accumulation Unit Value, End of Period - $13.282 $15.049 $16.465 $20.507 $21.667
Number of Units Outstanding, End of Period - 15,292 8,870 8,551 8,194 7,989
- -------------------------------------------------------------------------------------------------------
130 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.670 $12.894 $14.163 $15.027 $16.696
Accumulation Unit Value, End of Period - $12.894 $14.163 $15.027 $16.696 $15.437
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period - $ 9.917 $ 9.779 $ 9.598 $ 9.597 $ 9.770
Accumulation Unit Value, End of Period - $ 9.779 $ 9.598 $ 9.597 $ 9.770 $ 9.981
Number of Units Outstanding, End of Period - 1,411 3,015 8,670 9,762 9,632
- ------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.957 $13.395 $14.408 $15.456 $16.362
Accumulation Unit Value, End of Period - $13.395 $14.408 $15.456 $16.362 $16.868
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.298 $14.464 $16.280 $16.812 $19.020
Accumulation Unit Value, End of Period - $14.464 $16.280 $16.812 $19.020 $17.637
Number of Units Outstanding, End of Period - 12,046 13,910 15,326 14,500 14,265
- ------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.819 $12.997 $13.632 $13.960 $15.153
Accumulation Unit Value, End of Period - $12.997 $13.632 $13.960 $15.153 $14.856
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period - $10.660 $11.992 $12.654 $12.833 $14.006
Accumulation Unit Value, End of Period - $11.992 $12.654 $12.833 $14.006 $13.786
Number of Units Outstanding, End of Period - 1,563 1,561 2,112 1,869 1,731
- ------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $11.455 $13.971 $16.543 $17.516 $21.699
Accumulation Unit Value, End of Period - $13.971 $16.543 $17.516 $21.699 $25.376
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.776 $13.460 $15.567 $17.025 $17.507
Accumulation Unit Value, End of Period - $13.460 $15.567 $17.025 $17.507 $17.719
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.557 $12.305 $12.603 $12.989 $13.355
Accumulation Unit Value, End of Period - $12.305 $12.603 $12.989 $13.355 $13.740
Number of Units Outstanding, End of Period - 813 915 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.062 $11.986 $12.263
Accumulation Unit Value, End of Period - - $11.062 $11.986 $12.263 $14.061
Number of Units Outstanding, End of Period - - 1,030 1,030 1,003 955
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $10.000 $11.274 $11.446 $12.952
Accumulation Unit Value, End of Period - - $11.274 $11.446 $12.952 $12.334
Number of Units Outstanding, End of Period - - 0 2,787 2,016 2,145
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 9.909 $11.650 $12.129 $12.732 $12.742
Accumulation Unit Value, End of Period - $11.650 $12.129 $12.732 $12.742 $14.490
Number of Units Outstanding, End of Period - 14,005 16,837 15,428 14,773 14,117
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.757 $13.254 $14.749 $15.781 $17.848
Accumulation Unit Value, End of Period - $13.254 $14.749 $15.781 $17.848 $17.840
Number of Units Outstanding, End of Period - 2,676 2,467 5,528 4,770 4,656
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $ 9.805 $ 9.793 $ 9.948
Accumulation Unit Value, End of Period - $10.000 $ 9.805 $ 9.793 $ 9.948 $10.132
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
131 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $12.265 $13.770 $14.780 $16.162 $17.464
Accumulation Unit Value, End of Period - $13.770 $14.780 $16.162 $17.464 $18.115
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.900 $11.413 $12.530
Accumulation Unit Value, End of Period - - $10.900 $11.413 $12.530 $12.627
Number of Units Outstanding, End of Period - - 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.697 $12.071 $12.254
Accumulation Unit Value, End of Period - - $10.697 $12.071 $12.254 $14.565
Number of Units Outstanding, End of Period - - 3,557 3,407 3,405 3,141
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.672 $12.018 $12.166
Accumulation Unit Value, End of Period - - $10.672 $12.018 $12.166 $14.432
Number of Units Outstanding, End of Period - - 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $10.996 $12.007 $14.228
Accumulation Unit Value, End of Period - $10.000 $10.996 $12.007 $14.228 $15.228
Number of Units Outstanding, End of Period - 0 0 0 0 159
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.772
Accumulation Unit Value, End of Period - - - - $ 9.772 $11.682
Number of Units Outstanding, End of Period - - - - 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $13.510 $15.670 $17.250 $18.813
Accumulation Unit Value, End of Period - $13.510 $15.670 $17.250 $18.813 $18.885
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.237 $12.307 $14.486
Accumulation Unit Value, End of Period - - $11.237 $12.307 $14.486 $15.231
Number of Units Outstanding, End of Period - - 1,038 1,038 1,011 963
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.231 $12.282 $14.447
Accumulation Unit Value, End of Period - - $11.231 $12.282 $14.447 $15.176
Number of Units Outstanding, End of Period - - 0 0 0 153
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $11.357 $14.402 $19.109 $21.756 $29.208
Accumulation Unit Value, End of Period - $14.402 $19.109 $21.756 $29.208 $23.558
Number of Units Outstanding, End of Period - 2,467 2,258 2,395 2,198 2,284
- ----------------------------------------------------------------------------------------------------------
* 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, and the Fidelity VIP
Contrafund - Service Class 2 Sub-Account, Fidelity VIP Freedom 2010 - Service
Class 2 Sub-Account, Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account,
Fidelity VIP Freedom 2030 - Service Class 2 Sub-Account, Fidelity VIP Freedom
Income - Service Class 2 Sub-Account, Fidelity VIP Growth Stock - Service
Class 2 Sub-Account, Fidelity VIP Index 500 - Service Class 2 Sub-Account,
Fidelity VIP Mid Cap - Service Class 2 Sub-Account, FTVIP Mutual Discovery
Securities - Class 2 Sub-Account and Van Kampen UIF Mid Cap Growth, Class II
Sub-Account, which were first offered under the Contracts on May 1, 2006. 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 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
132 PROSPECTUS
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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
133 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)
Mortality & Expense = 1.4
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.270
Accumulation Unit Value, End of Period - - - - $ 10.270 $ 11.854
Number of Units Outstanding, End of Period - - - - 58,931 205,386
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.462
Accumulation Unit Value, End of Period - - - - $ 10.462 $ 11.161
Number of Units Outstanding, End of Period - - - - 22,865 49,421
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.491
Accumulation Unit Value, End of Period - - - - $ 10.491 $ 11.353
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.500
Accumulation Unit Value, End of Period - - - - $ 10.500 $ 11.477
Number of Units Outstanding, End of Period - - - - 4,936 3,177
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.352
Accumulation Unit Value, End of Period - - - - $ 10.352 $ 10.789
Number of Units Outstanding, End of Period - - - - 2,423 4,787
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.746
Accumulation Unit Value, End of Period - - - - $ 9.746 $ 11.730
Number of Units Outstanding, End of Period - - - - 0 1,813
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.824
Accumulation Unit Value, End of Period - - - - $ 10.824 $ 11.203
Number of Units Outstanding, End of Period - - - - 22,952 55,881
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.879
Accumulation Unit Value, End of Period - - - - $ 9.879 $ 11.212
Number of Units Outstanding, End of Period - - - - 9,989 38,987
- -------------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $10.853 $13.425 $ 14.614 $ 14.888 $ 17.107
Accumulation Unit Value, End of Period $10.853 $13.425 $14.614 $ 14.888 $ 17.107 $ 16.210
Number of Units Outstanding, End of Period 1,895 31,028 68,823 79,315 84,562 90,229
- -------------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $ 11.240 $ 11.240 $ 13.079
Accumulation Unit Value, End of Period - - $11.240 $ 11.240 $ 13.079 $ 13.354
Number of Units Outstanding, End of Period - - 22,636 258,448 488,323 651,119
- -------------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $ 10.525 $ 10.468 $ 11.425
Accumulation Unit Value, End of Period - - $10.525 $ 10.468 $ 11.425 $ 11.943
Number of Units Outstanding, End of Period - - 1,153 106,672 209,179 242,913
- -------------------------------------------------------------------------------------------------------------
134 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund -
Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $11.538 $15.583 $ 17.095 $ 17.630 $ 18.858
Accumulation Unit Value, End of Period $11.538 $15.583 $17.095 $ 17.630 $ 18.858 $ 20.643
Number of Units Outstanding, End of Period 0 2,120 1,457 1,685 1,833 1,745
- ---------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $11.228 $14.599 $ 17.778 $ 19.031 $ 21.909
Accumulation Unit Value, End of Period $11.228 $14.599 $17.778 $ 19.031 $ 21.909 $ 21.046
Number of Units Outstanding, End of Period 0 17,710 32,091 56,409 67,453 74,742
- ---------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $ 10.253 $ 10.333 $ 10.577
Accumulation Unit Value, End of Period - - $10.253 $ 10.333 $ 10.577 $ 11.096
Number of Units Outstanding, End of Period - - 4,788 36,809 69,659 71,356
- ---------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 11.019
Accumulation Unit Value, End of Period - - - - $ 11.019 $ 12.127
Number of Units Outstanding, End of Period - - - - 28,256 139,069
- ---------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $10.327 $12.718 $ 14.097 $ 15.338 $ 17.869
Accumulation Unit Value, End of Period $10.327 $12.718 $14.097 $ 15.338 $ 17.869 $ 18.195
Number of Units Outstanding, End of Period 0 51,247 89,468 195,874 248,012 286,267
- ---------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $11.236 $16.917 $ 20.762 $ 26.037 $ 32.822
Accumulation Unit Value, End of Period $11.236 $16.917 $20.762 $ 26.037 $ 32.822 $ 41.594
Number of Units Outstanding, End of Period 0 4,338 10,936 24,121 33,128 21,398
- ---------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $10.477 $13.633 $ 15.902 $ 17.241 $ 20.606
Accumulation Unit Value, End of Period $10.477 $13.633 $15.902 $ 17.241 $ 20.606 $ 23.411
Number of Units Outstanding, End of Period 0 10,738 24,545 131,380 214,900 229,814
- ---------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $10.723 $12.920 $ 14.589 $ 13.916 $ 15.444
Accumulation Unit Value, End of Period $10.723 $12.920 $14.589 $ 13.916 $ 15.444 $ 16.870
Number of Units Outstanding, End of Period 1,921 1,995 2,561 2,729 2,751 2,584
- ---------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $ 10.912 $ 11.485 $ 12.958
Accumulation Unit Value, End of Period - - $10.912 $ 11.485 $ 12.958 $ 13.608
Number of Units Outstanding, End of Period - - 2,680 19,434 33,197 39,496
- ---------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $ 10.363 $ 10.332 $ 11.116
Accumulation Unit Value, End of Period - - $10.363 $ 10.332 $ 11.116 $ 11.615
Number of Units Outstanding, End of Period - - 1,954 64,927 124,486 173,757
- ---------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $ 10.896 $ 11.072 $ 12.778
Accumulation Unit Value, End of Period - - $10.896 $ 11.072 $ 12.778 $ 13.006
Number of Units Outstanding, End of Period - - 7,786 66,461 96,277 122,166
- ---------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $ 11.144 $ 11.475 $ 12.184
Accumulation Unit Value, End of Period - - $11.144 $ 11.475 $ 12.184 $ 14.541
Number of Units Outstanding, End of Period - - 86 6,838 31,720 42,332
- ---------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $ 11.127 $ 11.851 $ 13.090
Accumulation Unit Value, End of Period - - $11.127 $ 11.851 $ 13.090 $ 12.955
Number of Units Outstanding, End of Period - - 2,907 88,785 113,220 133,809
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $10.063 $12.422 $ 14.600 $ 16.090 $ 16.263
Accumulation Unit Value, End of Period $10.063 $12.422 $14.600 $ 16.090 $ 16.263 $ 16.969
Number of Units Outstanding, End of Period 0 8,483 22,403 30,987 40,565 36,754
- ---------------------------------------------------------------------------------------------------------------
135 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $10.699 $13.128 $ 14.184 $ 14.472 $ 15.789
Accumulation Unit Value, End of Period $10.699 $13.128 $14.184 $ 14.472 $ 15.789 $ 16.078
Number of Units Outstanding, End of Period 0 14,806 25,039 40,359 46,580 45,964
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $10.000 $ 10.110 $ 10.182 $ 10.515
Accumulation Unit Value, End of Period - - $10.110 $ 10.182 $ 10.515 $ 10.770
Number of Units Outstanding, End of Period - - 1,900 19,950 131,838 250,642
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.000 $12.298 $ 12.903 $ 13.316 $ 14.111
Accumulation Unit Value, End of Period - $12.298 $12.903 $ 13.316 $ 14.111 $ 15.810
Number of Units Outstanding, End of Period - 16,293 62,821 119,313 148,739 121,790
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $10.150 $14.270 $ 16.695 $ 18.740 $ 21.645
Accumulation Unit Value, End of Period $10.150 $14.270 $16.695 $ 18.740 $ 21.645 $ 22.595
Number of Units Outstanding, End of Period 0 4,146 18,071 21,315 21,514 24,156
- -------------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $10.663 $12.991 $ 13.901 $ 13.955 $ 15.000
Accumulation Unit Value, End of Period $10.663 $12.991 $13.901 $ 13.955 $ 15.000 $ 14.691
Number of Units Outstanding, End of Period 0 12 41,186 48,901 61,033 66,322
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $10.179 $12.666 $ 13.604 $ 14.157 $ 15.989
Accumulation Unit Value, End of Period $10.179 $12.666 $13.604 $ 14.157 $ 15.989 $ 16.387
Number of Units Outstanding, End of Period 1,945 26,782 59,125 140,753 202,184 197,820
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $10.356 $14.701 $ 17.242 $ 18.617 $ 21.007
Accumulation Unit Value, End of Period $10.356 $14.701 $17.242 $ 18.617 $ 21.007 $ 20.384
Number of Units Outstanding, End of Period 0 14,941 25,485 41,748 54,905 54,188
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $10.553 $12.168 $ 12.984 $ 13.095 $ 13.820
Accumulation Unit Value, End of Period $10.553 $12.168 $12.984 $ 13.095 $ 13.820 $ 14.898
Number of Units Outstanding, End of Period 1,928 41,097 77,772 191,974 247,776 297,150
- -------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.390 $12.464 $ 13.383 $ 14.089 $ 15.649
Accumulation Unit Value, End of Period $10.390 $12.464 $13.383 $ 14.089 $ 15.649 $ 15.851
Number of Units Outstanding, End of Period 0 8,988 14,779 22,697 33,202 29,202
- -------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.800 $14.093 $ 14.804 $ 15.331 $ 17.489
Accumulation Unit Value, End of Period $10.800 $14.093 $14.804 $ 15.331 $ 17.489 $ 16.170
Number of Units Outstanding, End of Period 0 2,112 49,986 53,041 51,557 56,846
- -------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 9.726 $11.331 $ 11.945 $ 13.308 $ 13.462
Accumulation Unit Value, End of Period $ 9.726 $11.331 $11.945 $ 13.308 $ 13.462 $ 13.168
Number of Units Outstanding, End of Period 0 978 1,958 2,147 2,250 2,107
- -------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.743 $13.378 $ 14.554 $ 14.766 $ 16.062
Accumulation Unit Value, End of Period $10.743 $13.378 $14.554 $ 14.766 $ 16.062 $ 16.246
Number of Units Outstanding, End of Period 0 20,709 39,241 58,158 84,296 90,170
- -------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.187 $10.469 $ 10.759 $ 10.838 $ 11.149
Accumulation Unit Value, End of Period $10.187 $10.469 $10.759 $ 10.838 $ 11.149 $ 11.544
Number of Units Outstanding, End of Period 0 33,742 65,425 153,673 278,298 316,107
- -------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.606 $13.416 $ 15.341 $ 16.939 $ 21.291
Accumulation Unit Value, End of Period $10.606 $13.416 $15.341 $ 16.939 $ 21.291 $ 22.704
Number of Units Outstanding, End of Period 0 16,560 23,536 34,205 56,149 67,587
- -------------------------------------------------------------------------------------------------------------
136 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.409 $13.024 $ 14.437 $ 15.460 $ 17.334
Accumulation Unit Value, End of Period $10.409 $13.024 $14.437 $ 15.460 $ 17.334 $ 16.176
Number of Units Outstanding, End of Period 0 4,222 5,134 14,206 28,439 33,309
- ------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 9.987 $ 9.878 $ 9.785 $ 9.873 $ 10.144
Accumulation Unit Value, End of Period $ 9.987 $ 9.878 $ 9.785 $ 9.873 $ 10.144 $ 10.459
Number of Units Outstanding, End of Period 0 3,503 25,745 132,095 212,468 333,114
- ------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $10.381 $13.530 $ 14.687 $ 15.900 $ 16.987
Accumulation Unit Value, End of Period $10.381 $13.530 $14.687 $ 15.900 $ 16.987 $ 17.675
Number of Units Outstanding, End of Period 0 4,646 4,607 4,534 4,578 3,706
- ------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $11.206 $14.610 $ 16.596 $ 17.296 $ 19.747
Accumulation Unit Value, End of Period $11.206 $14.610 $16.596 $ 17.296 $ 19.747 $ 18.481
Number of Units Outstanding, End of Period 0 3,413 9,332 52,908 83,473 99,643
- ------------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $10.644 $13.128 $ 13.896 $ 14.361 $ 15.733
Accumulation Unit Value, End of Period $10.644 $13.128 $13.896 $ 14.361 $ 15.733 $ 15.568
Number of Units Outstanding, End of Period 0 2,239 4,387 4,597 4,443 3,226
- ------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.517 $12.113 $ 12.899 $ 13.202 $ 14.542
Accumulation Unit Value, End of Period $10.517 $12.113 $12.899 $ 13.202 $ 14.542 $ 14.446
Number of Units Outstanding, End of Period 0 24,540 64,309 58,344 72,048 67,765
- ------------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $11.472 $14.093 $ 16.864 $ 18.020 $ 22.529
Accumulation Unit Value, End of Period $11.472 $14.093 $16.864 $ 18.020 $ 22.529 $ 26.590
Number of Units Outstanding, End of Period 0 2,112 5,170 5,057 4,787 2,885
- ------------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.374 $13.596 $ 15.869 $ 17.515 $ 18.177
Accumulation Unit Value, End of Period $10.374 $13.596 $15.869 $ 17.515 $ 18.177 $ 18.568
Number of Units Outstanding, End of Period 0 9,417 15,619 12,925 9,150 7,663
- ------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $10.111 $12.429 $ 12.847 $ 13.363 $ 13.866
Accumulation Unit Value, End of Period $10.111 $12.429 $12.847 $ 13.363 $ 13.866 $ 14.398
Number of Units Outstanding, End of Period 0 44,440 54,946 71,627 70,383 64,271
- ------------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $10.000 $ 11.130 $ 12.171 $ 12.567
Accumulation Unit Value, End of Period - - $11.130 $ 12.171 $ 12.567 $ 14.543
Number of Units Outstanding, End of Period - - 5,000 9,550 7,898 7,549
- ------------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $10.000 $ 11.343 $ 11.622 $ 13.273
Accumulation Unit Value, End of Period - - $11.343 $ 11.622 $ 13.273 $ 12.757
Number of Units Outstanding, End of Period - - 29,089 104,771 162,673 166,026
- ------------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 9.412 $11.767 $ 12.365 $ 13.098 $ 13.229
Accumulation Unit Value, End of Period $ 9.412 $11.767 $12.365 $ 13.098 $ 13.229 $ 15.184
Number of Units Outstanding, End of Period 0 4,800 16,427 35,171 43,766 46,533
- ------------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $10.655 $13.388 $ 15.035 $ 16.235 $ 18.530
Accumulation Unit Value, End of Period $10.655 $13.388 $15.035 $ 16.235 $ 18.530 $ 18.694
Number of Units Outstanding, End of Period 0 16,041 55,062 97,713 121,276 125,665
- ------------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $ 9.895 $ 9.975 $ 10.226
Accumulation Unit Value, End of Period - $10.000 $ 9.895 $ 9.975 $ 10.226 $ 10.511
Number of Units Outstanding, End of Period - 0 23,867 76,491 55,566 52,997
- ------------------------------------------------------------------------------------------------------------
137 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $11.062 $13.908 $15.067 $ 16.627 $ 18.131
Accumulation Unit Value, End of Period $11.062 $13.908 $15.067 $16.627 $ 18.131 $ 18.983
Number of Units Outstanding, End of Period 0 2,511 7,583 20,297 24,735 25,013
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.967 $ 11.589 $ 12.840
Accumulation Unit Value, End of Period - - $10.967 $11.589 $ 12.840 $ 13.060
Number of Units Outstanding, End of Period - - 40,892 82,180 139,142 160,968
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.763 $ 12.257 $ 12.558
Accumulation Unit Value, End of Period - - $10.763 $12.257 $ 12.558 $ 15.064
Number of Units Outstanding, End of Period - - 7,291 6,860 5,209 4,795
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.738 $ 12.203 $ 12.468
Accumulation Unit Value, End of Period - - $10.738 $12.203 $ 12.468 $ 14.926
Number of Units Outstanding, End of Period - - 4,141 5,702 8,295 8,181
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $11.098 $ 12.230 $ 14.625
Accumulation Unit Value, End of Period - $10.000 $11.098 $12.230 $ 14.625 $ 15.798
Number of Units Outstanding, End of Period - 0 20,294 67,795 126,365 126,897
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.833
Accumulation Unit Value, End of Period - - - - $ 9.833 $ 11.864
Number of Units Outstanding, End of Period - - - - 33,087 55,991
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $13.593 $15.912 $ 17.677 $ 19.456
Accumulation Unit Value, End of Period - $13.593 $15.912 $17.677 $ 19.456 $ 19.712
Number of Units Outstanding, End of Period - 1,742 8,905 12,996 11,922 9,527
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.306 $ 12.497 $ 14.844
Accumulation Unit Value, End of Period - - $11.306 $12.497 $ 14.844 $ 15.753
Number of Units Outstanding, End of Period - - 17,454 18,097 17,725 14,683
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.300 $ 12.472 $ 14.805
Accumulation Unit Value, End of Period - - $11.300 $12.472 $ 14.805 $ 15.697
Number of Units Outstanding, End of Period - - 18,683 23,225 40,335 53,940
- ---------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $10.703 $14.547 $19.479 $ 22.382 $ 30.325
Accumulation Unit Value, End of Period $10.703 $14.547 $19.479 $22.382 $ 30.325 $ 24.686
Number of Units Outstanding, End of Period 0 10,341 25,715 34,738 37,755 45,700
- ---------------------------------------------------------------------------------------------------------------
* 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, and the Fidelity VIP Contrafund - Service Class
2 Sub-Account, Fidelity VIP Freedom 2010 - Service Class 2 Sub-Account,
Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account, Fidelity VIP Freedom
2030 - Service Class 2 Sub-Account, Fidelity VIP Freedom Income - Service
Class 2 Sub-Account, Fidelity VIP Growth Stock - Service Class 2 Sub-Account,
Fidelity VIP Index 500 - Service Class 2 Sub-Account, Fidelity VIP Mid Cap -
Service Class 2 Sub-Account, FTVIP Mutual Discovery Securities - Class 2
Sub-Account and Van Kampen UIF Mid Cap Growth, Class II Sub-Account, which
were first offered under the Contracts on May 1, 2006. 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 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
138 PROSPECTUS
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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
139 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))
Mortality & Expense = 2.3
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.207
Accumulation Unit Value, End of Period - - - - $10.207 $11.673
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.397
Accumulation Unit Value, End of Period - - - - $10.397 $10.991
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.427
Accumulation Unit Value, End of Period - - - - $10.427 $11.179
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.436
Accumulation Unit Value, End of Period - - - - $10.436 $11.302
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.289
Accumulation Unit Value, End of Period - - - - $10.289 $10.624
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.686
Accumulation Unit Value, End of Period - - - - $ 9.686 $11.551
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.757
Accumulation Unit Value, End of Period - - - - $10.757 $11.031
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.818
Accumulation Unit Value, End of Period - - - - $ 9.818 $11.040
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.680 $13.292 $14.336 $14.472 $16.477
Accumulation Unit Value, End of Period - $13.292 $14.336 $14.472 $16.477 $15.469
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.171 $11.069 $12.763
Accumulation Unit Value, End of Period - - $11.171 $11.069 $12.763 $12.911
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.501 $10.349 $11.192
Accumulation Unit Value, End of Period - - $10.501 $10.349 $11.192 $11.592
Number of Units Outstanding, End of Period - - 0 40 40 40
- -------------------------------------------------------------------------------------------------------
140 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.801 $15.428 $16.770 $17.137 $18.164
Accumulation Unit Value, End of Period - $15.428 $16.770 $17.137 $18.164 $19.700
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.021 $14.453 $17.440 $18.498 $21.102
Accumulation Unit Value, End of Period - $14.453 $17.440 $18.498 $21.102 $20.084
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.190 $10.176 $10.322
Accumulation Unit Value, End of Period - - $10.190 $10.176 $10.322 $10.728
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.951
Accumulation Unit Value, End of Period - - - - $10.951 $11.942
Number of Units Outstanding, End of Period - - - - 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.581 $12.591 $13.829 $14.909 $17.211
Accumulation Unit Value, End of Period - $12.591 $13.829 $14.909 $17.211 $17.364
Number of Units Outstanding, End of Period - 0 0 0 552 548
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.655 $16.748 $20.367 $25.309 $31.613
Accumulation Unit Value, End of Period - $16.748 $20.367 $25.309 $31.613 $39.694
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.359 $13.497 $15.599 $16.759 $19.847
Accumulation Unit Value, End of Period - $13.497 $15.599 $16.759 $19.847 $22.342
Number of Units Outstanding, End of Period - 0 0 0 281 279
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.563 $12.792 $14.312 $13.526 $14.875
Accumulation Unit Value, End of Period - $12.792 $14.312 $13.526 $14.875 $16.099
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.887 $11.355 $12.694
Accumulation Unit Value, End of Period - - $10.887 $11.355 $12.694 $13.208
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.339 $10.214 $10.890
Accumulation Unit Value, End of Period - - $10.339 $10.214 $10.890 $11.274
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.871 $10.946 $12.518
Accumulation Unit Value, End of Period - - $10.871 $10.946 $12.518 $12.624
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.119 $11.344 $11.936
Accumulation Unit Value, End of Period - - $11.119 $11.344 $11.936 $14.114
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.102 $11.716 $12.823
Accumulation Unit Value, End of Period - - $11.102 $11.716 $12.823 $12.574
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.319 $12.298 $14.322 $15.640 $15.664
Accumulation Unit Value, End of Period - $12.298 $14.322 $15.640 $15.664 $16.193
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
141 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.085 $12.997 $13.914 $14.067 $15.207
Accumulation Unit Value, End of Period - $12.997 $13.914 $14.067 $15.207 $15.343
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $10.000 $10.087 $10.066 $10.300
Accumulation Unit Value, End of Period - - $10.087 $10.066 $10.300 $10.453
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.000 $12.222 $12.707 $12.994 $13.644
Accumulation Unit Value, End of Period - $12.222 $12.707 $12.994 $13.644 $15.146
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.062 $14.128 $16.377 $18.216 $20.848
Accumulation Unit Value, End of Period - $14.128 $16.377 $18.216 $20.848 $21.563
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.708 $12.861 $13.636 $13.564 $14.448
Accumulation Unit Value, End of Period - $12.861 $13.636 $13.564 $14.448 $14.020
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.442 $12.540 $13.346 $13.761 $15.400
Accumulation Unit Value, End of Period - $12.540 $13.346 $13.761 $15.400 $15.638
Number of Units Outstanding, End of Period - 370 498 525 29 29
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.692 $14.554 $16.914 $18.096 $20.234
Accumulation Unit Value, End of Period - $14.554 $16.914 $18.096 $20.234 $19.452
Number of Units Outstanding, End of Period - 321 428 213 211 210
- -------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.224 $12.046 $12.737 $12.729 $13.310
Accumulation Unit Value, End of Period - $12.046 $12.737 $12.729 $13.310 $14.217
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.730 $12.339 $13.128 $13.695 $15.072
Accumulation Unit Value, End of Period - $12.339 $13.128 $13.695 $15.072 $15.127
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.971 $13.404 $14.522 $14.902 $16.845
Accumulation Unit Value, End of Period - $13.404 $14.522 $14.902 $16.845 $15.431
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.213 $11.218 $11.718 $12.935 $12.966
Accumulation Unit Value, End of Period - $11.218 $11.718 $12.935 $12.966 $12.566
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.841 $13.245 $14.277 $14.353 $15.470
Accumulation Unit Value, End of Period - $13.245 $14.277 $14.353 $15.470 $15.504
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.335 $10.364 $10.554 $10.535 $10.738
Accumulation Unit Value, End of Period - $10.364 $10.554 $10.535 $10.738 $11.016
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.554 $13.282 $15.049 $16.465 $20.507
Accumulation Unit Value, End of Period - $13.282 $15.049 $16.465 $20.507 $21.667
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
142 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.670 $12.894 $14.163 $15.027 $16.696
Accumulation Unit Value, End of Period - $12.894 $14.163 $15.027 $16.696 $15.437
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period - $ 9.917 $ 9.779 $ 9.598 $ 9.597 $ 9.770
Accumulation Unit Value, End of Period - $ 9.779 $ 9.598 $ 9.597 $ 9.770 $ 9.981
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.957 $13.395 $14.408 $15.456 $16.362
Accumulation Unit Value, End of Period - $13.395 $14.408 $15.456 $16.362 $16.868
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.298 $14.464 $16.280 $16.812 $19.020
Accumulation Unit Value, End of Period - $14.464 $16.280 $16.812 $19.020 $17.637
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.819 $12.997 $13.632 $13.960 $15.153
Accumulation Unit Value, End of Period - $12.997 $13.632 $13.960 $15.153 $14.856
Number of Units Outstanding, End of Period - 356 481 478 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period - $10.660 $11.992 $12.654 $12.833 $14.006
Accumulation Unit Value, End of Period - $11.992 $12.654 $12.833 $14.006 $13.786
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $11.623 $13.975 $16.543 $17.516 $21.699
Accumulation Unit Value, End of Period - $13.975 $16.543 $17.516 $21.699 $25.376
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.776 $13.460 $15.567 $17.025 $17.507
Accumulation Unit Value, End of Period - $13.460 $15.567 $17.025 $17.507 $17.719
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.557 $12.305 $12.603 $12.989 $13.355
Accumulation Unit Value, End of Period - $12.305 $12.603 $12.989 $13.355 $13.740
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.062 $11.986 $12.263
Accumulation Unit Value, End of Period - - $11.062 $11.986 $12.263 $14.061
Number of Units Outstanding, End of Period - - 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $10.000 $11.274 $11.446 $12.952
Accumulation Unit Value, End of Period - - $11.274 $11.446 $12.952 $12.334
Number of Units Outstanding, End of Period - - 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 9.909 $11.650 $12.129 $12.732 $12.742
Accumulation Unit Value, End of Period - $11.650 $12.129 $12.732 $12.742 $14.490
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.757 $13.254 $14.749 $15.781 $17.848
Accumulation Unit Value, End of Period - $13.254 $14.749 $15.781 $17.848 $17.840
Number of Units Outstanding, End of Period - 354 476 499 625 621
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $ 9.805 $ 9.793 $ 9.948
Accumulation Unit Value, End of Period - $10.000 $ 9.805 $ 9.793 $ 9.948 $10.132
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
143 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $12.265 $13.770 $14.780 $ 16.162 $17.464
Accumulation Unit Value, End of Period - $13.770 $14.780 $16.162 $ 17.464 $18.115
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.900 $ 11.413 $12.530
Accumulation Unit Value, End of Period - - $10.900 $11.413 $ 12.530 $12.627
Number of Units Outstanding, End of Period - - 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.697 $ 12.071 $12.254
Accumulation Unit Value, End of Period - - $10.697 $12.071 $ 12.254 $14.565
Number of Units Outstanding, End of Period - - 0 0 688,857 851
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.672 $ 12.018 $12.166
Accumulation Unit Value, End of Period - - $10.672 $12.018 $ 12.166 $14.432
Number of Units Outstanding, End of Period - - 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $10.996 $ 12.007 $14.228
Accumulation Unit Value, End of Period - $10.000 $10.996 $12.007 $ 14.228 $15.228
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.772
Accumulation Unit Value, End of Period - - - - $ 9.772 $11.682
Number of Units Outstanding, End of Period - - - - 0 0
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $13.510 $15.670 $ 17.250 $18.813
Accumulation Unit Value, End of Period - $13.510 $15.670 $17.250 $ 18.813 $18.885
Number of Units Outstanding, End of Period - 0 0 0 211 210
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.237 $ 12.307 $14.486
Accumulation Unit Value, End of Period - - $11.237 $12.307 $ 14.486 $15.231
Number of Units Outstanding, End of Period - - 629 313 311 309
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.231 $ 12.282 $14.447
Accumulation Unit Value, End of Period - - $11.231 $12.282 $ 14.447 $15.176
Number of Units Outstanding, End of Period - - 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $11.357 $14.402 $19.109 $2 1.756 $29.208
Accumulation Unit Value, End of Period - $14.402 $19.109 $21.756 $ 29.208 $23.558
Number of Units Outstanding, End of Period - 0 0 0 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, and the Fidelity VIP
Contrafund - Service Class 2 Sub-Account, Fidelity VIP Freedom 2010 - Service
Class 2 Sub-Account, Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account,
Fidelity VIP Freedom 2030 - Service Class 2 Sub-Account, Fidelity VIP Freedom
Income - Service Class 2 Sub-Account, Fidelity VIP Growth Stock - Service
Class 2 Sub-Account, Fidelity VIP Index 500 - Service Class 2 Sub-Account,
Fidelity VIP Mid Cap - Service Class 2 Sub-Account, FTVIP Mutual Discovery
Securities - Class 2 Sub-Account and Van Kampen UIF Mid Cap Growth, Class II
Sub-Account, which were first offered under the Contracts on May 1, 2006. 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 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
144 PROSPECTUS
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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
145 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)
Mortality & Expense = 1.5
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.263
Accumulation Unit Value, End of Period - - - - $ 10.263 $ 11.834
Number of Units Outstanding, End of Period - - - - 414,282 723,702
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.454
Accumulation Unit Value, End of Period - - - - $ 10.454 $ 11.142
Number of Units Outstanding, End of Period - - - - 130,383 148,898
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.484
Accumulation Unit Value, End of Period - - - - $ 10.484 $ 11.333
Number of Units Outstanding, End of Period - - - - 36,399 99,598
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.493
Accumulation Unit Value, End of Period - - - - $ 10.493 $ 11.458
Number of Units Outstanding, End of Period - - - - 42,087 40,167
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.345
Accumulation Unit Value, End of Period - - - - $ 10.345 $ 10.771
Number of Units Outstanding, End of Period - - - - 9,730 10,156
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.739
Accumulation Unit Value, End of Period - - - - $ 9.739 $ 11.710
Number of Units Outstanding, End of Period - - - - 7,984 10,829
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.816
Accumulation Unit Value, End of Period - - - - $ 10.816 $ 11.184
Number of Units Outstanding, End of Period - - - - 37,450 47,278
- ------------------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.872
Accumulation Unit Value, End of Period - - - - $ 9.872 $ 11.192
Number of Units Outstanding, End of Period - - - - 94,755 192,846
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.851 $ 13.409 $ 14.582 $ 14.840 $ 17.034
Accumulation Unit Value, End of Period $10.851 $ 13.409 $ 14.582 $ 14.840 $ 17.034 $ 16.124
Number of Units Outstanding, End of Period 347 117,457 236,098 310,781 302,687 261,390
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.233 $ 11.221 $ 13.044
Accumulation Unit Value, End of Period - - $ 11.233 $ 11.221 $ 13.044 $ 13.304
Number of Units Outstanding, End of Period - - 66,922 1,005,366 2,122,022 2,815,817
- ------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.523 $ 10.455 $ 11.399
Accumulation Unit Value, End of Period - - $ 10.523 $ 10.455 $ 11.399 $ 11.903
Number of Units Outstanding, End of Period - - 2,116 378,307 825,544 1,001,796
- ------------------------------------------------------------------------------------------------------------------
146 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -----------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund -
Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.535 $ 15.564 $ 17.057 $ 17.572 $ 18.778
Accumulation Unit Value, End of Period $11.535 $ 15.564 $ 17.057 $ 17.572 $ 18.778 $ 20.534
Number of Units Outstanding, End of Period 434 4,327 3,941 8,813 7,164 5,267
- -----------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 11.225 $ 14.581 $ 17.739 $ 18.969 $ 21.816
Accumulation Unit Value, End of Period $11.225 $ 14.581 $ 17.739 $ 18.969 $ 21.816 $ 20.935
Number of Units Outstanding, End of Period 860 101,030 168,475 285,208 356,890 345,544
- -----------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.246 $ 10.315 $ 10.549
Accumulation Unit Value, End of Period - - $ 10.246 $ 10.315 $ 10.549 $ 11.055
Number of Units Outstanding, End of Period - - 42,893 136,448 257,214 355,522
- -----------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 11.011
Accumulation Unit Value, End of Period - - - - $ 11.011 $ 12.107
Number of Units Outstanding, End of Period - - - - 320,169 558,370
- -----------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.324 $ 12.703 $ 14.065 $ 15.288 $ 17.793
Accumulation Unit Value, End of Period $10.324 $ 12.703 $ 14.065 $ 15.288 $ 17.793 $ 18.099
Number of Units Outstanding, End of Period 2,174 148,918 358,905 688,072 1,079,337 1,269,936
- -----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund -
Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 11.233 $ 16.896 $ 20.715 $ 25.952 $ 32.682
Accumulation Unit Value, End of Period $11.233 $ 16.896 $ 20.715 $ 25.952 $ 32.682 $ 41.374
Number of Units Outstanding, End of Period 0 54,196 85,691 122,683 166,538 194,282
- -----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $ 10.475 $ 13.616 $ 15.866 $ 17.185 $ 20.518
Accumulation Unit Value, End of Period $10.475 $ 13.616 $ 15.866 $ 17.185 $ 20.518 $ 23.288
Number of Units Outstanding, End of Period 640 53,801 104,501 354,268 733,746 922,024
- -----------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund -
Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.721 $ 12.905 $ 14.556 $ 13.871 $ 15.378
Accumulation Unit Value, End of Period $10.721 $ 12.905 $ 14.556 $ 13.871 $ 15.378 $ 16.780
Number of Units Outstanding, End of Period 135 12,812 4,209 5,030 5,249 3,012
- -----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.909 $ 11.471 $ 12.929
Accumulation Unit Value, End of Period - - $ 10.909 $ 11.471 $ 12.929 $ 13.563
Number of Units Outstanding, End of Period - - 1,724 75,627 147,228 126,050
- -----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.360 $ 10.319 $ 11.091
Accumulation Unit Value, End of Period - - $ 10.360 $ 10.319 $ 11.091 $ 11.577
Number of Units Outstanding, End of Period - - 3,670 188,567 388,338 495,383
- -----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.893 $ 11.057 $ 12.749
Accumulation Unit Value, End of Period - - $ 10.893 $ 11.057 $ 12.749 $ 12.963
Number of Units Outstanding, End of Period - - 11,058 149,184 311,007 391,344
- -----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.141 $ 11.460 $ 12.156
Accumulation Unit Value, End of Period - - $ 11.141 $ 11.460 $ 12.156 $ 14.493
Number of Units Outstanding, End of Period - - 2,150 37,104 134,749 199,136
- -----------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.124 $ 11.836 $ 13.060
Accumulation Unit Value, End of Period - - $ 11.124 $ 11.836 $ 13.060 $ 12.913
Number of Units Outstanding, End of Period - - 16 431,792 720,550 767,839
- -----------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.060 $ 12.406 $ 14.567 $ 16.038 $ 16.193
Accumulation Unit Value, End of Period $10.060 $ 12.406 $ 14.567 $ 16.038 $ 16.193 $ 16.879
Number of Units Outstanding, End of Period 0 22,549 68,809 102,358 132,006 111,355
- -----------------------------------------------------------------------------------------------------------------
147 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.696 $ 13.112 $ 14.152 $ 14.425 $ 15.722
Accumulation Unit Value, End of Period $10.696 $ 13.112 $ 14.152 $ 14.425 $ 15.722 $ 15.993
Number of Units Outstanding, End of Period 0 73,942 124,555 184,065 190,342 170,766
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.108 $ 10.169 $ 10.491
Accumulation Unit Value, End of Period - - $ 10.108 $ 10.169 $ 10.491 $ 10.734
Number of Units Outstanding, End of Period - - 274 55,948 456,364 845,679
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 12.289 $ 12.881 $ 13.280 $ 14.059
Accumulation Unit Value, End of Period - $ 12.289 $ 12.881 $ 13.280 $ 14.059 $ 15.735
Number of Units Outstanding, End of Period - 45,608 124,466 313,104 394,571 358,649
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.148 $ 14.253 $ 16.657 $ 18.679 $ 21.553
Accumulation Unit Value, End of Period $10.148 $ 14.253 $ 16.657 $ 18.679 $ 21.553 $ 22.475
Number of Units Outstanding, End of Period 0 38,933 62,907 59,949 90,930 82,603
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.661 $ 12.975 $ 13.869 $ 13.909 $ 14.936
Accumulation Unit Value, End of Period $10.661 $ 12.975 $ 13.869 $ 13.909 $ 14.936 $ 14.614
Number of Units Outstanding, End of Period 508 81,371 165,436 197,061 160,880 134,180
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.177 $ 12.650 $ 13.574 $ 14.111 $ 15.921
Accumulation Unit Value, End of Period $10.177 $ 12.650 $ 13.574 $ 14.111 $ 15.921 $ 16.300
Number of Units Outstanding, End of Period 1,007 83,324 196,103 446,470 653,766 674,700
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.354 $ 14.682 $ 17.203 $ 18.556 $ 20.918
Accumulation Unit Value, End of Period $10.354 $ 14.682 $ 17.203 $ 18.556 $ 20.918 $ 20.276
Number of Units Outstanding, End of Period 745 58,798 106,502 180,178 260,535 252,429
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.551 $ 12.153 $ 12.955 $ 13.052 $ 13.761
Accumulation Unit Value, End of Period $10.551 $ 12.153 $ 12.955 $ 13.052 $ 13.761 $ 14.819
Number of Units Outstanding, End of Period 0 261,984 475,970 837,415 941,030 918,620
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.388 $ 12.448 $ 13.353 $ 14.043 $ 15.582
Accumulation Unit Value, End of Period $10.388 $ 12.448 $ 13.353 $ 14.043 $ 15.582 $ 15.767
Number of Units Outstanding, End of Period 0 12,054 35,146 132,476 172,913 162,161
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.798 $ 14.075 $ 14.771 $ 15.281 $ 17.414
Accumulation Unit Value, End of Period $10.798 $ 14.075 $ 14.771 $ 15.281 $ 17.414 $ 16.084
Number of Units Outstanding, End of Period 1,666 15,549 186,092 223,540 189,319 159,148
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 9.724 $ 11.317 $ 11.919 $ 13.264 $ 13.405
Accumulation Unit Value, End of Period $ 9.724 $ 11.317 $ 11.919 $ 13.264 $ 13.405 $ 13.098
Number of Units Outstanding, End of Period 0 24,389 34,838 31,655 24,547 12,934
- ---------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.741 $ 13.362 $ 14.521 $ 14.718 $ 15.993
Accumulation Unit Value, End of Period $10.741 $ 13.362 $ 14.521 $ 14.718 $ 15.993 $ 16.161
Number of Units Outstanding, End of Period 1,550 114,140 182,596 293,917 301,544 305,846
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.185 $ 10.456 $ 10.735 $ 10.803 $ 11.101
Accumulation Unit Value, End of Period $10.185 $ 10.456 $ 10.735 $ 10.803 $ 11.101 $ 11.482
Number of Units Outstanding, End of Period 1,811 155,621 329,460 676,821 914,327 932,946
- ---------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.604 $ 13.399 $ 15.306 $ 16.884 $ 21.200
Accumulation Unit Value, End of Period $10.604 $ 13.399 $ 15.306 $ 16.884 $ 21.200 $ 22.584
Number of Units Outstanding, End of Period 319 50,972 72,525 136,789 208,019 267,987
- ---------------------------------------------------------------------------------------------------------------
148 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.407 $ 13.008 $ 14.405 $ 15.409 $ 17.260
Accumulation Unit Value, End of Period $10.407 $ 13.008 $ 14.405 $ 15.409 $ 17.260 $ 16.090
Number of Units Outstanding, End of Period 150 41,343 41,743 60,847 59,846 56,727
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 9.985 $ 9.865 $ 9.763 $ 9.841 $ 10.100
Accumulation Unit Value, End of Period $ 9.985 $ 9.865 $ 9.763 $ 9.841 $ 10.100 $ 10.404
Number of Units Outstanding, End of Period 0 652,592 641,522 952,353 1,202,292 1,302,640
- ------------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.379 $ 13.513 $ 14.654 $ 15.849 $ 16.915
Accumulation Unit Value, End of Period $10.379 $ 13.513 $ 14.654 $ 15.849 $ 16.915 $ 17.582
Number of Units Outstanding, End of Period 1,640 20,679 33,167 32,056 20,031 4,574
- ------------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 11.204 $ 14.592 $ 16.559 $ 17.239 $ 19.663
Accumulation Unit Value, End of Period $11.204 $ 14.592 $ 16.559 $ 17.239 $ 19.663 $ 18.384
Number of Units Outstanding, End of Period 424 48,650 96,870 252,139 343,255 382,838
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.642 $ 13.112 $ 13.865 $ 14.315 $ 15.665
Accumulation Unit Value, End of Period $10.642 $ 13.112 $ 13.865 $ 14.315 $ 15.665 $ 15.485
Number of Units Outstanding, End of Period 0 7,152 14,354 14,048 13,472 9,001
- ------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.515 $ 12.098 $ 12.870 $ 13.159 $ 14.480
Accumulation Unit Value, End of Period $10.515 $ 12.098 $ 12.870 $ 13.159 $ 14.480 $ 14.370
Number of Units Outstanding, End of Period 2,030 79,093 157,776 218,982 184,184 248,096
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.470 $ 14.075 $ 16.826 $ 17.961 $ 22.432
Accumulation Unit Value, End of Period $11.470 $ 14.075 $ 16.826 $ 17.961 $ 22.432 $ 26.449
Number of Units Outstanding, End of Period 0 15,549 25,933 23,337 18,945 13,069
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.372 $ 13.579 $ 15.833 $ 17.458 $ 18.099
Accumulation Unit Value, End of Period $10.372 $ 13.579 $ 15.833 $ 17.458 $ 18.099 $ 18.470
Number of Units Outstanding, End of Period 2,547 50,687 82,701 64,526 58,064 51,749
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.109 $ 12.414 $ 12.818 $ 13.320 $ 13.807
Accumulation Unit Value, End of Period $10.109 $ 12.414 $ 12.818 $ 13.320 $ 13.807 $ 14.322
Number of Units Outstanding, End of Period 617 153,342 248,311 317,126 316,832 249,085
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.122 $ 12.150 $ 12.533
Accumulation Unit Value, End of Period - - $ 11.122 $ 12.150 $ 12.533 $ 14.489
Number of Units Outstanding, End of Period - - 49,268 62,073 45,545 39,401
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.336 $ 11.603 $ 13.237
Accumulation Unit Value, End of Period - - $ 11.336 $ 11.603 $ 13.237 $ 12.709
Number of Units Outstanding, End of Period - - 53,964 402,711 647,016 665,447
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 9.410 $ 11.753 $ 12.337 $ 13.056 $ 13.172
Accumulation Unit Value, End of Period $ 9.410 $ 11.753 $ 12.337 $ 13.056 $ 13.172 $ 15.104
Number of Units Outstanding, End of Period 0 31,986 49,070 81,791 88,072 83,140
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 10.653 $ 13.371 $ 15.002 $ 16.182 $ 18.451
Accumulation Unit Value, End of Period $10.653 $ 13.371 $ 15.002 $ 16.182 $ 18.451 $ 18.595
Number of Units Outstanding, End of Period 0 74,198 146,747 296,595 387,496 334,095
- ------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.000 $ 9.885 $ 9.955 $ 10.195
Accumulation Unit Value, End of Period - $ 10.000 $ 9.885 $ 9.955 $ 10.195 $ 10.468
Number of Units Outstanding, End of Period - 0 95,428 276,059 280,454 394,938
- ------------------------------------------------------------------------------------------------------------------
149 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $11.059 $ 13.891 $ 15.033 $ 16.573 $ 18.054
Accumulation Unit Value, End of Period $11.059 $13.891 $ 15.033 $ 16.573 $ 18.054 $ 18.882
Number of Units Outstanding, End of Period 0 12,459 61,335 87,995 103,578 98,940
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.959 $ 11.570 $ 12.805
Accumulation Unit Value, End of Period - - $ 10.959 $ 11.570 $ 12.805 $ 13.011
Number of Units Outstanding, End of Period - - 70,540 222,716 415,319 401,611
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.756 $ 12.236 $ 12.524
Accumulation Unit Value, End of Period - - $ 10.756 $ 12.236 $ 12.524 $ 15.008
Number of Units Outstanding, End of Period - - 63,467 57,712 44,233 18,828
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.731 $ 12.183 $ 12.434
Accumulation Unit Value, End of Period - - $ 10.731 $ 12.183 $ 12.434 $ 14.871
Number of Units Outstanding, End of Period - - 41,130 39,564 34,463 30,048
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $ 10.000 $ 11.086 $ 12.205 $ 14.580
Accumulation Unit Value, End of Period - $10.000 $ 11.086 $ 12.205 $ 14.580 $ 15.734
Number of Units Outstanding, End of Period - 0 36,213 306,837 671,532 793,322
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.826
Accumulation Unit Value, End of Period - - - - $ 9.826 $ 11.844
Number of Units Outstanding, End of Period - - - - 151,344 287,553
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $ 13.584 $ 15.885 $ 17.630 $ 19.384
Accumulation Unit Value, End of Period - $13.584 $ 15.885 $ 17.630 $ 19.384 $ 19.619
Number of Units Outstanding, End of Period - 13,341 33,746 45,386 35,762 33,493
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.299 $ 12.476 $ 14.804
Accumulation Unit Value, End of Period - - $ 11.299 $ 12.476 $ 14.804 $ 15.694
Number of Units Outstanding, End of Period - - 104,318 113,259 85,256 65,948
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.292 $ 12.451 $ 14.765
Accumulation Unit Value, End of Period - - $ 11.292 $ 12.451 $ 14.765 $ 15.638
Number of Units Outstanding, End of Period - - 33,745 71,563 150,213 209,679
- -----------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $10.701 $ 14.529 $ 19.436 $ 22.309 $ 30.195
Accumulation Unit Value, End of Period $10.701 $14.529 $ 19.436 $ 22.309 $ 30.195 $ 24.555
Number of Units Outstanding, End of Period 0 19,376 121,865 275,668 378,389 372,415
- -----------------------------------------------------------------------------------------------------------------
* 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, and the Fidelity VIP Contrafund - Service Class
2 Sub-Account, Fidelity VIP Freedom 2010 - Service Class 2 Sub-Account,
Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account, Fidelity VIP Freedom
2030 - Service Class 2 Sub-Account, Fidelity VIP Freedom Income - Service
Class 2 Sub-Account, Fidelity VIP Growth Stock - Service Class 2 Sub-Account,
Fidelity VIP Index 500 - Service Class 2 Sub-Account, Fidelity VIP Mid Cap -
Service Class 2 Sub-Account, FTVIP Mutual Discovery Securities - Class 2
Sub-Account and Van Kampen UIF Mid Cap Growth, Class II Sub-Account, which
were first offered under the Contracts on May 1, 2006. 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 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
150 PROSPECTUS
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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
151 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))
Mortality & Expense = 2.4
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.200
Accumulation Unit Value, End of Period - - - - $10.200 $11.653
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.390
Accumulation Unit Value, End of Period - - - - $10.390 $10.972
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.420
Accumulation Unit Value, End of Period - - - - $10.420 $11.160
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.428
Accumulation Unit Value, End of Period - - - - $10.428 $11.282
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.281
Accumulation Unit Value, End of Period - - - - $10.281 $10.606
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.680
Accumulation Unit Value, End of Period - - - - $ 9.680 $11.531
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.750
Accumulation Unit Value, End of Period - - - - $10.750 $11.012
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.811
Accumulation Unit Value, End of Period - - - - $ 9.811 $11.021
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.675 $13.275 $14.304 $14.424 $16.406
Accumulation Unit Value, End of Period - $13.275 $14.304 $14.424 $16.406 $15.386
Number of Units Outstanding, End of Period - 544 1,424 1,453 423 428
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.164 $11.050 $12.728
Accumulation Unit Value, End of Period - - $11.164 $11.050 $12.728 $12.862
Number of Units Outstanding, End of Period - - 0 467 508 485
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.499 $10.336 $11.166
Accumulation Unit Value, End of Period - - $10.499 $10.336 $11.166 $11.553
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
152 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.794 $15.409 $16.732 $17.080 $18.085
Accumulation Unit Value, End of Period - $15.409 $16.732 $17.080 $18.085 $19.595
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.014 $14.435 $17.401 $18.438 $21.012
Accumulation Unit Value, End of Period - $14.435 $17.401 $18.438 $21.012 $19.977
Number of Units Outstanding, End of Period - 4,865 5,390 5,354 873 754
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.183 $10.158 $10.294
Accumulation Unit Value, End of Period - - $10.183 $10.158 $10.294 $10.688
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.943
Accumulation Unit Value, End of Period - - - - $10.943 $11.921
Number of Units Outstanding, End of Period - - - - 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.575 $12.576 $13.797 $14.860 $17.137
Accumulation Unit Value, End of Period - $12.576 $13.797 $14.860 $17.137 $17.271
Number of Units Outstanding, End of Period - 3,040 4,637 4,937 1,078 1,022
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.648 $16.727 $20.321 $25.226 $31.477
Accumulation Unit Value, End of Period - $16.727 $20.321 $25.226 $31.477 $39.483
Number of Units Outstanding, End of Period - 1,444 1,931 1,763 324 280
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.354 $13.480 $15.564 $16.704 $19.762
Accumulation Unit Value, End of Period - $13.480 $15.564 $16.704 $19.762 $22.223
Number of Units Outstanding, End of Period - 0 0 0 512 442
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.557 $12.776 $14.279 $13.482 $14.811
Accumulation Unit Value, End of Period - $12.776 $14.279 $13.482 $14.811 $16.013
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.884 $11.340 $12.665
Accumulation Unit Value, End of Period - - $10.884 $11.340 $12.665 $13.164
Number of Units Outstanding, End of Period - - 0 318 344 329
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.336 $10.201 $10.865
Accumulation Unit Value, End of Period - - $10.336 $10.201 $10.865 $11.236
Number of Units Outstanding, End of Period - - 0 170 185 176
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.868 $10.932 $12.489
Accumulation Unit Value, End of Period - - $10.868 $10.932 $12.489 $12.582
Number of Units Outstanding, End of Period - - 0 324 1,925 1,695
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.116 $11.330 $11.908
Accumulation Unit Value, End of Period - - $11.116 $11.330 $11.908 $14.067
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.099 $11.701 $12.793
Accumulation Unit Value, End of Period - - $11.099 $11.701 $12.793 $12.533
Number of Units Outstanding, End of Period - - 0 307 1,834 1,614
- --------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.314 $12.283 $14.289 $15.589 $15.596
Accumulation Unit Value, End of Period - $12.283 $14.289 $15.589 $15.596 $16.107
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
153 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.079 $12.981 $13.883 $14.021 $15.142
Accumulation Unit Value, End of Period - $12.981 $13.883 $14.021 $15.142 $15.262
Number of Units Outstanding, End of Period - 0 212 526 300 285
- -------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $10.000 $10.084 $10.053 $10.277
Accumulation Unit Value, End of Period - - $10.084 $10.053 $10.277 $10.418
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.000 $12.214 $12.685 $12.958 $13.593
Accumulation Unit Value, End of Period - $12.214 $12.685 $12.958 $13.593 $15.074
Number of Units Outstanding, End of Period - 995 2,545 2,564 896 792
- -------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.056 $14.111 $16.340 $18.156 $20.759
Accumulation Unit Value, End of Period - $14.111 $16.340 $18.156 $20.759 $21.448
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.702 $12.845 $13.605 $13.520 $14.385
Accumulation Unit Value, End of Period - $12.845 $13.605 $13.520 $14.385 $13.945
Number of Units Outstanding, End of Period - 0 612 1,545 895 884
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.436 $12.524 $13.315 $13.716 $15.334
Accumulation Unit Value, End of Period - $12.524 $13.315 $13.716 $15.334 $15.555
Number of Units Outstanding, End of Period - 6,474 7,620 7,865 1,003 952
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.686 $14.536 $16.875 $18.037 $20.146
Accumulation Unit Value, End of Period - $14.536 $16.875 $18.037 $20.146 $19.349
Number of Units Outstanding, End of Period - 487 802 772 346 345
- -------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.218 $11.218 $12.708 $12.687 $13.253
Accumulation Unit Value, End of Period - $12.031 $12.708 $12.687 $13.253 $14.141
Number of Units Outstanding, End of Period - 0 1,731 2,773 2,387 2,094
- -------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.724 $12.324 $13.098 $13.650 $15.007
Accumulation Unit Value, End of Period - $12.324 $13.098 $13.650 $15.007 $15.046
Number of Units Outstanding, End of Period - 6,221 9,245 9,405 202 193
- -------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.965 $13.387 $14.490 $14.853 $16.772
Accumulation Unit Value, End of Period - $13.387 $14.490 $14.853 $16.772 $15.349
Number of Units Outstanding, End of Period - 7,904 8,998 9,101 738 772
- -------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.207 $11.204 $11.691 $12.893 $12.910
Accumulation Unit Value, End of Period - $11.204 $11.691 $12.893 $12.910 $12.499
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.835 $13.228 $14.244 $14.306 $15.403
Accumulation Unit Value, End of Period - $13.228 $14.244 $14.306 $15.403 $15.421
Number of Units Outstanding, End of Period - 0 686 1,015 295 282
- -------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.329 $10.351 $10.530 $10.500 $10.692
Accumulation Unit Value, End of Period - $10.351 $10.530 $10.500 $10.692 $10.957
Number of Units Outstanding, End of Period - 0 1,298 1,361 1,743 1,505
- -------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.548 $13.265 $15.015 $16.411 $20.419
Accumulation Unit Value, End of Period - $13.265 $15.015 $16.411 $20.419 $21.551
Number of Units Outstanding, End of Period - 3,566 4,094 4,031 0 0
- -------------------------------------------------------------------------------------------------------
154 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.664 $12.878 $14.131 $14.978 $16.624
Accumulation Unit Value, End of Period - $12.878 $14.131 $14.978 $16.624 $15.354
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period - $ 9.911 $ 9.767 $ 9.576 $ 9.565 $ 9.728
Accumulation Unit Value, End of Period - $ 9.767 $ 9.576 $ 9.565 $ 9.728 $ 9.928
Number of Units Outstanding, End of Period - 0 1,427 1,494 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.951 $13.378 $14.375 $15.405 $16.291
Accumulation Unit Value, End of Period - $13.378 $14.375 $15.405 $16.291 $16.778
Number of Units Outstanding, End of Period - 1,010 937 885 859 812
- ------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.292 $14.446 $16.244 $16.757 $18.938
Accumulation Unit Value, End of Period - $14.446 $16.244 $16.757 $18.938 $17.543
Number of Units Outstanding, End of Period - 0 421 426 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.813 $12.981 $13.601 $13.914 $15.088
Accumulation Unit Value, End of Period - $12.981 $13.601 $13.914 $15.088 $14.777
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period - $10.654 $11.977 $12.625 $12.791 $13.946
Accumulation Unit Value, End of Period - $11.977 $12.625 $12.791 $13.946 $13.712
Number of Units Outstanding, End of Period - 427 712 1,171 820 807
- ------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $11.616 $13.935 $16.506 $17.459 $21.606
Accumulation Unit Value, End of Period - $13.935 $16.506 $17.459 $21.606 $25.240
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.770 $13.443 $15.532 $16.969 $17.432
Accumulation Unit Value, End of Period - $13.443 $15.532 $16.969 $17.432 $17.625
Number of Units Outstanding, End of Period - 3,822 4,339 4,183 1,376 1,225
- ------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.551 $12.290 $12.574 $12.947 $13.298
Accumulation Unit Value, End of Period - $12.290 $12.574 $12.947 $13.298 $13.666
Number of Units Outstanding, End of Period - 8,426 10 10,159 2,422 2,185
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.054 $11.965 $12.230
Accumulation Unit Value, End of Period - - $11.054 $11.965 $12.230 $14.008
Number of Units Outstanding, End of Period - - 4,384 4,325 562 479
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $10.000 $11.266 $11.426 $12.917
Accumulation Unit Value, End of Period - - $11.266 $11.426 $12.917 $12.288
Number of Units Outstanding, End of Period - - 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 9.903 $11.635 $12.102 $12.690 $12.687
Accumulation Unit Value, End of Period - $11.635 $12.102 $12.690 $12.687 $14.413
Number of Units Outstanding, End of Period - 1,920 2,937 2,926 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.751 $13.238 $14.716 $15.729 $17.771
Accumulation Unit Value, End of Period - $13.238 $14.716 $15.729 $17.771 $17.745
Number of Units Outstanding, End of Period - 938 804 752 699 667
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $ 9.794 $ 9.773 $ 9.918
Accumulation Unit Value, End of Period - $10.000 $ 9.794 $ 9.773 $ 9.918 $10.090
Number of Units Outstanding, End of Period - 0 1,001 2,515 1,527 1,438
- ------------------------------------------------------------------------------------------------------
155 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $12.258 $13.752 $14.746 $16.109 $17.388
Accumulation Unit Value, End of Period - $13.752 $14.746 $16.109 $17.388 $18.019
Number of Units Outstanding, End of Period - 0 166 381 772 680
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.892 $11.394 $12.496
Accumulation Unit Value, End of Period - - $10.892 $11.394 $12.496 $12.579
Number of Units Outstanding, End of Period - - 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.690 $12.050 $12.221
Accumulation Unit Value, End of Period - - $10.690 $12.050 $12.221 $14.510
Number of Units Outstanding, End of Period - - 478 422 433 365
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.665 $11.998 $12.133
Accumulation Unit Value, End of Period - - $10.665 $11.998 $12.133 $14.377
Number of Units Outstanding, End of Period - - 1,922 1,786 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $10.985 $11.983 $14.184
Accumulation Unit Value, End of Period - $10.000 $10.985 $11.983 $14.184 $15.166
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.766
Accumulation Unit Value, End of Period - - - - $ 9.766 $11.662
Number of Units Outstanding, End of Period - - - - 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $13.501 $15.644 $17.203 $18.742
Accumulation Unit Value, End of Period - $13.501 $15.644 $17.203 $18.742 $18.795
Number of Units Outstanding, End of Period - 0 0 0 941 812
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.229 $12.286 $14.446
Accumulation Unit Value, End of Period - - $11.229 $12.286 $14.446 $15.174
Number of Units Outstanding, End of Period - - 1,052 975 861 788
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.223 $12.261 $14.408
Accumulation Unit Value, End of Period - - $11.223 $12.261 $14.408 $15.119
Number of Units Outstanding, End of Period - - 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $11.351 $14.384 $19.066 $21.685 $29.083
Accumulation Unit Value, End of Period - $14.384 $19.066 $21.685 $29.083 $23.432
Number of Units Outstanding, End of Period - 0 129 283 498 473
- ----------------------------------------------------------------------------------------------------------
* 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,
and the Fidelity VIP Contrafund - Service Class 2 Sub-Account, Fidelity VIP
Freedom 2010 - Service Class 2 Sub-Account, Fidelity VIP Freedom 2020 -
Service Class 2 Sub-Account, Fidelity VIP Freedom 2030 - Service Class 2
Sub-Account, Fidelity VIP Freedom Income - Service Class 2 Sub-Account,
Fidelity VIP Growth Stock - Service Class 2 Sub-Account, Fidelity VIP Index
500 - Service Class 2 Sub-Account, Fidelity VIP Mid Cap - Service Class 2
Sub-Account, FTVIP Mutual Discovery Securities - Class 2 Sub-Account and Van
Kampen UIF Mid Cap Growth, Class II Sub-Account, which were first offered
under the Contracts on May 1, 2006. 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%.
156 PROSPECTUS
(1)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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
157 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)
Mortality & Expense = 1.6
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.256
Accumulation Unit Value, End of Period - - - - $ 10.256 $ 11.814
Number of Units Outstanding, End of Period - - - - 101,761 99,784
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.447
Accumulation Unit Value, End of Period - - - - $ 10.447 $ 11.123
Number of Units Outstanding, End of Period - - - - 0 18,543
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.477
Accumulation Unit Value, End of Period - - - - $ 10.477 $ 11.314
Number of Units Outstanding, End of Period - - - - 1,372 1,363
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.486
Accumulation Unit Value, End of Period - - - - $ 10.486 $ 11.438
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.338
Accumulation Unit Value, End of Period - - - - $ 10.338 $ 10.753
Number of Units Outstanding, End of Period - - - - 0 1,648
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.733
Accumulation Unit Value, End of Period - - - - $ 9.733 $ 11.690
Number of Units Outstanding, End of Period - - - - 6,172 943
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 10.809
Accumulation Unit Value, End of Period - - - - $ 10.809 $ 11.165
Number of Units Outstanding, End of Period - - - - 1,419 5,208
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.865
Accumulation Unit Value, End of Period - - - - $ 9.865 $ 11.173
Number of Units Outstanding, End of Period - - - - 9,107 16,959
- -------------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $10.849 $13.392 $ 14.549 $ 14.791 $ 16.961
Accumulation Unit Value, End of Period $10.849 $13.392 $14.549 $ 14.791 $ 16.961 $ 16.039
Number of Units Outstanding, End of Period 0 23,469 42,275 60,071 48,538 47,477
- -------------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $ 11.225 $ 11.202 $ 13.008
Accumulation Unit Value, End of Period - - $11.225 $ 11.202 $ 13.008 $ 13.254
Number of Units Outstanding, End of Period - - 33,355 174,991 300,594 326,039
- -------------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $ 10.520 $ 10.442 $ 11.373
Accumulation Unit Value, End of Period - - $10.520 $ 10.442 $ 11.373 $ 11.864
Number of Units Outstanding, End of Period - - 1,205 104,302 133,393 90,645
- -------------------------------------------------------------------------------------------------------------
158 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $11.533 $15.545 $17.018 $ 17.515 $ 18.698
Accumulation Unit Value, End of Period $11.533 $15.545 $17.018 $17.515 $ 18.698 $ 20.425
Number of Units Outstanding, End of Period 0 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $11.223 $14.563 $17.699 $ 18.907 $ 21.723
Accumulation Unit Value, End of Period $11.223 $14.563 $17.699 $18.907 $ 21.723 $ 20.824
Number of Units Outstanding, End of Period 0 7,677 14,403 38,744 31,855 28,468
- -------------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.239 $ 10.298 $ 10.520
Accumulation Unit Value, End of Period - - $10.239 $10.298 $ 10.520 $ 11.014
Number of Units Outstanding, End of Period - - 7,924 84,783 90,463 63,048
- -------------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 11.004
Accumulation Unit Value, End of Period - - - - $ 11.004 $ 12.086
Number of Units Outstanding, End of Period - - - - 40,999 61,577
- -------------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $10.322 $12.687 $14.034 $ 15.238 $ 17.717
Accumulation Unit Value, End of Period $10.322 $12.687 $14.034 $15.238 $ 17.717 $ 18.004
Number of Units Outstanding, End of Period 0 13,840 35,124 96,633 119,196 108,493
- -------------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $11.231 $16.875 $20.668 $ 25.867 $ 32.542
Accumulation Unit Value, End of Period $11.231 $16.875 $20.668 $25.867 $ 32.542 $ 41.155
Number of Units Outstanding, End of Period 0 3,012 8,722 18,080 17,441 14,969
- -------------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period $10.000 $10.473 $13.599 $15.830 $ 17.129 $ 20.431
Accumulation Unit Value, End of Period $10.473 $13.599 $15.830 $17.129 $ 20.431 $ 23.164
Number of Units Outstanding, End of Period 0 7,819 25,595 72,793 81,328 69,029
- -------------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period $10.000 $10.719 $12.889 $14.524 $ 13.825 $ 15.313
Accumulation Unit Value, End of Period $10.719 $12.889 $14.524 $13.825 $ 15.313 $ 16.692
Number of Units Outstanding, End of Period 0 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.906 $ 11.456 $ 12.899
Accumulation Unit Value, End of Period - - $10.906 $11.456 $ 12.899 $ 13.519
Number of Units Outstanding, End of Period - - 2,629 8,148 21,461 15,659
- -------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.357 $ 10.305 $ 11.066
Accumulation Unit Value, End of Period - - $10.357 $10.305 $ 11.066 $ 11.539
Number of Units Outstanding, End of Period - - 494 43,664 133,264 47,660
- -------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.891 $ 11.043 $ 12.720
Accumulation Unit Value, End of Period - - $10.891 $11.043 $ 12.720 $ 12.920
Number of Units Outstanding, End of Period - - 4,338 52,475 72,238 83,465
- -------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.139 $ 11.446 $ 12.129
Accumulation Unit Value, End of Period - - $11.139 $11.446 $ 12.129 $ 14.445
Number of Units Outstanding, End of Period - - 0 15,159 25,731 27,856
- -------------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.122 $ 11.821 $ 13.030
Accumulation Unit Value, End of Period - - $11.122 $11.821 $ 13.030 $ 12.870
Number of Units Outstanding, End of Period - - 4,630 79,110 79,065 64,917
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $10.058 $12.391 $14.534 $ 15.986 $ 16.124
Accumulation Unit Value, End of Period $10.058 $12.391 $14.534 $15.986 $ 16.124 $ 16.790
Number of Units Outstanding, End of Period 0 5,954 15,708 22,636 30,216 24,958
- -------------------------------------------------------------------------------------------------------------------
159 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.694 $ 13.095 $ 14.121 $ 14.378 $ 15.654
Accumulation Unit Value, End of Period $10.694 $ 13.095 $ 14.121 $ 14.378 $ 15.654 $ 15.909
Number of Units Outstanding, End of Period 0 7,233 19,314 17,516 16,614 14,185
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.105 $ 10.156 $ 10.467
Accumulation Unit Value, End of Period - - $ 10.105 $ 10.156 $ 10.467 $ 10.699
Number of Units Outstanding, End of Period - - 1,761 21,259 56,610 113,131
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 12.281 $ 12.859 $ 13.244 $ 14.006
Accumulation Unit Value, End of Period - $ 12.281 $ 12.859 $ 13.244 $ 14.006 $ 15.661
Number of Units Outstanding, End of Period - 19,650 139,232 113,526 109,153 94,498
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.146 $ 14.235 $ 16.620 $ 18.618 $ 21.461
Accumulation Unit Value, End of Period $10.146 $ 14.235 $ 16.620 $ 18.618 $ 21.461 $ 22.357
Number of Units Outstanding, End of Period 0 3,483 69,433 13,925 30,533 27,024
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.659 $ 12.959 $ 13.838 $ 13.864 $ 14.873
Accumulation Unit Value, End of Period $10.659 $ 12.959 $ 13.838 $ 13.864 $ 14.873 $ 14.536
Number of Units Outstanding, End of Period 0 14,596 24,084 34,147 29,168 21,030
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.175 $ 12.635 $ 13.543 $ 14.065 $ 15.853
Accumulation Unit Value, End of Period $10.175 $ 12.635 $ 13.543 $ 14.065 $ 15.853 $ 16.214
Number of Units Outstanding, End of Period 3,180 20,820 44,796 136,243 129,358 110,198
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.351 $ 14.664 $ 17.164 $ 18.496 $ 20.828
Accumulation Unit Value, End of Period $10.351 $ 14.664 $ 17.164 $ 18.496 $ 20.828 $ 20.169
Number of Units Outstanding, End of Period 0 7,755 16,016 42,092 43,420 27,811
- ---------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period $10.000 $ 10.549 $ 12.138 $ 12.926 $ 13.010 $ 13.702
Accumulation Unit Value, End of Period $10.549 $ 12.138 $ 12.926 $ 13.010 $ 13.702 $ 14.741
Number of Units Outstanding, End of Period 0 36,470 76,890 181,853 176,737 153,933
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.386 $ 12.433 $ 13.323 $ 13.997 $ 15.515
Accumulation Unit Value, End of Period $10.386 $ 12.433 $ 13.323 $ 13.997 $ 15.515 $ 15.684
Number of Units Outstanding, End of Period 0 0 373 19,300 50,392 83,907
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.796 $ 13.506 $ 14.738 $ 15.231 $ 17.340
Accumulation Unit Value, End of Period $10.796 $ 13.506 $ 14.738 $ 15.231 $ 17.340 $ 15.999
Number of Units Outstanding, End of Period 0 13,936 20,681 29,879 36,373 25,411
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 9.722 $ 11.303 $ 11.892 $ 13.221 $ 13.348
Accumulation Unit Value, End of Period $ 9.722 $ 11.303 $ 11.892 $ 13.221 $ 13.348 $ 13.029
Number of Units Outstanding, End of Period 0 1,277 1,832 1,747 1,825 1,961
- ---------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.738 $ 13.345 $ 14.488 $ 14.670 $ 15.925
Accumulation Unit Value, End of Period $10.738 $ 13.345 $ 14.488 $ 14.670 $ 15.925 $ 16.075
Number of Units Outstanding, End of Period 0 363,012 53,015 49,391 43,697 35,867
- ---------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.183 $ 10.443 $ 10.711 $ 10.768 $ 11.054
Accumulation Unit Value, End of Period $10.183 $ 10.443 $ 10.711 $ 10.768 $ 11.054 $ 11.422
Number of Units Outstanding, End of Period 0 163,346 94,571 149,423 159,430 132,584
- ---------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.602 $ 13.383 $ 15.272 $ 16.829 $ 21.110
Accumulation Unit Value, End of Period $10.602 $ 13.383 $ 15.272 $ 16.829 $ 21.110 $ 22.464
Number of Units Outstanding, End of Period 0 228,069 171,334 53,857 54,094 55,076
- ---------------------------------------------------------------------------------------------------------------
160 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.405 $ 12.992 $ 14.373 $ 15.359 $ 17.187
Accumulation Unit Value, End of Period $10.405 $ 12.992 $ 14.373 $ 15.359 $ 17.187 $ 16.005
Number of Units Outstanding, End of Period 0 5,187 4,353 4,774 54,996 35,019
- --------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 9.983 $ 9.853 $ 9.741 $ 9.809 $ 10.057
Accumulation Unit Value, End of Period $ 9.983 $ 9.853 $ 9.741 $ 9.809 $ 10.057 $ 10.349
Number of Units Outstanding, End of Period 4,006 776,190 571,779 283,085 213,854 342,086
- --------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.377 $ 13.497 $ 14.621 $ 15.797 $ 16.843
Accumulation Unit Value, End of Period $10.377 $ 13.497 $ 14.621 $ 15.797 $ 16.843 $ 17.489
Number of Units Outstanding, End of Period 0 3,291 3,402 233 234 168
- --------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 11.202 $ 14.574 $ 16.522 $ 17.183 $ 19.579
Accumulation Unit Value, End of Period $11.202 $ 14.574 $ 16.522 $ 17.183 $ 19.579 $ 18.286
Number of Units Outstanding, End of Period 0 6,517 18,620 71,713 74,753 63,253
- --------------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 10.640 $ 13.096 $ 13.834 $ 14.268 $ 15.599
Accumulation Unit Value, End of Period $10.640 $ 13.096 $ 13.834 $ 14.268 $ 15.599 $ 15.403
Number of Units Outstanding, End of Period 0 5,620 6,279 1,616 1,566 1,499
- --------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.512 $ 12.083 $ 12.841 $ 13.117 $ 14.418
Accumulation Unit Value, End of Period $10.512 $ 12.083 $ 12.841 $ 13.117 $ 14.418 $ 14.294
Number of Units Outstanding, End of Period 3,141 17,937 19,997 34,620 30,252 26,289
- --------------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.467 $ 14.058 $ 16.789 $ 17.903 $ 22.337
Accumulation Unit Value, End of Period $11.467 $ 14.058 $ 16.789 $ 17.903 $ 22.337 $ 26.310
Number of Units Outstanding, End of Period 0 3,216 3,706 3,557 3,442 3,165
- --------------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.370 $ 13.562 $ 15.798 $ 17.401 $ 18.022
Accumulation Unit Value, End of Period $10.370 $ 13.562 $ 15.798 $ 17.401 $ 18.022 $ 18.372
Number of Units Outstanding, End of Period 0 2,975 2,606 2,301 3,112 1,127
- --------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 10.107 $ 12.398 $ 12.789 $ 13.276 $ 13.748
Accumulation Unit Value, End of Period $10.107 $ 12.398 $ 12.789 $ 13.276 $ 13.748 $ 14.246
Number of Units Outstanding, End of Period 0 27,311 27,234 34,981 33,560 25,420
- --------------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.115 $ 12.129 $ 12.499
Accumulation Unit Value, End of Period - - $ 11.115 $ 12.129 $ 12.499 $ 14.435
Number of Units Outstanding, End of Period - - 6,523 6,398 2,041 1,940
- --------------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.328 $ 11.583 $ 13.202
Accumulation Unit Value, End of Period - - $ 11.328 $ 11.583 $ 13.202 $ 12.662
Number of Units Outstanding, End of Period - - 35,103 103,444 96,241 62,385
- --------------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 9.408 $ 13.874 $ 12.309 $ 13.013 $ 13.116
Accumulation Unit Value, End of Period $ 9.408 $ 13.874 $ 12.309 $ 13.013 $ 13.116 $ 15.024
Number of Units Outstanding, End of Period 0 0 22,487 17,612 16,490 9,192
- --------------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $ 10.650 $ 13.355 $ 14.968 $ 16.129 $ 18.372
Accumulation Unit Value, End of Period $10.650 $ 13.355 $ 14.968 $ 16.129 $ 18.372 $ 18.497
Number of Units Outstanding, End of Period 0 36,801 81,112 100,032 88,795 52,886
- --------------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.000 $ 9.875 $ 9.934 $ 10.164
Accumulation Unit Value, End of Period - $ 10.000 $ 9.875 $ 9.934 $ 10.164 $ 10.426
Number of Units Outstanding, End of Period - 0 113,071 251,605 133,457 137,828
- --------------------------------------------------------------------------------------------------------------
161 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio -
Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $11.057 $13.874 $14.999 $ 16.519 $17.977
Accumulation Unit Value, End of Period $11.057 $13.874 $14.999 $16.519 $ 17.977 $18.782
Number of Units Outstanding, End of Period 0 0 6,120 10,110 14,849 10,381
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.952 $ 11.550 $12.771
Accumulation Unit Value, End of Period - - $10.952 $11.550 $ 12.771 $12.962
Number of Units Outstanding, End of Period - - 12,560 29,686 72,485 66,971
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.749 $ 12.215 $12.490
Accumulation Unit Value, End of Period - - $10.749 $12.215 $ 12.490 $14.952
Number of Units Outstanding, End of Period - - 18,791 16,554 10,996 10,166
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.723 $ 12.162 $12.400
Accumulation Unit Value, End of Period - - $10.723 $12.162 $ 12.400 $14.815
Number of Units Outstanding, End of Period - - 10,867 12,616 13,657 6,253
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $11.075 $ 12.180 $14.536
Accumulation Unit Value, End of Period - $10.000 $11.075 $12.180 $ 14.536 $15.670
Number of Units Outstanding, End of Period - 0 24,900 47,188 101,345 83,710
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $ 10.000 $ 9.820
Accumulation Unit Value, End of Period - - - - $ 9.820 $11.823
Number of Units Outstanding, End of Period - - - - 22,302 30,094
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $13.575 $15.858 $ 17.582 $19.312
Accumulation Unit Value, End of Period - $13.575 $15.858 $17.582 $ 19.312 $19.526
Number of Units Outstanding, End of Period - 504 1,901 1,861 5,220 4,232
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.291 $ 12.455 $14.764
Accumulation Unit Value, End of Period - - $11.291 $12.455 $ 14.764 $15.636
Number of Units Outstanding, End of Period - - 9,030 11,341 5,289 5,082
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.284 $ 12.429 $14.725
Accumulation Unit Value, End of Period - - $11.284 $12.429 $ 14.725 $15.580
Number of Units Outstanding, End of Period - - 3,401 11,785 12,220 18,366
- --------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period $10.000 $10.698 $14.511 $19.392 $ 22.236 $30.066
Accumulation Unit Value, End of Period $10.698 $14.511 $19.392 $22.236 $ 30.066 $24.425
Number of Units Outstanding, End of Period 0 6,427 23,013 24,523 29,901 16,406
- --------------------------------------------------------------------------------------------------------------
* 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, and the Fidelity VIP Contrafund - Service Class
2 Sub-Account, Fidelity VIP Freedom 2010 - Service Class 2 Sub-Account,
Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account, Fidelity VIP Freedom
2030 - Service Class 2 Sub-Account, Fidelity VIP Freedom Income - Service
Class 2 Sub-Account, Fidelity VIP Growth Stock - Service Class 2 Sub-Account,
Fidelity VIP Index 500 - Service Class 2 Sub-Account, Fidelity VIP Mid Cap -
Service Class 2 Sub-Account, FTVIP Mutual Discovery Securities - Class 2
Sub-Account and Van Kampen UIF Mid Cap Growth, Class II Sub-Account, which
were first offered under the Contracts on May 1, 2006. 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%.
162 PROSPECTUS
(1)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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
163 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))
Mortality & Expense = 2.5
- --------------------------------------------------------------------------------
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.193
Accumulation Unit Value, End of Period - - - - $10.193 $11.633
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2010 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.383
Accumulation Unit Value, End of Period - - - - $10.383 $10.953
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.412
Accumulation Unit Value, End of Period - - - - $10.412 $11.141
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom 2030 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.421
Accumulation Unit Value, End of Period - - - - $10.421 $11.263
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Freedom Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.274
Accumulation Unit Value, End of Period - - - - $10.274 $10.588
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Stock Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.673
Accumulation Unit Value, End of Period - - - - $ 9.673 $11.511
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.742
Accumulation Unit Value, End of Period - - - - $10.742 $10.994
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.804
Accumulation Unit Value, End of Period - - - - $ 9.804 $11.002
Number of Units Outstanding, End of Period - - - - 0 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Growth and Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.669 $13.259 $14.271 $14.377 $16.335
Accumulation Unit Value, End of Period - $13.259 $14.271 $14.377 $16.335 $15.304
Number of Units Outstanding, End of Period - 576 539 540 497 510
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.156 $11.031 $12.693
Accumulation Unit Value, End of Period - - $11.156 $11.031 $12.693 $12.814
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
FTVIP Franklin Large Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.496 $10.323 $11.140
Accumulation Unit Value, End of Period - - $10.496 $10.323 $11.140 $11.514
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
164 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small-Mid Cap Growth Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $11.788 $15.390 $16.694 $17.024 $18.007
Accumulation Unit Value, End of Period - $15.390 $16.694 $17.024 $18.007 $19.490
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Small Cap Value Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.008 $14.417 $17.361 $18.377 $20.921
Accumulation Unit Value, End of Period - $14.417 $17.361 $18.377 $20.921 $19.871
Number of Units Outstanding, End of Period - 722 641 630 622 640
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin U.S. Government Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.176 $10.141 $10.265
Accumulation Unit Value, End of Period - - $10.176 $10.141 $10.265 $10.648
Number of Units Outstanding, End of Period - - 1,084 1,084 1,084 1,084
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - - - $10.000 $10.936
Accumulation Unit Value, End of Period - - - - $10.936 $11.901
Number of Units Outstanding, End of Period - - - - 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.569 $12.560 $13.766 $14.811 $17.063
Accumulation Unit Value, End of Period - $12.560 $13.766 $14.811 $17.063 $17.179
Number of Units Outstanding, End of Period - 1,429 1,378 1,332 1,250 1,203
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Developing Markets Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $11.642 $16.706 $20.275 $25.143 $31.342
Accumulation Unit Value, End of Period - $16.706 $20.275 $25.143 $31.342 $39.272
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.348 $13.463 $15.528 $16.649 $19.677
Accumulation Unit Value, End of Period - $13.463 $15.528 $16.649 $19.677 $22.104
Number of Units Outstanding, End of Period - 0 608 608 608 608
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Global Income Securities Fund - Class 2 (1)
Accumulation Unit Value, Beginning of Period - $10.550 $12.760 $14.247 $13.438 $14.747
Accumulation Unit Value, End of Period - $12.760 $14.247 $13.438 $14.747 $15.927
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - All Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.881 $11.326 $12.636
Accumulation Unit Value, End of Period - - $10.881 $11.326 $12.636 $13.120
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Bond-Debenture Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.334 $10.188 $10.840
Accumulation Unit Value, End of Period - - $10.334 $10.188 $10.840 $11.199
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth and Income Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $10.866 $10.918 $12.460
Accumulation Unit Value, End of Period - - $10.866 $10.918 $12.460 $12.540
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Growth Opportunities Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.113 $11.315 $11.881
Accumulation Unit Value, End of Period - - $11.113 $11.315 $11.881 $14.020
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lord Abbett Series Fund - Mid-Cap Value Portfolio
Accumulation Unit Value, Beginning of Period - - $10.000 $11.096 $11.686 $12.764
Accumulation Unit Value, End of Period - - $11.096 $11.686 $12.764 $12.491
Number of Units Outstanding, End of Period - - 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.308 $12.267 $14.257 $15.538 $15.529
Accumulation Unit Value, End of Period - $12.267 $14.257 $15.538 $15.529 $16.021
Number of Units Outstanding, End of Period - 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
165 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Oppenheimer Balanced Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.073 $12.964 $13.851 $13.975 $15.077
Accumulation Unit Value, End of Period - $12.964 $13.851 $13.975 $15.077 $15.180
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Core Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - - $10.000 $10.082 $10.040 $10.253
Accumulation Unit Value, End of Period - - $10.082 $10.040 $10.253 $10.384
Number of Units Outstanding, End of Period - - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.000 $12.206 $12.663 $12.923 $13.542
Accumulation Unit Value, End of Period - $12.206 $12.663 $12.923 $13.542 $15.002
Number of Units Outstanding, End of Period - 1,456 1,465 1,481 1,540 1,366
- -------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.051 $14.093 $16.303 $18.097 $20.669
Accumulation Unit Value, End of Period - $14.093 $16.303 $18.097 $20.669 $21.333
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer High Income Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.695 $12.829 $13.574 $13.475 $14.324
Accumulation Unit Value, End of Period - $12.829 $13.574 $13.475 $14.324 $13.871
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.431 $12.508 $13.285 $13.671 $15.268
Accumulation Unit Value, End of Period - $12.508 $13.285 $13.671 $15.268 $15.472
Number of Units Outstanding, End of Period - 1,423 2,527 2,532 2,503 2,445
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $10.680 $14.518 $16.837 $17.977 $20.060
Accumulation Unit Value, End of Period - $14.518 $16.837 $17.977 $20.060 $19.245
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA - Service Shares
Accumulation Unit Value, Beginning of Period - $11.212 $12.016 $12.679 $12.645 $13.196
Accumulation Unit Value, End of Period - $12.016 $12.679 $12.645 $13.196 $14.066
Number of Units Outstanding, End of Period - 57 56 56 56 52
- -------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.717 $12.309 $13.069 $13.605 $14.943
Accumulation Unit Value, End of Period - $12.309 $13.069 $13.605 $14.943 $14.966
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.958 $13.370 $14.457 $14.804 $16.700
Accumulation Unit Value, End of Period - $13.370 $14.457 $14.804 $16.700 $15.267
Number of Units Outstanding, End of Period - 1,360 2,340 2,355 2,315 2,370
- -------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.201 $11.190 $11.665 $12.850 $12.855
Accumulation Unit Value, End of Period - $11.190 $11.665 $12.850 $12.855 $12.432
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.828 $13.212 $14.212 $14.259 $15.337
Accumulation Unit Value, End of Period - $13.212 $14.212 $14.259 $15.337 $15.339
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT Income Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.324 $10.338 $10.506 $10.466 $10.645
Accumulation Unit Value, End of Period - $10.338 $10.506 $10.466 $10.645 $10.899
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.542 $13.249 $14.981 $16.357 $20.331
Accumulation Unit Value, End of Period - $13.249 $14.981 $16.357 $20.331 $21.436
Number of Units Outstanding, End of Period - 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------
166 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.658 $12.862 $14.098 $14.929 $16.552
Accumulation Unit Value, End of Period - $12.862 $14.098 $14.929 $16.552 $15.273
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund - Class IB
Accumulation Unit Value, Beginning of Period - $ 9.906 $ 9.755 $ 9.555 $ 9.534 $ 9.686
Accumulation Unit Value, End of Period - $ 9.755 $ 9.555 $ 9.534 $ 9.686 $ 9.875
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.944 $13.362 $14.343 $15.354 $16.221
Accumulation Unit Value, End of Period - $13.362 $14.343 $15.354 $16.221 $16.688
Number of Units Outstanding, End of Period - 1,492 1,502 1,449 1,490 1,419
- ------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - $11.285 $14.429 $16.207 $16.701 $18.856
Accumulation Unit Value, End of Period - $14.429 $16.207 $16.701 $18.856 $17.449
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT Research Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $10.807 $12.965 $13.570 $13.868 $15.023
Accumulation Unit Value, End of Period - $12.965 $13.570 $13.868 $15.023 $14.698
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period - $10.649 $11.963 $12.596 $12.749 $13.886
Accumulation Unit Value, End of Period - $11.963 $12.596 $12.749 $13.886 $13.639
Number of Units Outstanding, End of Period - 0 911 960 982 981
- ------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period - $11.450 $13.937 $16.469 $17.401 $21.512
Accumulation Unit Value, End of Period - $13.937 $16.469 $17.401 $21.512 $25.106
Number of Units Outstanding, End of Period - 0 44 41 35 28
- ------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.764 $13.427 $15.497 $16.913 $17.357
Accumulation Unit Value, End of Period - $13.427 $15.497 $16.913 $17.357 $17.531
Number of Units Outstanding, End of Period - 736 728 691 744 715
- ------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period - $10.545 $12.274 $12.545 $12.904 $13.240
Accumulation Unit Value, End of Period - $12.274 $12.545 $12.904 $13.240 $13.594
Number of Units Outstanding, End of Period - 1,630 1,697 1,709 1,830 1,752
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.047 $11.945 $12.197
Accumulation Unit Value, End of Period - - $11.047 $11.945 $12.197 $13.955
Number of Units Outstanding, End of Period - - 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period - - $10.000 $11.258 $11.407 $12.882
Accumulation Unit Value, End of Period - - $11.258 $11.407 $12.882 $12.242
Number of Units Outstanding, End of Period - - 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $ 9.898 $11.621 $12.075 $12.648 $12.632
Accumulation Unit Value, End of Period - $11.621 $12.075 $12.648 $12.632 $14.336
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.754 $13.221 $14.683 $15.677 $17.694
Accumulation Unit Value, End of Period - $13.221 $14.683 $15.677 $17.694 $17.650
Number of Units Outstanding, End of Period - 1,365 1,280 1,227 1,195 1,156
- ------------------------------------------------------------------------------------------------------
Van Kampen LIT Money Market Portfolio - Class II
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $ 9.784 $ 9.753 $ 9.887
Accumulation Unit Value, End of Period - $10.000 $ 9.784 $ 9.753 $ 9.887 $10.049
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------
167 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2002 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $12.251 $13.735 $14.713 $16.056 $17.313
Accumulation Unit Value, End of Period - $13.735 $14.713 $16.056 $17.313 $17.922
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.885 $11.374 $12.461
Accumulation Unit Value, End of Period - - $10.885 $11.374 $12.461 $12.532
Number of Units Outstanding, End of Period - - 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.683 $12.029 $12.187
Accumulation Unit Value, End of Period - - $10.683 $12.029 $12.187 $14.455
Number of Units Outstanding, End of Period - - 1,685 1,541 1,643 1,371
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $10.657 $11.977 $12.100
Accumulation Unit Value, End of Period - - $10.657 $11.977 $12.100 $14.323
Number of Units Outstanding, End of Period - - 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.000 $10.974 $11.958 $14.141
Accumulation Unit Value, End of Period - $10.000 $10.974 $11.958 $14.141 $15.104
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - - - - $10.000 $ 9.759
Accumulation Unit Value, End of Period - - - - $ 9.759 $11.642
Number of Units Outstanding, End of Period - - - - 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $13.492 $15.617 $17.156 $18.672
Accumulation Unit Value, End of Period - $13.492 $15.617 $17.156 $18.672 $18.705
Number of Units Outstanding, End of Period - 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.222 $12.265 $14.407
Accumulation Unit Value, End of Period - - $11.222 $12.265 $14.407 $15.117
Number of Units Outstanding, End of Period - - 1,693 1,587 1,479 1,356
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (4)(5)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.215 $12.240 $14.369
Accumulation Unit Value, End of Period - - $11.215 $12.240 $14.369 $15.063
Number of Units Outstanding, End of Period - - 0 0 0 0
- ----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (4)
Accumulation Unit Value, Beginning of Period - $11.344 $14.366 $19.022 $21.613 $28.957
Accumulation Unit Value, End of Period - $14.366 $19.022 $21.613 $28.957 $23.307
Number of Units Outstanding, End of Period - 0 510 510 510 510
- ----------------------------------------------------------------------------------------------------------
* 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, and the Fidelity VIP
Contrafund - Service Class 2 Sub-Account, Fidelity VIP Freedom 2010 - Service
Class 2 Sub-Account, Fidelity VIP Freedom 2020 - Service Class 2 Sub-Account,
Fidelity VIP Freedom 2030 - Service Class 2 Sub-Account, Fidelity VIP Freedom
Income - Service Class 2 Sub-Account, Fidelity VIP Growth Stock - Service
Class 2 Sub-Account, Fidelity VIP Index 500 - Service Class 2 Sub-Account,
Fidelity VIP Mid Cap - Service Class 2 Sub-Account, FTVIP Mutual Discovery
Securities - Class 2 Sub-Account and Van Kampen UIF Mid Cap Growth, Class II
Sub-Account, which were first offered under the Contracts on May 1, 2006. 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%.
168 PROSPECTUS
(1)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.
(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-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.
(3)Effective May 1, 2006 the Van Kampen LIT Aggressive Growth Portfolio, Class
II is no longer available for new investments. If you are currently invested
in the Variable Sub-Account that invests in this Portfolio you may continue
your investment. If, prior to May 1, 2006, 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 the Variable Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
(4)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
(5)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.
169 PROSPECTUS
PA195-4
[LOGO]
The Allstate Variable Annuities
(Allstate Variable Annuity, Allstate Variable Annuity - L Share)
Allstate Life Insurance Company
Street Address: 5801 SW 6th Ave. Topeka, KS 66606-0001
Mailing Address: P.O. Box 758566, Topeka, KS 66675-8566
Telephone Number: 1-800-457-7617
Fax Number: 1-785-228-4584
Prospectus dated May 1, 2008
- --------------------------------------------------------------------------------
Allstate Life Insurance Company ("Allstate Life") has offered the following
individual and group flexible premium deferred variable annuity contracts
(each, a "Contract"):
. Allstate Variable Annuity
. Allstate Variable Annuity - L Share
This prospectus contains information about each Contract that you should know
before investing. Please keep it for future reference. These Contracts are no
longer offered for new sales.
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 47*
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 funds ("Funds"):
Morgan Stanley Variable Investment Fidelity(R) Variable Insurance
Series (Class Y) Products (Service Class 2)
The Universal Institutional Funds, Franklin Templeton Variable Insurance
Inc. (Class II Shares) Products Trust (Class 2)
Van Kampen Life Investment Trust Goldman Sachs Variable Insurance Trust
(Class II)
PIMCO Variable Insurance Trust
AIM Variable Insurance Funds
(Series II) Putnam Variable Trust (Class IB)
AllianceBernstein Variable Products
Series Fund, Inc. (Class B)
* Up to 17 additional Variable Sub-Accounts may be available depending on the
date you purchased your Contract. Please see page 44 for information about
Variable Sub-Account 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
May 1, 2008, 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 88 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.
- ------------------------------------------------------------------------------------------------------
IMPORTANT The Securities and Exchange Commission has not approved or disapproved the securities
NOTICES 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.
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 5
----------------------------------------
The Contracts at a Glance 6
----------------------------------------
How the Contracts Work 11
----------------------------------------
Expense Table 12
----------------------------------------
Financial Information 16
----------------------------------------
Contract Features
----------------------------------------
The Contracts 16
----------------------------------------
Purchases 19
----------------------------------------
Contract Value 20
----------------------------------------
Investment Alternatives 43
----------------------------------------
The Variable Sub-Accounts 43
----------------------------------------
The Fixed Account Options 49
----------------------------------------
Transfers 53
----------------------------------------
Expenses 56
----------------------------------------
Access to Your Money 61
----------------------------------------
Income Payments 62
----------------------------------------
Death Benefits 71
----------------------------------------
Page
----------------------------------------------------------
Other Information
----------------------------------------------------------
More Information 78
----------------------------------------------------------
Taxes 80
----------------------------------------------------------
Annual Reports and Other Documents 88
----------------------------------------------------------
Statement of Additional Information Table of Contents 89
----------------------------------------------------------
Appendix A - Contract Comparison Chart 90
----------------------------------------------------------
Appendix B - Market Value Adjustment 91
----------------------------------------------------------
Appendix C - Example of Calculation of Income
Protection Benefit 93
----------------------------------------------------------
Appendix D - Withdrawal Adjustment Example-Income
Benefits 94
----------------------------------------------------------
Appendix E - Withdrawal Adjustment Example-Death
Benefits 95
----------------------------------------------------------
Appendix F - Calculation of Earnings Protection Death
Benefit 96
----------------------------------------------------------
Appendix G - Withdrawal Adjustment Example -
TrueReturn Accumulation Benefit 99
----------------------------------------------------------
Appendix H - SureIncome Withdrawal Benefit Option
Calculation Examples 100
----------------------------------------------------------
Appendix I - SureIncome Plus Withdrawal Benefit
Option Calculation Examples 101
----------------------------------------------------------
Appendix J - SureIncome for Life Withdrawal Benefit
Option Calculation Examples 103
----------------------------------------------------------
Appendix K - Accumulation Unit Values 107
----------------------------------------------------------
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 21
----------------------------------------------------------------
Accumulation Benefit 21
----------------------------------------------------------------
Accumulation Phase 11
----------------------------------------------------------------
Accumulation Unit 20
----------------------------------------------------------------
Accumulation Unit Value 20
----------------------------------------------------------------
Allstate Life ("We") 77
----------------------------------------------------------------
Annuitant 17
----------------------------------------------------------------
Automatic Additions Program 19
----------------------------------------------------------------
Automatic Portfolio Rebalancing Program 54
----------------------------------------------------------------
Beneficiary 18
----------------------------------------------------------------
Benefit Base (for the TrueReturn Accumulation Benefit
Option) 21
----------------------------------------------------------------
Benefit Base (for the SureIncome Withdrawal Benefit Option) 30
----------------------------------------------------------------
Benefit Base (for the SureIncome Plus Withdrawal Benefit
Option) 33
----------------------------------------------------------------
Benefit Base (for the SureIncome For Life Withdrawal
Benefit Option) 37
----------------------------------------------------------------
Benefit Payment (for the SureIncome Withdrawal Benefit
Option) 29
----------------------------------------------------------------
Benefit Payment (for the SureIncome Plus Withdrawal
Benefit Option) 32
----------------------------------------------------------------
Benefit Payment (for the SureIncome For Life Withdrawal
Benefit Option) 36
----------------------------------------------------------------
Benefit Payment Remaining (for the SureIncome Withdrawal
Benefit Option) 29
----------------------------------------------------------------
Benefit Payment Remaining (for the SureIncome Plus
Withdrawal Benefit Option) 32
----------------------------------------------------------------
Benefit Payment Remaining (for the SureIncome For Life
Withdrawal Benefit Option) 36
----------------------------------------------------------------
Benefit Year (for the SureIncome Withdrawal Benefit Option) 28
----------------------------------------------------------------
Benefit Year (for the SureIncome Plus Withdrawal Benefit
Option) 32
----------------------------------------------------------------
Benefit Year (for the SureIncome For Life Withdrawal
Benefit Option) 35
----------------------------------------------------------------
Co-Annuitant 17
----------------------------------------------------------------
*Contract 78
----------------------------------------------------------------
Contract Anniversary 7
----------------------------------------------------------------
Contract Owner ("You") 16
----------------------------------------------------------------
Contract Value 7
----------------------------------------------------------------
Contract Year 7
----------------------------------------------------------------
Dollar Cost Averaging Program 54
----------------------------------------------------------------
Due Proof of Death 69
----------------------------------------------------------------
Earnings Protection Death Benefit Option 71
----------------------------------------------------------------
Enhanced Beneficiary Protection (Annual Increase) Option 71
----------------------------------------------------------------
Page
---------------------------------------------------------------
Excess of Earnings Withdrawal 72
---------------------------------------------------------------
Fixed Account Options 48
---------------------------------------------------------------
Free Withdrawal Amount 58
---------------------------------------------------------------
Funds 1
---------------------------------------------------------------
Guarantee Option 22
---------------------------------------------------------------
Guarantee Period Accounts 49
---------------------------------------------------------------
Income Base 7
---------------------------------------------------------------
Income Plan 61
---------------------------------------------------------------
Income Protection Benefit Option 64
---------------------------------------------------------------
In-Force Earnings 72
---------------------------------------------------------------
In-Force Premium 72
---------------------------------------------------------------
Investment Alternatives 42
---------------------------------------------------------------
IRA Contract 7
---------------------------------------------------------------
Issue Date 11
---------------------------------------------------------------
Market Value Adjustment 50
---------------------------------------------------------------
Maximum Anniversary Value (MAV) Death Benefit Option 70
---------------------------------------------------------------
Payout Phase 11
---------------------------------------------------------------
Payout Start Date 61
---------------------------------------------------------------
Payout Withdrawal 63
---------------------------------------------------------------
Portfolios 78
---------------------------------------------------------------
Qualified Contract 16
---------------------------------------------------------------
Retirement Income Guarantee Options 57
---------------------------------------------------------------
Return of Premium ("ROP") Death Benefit 70
---------------------------------------------------------------
Rider Anniversary 20
---------------------------------------------------------------
Rider Application Date 17
---------------------------------------------------------------
Rider Date (for the TrueReturn Accumulation Benefit
Option) 20
---------------------------------------------------------------
Rider Date (for the SureIncome Withdrawal Benefit Option) 28
---------------------------------------------------------------
Rider Date (for the SureIncome Plus Withdrawal Benefit
Option) 32
---------------------------------------------------------------
Rider Date (for the SureIncome For Life Withdrawal Benefit
Option) 36
---------------------------------------------------------------
Rider Fee (for the TrueReturn Accumulation Benefit Option) 7
---------------------------------------------------------------
Rider Fee (for the SureIncome Withdrawal Benefit Option) 7
---------------------------------------------------------------
Rider Fee (for the SureIncome Plus Withdrawal Benefit
Option) 7
---------------------------------------------------------------
Rider Fee (for the SureIncome For Life Withdrawal Benefit
Option) 7
---------------------------------------------------------------
Rider Fee Percentage 7
---------------------------------------------------------------
Rider Maturity Date 20
---------------------------------------------------------------
Rider Period 20
---------------------------------------------------------------
Rider Trade-In Option (for the TrueReturn Accumulation
Benefit Option) 27
---------------------------------------------------------------
3 PROSPECTUS
Page
---------------------------------------------------------
Rider Trade-In Option (for the SureIncome Withdrawal
Benefit Option) 31
---------------------------------------------------------
Right to Cancel 19
---------------------------------------------------------
SEC 1
---------------------------------------------------------
Settlement Value 70
---------------------------------------------------------
Spousal Protection Benefit (Co-Annuitant) Option 17
---------------------------------------------------------
Spousal Protection Benefit (Co-Annuitant) Option for
Custodial Individual Retirement Accounts 17
---------------------------------------------------------
Standard Fixed Account Option 49
---------------------------------------------------------
SureIncome Covered Life 35
---------------------------------------------------------
SureIncome Option Fee 7
---------------------------------------------------------
SureIncome Plus Option 7
---------------------------------------------------------
SureIncome Plus Option Fee 7
---------------------------------------------------------
SureIncome Plus Withdrawal Benefit Option 32
---------------------------------------------------------
SureIncome For Life Option 7
---------------------------------------------------------
SureIncome For Life Option Fee 7
---------------------------------------------------------
SureIncome For Life Withdrawal Benefit Option 35
---------------------------------------------------------
SureIncome ROP Death Benefit 38
---------------------------------------------------------
SureIncome Withdrawal Benefit Option 28
---------------------------------------------------------
Systematic Withdrawal Program 61
---------------------------------------------------------
Tax Qualified Contract 83
---------------------------------------------------------
Transfer Period Accounts 40
---------------------------------------------------------
Trial Examination Period 19
---------------------------------------------------------
Page
-------------------------------------------------------------
TrueBalance/SM/ Asset Allocation Program 46
-------------------------------------------------------------
TrueReturn/SM/ Accumulation Benefit Option 20
-------------------------------------------------------------
Valuation Date 19
-------------------------------------------------------------
Variable Account 77
-------------------------------------------------------------
Variable Sub-Account 42
-------------------------------------------------------------
Withdrawal Benefit Factor (for the SureIncome Withdrawal
Benefit Option) 29
-------------------------------------------------------------
Withdrawal Benefit Factor (for the SureIncome Plus
Withdrawal Benefit Option) 32
-------------------------------------------------------------
Withdrawal Benefit Factor (for the SureIncome for Life
Withdrawal Benefit Option) 36
-------------------------------------------------------------
Withdrawal Benefit Payout Phase (for the SureIncome
Withdrawal Benefit Option) 30
-------------------------------------------------------------
Withdrawal Benefit Payout Phase (for the SureIncome Plus
Withdrawal Benefit Option) 34
-------------------------------------------------------------
Withdrawal Benefit Payout Phase (for the SureIncome for
Life Withdrawal Benefit Option) 36
-------------------------------------------------------------
Withdrawal Benefit Payout Start Date (for the SureIncome
Withdrawal Benefit Option) 30
-------------------------------------------------------------
Withdrawal Benefit Payout Start Date (for the SureIncome
Plus Withdrawal Benefit Option) 34
-------------------------------------------------------------
Withdrawal Benefit Payout Start Date (for the SureIncome
for Life Withdrawal Benefit Option) 38
-------------------------------------------------------------
Withdrawal Benefit Option 28
-------------------------------------------------------------
Withdrawal Benefit Option Fee 57
-------------------------------------------------------------
* In certain states a Contract was available only as a group Contract. If you
purchased a group Contract, we issued 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.
4 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 0.19%*, 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 0.19%*,
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 and 0.19% for Contracts issued
on or after October 17, 2005. The administrative expense charge is 0.30% for
Contracts issued on or after January 1, 2005 and prior to October 17, 2005;
effective October 17, 2005 and thereafter, the administrative expense charge
applied to such Contracts is 0.19%.
5 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 We are no longer offering new contracts.
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 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.
All Contracts
. Annual administrative expense charge of 0.19% for Contracts issued
before January 1, 2005 and for Contracts issued on or after October 17,
2005 (0.30% for Contracts issued on or after January 1, 2005 and prior
to October 17, 2005; effective October 17, 2005 and thereafter, the
annual administrative expense charge applied to such Contracts is
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").
6 PROSPECTUS
. 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 any Withdrawal Benefit Option.
. We discontinued offering the SureIncome Withdrawal Benefit Option
("SureIncome Option") as of May 1, 2006, except in a limited number of
states. If you elected the SureIncome Option prior to May 1, 2006, you
would pay an additional annual fee ("SureIncome Option Fee") of 0.50%
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, a TrueReturn
Option or any other Withdrawal Benefit Option.
. If you select the SureIncome Plus Withdrawal Benefit Option
("SureIncome Plus Option") you would pay an additional annual fee
("SureIncome Plus Option Fee") of 0.65% (up to 1.25% for Options
added in the future) of the Benefit Base on each Contract Anniversary
(see the SureIncome Plus Option Fee section). You may not select the
SureIncome Plus Option together with a Retirement Income Guarantee
Option, a TrueReturn Option or any other Withdrawal Benefit Option.
. If you select the SureIncome For Life Withdrawal Benefit Option
("SureIncome For Life Option") you would pay an additional annual fee
("SureIncome For Life Option Fee") of 0.65% (up to 1.25% for Options
added in the future) of the Benefit Base on each Contract Anniversary
(see the SureIncome For Life Option Fee section). You may not select
the SureIncome For Life Option together with a Retirement Income
Guarantee Option, a TrueReturn Option or any other Withdrawal
Benefit 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.
. 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
7 PROSPECTUS
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 13 for
details.
. Transfer fee equal to 1.00% (subject to increase to up to 2.00%) of the
amount transferred after the 12th 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.
- ------------------------------------------------------------------------------------------------------
Investment Alternatives Each Contract offers several investment alternatives including:
. up to 3 Fixed Account Options that credit interest at rates we guarantee,
and
. 47* 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
. Invesco A I M Advisors, Inc.
. AllianceBernstein L.P.
. Fidelity Management & Research Company
. Franklin Advisers, Inc.
. Franklin Mutual Advisers, LLC
. Goldman Sachs Asset Management, L.P.
. Pacific Investment Management Company LLC
. Putnam Investment Management, LLC
. Templeton Investment Counsel, LLC
*Up to 17 additional Variable Sub-Accounts may be available depending
on the date you purchased your Contract. Please see page 45 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
1-800-457-7617.
8 PROSPECTUS
- ----------------------------------------------------------------------------------------------
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
- ----------------------------------------------------------------------------------------------
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
The SureIncome Plus Option and SureIncome For Life Option also include
a death benefit option, the SureIncome Return of Premium Death Benefit,
("SureIncome ROP Death Benefit").
- ----------------------------------------------------------------------------------------------
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 $100.
A charge may apply after the 12th transfer in each Contract Year.
9 PROSPECTUS
- -------------------------------------------------------------------------------------------
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 a
Withdrawal Benefit Option is in effect under your Contract. Your Contract
will terminate if you withdraw all of your Contract Value.
- -------------------------------------------------------------------------------------------
10 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 64. 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.
[FLOW CHART]
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 1-800-457-7617 if you have any question about how the
Contracts work.
11 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 Administrative Total Variable Account
Basic Contract (without any optional benefit) Risk Charge Expense Charge* Annual Expense
- -------------------------------------------------------------------------------------------------------------------------
Allstate Variable Annuity 1.10% 0.19% 1.29%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Variable Annuity - L Share 1.50% 0.19% 1.69%
- -------------------------------------------------------------------------------------------------------------------------
* 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 and for Contracts issued on or after October 17, 2005. The administrative
expense charge is 0.30% for Contracts issued on or after January 1, 2005 and
prior to October 17, 2005; effective October 17, 2005 and thereafter, the
administrative expense charge applied to such Contracts is 0.19%.
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.
MAV Death Benefit Option 0.20% (up to 0.30% for Options added
in the future)
Enhanced Beneficiary Protection
(Annual Increase) Option 0.30%
Earnings Protection Death Benefit 0.25% (up to 0.35% for Options added
Option (issue age 0-70) in the future)
Earnings Protection Death Benefit 0.40% (up to 0.50% for Options added
Option (issue 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 Total Variable Account
Protection Death Benefit Option (issue age 71-79) Risk Charge* Expense Charge* Annual Expense
- -------------------------------------------------------------------------------------------------------------------------
Allstate Variable Annuity 2.00% 0.19% 2.19%
- -------------------------------------------------------------------------------------------------------------------------
Allstate Variable Annuity - L Share 2.40% 0.19% 2.59%
- -------------------------------------------------------------------------------------------------------------------------
* 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 and for Contracts issued on or after
October 17, 2005. The administrative expense charge is 0.30% for Contracts
issued on or after January 1, 2005 and prior to October 17, 2005; effective
October 17, 2005 and thereafter, the administrative expense charge applied to
such Contracts is 0.19%.
12 PROSPECTUS
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%**
--------------------------------------------------------------------
* Effective May 1, 2006, we ceased offering the SureIncome Option except in a
limited number of states.
** Up to 1.25% for SureIncome Options added in the future. See "SureIncome
Withdrawal Benefit Option" for details.
SureIncome Plus Withdrawal Benefit Option Fee
(annual rate as a percentage of Benefit Base on a Contract Anniversary)
SureIncome Plus Withdrawal Benefit Option 0.65%*
-------------------------------------------------------------------
* Up to 1.25% for SureIncome Plus Options added in the future. See "SureIncome
Plus Withdrawal Benefit Option" for details.
SureIncome For Life Withdrawal Benefit Option Fee
(annual rate as a percentage of Benefit Base on a Contract Anniversary)
SureIncome For Life Withdrawal Benefit Option 0.65%*
-------------------------------------------------------------------
* Up to 1.25% for SureIncome For Life Options added in the future. See
"SureIncome For Life 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 Individual Retirement Accounts 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.
13 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 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,
and other expenses) 0.57% 1.93%
----------------------------------------------------------------------------
(1)Expenses are shown as a percentage of Portfolio average daily net assets
(before any waiver or reimbursement) as of December 31, 2007 (except as
otherwise noted).
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 (with a 0.19% annual administrative charge), 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 the Spousal Protection Benefit (Co-Annuitant) Option; and
.. elected the SureIncome Plus Withdrawal Benefit 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 $1,126 $2,023 $2,929 $5,401 $1,081 $1,714 $2,858 $5,716
- -------------------------------------------------------------------------------------------------
Costs Based on Minimum Annual
Portfolio Expenses $ 986 $1,619 $2,279 $4,227 $ 942 $1,314 $2,219 $4,589
- -------------------------------------------------------------------------------------------------
14 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 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 $531 $1,598 $2,674 $5,401 $571 $1,714 $2,858 $5,716
- -------------------------------------------------------------------------------------------------
Costs Based on Minimum Annual
Portfolio Expenses $391 $1,194 $2,024 $4,227 $432 $1,314 $2,219 $4,589
- -------------------------------------------------------------------------------------------------
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), the
Spousal Protection Benefit (Co-Annuitant) Option and the SureIncome Plus
Withdrawal Benefit Option. If any or all of these features were not elected,
the expense figures shown above would be slightly lower.
15 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 lowest and highest available combinations of
Contract charges that affect Accumulation Unit Values for each Contract are
shown in Appendix K to this prospectus. The Statement of Additional Information
contains the Accumulation Unit Values for all other available combinations of
Contract charges that affect Accumulation Unit Values for each Contract. 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 Contracts with administrative expense
charges of 0.30% which applies to Contracts purchased on or after January 1,
2005, and prior to October 17, 2005; effective October 17, 2005, and
thereafter, the administrative expense charge applied to such Contracts is
0.19%.
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 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 Plus Withdrawal Benefit Option,
the maximum age of any Contract Owner on the Rider Application Date is age 80.
If you select the SureIncome For Life Withdrawal Benefit Option, the minimum
and maximum ages of the oldest Contract Owner (oldest annuitant if Contract
Owner is a non-living person) on the Rider Application Date are ages 50 and 79,
respectively.
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
16 PROSPECTUS
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 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. Additional
restrictions may apply in the case of Qualified Plans. The maximum age of the
Annuitant on the date we receive the completed application for each Contract is
age 90.
If you select the Enhanced Beneficiary Protection (MAV) Death Benefit 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 age 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 Plus Withdrawal Benefit Option, the maximum age of
any Annuitant on the Rider Application Date is age 80. If you select the
SureIncome For Life Withdrawal Benefit Option, the minimum and maximum ages of
the oldest annuitant, if the Contract Owner is a non-living person, on the
Rider Application Date are ages 50 and 79, respectively.
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.
17 PROSPECTUS
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 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 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.
18 PROSPECTUS
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 periodic income payments under your Contract.
Purchases
- --------------------------------------------------------------------------------
MINIMUM PURCHASE PAYMENTS
You may make purchase payments at any time prior to the Payout Start Date. All
subsequent purchase payments under a Contract must be $1,000 or more ($50 for
automatic payments). 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 lesser subsequent
purchase payment amounts. We reserve the right to limit the availability of the
investment alternatives for additional investments.
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 us at 1-800-457-7617.
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 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 - Class Y 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 - Class Y 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.
19 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 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 Withdrawal Benefit 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
20 PROSPECTUS
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 Morgan
Stanley VIS Money Market--Class Y Sub-Account. You may transfer the excess
amount out of the Morgan Stanley VIS Money Market--Class Y 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
carefully whether this Option is appropriate for your needs.
21 PROSPECTUS
.. 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 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 *TrueBalance
Conservative Model Conservative Model
Portfolio Option Portfolio Option
*TrueBalance Moderately *TrueBalance Moderately
Conservative Model Conservative Model
Portfolio Option 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
22 PROSPECTUS
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 selected.
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 allocation 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 $100 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
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
(1,3,4,5):
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
Fidelity VIP Money Market - Service Class 2 Sub-Account
- --------------------------------------------------------------------------------
Category B
Morgan Stanley VIS High Yield - Class Y Sub-Account/(1)/
Morgan Stanley VIS Income Plus - Class Y Sub-Account
Morgan Stanley VIS Limited Duration - Class Y Sub-Account/(4)/
Fidelity VIP High Income - Service Class 2 Sub-Account
FTVIP Franklin High Income Securities - Class 2 Sub-Account/(1)/
PIMCO VIT CommodityRealReturn(TM) Strategy - Advisor Shares Sub-Account
PIMCO VIT Emerging Markets Bond - Advisor Shares Sub-Account
PIMCO VIT Real Return - Advisor Shares Sub-Account
PIMCO VIT Total Return - Advisor Shares Sub-Account
UIF Emerging Markets Debt, Class II Sub-Account/(1)(2)(7)/
UIF U.S. Real Estate, Class II Sub-Account/(2)(7)/
- --------------------------------------------------------------------------------
Category C
Morgan Stanley VIS Capital Opportunities - Class Y Sub-Account/(6)/
Morgan Stanley VIS Dividend Growth - 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 VPS Growth - Class B Sub-Account
AllianceBernstein VPS Growth and Income - Class B Sub-Account/(1)/
AllianceBernstein VPS International Value - Class B Sub-Account
AllianceBernstein VPS Small/Mid Cap Value - Class B Sub-Account
AllianceBernstein VPS Utility Income - Class B Sub-Account
AllianceBernstein VPS Value - Class B Sub-Account
AIM V.I. Basic Value - Series II Sub-Account/(1)/
AIM V.I. Core Equity - Series II Sub-Account/(5)/
AIM V.I. Mid Cap Core Equity - Series II Sub-Account/(1)/
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Growth & Income - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
FTVIP Franklin Flex Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Goldman Sachs VIT Structured Small Cap Equity Sub-Account
Goldman Sachs VIT Structured U.S. Equity Sub-Account
Goldman Sachs VIT Growth and Income Sub-Account
Goldman Sachs VIT Mid Cap Value Sub-Account/(4)/
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/(3)/
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT New Value - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
UIF Emerging Markets Equity, Class II Sub-Account/(2)(7)/
UIF Equity and Income, Class II Sub-Account/(2)(7)/
UIF Global Franchise, Class II Sub-Account/(2)(7)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(7)/
UIF U.S. Mid Cap Value, Class II Sub-Account/(2)(7)/
UIF International Growth Equity, Class II Sub-Account/(2)(7)/
Van Kampen LIT Capital Growth, Class II Sub-Account/(6)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
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)/
AIM V.I. Capital Appreciation - Series II Sub-Account/(1)/
AllianceBernstein VPS Large Cap Growth - Class B Sub-Account/(1)/
UIF Capital Growth, Class II Sub-Account/(2)(7)/
UIF Small Company Growth, Class II Sub-Account/(2)(7)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(6)/
- --------------------------------------------------------------------------------
23 PROSPECTUS
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)Effective May 1, 2005, the following Variable Sub-Accounts closed to new
investments: 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 AllianceBernstein VPS Growth and Income -
Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth - Class B
Sub-Account, the FTVIP Franklin High Income Securities - 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 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.*
2)Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3)Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account closed
to new investments.*
4)Effective May 1, 2006, the following Variable Sub-Accounts closed to new
investments: the Goldman Sachs VIT Mid Cap Value Sub-Account, the Morgan
Stanley VIS European Equity - Class Y Sub-Account and the Morgan Stanley VIS
Limited Duration - Class Y Sub-Account.*
5)Effective May 1, 2006, the AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II
Sub-Account), such as automatic additions, portfolio rebalancing, or dollar
cost averaging, we will continue to effect automatic transactions into the
AIM V.I. Core Equity - Series II Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.*
6)Effective May 1, 2008, the Morgan Stanley VIS Equity Portfolio - Class Y
changed its name to the Morgan Stanley VIS Capital Opportunities Portfolio -
Class Y, the Van Kampen LIT Strategic Growth Portfolio, Class II changed its
name to Van Kampen LIT Capital Growth Portfolio, Class II and the Van Kampen
LIT Aggressive Growth Portfolio, Class II changed its name to the Van Kampen
LIT Mid Cap Growth Portfolio, Class II.
7)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed its
name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging Markets
Debt Portfolio changed its name to UIF Emerging Markets Debt Portfolio; the
Van Kampen UIF Emerging Markets Equity Portfolio changed it's name to the UIF
Emerging Markets Equity Portfolio; the Van Kampen UIF U.S. Real Estate
Portfolio changed its name to the UIF U.S. Real Estate Portfolio; the Van
Kampen UIF Equity and Income Portfolio changed its name to the UIF Equity and
Income Portfolio; the Van Kampen UIF U.S. Mid Cap Value Portfolio changed its
name to the UIF U.S. Mid Cap Value Portfolio; the Van Kampen UIF Mid Cap
Growth Portfolio changed its name to the UIF Mid Cap Growth Portfolio; the
Van Kampen UIF Global Franchise Portfolio changed its name to the UIF Global
Franchise Portfolio; the Van Kampen UIF International Growth Equity Portfolio
changed its name to UIF International Growth Equity Portfolio; and the Van
Kampen Small Company Growth Portfolio changed its name to the UIF Small
Company Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If prior to the effective close date,
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 the effective close date, 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 this TrueReturn Option prior to
adding it 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, 3, 4, 5):
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
Morgan Stanley VIS Money Market - Class Y Sub-Account
Fidelity VIP Money Market - Service Class 2 Sub-Account
- --------------------------------------------------------------------------------
Category B
Morgan Stanley VIS High Yield - Class Y Sub-Account/(1)/
Morgan Stanley VIS Income Plus - Class Y Sub-Account
Morgan Stanley VIS Limited Duration - Class Y Sub-Account/(4)/
Fidelity VIP High Income - Service Class 2 Sub-Account
FTVIP Franklin High Income Securities - Class 2 Sub-Account/(1)/
PIMCO VIT CommodityRealReturn(TM) Strategy - Advisor Shares Sub-Account
24 PROSPECTUS
PIMCO VIT Emerging Markets Bond - Advisor Shares Sub-Account
PIMCO VIT Real Return - Advisor Shares Sub-Account
PIMCO VIT Total Return - Advisor Shares Sub-Account
UIF U.S. Real Estate, Class II Sub-Account/(2)(7)/
UIF Emerging Markets Debt, Class II Sub-Account/(1)(2)(7)/
- --------------------------------------------------------------------------------
Category C
Morgan Stanley VIS Capital Opportunities - Class Y Sub-Account/(6)/
Morgan Stanley VIS Dividend Growth - Class Y Sub-Account
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. Core Equity - Series II Sub-Account/(5)/
AllianceBernstein VPS Growth and Income - Class B Sub-Account/(1)/
AllianceBernstein VPS International Value - Class B Sub-Account
AllianceBernstein VPS Utility Income - Class B Sub-Account
AllianceBernstein VPS Value - Class B Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Growth & Income - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
FTVIP Franklin Flex Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
Goldman Sachs VIT Structured Small Cap Equity Sub-Account
Goldman Sachs VIT Structured U.S. Equity Sub-Account
Goldman Sachs VIT Growth and Income Sub-Account
Goldman Sachs VIT Mid Cap Value Sub-Account/(4)/
Putnam VT Growth and Income - Class IB Sub-Account/(1)/
Putnam VT New Value - Class IB Sub-Account
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
UIF Equity and Income, Class II Sub-Account/(2)(7)/
UIF U.S. Mid Cap Value, Class II Sub-Account/(2)(7)/
UIF International Growth Equity, Class II Sub-Account/(2)(7)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
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
AIM V.I. Capital Appreciation - Series II Sub-Account/(1)/
AIM V.I. Mid Cap Core Equity - Series II Sub-Account/(1)/
AllianceBernstein VPS Growth - Class B Sub-Account
AllianceBernstein VPS Large Cap Growth - Class B Sub-Account/(1)/
AllianceBernstein VPS Small/Mid Cap Value - Class B Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Putnam VT International Equity - Class IB Sub-Account
Putnam VT Investors - Class IB Sub-Account/(3)/
Putnam VT Voyager - Class IB Sub-Account
UIF Emerging Markets Equity, Class II Sub-Account/(2)(7)/
UIF Capital Growth, Class II Sub-Account/(2)(7)/
UIF Global Franchise, Class II Sub-Account/(2)(7)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(7)/
UIF Small Company Growth, Class II Sub-Account/(2)(7)/
Van Kampen LIT Capital Growth, Class II Sub-Account/(6)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(6)/
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 following Variable Sub-Accounts closed to new
investments: 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 AllianceBernstein VPS Growth and
Income -Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth -
Class B Sub-Account, the FTVIP Franklin High Income Securities - 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 Utilities -
Class Y Sub-Account, the Putnam VT Growth and Income - Class IB Sub-Account
and the UIF Emerging Markets Debt, Class II Sub-Account.*
2)Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3)Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account closed
to new investments.*
4)Effective May 1, 2006, the following Variable Sub-Accounts closed to new
investments: the Goldman Sachs VIT Mid Cap Value Sub-Account, the Morgan
Stanley VIS European Equity - Class Y Sub-Account and the Morgan Stanley VIS
Limited Duration - Class Y Sub-Account.*
5)Effective May 1, 2006, the AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II
Sub-Account), such as automatic additions, portfolio rebalancing, or dollar
cost averaging, we will continue to effect automatic transactions into the
AIM V.I. Core Equity - Series II Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.
6)Effective May 1, 2008, the Morgan Stanley VIS Equity Portfolio - Class Y
changed its name to the Morgan Stanley VIS Capital Opportunities Portfolio -
Class Y, the Van Kampen LIT Strategic Growth Portfolio, Class II changed its
name to Van Kampen LIT Capital Growth Portfolio, Class II and the Van Kampen
LIT Aggressive Growth Portfolio, Class II changed its name to the Van Kampen
LIT Mid Cap Growth Portfolio, Class II.
7)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed its
name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging Markets
Debt Portfolio changed its name to UIF Emerging Markets Debt Portfolio; the
Van Kampen UIF Emerging Markets Equity Portfolio changed it's name to the UIF
Emerging Markets Equity Portfolio; the Van Kampen UIF U.S. Real Estate
Portfolio changed its name to the UIF U.S. Real Estate Portfolio; the Van
Kampen UIF Equity and Income Portfolio changed its name to the UIF Equity and
Income Portfolio; the Van Kampen UIF U.S. Mid Cap Value Portfolio changed its
name to the UIF U.S. Mid Cap Value Portfolio; the Van Kampen UIF Mid Cap
Growth Portfolio changed its name to the UIF Mid Cap Growth Portfolio; the
Van Kampen UIF Global Franchise Portfolio changed its name to the UIF Global
Franchise Portfolio; the Van Kampen UIF International Growth Equity Portfolio
changed its name to UIF International Growth Equity Portfolio; and the Van
Kampen Small Company Growth Portfolio changed its name to the UIF Small
Company Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If prior to the effective close date,
you enrolled in one of our automatic transaction programs, such as automatic
additions,
25 PROSPECTUS
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.
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, 3,
4, 5):
Model Portfolio Option 2 (Rider Date on or after October 1, 2004)
- --------------------------------------------------------------------------------
Available
- --------------------------------------------------------------------------------
Morgan Stanley VIS Capital Opportunities - Class Y Sub-Account/(6)/
Morgan Stanley VIS Dividend Growth - 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
Morgan Stanley VIS Limited Duration - Class Y Sub-Account/(4)/
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. Core Equity - Series II Sub-Account/(5)/
AIM V.I. Mid Cap Core Equity - Series II Sub-Account/(1)/
AllianceBernstein VPS Growth - Class B Sub-Account
AllianceBernstein VPS Growth and Income - Class B Sub-Account/(1)/
AllianceBernstein VPS International Value - Class B Sub-Account
AllianceBernstein VPS Small/Mid Cap Value - Class B Sub-Account
AllianceBernstein VPS Utility Income - Class B Sub-Account
AllianceBernstein VPS Value - Class B Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Growth & Income - Service Class 2 Sub-Account
Fidelity VIP High Income - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
Fidelity VIP Money Market - Service Class 2 Sub-Account
FTVIP Franklin Flex Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin High Income Securities - Class 2 Sub-Account/(1)/
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Goldman Sachs VIT Structured Small Cap Equity Sub-Account
Goldman Sachs VIT Structured U.S. Equity Sub-Account
Goldman Sachs VIT Growth and Income Sub-Account
Goldman Sachs VIT Mid Cap Value Sub-Account/(4)/
- --------------------------------------------------------------------------------
Model Portfolio Option 2 (Rider Date on or after October 1, 2004)
- --------------------------------------------------------------------------------
PIMCO VIT CommodityRealReturn(TM) Strategy - Advisor Shares Sub-Account
PIMCO VIT Emerging Markets Bond - Advisor Shares Sub-Account
PIMCO VIT Real Return - Advisor Shares Sub-Account
PIMCO VIT Total Return - Advisor Shares Sub-Account
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
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
UIF Emerging Markets Debt, Class II Sub-Account/(1)(2)(7)/
UIF Emerging Markets Equity, Class II Sub-Account/(2)(7)/
UIF Equity and Income, Class II Sub-Account/(2)(7)/
UIF Global Franchise, Class II Sub-Account/(2)(7)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(7)/
UIF U.S. Mid Cap Value, Class II Sub-Account/(2)(7)/
UIF U.S. Real Estate, Class II Sub-Account/(2)(7)/
UIF International Growth Equity, Class II Sub-Account/(2)(7)/
Van Kampen LIT Capital Growth, Class II Sub-Account/(6)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
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)/
AIM V.I. Capital Appreciation - Series II Sub-Account/(1)/
AllianceBernstein VPS Large Cap Growth - Class B Sub-Account/(1)/
UIF Capital Growth, Class II Sub-Account/(2)(7)/
UIF Small Company Growth, Class II Sub-Account/(2)(7)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(6)/
- --------------------------------------------------------------------------------
1)Effective May 1, 2005, the following Variable Sub-Accounts closed to new
investments: 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 AllianceBernstein VPS Growth and Income -
Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth - Class B
Sub-Account, the FTVIP Franklin High Income Securities - 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 Utilities - Class Y
Sub-Account, the Putnam VT Growth and Income - Class IB Sub-Account and the
UIF Emerging Markets Debt, Class II Sub-Account.*
2)Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3)Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account closed
to new investments and is not available with this TrueReturn Option.*
4)Effective May 1, 2006, the following Variable Sub-Accounts closed to new
investments: the Goldman Sachs VIT Mid Cap Value Sub-Account, the Morgan
Stanley VIS European Equity - Class Y Sub-Account and the Morgan Stanley VIS
Limited Duration - Class Y Sub-Account.*
5)Effective May 1, 2006, the AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II
Sub-Account),
26 PROSPECTUS
such as automatic additions, portfolio rebalancing, or dollar cost averaging,
we will continue to effect automatic transactions into the AIM V.I. Core
Equity - Series II Sub-Account in accordance with that program. Outside of
these automatic transaction programs, additional allocations will not be
allowed.*
6)Effective May 1, 2008, the Morgan Stanley VIS Equity Portfolio - Class Y
changed its name to the Morgan Stanley VIS Capital Opportunities Portfolio -
Class Y, the Van Kampen LIT Strategic Growth Portfolio, Class II changed its
name to Van Kampen LIT Capital Growth Portfolio, Class II and the Van Kampen
LIT Aggressive Growth Portfolio, Class II changed its name to the Van Kampen
LIT Mid Cap Growth Portfolio, Class II.
7)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed its
name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging Markets
Debt Portfolio changed its name to UIF Emerging Markets Debt Portfolio; the
Van Kampen UIF Emerging Markets Equity Portfolio changed it's name to the UIF
Emerging Markets Equity Portfolio; the Van Kampen UIF U.S. Real Estate
Portfolio changed its name to the UIF U.S. Real Estate Portfolio; the Van
Kampen UIF Equity and Income Portfolio changed its name to the UIF Equity and
Income Portfolio; the Van Kampen UIF U.S. Mid Cap Value Portfolio changed its
name to the UIF U.S. Mid Cap Value Portfolio; the Van Kampen UIF Mid Cap
Growth Portfolio changed its name to the UIF Mid Cap Growth Portfolio; the
Van Kampen UIF Global Franchise Portfolio changed its name to the UIF Global
Franchise Portfolio; the Van Kampen UIF International Growth Equity Portfolio
changed its name to UIF International Growth Equity Portfolio; and the Van
Kampen Small Company Growth Portfolio changed its name to the UIF Small
Company Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If prior to the effective close date,
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 the effective close date, 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 this TrueReturn Option prior to
adding it to your Contract.
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. Failure to comply with the investment requirements for any reason
may result in the cancellation of the TrueReturn Option. 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 requirements
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, as described on page 77 of this
prospectus, 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
27 PROSPECTUS
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.
We are also making the SureIncome Plus or SureIncome For Life Withdrawal
Benefit Options available at the time of your first utilization of this
TrueReturn Rider Trade-In Option. We may discontinue offering these Withdrawal
Benefit Options under the Rider Trade-In Option with respect to new TrueReturn
Options added in the future at anytime at our discretion. If we do so,
TrueReturn Options issued prior to this time will continue to have a Withdrawal
Benefit Option available at the time of the first utilization of this
TrueReturn Rider Trade-In Option. You may cancel your TrueReturn Option and
immediately add a new SureIncome Plus Option or a new SureIncome For Life
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. At our discretion, we reserve the right to extend
the date at which time the trade-in may occur up to the 10th anniversary of
the Rider Date at any time. 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 Withdrawal Benefit 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 Withdrawal Benefit Option must be a Withdrawal Benefit Option that
we make available for use with this Rider Trade-In Option.
.. The issue requirements and terms and conditions of the new Withdrawal
Benefit Option must be met as of the date the new Withdrawal Benefit Option
is made a part of your Contract. Currently, if you select the SureIncome
Plus Withdrawal Benefit Option by utilizing the Rider Trade-In Option, the
maximum age of any Contract Owner or Annuitant on the Rider Application
Date is age 85. For other Withdrawal Benefit Options that may be selected
in the future utilizing the Rider Trade-In Option, issue age requirements
may differ.
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.
WITHDRAWAL BENEFIT OPTIONS
"Withdrawal Benefit Options" is used to refer collectively to the SureIncome
Withdrawal Benefit Option, the SureIncome Plus Withdrawal Benefit Option, and
the SureIncome For Life Withdrawal Benefit Option. "Withdrawal Benefit Option"
is used to refer to any one of the Withdrawal Benefit Options.
SUREINCOME WITHDRAWAL BENEFIT OPTION
Effective May 1, 2006, we ceased offering the SureIncome Withdrawal Benefit
Option ("SureIncome
28 PROSPECTUS
Option"), except in a limited number of states where we intend to discontinue
offering the Option as soon as possible. In the states where we continue to
offer the SureIncome Option, it 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
is identical to the Contract Year.
In those states where currently offered, 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 Withdrawal Benefit Option (SureIncome, SureIncome Plus or
SureIncome For Life) 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 Withdrawal
Benefit 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.
In those states where the SureIncome Option is currently available, we may
discontinue offering, at any time without prior notice, the Option 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
purchase payments 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
29 PROSPECTUS
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.
The Benefit Payment Remaining at the time of a withdrawal during a calendar
year will be increased on a nondiscriminatory basis in order to satisfy IRS
minimum distribution requirements on the Contract under which this Option has
been elected. The Benefit Payment Remaining will be increased by the excess of
the IRS minimum distribution required on the Contract as calculated at the end
of the previous calendar year and the Benefit Payment at the end of the
previous calendar year. For the purposes of this calculation, the Benefit
Payment Remaining will not be increased if a Withdrawal Benefit Option was not
attached to this Contract as of the end of the previous calendar year. Note
that any systematic withdrawal programs designed to satisfy IRS minimum
distribution requirements may need to be modified to ensure guarantees under
this Option are not impacted by the withdrawals. This modification may result
in uneven payment amounts throughout the year.
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
"Contract 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.
Under the Withdrawal Benefit Payout Phase, 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 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
30 PROSPECTUS
divided by 12, unless a payment frequency other than monthly is requested. The
request must be in a form acceptable to us and processed 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 less than
each of the previous payments. If your Contract is subject to Internal Revenue
Code Section 401(a)(9), the period certain cannot exceed that which is required
by such section and the regulations promulgated thereunder. Therefore, the
amount of each payment under the SureIncome 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 subject to Internal Revenue Code
Section 401(a)(9), we will not permit a change in the payment frequency or
level.
If your Contract is not subject to Internal Revenue Code Section 401(a)(9), we
reserve the right to allow other payment frequencies or levels 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 take any other
actions associated with the Accumulation Phase after the commencement of the
Withdrawal Benefit Payout Start Date.
Investment Requirements
If you add a SureIncome Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest.
These requirements are described in "Investment Requirements (Applicable to All
Withdrawal Benefit Options)" below.
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 such 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"). In most states, we currently offer the SureIncome Plus Withdrawal
Benefit Option as the New SureIncome Option under the Rider Trade-In Option. We
may also offer other Options ("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. If we do so, SureIncome Options issued prior to this time will
continue to have a TrueReturn Option available at the time of the first
utilization of this SureIncome Rider Trade-In Option.
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 SureIncome Option or any 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 SureIncome Option or any 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 SureIncome
Option or the New Option must be met as of the date any such Option is made
a part of your Contract. Currently, if you select the SureIncome Plus
Withdrawal Benefit Option utilizing the Rider Trade-in Option, the maximum
age of any Contract Owner or Annuitant on the Rider Application Date is age
85. For a New SureIncome Option or New Option that may be offered and
selected in the future utilizing the Rider Trade-In Option, issue age
requirements may differ.
If the New Option is a New SureIncome Option, it must provide that the new
Benefit Payment be greater than or
31 PROSPECTUS
equal to your current Benefit Payment as of the date the Rider Trade-In Option
is exercised, if applicable.
You should consult with your Morgan Stanley Financial Advisor 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.
If the Contract death settlement options are governed by an Endorsement and
such Endorsement allows for the continuation of the Contract upon the death of
the Owner or Annuitant by the spouse, the SureIncome Option will continue
unless the new Owner elects to cancel the SureIncome Option. If the SureIncome
Option is continued, it will remain in effect until terminated pursuant to
Termination of the SureIncome Option below. If the Contract is not continued,
then the SureIncome Option will terminate on the date we received a complete
request for settlement of the Death Proceeds.
Termination of the SureIncome Option
The 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.
SUREINCOME PLUS WITHDRAWAL BENEFIT OPTION
We offer the SureIncome Plus Withdrawal Benefit Option ("SureIncome Plus
Option"), except in a limited number of states where it is not currently
available, for an additional fee. The SureIncome Plus Option provides a
guaranteed withdrawal benefit that gives you the right to take limited partial
withdrawals, which may increase during the first 10 years of the Option, 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 (see defined terms below). The SureIncome
Plus Option also provides an additional death benefit option.
The SureIncome Plus 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".
Prior to the commencement of the Withdrawal Benefit Payout Phase, the
SureIncome Plus Option also provides an additional death benefit option, the
SureIncome Return of Premium Death Benefit ("SureIncome ROP Death Benefit").
This death benefit option is described below under "Death of Owner or
Annuitant" and in the Death Benefits section starting on page 73.
For purposes of the SureIncome Plus 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 Plus 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 Plus 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
is identical to the Contract Year.
The SureIncome Plus 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 Plus 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 Plus Option. Currently, you may have only one
Withdrawal Benefit 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
Withdrawal Benefit Option, a TrueReturn Option, or a Retirement Income
Guarantee Option. The SureIncome Plus Option is 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), up to age 85 or younger if selected by utilizing the Rider
Trade-in Option. (See Rider Trade-In Option, above, under TrueReturn
Accumulation Benefit Option and SureIncome Withdrawal Benefit Option.) The
SureIncome Plus Option may not be added to a Contract
32 PROSPECTUS
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 Plus
Option available to such Contracts on a nondiscriminatory basis in the future
at our discretion. Once added to your Contract, the SureIncome Plus Option may
not be cancelled at any time.
We may discontinue offering the SureIncome Plus Option at any time to new
Contract Owners and to existing Contract Owners who did not elect the
SureIncome Plus 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 Plus Options and/or to eliminate the current
Withdrawal Benefit Factor. Once a Withdrawal Benefit Factor has been
established for a SureIncome Plus Option, it cannot be changed after the Rider
Date.
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 and your SureIncome ROP Death Benefit by more than the amount of
the withdrawal and without reducing your Benefit Payment available in future
Benefit Years. Please note that any purchase payments 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 Plus 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 Plus 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, if applicable. See Rider Trade-In Option, above, under
SureIncome Withdrawal Benefit Option for more information.
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.
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments received on the date of this withdrawal, but before the
application of any SureIncome Plus Withdrawal Benefit Option Fee, Spousal
Protection Benefit Option Fee, Spousal Protection Benefit Option for Custodial
Individual Retirement Accounts Fee or Contract Maintenance Charge that may be
applicable.
On each of the ten Contract Anniversaries after the Rider Date, the amount of
the Benefit Payment may be increased based upon the maximum anniversary value
of the Contract according to the following calculation. The Benefit Payment
will be recalculated to the greater of:
.. The Benefit Payment following the application of all purchase payments and
withdrawals on that Contract Anniversary; and
.. The Contract Value on that Contract Anniversary, following the application
of all purchase payments, withdrawals, and expenses multiplied by the
Withdrawal Benefit Factor.
The Benefit Payment Remaining at the time of a withdrawal during a calendar
year will be increased on a nondiscriminatory basis in order to satisfy IRS
minimum distribution requirements on the Contract under which this Option has
been elected. The Benefit Payment Remaining will be increased by the excess of
the IRS minimum distribution required on the Contract as calculated at the end
of the previous calendar year and the Benefit Payment at the end of the
previous calendar year. For the purposes of this calculation, the Benefit
Payment Remaining will not be increased if a Withdrawal Benefit Option was not
attached to this Contract as of the end of the previous calendar year. Note
that any systematic withdrawal programs designed to satisfy IRS minimum
distribution requirements may need to be modified to ensure guarantees under
this Option are not impacted by the withdrawals. This
33 PROSPECTUS
modification may result in uneven payment amounts throughout the year.
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 Plus
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 the withdrawal less the amount of
the withdrawal; or
.. The Benefit Base immediately prior to the withdrawal less the amount of the
withdrawal.
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments received on the date of this withdrawal, but before the
application of any SureIncome Plus Withdrawal Benefit Option Fee, Spousal
Protection Benefit Option Fee, Spousal Protection Benefit Option for Custodial
Individual Retirement Accounts Fee or Contract Maintenance Charge that may be
applicable.
On each of the ten Contract Anniversaries after the Rider Date, the amount of
the Benefit Base may be increased based upon the maximum anniversary value of
the Contract according to the following calculation. The Benefit Base will be
recalculated to the greater of:
.. The Benefit Base following the application of all purchase payments and
withdrawals on that Contract Anniversary; and
.. The Contract Value on that Contract Anniversary, following the application
of all purchase payments, withdrawals and expenses.
The Benefit Base may also be reduced in other situations as detailed in the
"Contract Owner and Assignment of Payments or Interest" section below.
If the Benefit Base is reduced to zero, this SureIncome Plus Option will
terminate.
For numerical examples that illustrate how the values defined under the
SureIncome Plus Option are calculated, see Appendix I.
Contract Owner and Assignment of Payments or Interest
If you change the Contract Owner or assign any payments or interest under the
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 or 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 Plus 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.
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 of the Contract can be made after the Withdrawal Benefit
Payout Start Date. Since the Accumulation Phase ends at this point, the
SureIncome ROP Death Benefit no longer applies.
Under the Withdrawal Benefit Payout Phase, 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 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 commencement of 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. The request must be in a form
acceptable to us and processed 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 less than each of the previous
payments. If your Contract is subject to Internal Revenue Code
Section 401(a)(9), the period certain cannot exceed that which is required by
such section and the regulations promulgated thereunder. Therefore, the amount
of each payment
34 PROSPECTUS
under the SureIncome Plus 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 subject to Internal Revenue Code
Section 401(a)(9), we will not permit a change in the payment frequency or
level.
If your Contract is not subject to Internal Revenue Code Section 401(a)(9), we
reserve the right to allow other payment frequencies or levels 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 take any other
actions associated with the Accumulation Phase after the Withdrawal Benefit
Payout Start Date.
Investment Requirements
If you add a SureIncome Plus Option to your Contract, you must adhere to
certain requirements related to the investment alternatives in which you may
invest. These requirements are described in "Investment Requirements
(Applicable to All Withdrawal Benefit Options)" below.
Death of Owner or Annuitant
If the Owner or the 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 Plus Option will continue unless the Contract Owner (or new
Contract Owner) elects to cancel the SureIncome Plus Option. If the SureIncome
Plus Option is continued, it will remain in effect until terminated. If the
Contract is not continued under Option D above, then the SureIncome Plus Option
will terminate on the date we receive a Complete Request for Settlement of the
Death Proceeds.
If the Contract death settlement options are governed by an Endorsement and
such Endorsement allows for the continuation of the Contract upon the death of
the Owner or Annuitant by the spouse, the SureIncome Plus Option will continue
unless the new Owner elects to cancel the SureIncome Plus Option. If the
SureIncome Plus Option is continued, it will remain in effect until terminated
pursuant to Termination of the SureIncome Plus Option below. If the Contract is
not continued, then the SureIncome Plus Option will terminate on the date we
received a complete request for settlement of the Death Proceeds.
The SureIncome Plus Option also makes available the SureIncome ROP Death
Benefit. On the Rider Date, the SureIncome ROP Death Benefit is equal to the
Contract Value. After the Rider Date, the SureIncome ROP Death Benefit 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 SureIncome ROP Death
Benefit 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 SureIncome ROP Death Benefit will
be the lesser of:
. The Contract Value immediately prior to withdrawal less the amount of
the withdrawal; or
. The SureIncome ROP Death Benefit immediately prior to withdrawal less
the amount of the withdrawal.
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments received on the date of this withdrawal, but before the
application of any SureIncome Plus Withdrawal Benefit Option Fee, Spousal
Protection Benefit Option Fee, Spousal Protection Benefit Option for Custodial
Individual Retirement Accounts Fee or Contract Maintenance Charge that may be
applicable.
For numerical examples that illustrate how the SureIncome ROP Death Benefit
under the SureIncome Plus Option is calculated, see Appendix I.
Refer to the Death Benefits section page 73 for more details on the SureIncome
ROP Death Benefit.
Termination of the SureIncome Plus Option
The SureIncome Plus 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 Plus Option is cancelled as detailed under Death
of Owner or Annuitant above; or
.. On the date we receive a Complete Request for Settlement of the Death
Proceeds.
SUREINCOME FOR LIFE WITHDRAWAL BENEFIT OPTION
We offer the SureIncome For Life Withdrawal Benefit Option ("SureIncome For
Life Option"), except in a limited number of states where it is not currently
available, for an additional fee. The SureIncome For Life
35 PROSPECTUS
Option provides a guaranteed withdrawal benefit that gives you the right to
take limited partial withdrawals, which may increase during the first 10 years
of the Option, as long as the SureIncome Covered Life is alive, subject to
certain restrictions. Therefore, regardless of subsequent fluctuations in the
value of your Contract Value, you are entitled to a Benefit Payment each
Benefit Year until the death of the SureIncome Covered Life (as defined below),
subject to certain restrictions. The SureIncome For Life Option also provides
an additional death benefit option.
The SureIncome For Life Option guarantees an amount up to the "Benefit Payment
Remaining" which will be available for withdrawal from the Contract each
"Benefit Year" as long as the SureIncome Covered Life is alive, subject to
certain restrictions. The "SureIncome Covered Life" is the oldest Contract
Owner, or the oldest Annuitant if the Contact Owner is a non-living entity, on
the Rider Date. If the Contract Value is reduced to zero and the Benefit
Payment is still greater than zero, we will distribute an amount equal to the
Benefit Payment each year to the Contract Owner as described below under the
"Withdrawal Benefit Payout Phase" as long as the SureIncome Covered Life is
alive. Prior to the commencement of the Withdrawal Benefit Payout Phase, the
SureIncome For Life Option also provides an additional death benefit option,
the SureIncome Return of Premium Death Benefit ("SureIncome ROP Death
Benefit"). This Option is described below under "Death of Owner or Annuitant"
and in the Death Benefits section starting on page 73.
For purposes of the SureIncome For Life 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 For Life 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 For Life 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 is identical to the Contract Year.
The SureIncome For Life 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 For Life 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 For Life Option. Currently, you may have
only one Withdrawal Benefit 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 Withdrawal Benefit Option, a TrueReturn Option, or a Retirement Income
Guarantee Option. The SureIncome For Life Option is only available if the
oldest Contract Owner or the oldest Annuitant, if the Contract Owner is a
non-living entity (i.e., the SureIncome Covered Life) is between the ages of 50
and 79, inclusive, on the effective date of the Rider (the "Rider Application
Date"). (The maximum age may depend on your state.) The SureIncome For Life
Option may not 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 For Life Option available to such Contracts on a
nondiscriminatory basis in the future at our discretion. Once added to your
Contract, the SureIncome For Life Option may not be cancelled at any time.
We may discontinue offering the SureIncome For Life Option at any time to new
Contract Owners and to existing Contract Owners who did not elect the
SureIncome For Life 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. Prior to the earlier of the date of the first
withdrawal after the issuance of the SureIncome For Life Option or the date the
Contract enters the Withdrawal Benefit Payout Phase, the Withdrawal Benefit
Factor used in these determinations may change as shown below. Generally
speaking, during this period the Withdrawal Benefit Factor will increase as the
SureIncome Covered Life grows older. On the earlier of the date of the first
withdrawal after the issuance of the SureIncome for Life Option or the date the
Contract enters the Withdrawal Benefit Payout Phase, the Withdrawal Benefit
Factor will be fixed at the then applicable rate, based on the then current
attained age of the SureIncome Covered Life, and will be used in all subsequent
determinations of Benefit Payments and Benefit Payments Remaining. After this
date the Withdrawal Benefit Factor will not change.
We currently offer the following Withdrawal Benefit Factors:
Attained Age of
SureIncome Covered Life Withdrawal Benefit Factor
-------------------------------------------------
50 - 59 4%
60 - 69 5%
70+ 6%
The Withdrawal Benefit Factors and age ranges applicable to your Contract are
set on the Rider Date. They cannot be changed after the SureIncome For Life
Option has been added to your Contract. We reserve the right to make other
Withdrawal Benefit Factors available in the future for new SureIncome For Life
Options, change the age ranges to which they apply, and/or to eliminate
currently available Withdrawal Benefit Factors.
36 PROSPECTUS
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 and your SureIncome ROP Death Benefit 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 are 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.
On the Rider Date, the Benefit Payment is equal to the Contract Value
multiplied by the Withdrawal Benefit Factor based on the current attained age
of the SureIncome Covered Life.
After the Rider Date, the Benefit Payment and Benefit Payment Remaining will be
increased by purchase payments multiplied by the Withdrawal Benefit Factor
based on the current attained age of the SureIncome Covered Life. On the date
of the first withdrawal after the Rider Date the Benefit Payment and Benefit
Payment Remaining will equal the Withdrawal Benefit Factor based on the current
attained age of the SureIncome Covered Life multiplied by the Benefit Base
immediately after application of any purchase payments, but prior to the
withdrawal on that date. The Withdrawal Benefit Factor used in all future
calculations will not change.
After the first withdrawal, the Benefit Payment Remaining will be increased by
purchase payments multiplied by the Withdrawal Benefit Factor. The Benefit
Payment Remaining is reduced by the amount of any withdrawal. The Benefit
Payment Remaining will never be less than zero.
After the first withdrawal, the Benefit Payment will be increased by purchase
payments multiplied by the Withdrawal Benefit Factor. The Benefit Payment is
affected by withdrawals as follows:
.. If a withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Payment is
unchanged.
.. If a 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 Benefit Base immediately after the withdrawal multiplied by the
Withdrawal Benefit Factor.
If the Benefit Payment is reduced to zero, the SureIncome For Life Option will
terminate.
On each of the ten Contract Anniversaries after the Rider Date, the amount of
the Benefit Payment may be increased based upon the maximum anniversary value
of the Contract according to the following calculation. The Benefit Payment
will be recalculated to the greater of:
.. The Benefit Payment following application of all purchase payments and
withdrawals on that Contract Anniversary; or
.. The Contract Value on that Contract Anniversary, following the application
of all purchase payments, withdrawals and expenses, multiplied by the
Withdrawal Benefit Factor currently applicable.
The Benefit Payment Remaining at the time of a withdrawal during a calendar
year will be increased on a nondiscriminatory basis in order to satisfy IRS
minimum distribution requirements on the Contract under which this Option has
been elected. The Benefit Payment Remaining will be increased by the excess of
the IRS minimum distribution required on the Contract as calculated at the end
of the previous calendar year and the Benefit Payment at the end of the
previous calendar year. For the purposes of this calculation, the Benefit
Payment Remaining will not be increased if a Withdrawal Benefit Option was not
attached to this Contract as of the end of the previous calendar year. Note
that any systematic withdrawal programs designed to satisfy IRS minimum
distribution requirements may need to be modified to ensure guarantees under
this Option are not impacted by the withdrawals. This modification may result
in uneven payment amounts throughout the year.
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 For
Life 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:
37 PROSPECTUS
. 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 (this value cannot be less than zero).
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments received on the date of this withdrawal, but before the
application of any SureIncome For Life Withdrawal Benefit Option Fee, Spousal
Protection Benefit Option Fee, Spousal Protection Benefit Option for Custodial
Individual Retirement Accounts Fee or Contract Maintenance Charge that may be
applicable.
On each of the ten Contract Anniversaries after the Rider Date, the amount of
the Benefit Base may be increased based upon the maximum anniversary value of
the Contract according to the following calculation. The Benefit Base will be
recalculated to the greater of:
.. The Benefit Base following the application of all purchase payments and
withdrawals on that Contract Anniversary; and
.. The Contract Value on that Contract Anniversary, following the application
of all purchase payments, withdrawals and expenses.
For numerical examples that illustrate how the values defined under the
SureIncome For Life Option are calculated, see Appendix J.
Contract Value
If your Contract Value is reduced to zero due to fees or withdrawals and your
Benefit Payment is still greater than zero, your Contract will immediately
enter the Withdrawal Benefit Payout Phase. Under the SureIncome For Life
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.
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 of the Contract can be made after the Withdrawal Benefit
Payout Start Date. Since the Accumulation Phase of the Contract ends at this
point, the SureIncome ROP Death Benefit no longer applies.
Under the Withdrawal Benefit Payout Phase, 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 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. The request must be in a form acceptable to us and
processed 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 until the later of the death of the
SureIncome Covered Life or over a period certain based on the total payments
made equaling at least the Benefit Base on the Payout Start Date. If your
Contract is subject to Internal Revenue Code Section 401(a)(9), the period
certain cannot exceed that which is required by such section and the
regulations promulgated thereunder. Therefore, the amount of each payment under
the SureIncome For Life Option may be larger during the period certain 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 subject to Internal
Revenue Code Section 401(a)(9), we will not permit a change in the payment
frequency or level.
If your Contract is not subject to Internal Revenue Code Section 401(a)(9), we
reserve the right to allow other payment frequencies or levels 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 take any other
actions associated with the Accumulation Phase after the commencement of the
Withdrawal Benefit Payout Start Date.
Investment Requirements
If you add a SureIncome For Life Option to your Contract, you must adhere to
certain requirements related to the investment alternatives in which you may
invest. These requirements are described in "Investment Requirements
(Applicable to All Withdrawal Benefit Options)" below.
Death of Owner or Annuitant
If the SureIncome Covered Life dies during the Accumulation Phase of the
Contract, the SureIncome For Life Option will terminate on the date of the
38 PROSPECTUS
SureIncome Covered Life's death. If the Contract Owner or the Annuitant who is
not the SureIncome Covered Life 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 For Life Option will continue unless the Contract Owner (or new
Contract Owner) elects to cancel the SureIncome For Life Option. If the
SureIncome For Life Option is continued, it will remain in effect until
terminated. If the Contract is not continued under Option D, then the
SureIncome For Life Option will terminate on the date we receive a Complete
Request for Settlement of the Death Proceeds.
The SureIncome For Life Option also makes available the SureIncome ROP Death
Benefit. The SureIncome ROP Death Benefit is only available upon the death of
the SureIncome Covered Life. If a Contract Owner, Annuitant or Co-Annuitant who
is not the SureIncome Covered Life dies, the SureIncome ROP Death Benefit is
not applicable. On the Rider Date, the SureIncome ROP Death Benefit is equal to
the Contract Value. After the Rider Date, the SureIncome ROP Death Benefit 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 SureIncome ROP Death
Benefit 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 SureIncome ROP Death Benefit will
be the lesser of:
. The Contract Value immediately prior to withdrawal less the amount of
the withdrawal; or
. The SureIncome ROP Death Benefit immediately prior to withdrawal less
the amount of the withdrawal.
As used in the above calculation, Contract Value incorporates the impact of any
purchase payments received on the date of this withdrawal, but before the
application of any SureIncome For Life Withdrawal Benefit Option Fee, Spousal
Protection Benefit Option Fee, Spousal Protection Benefit Option for Custodial
Individual Retirement Accounts Fee or Contract Maintenance Charge applicable.
For numerical examples that illustrate how the SureIncome ROP Death Benefit
under the SureIncome For Life Option is calculated, see Appendix J.
Refer to the Death Benefits section page 70 for more details on the SureIncome
ROP Death Benefit.
Termination of the SureIncome For Life Option
The SureIncome For Life Option will terminate on the earliest of the following
to occur:
.. The Benefit Payment 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 Covered Life is removed from the Contract for
any reason, and is no longer a Contract Owner or Annuitant under the
Contract (if the Covered Life continues as only the Beneficiary, the Option
will terminate);
.. On the date the SureIncome For Life Option is cancelled as detailed under
Death of Owner or Annuitant section above;
.. On the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. On the date the SureIncome Covered Life dies if the SureIncome Covered Life
dies prior to the Payout Start Date.
INVESTMENT REQUIREMENTS (APPLICABLE TO ALL WITHDRAWAL BENEFIT OPTIONS)
If you add a Withdrawal Benefit 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(s). 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 Withdrawal Benefit 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
SureIncome Option or 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.
39 PROSPECTUS
When you add a Withdrawal Benefit 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
interest to an available Model Portfolio Option; or
(3)to a combination of (1) and (2) above.
With respect to (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 to
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 of this prospectus 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
- --------------------------------------------------------------------------------
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 a Withdrawal Benefit 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
selections 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 allocation 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 $100 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 investment alternatives, 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, 3, 4, 5):
Available
- --------------------------------------------------------------------------------
Morgan Stanley VIS Capital Opportunities - Class Y Sub-Account/(6)/
Morgan Stanley VIS Dividend Growth - 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
Morgan Stanley VIS Limited Duration - Class Y Sub-Account/(4)/
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. Core Equity - Series II Sub-Account/(5)/
AIM V.I. Mid Cap Core Equity - Series II Sub-Account/(1)/
AllianceBernstein VPS Growth - Class B Sub-Account
AllianceBernstein VPS Growth and Income - Class B Sub-Account/(1)/
AllianceBernstein VPS International Value - Class B Sub-Account
AllianceBernstein VPS Small/Mid Cap Value - Class B Sub-Account
AllianceBernstein VPS Utility Income - Class B Sub-Account
AllianceBernstein VPS Value - Class B Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
40 PROSPECTUS
Fidelity VIP Growth & Income - Service Class 2 Sub-Account
Fidelity VIP High Income - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
Fidelity VIP Money Market - Service Class 2 Sub-Account
FTVIP Franklin Flex Cap Growth Securities - Class 2 Sub-Account
FTVIP Franklin High Income Securities - Class 2 Sub-Account/(1)/
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Goldman Sachs VIT Structured Small Cap Equity Sub-Account
Goldman Sachs VIT Structured U.S. Equity Sub-Account
Goldman Sachs VIT Growth and Income Sub-Account
Goldman Sachs VIT Mid Cap Value Sub-Account/(4)/
PIMCO VIT CommodityRealReturn(TM) Strategy - Advisor Shares Sub-Account
PIMCO VIT Emerging Markets Bond - Advisor Shares Sub-Account
PIMCO VIT Real Return - Advisor Shares Sub-Account
PIMCO VIT Total Return - Advisor Shares Sub-Account
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
Putnam VT The George Putnam Fund of Boston - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
UIF Emerging Markets Debt, Class II Sub-Account/(1)(2)(7)/
UIF Emerging Markets Equity, Class II Sub-Account/(2)(7)/
UIF Equity and Income, Class II Sub-Account/(2)(7)/
UIF Global Franchise, Class II Sub-Account/(2)(7)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(7)/
UIF U.S. Mid Cap Value, Class II Sub-Account/(2)(7)/
UIF U.S. Real Estate, Class II Sub-Account/(2)(7)/
UIF International Growth Equity, Class II Sub-Account/(2)(7)/
Van Kampen LIT Capital Growth, Class II Sub-Account/(6)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
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)/
AIM V.I. Capital Appreciation - Series II Sub-Account/(1)/
AllianceBernstein VPS Large Cap Growth - Class B Sub-Account/(1)/
UIF Capital Growth, Class II Sub-Account/(2)(7)/
UIF Small Company Growth, Class II Sub-Account/(2)(7)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(6)/
- --------------------------------------------------------------------------------
1)Effective May 1, 2005, the following Variable Sub-Accounts closed to new
investments: 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 AllianceBernstein VPS Growth and Income -
Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth - Class B
Sub-Account, the FTVIP Franklin High Income Securities - 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 Utilities - Class Y
Sub-Account, the Putnam VT Growth and Income - Class IB Sub-Account and the
UIF Emerging Markets Debt, Class II Sub-Account.*
2)Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3)Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account closed
to new investments and is not available with any Withdrawal Benefit Option.*
4)Effective May 1, 2006, the following Variable Sub-Accounts closed to new
investments: the Goldman Sachs VIT Mid Cap Value Sub-Account, the Morgan
Stanley VIS European Equity - Class Y Sub-Account and the Morgan Stanley VIS
Limited Duration - Class Y Sub-Account.*
5)Effective May 1, 2006, the AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II
Sub-Account), such as automatic additions, portfolio rebalancing, or dollar
cost averaging, we will continue to effect automatic transactions into the
AIM V.I. Core Equity - Series II Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.*
6)Effective May 1, 2008, the Morgan Stanley VIS Equity Portfolio - Class Y
changed its name to the Morgan Stanley VIS Capital Opportunities Portfolio -
Class Y, the Van Kampen LIT Strategic Growth Portfolio, Class II changed its
name to Van Kampen LIT Capital Growth Portfolio, Class II and the Van Kampen
LIT Aggressive Growth Portfolio, Class II changed its name to the Van Kampen
LIT Mid Cap Growth Portfolio, Class II.
7)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed its
name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging Markets
Debt Portfolio changed its name to UIF Emerging Markets Debt Portfolio; the
Van Kampen UIF Emerging Markets Equity Portfolio changed it's name to the UIF
Emerging Markets Equity Portfolio; the Van Kampen UIF U.S. Real Estate
Portfolio changed its name to the UIF U.S. Real Estate Portfolio; the Van
Kampen UIF Equity and Income Portfolio changed its name to the UIF Equity and
Income Portfolio; the Van Kampen UIF U.S. Mid Cap Value Portfolio changed its
name to the UIF U.S. Mid Cap Value Portfolio; the Van Kampen UIF Mid Cap
Growth Portfolio changed its name to the UIF Mid Cap Growth Portfolio; the
Van Kampen UIF Global Franchise Portfolio changed its name to the UIF Global
Franchise Portfolio; the Van Kampen UIF International Growth Equity Portfolio
changed its name to UIF International Growth Equity Portfolio; and the Van
Kampen Small Company Growth Portfolio changed its name to the UIF Small
Company Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If prior to the effective close date,
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 any Withdrawal Benefit
Option on or after the effective close date, 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 a Withdrawal Benefit Option
prior to adding it to your Contract.
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 that comprise that 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
41 PROSPECTUS
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 a
Withdrawal Benefit Option to your Contract.
42 PROSPECTUS
Investment Alternatives: The Variable Sub-Accounts
- --------------------------------------------------------------------------------
You may allocate your purchase payments to up to 47* 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 prospectuses for the
Funds. We will mail to you a prospectus for each Portfolio related to the
Variable Sub-Accounts to which you allocate your purchase payment.
You should carefully consider the investment objectives, risks, charges and
expenses of the investment alternatives when making an allocation to the
Variable Sub-Accounts. To obtain any or all of the underlying Portfolio
prospectuses, please contact us at 1-800-457-7617 or go to
www.accessallstate.com.
*Up to 17 additional Variable Sub-Accounts may be available depending on the
date you purchased your Contract. Please see page 48 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 Aggressive Equity Long-term capital growth
Portfolio - Class Y
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS Capital Growth of capital through investments in common
Opportunities Portfolio - Class Y/(7)/ stocks believed by the Investment Adviser to have
potential for superior growth. As a secondary
objective, income but only when consistent with its
primary objective.
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth Reasonable current income and long term growth of
Portfolio - Class Y income and capital.
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS European Equity To maximize the capital appreciation of its
Portfolio - Class Y/(1)/ investments Morgan Stanley Investment
- -------------------------------------------------------------------------------------------------Advisors Inc.
Morgan Stanley VIS Global Advantage Long-term capital growth
Portfolio - Class Y/(2)/
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Reasonable current income and long-term growth of
Growth Portfolio - Class Y income and capital.
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS High Yield Portfolio High level of current income by investing in a
- Class Y/(2)/ diversified portfolio consisting principally of 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 Builder Reasonable income and, as a secondary objective,
Portfolio - Class Y/(2)/ growth of capital
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus High level of current income by investing primarily
Portfolio - Class Y 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 Limited Duration High level of current income consistent with
Portfolio - Class Y/(1)/ preservation of capital
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS Money Market High current income, preservation of capital, and
Portfolio - Class Y liquidity
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS S&P 500 Index Investment results that, before expenses, correspond
Portfolio - Class Y to the total return (i.e., combination of capital
changes and income) of the Standard and Poor's
500 Composite Stock Price Index
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS Strategist Portfolio High total investment return
- Class Y
- -------------------------------------------------------------------------------------------------
Morgan Stanley VIS Utilities Portfolio Capital appreciation and current income
- Class Y/(2)/
- -------------------------------------------------------------------------------------------------
43 PROSPECTUS
Portfolio: Each Portfolio Seeks: Investment Advisor:
- ---------------------------------------------------------------------------------------------------------------------------------
The Universal Institutional Funds, Inc.
- ---------------------------------------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class Long-term capital appreciation by investing primarily
II/(8)/ in growth-oriented equity securities of large
capitalization companies.
- ------------------------------------------------------------------------------------------------
UIF Emerging Markets Debt Portfolio, High total return by investing primarily in fixed
Class II/(2)(8)/ income securities of government and government-
related issuers and, to a lesser extent, of corporate
issuers in emerging market countries.
- ------------------------------------------------------------------------------------------------
UIF Emerging Markets Equity Portfolio, Long-term capital appreciation by investing primarily Van Kampen/(3)/
Class II/(8)/ in growth-oriented equity securities of issuers in
emerging market countries.
- ------------------------------------------------------------------------------------------------
UIF Equity and Income Portfolio, Class Capital appreciation and current income.
II/(8)/
- ------------------------------------------------------------------------------------------------
UIF Global Franchise Portfolio, Long-term capital appreciation.
Class II/(8)/
- ------------------------------------------------------------------------------------------------
UIF International Growth Equity Long-term capital appreciation, with a secondary
Portfolio, Class II/(8)/ objective of income
- ------------------------------------------------------------------------------------------------
UIF Mid Cap Growth Portfolio, Long-term capital growth by investing primarily in
Class II/(8)/ common stocks and other equity securities.
- ------------------------------------------------------------------------------------------------
UIF Small Company Growth Portfolio, Long-term capital appreciation by investing primarily
Class II/(8)/ in growth-oriented equity securities of small
companies.
- ------------------------------------------------------------------------------------------------
UIF U.S. Mid Cap Value Portfolio, Class Above-average total return over a market cycle of
II/(8)/ three to five years by investing in common stocks
and other equity securities.
- ------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class Above average current income and long-term capital
II/(8)/ 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 Capital Growth Capital appreciation.
Portfolio, Class II/(7)/
- ------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio, Capital growth and income through investments in Van Kampen Asset
Class II equity securities, including common stocks, Management
preferred stocks and securities convertible into
common and preferred stocks.
- ------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Long-term growth of capital and income.
Portfolio, Class II
- ------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Capital growth
Portfolio, Class II/(7)/
- ------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds
- ---------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund - Series Long-term growth of capital
II/(2)/
- ------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund - Growth of capital Invesco A I M Advisors, Inc./(4)/
Series II/(2)/
- ------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund - Series Growth of capital
II/(5)/
- ------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund - Long-term growth of capital
Series II/(2)/
- ------------------------------------------------------------------------------------------------
44 PROSPECTUS
Portfolio: Each Portfolio Seeks: Investment Advisor:
- --------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Variable Products Series Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth and Income Long-term growth of capital
Portfolio - Class B/(2)/
- -------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth Portfolio Long-term growth of capital
- Class B
- -------------------------------------------------------------------------------------------------
AllianceBernstein VPS International Long-term growth of capital AllianceBernstein L.P.
Value Portfolio - Class B
- -------------------------------------------------------------------------------------------------
AllianceBernstein VPS Large Cap Growth Long-term growth of capital
Portfolio - Class B/(2)/
- -------------------------------------------------------------------------------------------------
AllianceBernstein VPS Small/Mid Cap Long-term growth of capital
Value Portfolio - Class B
- -------------------------------------------------------------------------------------------------
AllianceBernstein VPS Utility Income Current income and long-term growth of capital
Portfolio - Class B
- -------------------------------------------------------------------------------------------------
AllianceBernstein VPS Value Portfolio - Long-term growth of capital
Class B
- -------------------------------------------------------------------------------------------------
Fidelity(R) Variable Insurance Products
- --------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund(R) Portfolio - Long-term capital appreciation
Service Class 2
- -------------------------------------------------------------------------------------------------
Fidelity VIP Growth & Income Portfolio High total return through a combination of current
- Service Class 2 income and capital appreciation Fidelity Management &
- -------------------------------------------------------------------------------------------------Research Company
Fidelity VIP High Income Portfolio - High level of current income, while also considering
Service Class 2 growth of capital
- -------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Long-term growth of capital
Service Class 2
- -------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio - As high a level of current income as is consistent with
Service Class 2 preservation of capital and daily liquidity.
- -------------------------------------------------------------------------------------------------
Franklin Templeton Variable Insurance Products Trust
- --------------------------------------------------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Capital appreciation
Securities Fund - Class 2
- -------------------------------------------------------------------------------------------------Franklin Advisers, Inc.
FTVIP Franklin High Income Securities High level of current income with capital
Fund - Class 2/(2)/ appreciation as a secondary goal
- -------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - To maximize income while maintaining prospects for
Class 2 capital appreciation.
- -------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund Capital appreciation
- Class 2 Franklin Mutual Advisers,
- -------------------------------------------------------------------------------------------------LLC
FTVIP Mutual Shares Securities Fund - Capital appreciation with income as a secondary goal
Class 2
- -------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund Long-term capital growth. Templeton Investment
- Class 2 Counsel, LLC
- --------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust
- --------------------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Fund Long-term growth of capital and growth of income
- -------------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Value Long-term capital appreciation
Fund/(1)/ Goldman Sachs Asset
- -------------------------------------------------------------------------------------------------Management, L.P.
Goldman Sachs VIT Structured Small Cap Long-term growth of capital
Equity Fund
- -------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured U.S. Long-term growth of capital and dividend income
Equity Fund
- -------------------------------------------------------------------------------------------------
PIMCO Variable Insurance Trust
- --------------------------------------------------------------------------------------------------------------------------
45 PROSPECTUS
Portfolio: Each Portfolio Seeks: Investment Advisor:
- --------------------------------------------------------------------------------------------------------------------
PIMCO VIT CommodityRealReturn(TM) Maximum total return, investing for both current
Strategy Portfolio - Advisor Shares income and capital appreciation, consistent with
prudent investment management
- ----------------------------------------------------------------------------------------------Pacific Investment
PIMCO VIT Emerging Markets Bond Maximum total return, investing for current income, Management Company LLC
Portfolio - Advisor Shares consistent with preservation of capital and prudent
investment management
- ----------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio - Maximum total return, investing for both current
Advisor Shares income and capital appreciation, consistent with
preservation of real capital and prudent investment
management
- ----------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio - Maximum total return, investing for both current
Advisor Shares income and capital appreciation, consistent with
preservation of capital and prudent investment
management
- ----------------------------------------------------------------------------------------------
Putnam Variable Trust
- --------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of To provide a balanced investment composed of a well
Boston - Class IB diversified portfolio of value stocks and bonds,
which produce both capital growth and current
income.
- ----------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Capital growth and current income. Putnam Investment
Class IB/(2)/ Management, LLC
- ----------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Capital appreciation.
Class IB
- ----------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB/(6)/ Long-term growth of capital and any increased
income that results from this growth.
- ----------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB Long-term capital appreciation.
- ----------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB Capital appreciation.
- ----------------------------------------------------------------------------------------------
(1)Effective May 1, 2006, the Goldman Sachs VIT Mid Cap Value Sub-Account,
Morgan Stanley VIS European Equity - Class Y Sub-Account and Morgan Stanley
VIS Limited Duration - Class Y Sub-Account are no longer available for new
investments. If you are currently invested in theseVariable Sub-Accounts you
may continue your investments. If, prior to May 1, 2006, 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 the Variable Sub-Accounts in accordance with
that program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
(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 AllianceBernstein VPS Growth and
Income - Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth -
Class B Sub-Account, the FTVIP Franklin High Income Securities - 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 Utilities -
Class Y Sub-Account, the Putnam VT Growth and Income - Class IB Sub-Account
and the 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 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)The investment objective(s) of each sub-account may be changed by the Board
of Directors without shareholder approval.
(5)Effective May 1, 2006, the AIM V.I. Core Equity - Series II Sub-Account is
no longer available for new investments. If you are currently invested in
the AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II
Sub-Account), such as automatic additions, portfolio rebalancing, or dollar
cost averaging, we will continue to effect automatic transactions into the
AIM V.I. Core Equity - Series II Sub-Account in accordance with that
program. Outside of these automatic transaction programs, additional
allocations will not be allowed.
(6)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.
7)Effective May 1, 2008, the Morgan Stanley VIS Equity Portfolio - Class Y
changed its name to the Morgan Stanley VIS Capital Opportunities Portfolio -
Class Y, the Van Kampen LIT Strategic Growth Portfolio, Class II changed its
name to Van Kampen LIT Capital Growth Portfolio, Class II and the Van Kampen
LIT Aggressive Growth Portfolio, Class II changed its name to the Van Kampen
LIT Mid Cap Growth Portfolio, Class II.
8)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed its
name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging Markets
Debt Portfolio changed its name to UIF Emerging Markets Debt Portfolio; the
Van Kampen UIF Emerging Markets Equity Portfolio changed it's name
46 PROSPECTUS
to the UIF Emerging Markets Equity Portfolio; the Van Kampen UIF U.S. Real
Estate Portfolio changed its name to the UIF U.S. Real Estate Portfolio; the
Van Kampen UIF Equity and Income Portfolio changed its name to the UIF Equity
and Income Portfolio; the Van Kampen UIF U.S. Mid Cap Value Portfolio changed
its name to the UIF U.S. Mid Cap Value Portfolio; the Van Kampen UIF Mid Cap
Growth Portfolio changed its name to the UIF Mid Cap Growth Portfolio; the
Van Kampen UIF Global Franchise Portfolio changed its name to the UIF Global
Franchise Portfolio; the Van Kampen UIF International Growth Equity Portfolio
changed its name to UIF International Growth Equity Portfolio; and the Van
Kampen Small Company Growth Portfolio changed its name to the UIF Small
Company Growth Portfolio.
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
The TrueBalance asset allocation program ("TrueBalance program") is no longer
offered for new enrollments. If you enrolled in the TrueBalance program prior
to January 31, 2008, you may remain in the program. If you terminate your
enrollment or otherwise transfer your Contract Value out of the program, you
may not re-enroll.
There is no additional charge for the TrueBalance program. 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 invest,
such as the Income Protection Benefit Option, the TrueReturn Accumulation
Benefit Option or a 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 helps you determine whether participating in an asset
allocation program is appropriate for you. You complete a questionnaire to
identify your investment style. Based on your investment style, you select one
asset allocation model portfolio among the available model portfolios which may
range from conservative to aggressive. Your Contract Value is allocated among
the Variable Sub-Accounts according to your selected model portfolio. Not all
Variable Sub-Accounts are available in any one model portfolio, and you must
only allocate your Contract Value to the limited number of Variable
Sub-Accounts available in the model portfolio you select. You should not select
a model portfolio without first consulting with your sales representative.
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.
Allstate Life retained an independent investment management firm ("investment
management firm") to construct the TrueBalance model portfolios. The investment
management firm does not provide advice to Allstate Life's Contract Owners.
Neither Allstate Life nor the investment management firm is acting for any
Contract Owner as a "fiduciary" or as an "investment manager," as such terms
are defined under applicable laws and regulations relating to the Employee
Retirement Income Security Act of 1974 (ERISA).
The investment management firm does not take into account any information about
any Contract Owner or any Contract Owner's assets when creating, providing or
maintaining any TrueBalance model portfolio. Individual Contract Owners should
ultimately rely on their own judgment and/or the judgment of a financial
advisor in making their investment decisions. Neither Allstate Life nor the
investment management firm is responsible for determining the suitability of
the TrueBalance model portfolios for the Contract Owners' purposes.
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 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.
47 PROSPECTUS
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.
Allstate Life may offer new or revised TrueBalance model portfolios at any
time, and may retain a different investment management firm to create any such
new or revised TrueBalance model portfolios. Allstate Life will not
automatically reallocate your Contract Value allocated to the Variable
Sub-Accounts to match any new or revised model portfolios that are offered. 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 that may be available. 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.
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 a Withdrawal Benefit Option:
For TrueBalance model portfolios selected with the TrueReturn Option or a
Withdrawal Benefit 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 a Withdrawal Benefit Option:
For TrueBalance model portfolios selected without the TrueReturn or a
Withdrawal Benefit 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
48 PROSPECTUS
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 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 56.
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
$100.
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 - Class Y 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 - Class Y Sub-Account unless
you request a different investment alternative. Transferring Contract Value to
the Morgan Stanley VIS Money Market - Class Y Sub-Account in
49 PROSPECTUS
this manner may not be consistent with the theory of dollar cost averaging
described on page 56.
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 - Class Y Sub-Account
unless you request a different investment alternative.
If you have a TrueReturn Option or Withdrawal Benefit Option, at the expiration
of a Transfer Period Account or if you discontinue the DCA Fixed Account Option
any amounts remaining in the Transfer Period Account will be transferred
according to the investment requirements applicable to the Option you selected.
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 $100.
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 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.
50 PROSPECTUS
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 $100.
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 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
51 PROSPECTUS
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
52 PROSPECTUS
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 Option or a Withdrawal Benefit Option
to your Contract, certain restrictions on transfers apply. See the
"TrueReturn/SM/ Accumulation Benefit Option" and "Withdrawal Benefit Options"
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 $100.
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 1-800-457-7617. 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.
53 PROSPECTUS
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, require that all future transfer requests be submitted
through U.S. Postal Service First Class Mail thereby refusing to accept
transfer requests via telephone, facsimile, Internet, or overnight delivery, 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 (e.g., International, High Yield,
and Small Cap Variable Sub-Accounts);
.. 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 require that all future transfer requests be
submitted through U.S. Postal Service First Class Mail thereby refusing to
accept transfer requests via telephone, facsimile, Internet, or overnight
delivery. If we determine that a Contract Owner continues to engage in a
pattern of 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) or will restrict that Contract Owner from making future
additions or transfers into the class of Variable Sub-Account(s) if the Variable
Sub-Accounts(s) involved are vulnerable to arbitrage market timing trading
activity (e.g., International, High Yield, and Small Cap Variable Sub-Accounts).
In our sole discretion, we may revise our Trading Limitations at any time as
necessary to better deter or
54 PROSPECTUS
minimize market timing and excessive trading or to comply with regulatory
requirements.
SHORT TERM TRADING FEES
The underlying Portfolios are authorized by SEC regulation to adopt and impose
redemption fees if a Portfolio's Board of Directors determines that such fees
are necessary to minimize or eliminate short-term transfer activity that can
reduce or dilute the value of outstanding shares issued by the Portfolio. The
Portfolio will set the parameters relating to the redemption fee and such
parameters may vary by Portfolio. If a Portfolio elects to adopt and charge
redemption fees, these fees will be passed on to the Contract Owner(s)
responsible for the short-term transfer activity generating the fee.
We will administer and collect redemption fees in connection with transfers
between the Variable Sub-Accounts and forward these fees to the Portfolio.
Please consult the Portfolio's prospectus for more complete information
regarding the fees and charges associated with each Portfolio.
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 Mid Cap 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 Mid Cap Growth, Class
II 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.
55 PROSPECTUS
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
For Contracts issued before January 1, 2005 and for Contracts issued on or
after October 17, 2005, we deduct an administrative expense charge at an annual
rate of 0.19% of the average daily net assets you have invested in the Variable
Sub-Accounts. For Contracts issued on or after January 1, 2005 and prior to
October 17, 2005, we deduct an administrative expense charge at an annual rate
of 0.30% of the average daily net assets you have invested in the Variable
Sub-Accounts. Effective October 17, 2005 and thereafter, the administrative
expense charge we deduct for such Contracts is 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 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.
.. 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;
56 PROSPECTUS
. 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.
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
57 PROSPECTUS
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.
WITHDRAWAL BENEFIT OPTION FEE
Effective May 1, 2006, we ceased offering the SureIncome Option except in a
limited number of states. We charge separate annual Rider Fees for each of the
SureIncome Option (the "SureIncome Option Fee"), the SureIncome Plus Option
(the "SureIncome Plus Option Fee"), and the SureIncome For Life Option (the
"SureIncome For Life Option Fee"). Collectively, we refer to the SureIncome
Option Fee, the SureIncome Plus Option Fee and the SureIncome For Life Option
Fee as the "Withdrawal Benefit Option Fees". "Withdrawal Benefit Option Fee" is
used to refer to any one of the Withdrawal Benefit Option Fees.
The current annual SureIncome Option Fee is 0.50% of the Benefit Base. The
current annual SureIncome Plus Option Fee and the current annual SureIncome For
Life Option Fee are each 0.65% of the Benefit Base. We reserve the right to
increase any Withdrawal Benefit Option Fee to up to 1.25% of the Benefit Base.
We reserve the right to charge a different Withdrawal Benefit Option Fee for
different Withdrawal Benefit Factors or Withdrawal Benefit Options we may offer
in the future. Once we issue your Withdrawal Benefit Option, we cannot change
the Withdrawal Benefit Option Fee that applies to your Contract. If applicable,
if you elect to exercise the Rider Trade-In Option, the new Withdrawal Benefit
Option Fee will be based on the Withdrawal Benefit Option Fee percentage
applicable to a new Withdrawal Benefit Option available at the time of trade-in.
We deduct the Withdrawal Benefit Option Fees on each Contract Anniversary up to
and including the date you terminate the Option. The Withdrawal Benefit Option
Fees are 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. The Withdrawal Benefit
Option Fee will decrease the number of Accumulation Units in each Variable
Sub-Account. If, at the time the Withdrawal Benefit Option Fee is deducted, the
Withdrawal Benefit Option Fee exceeds the total Contract Value in all Variable
Sub-Accounts, the excess of the Withdrawal Benefit Option Fee over the total
Contract Value in all Variable Sub-Accounts will be waived.
The first Withdrawal Benefit Option Fee will be deducted on the first Contract
Anniversary following the Rider Date. A Withdrawal Benefit Option Fee will be
deducted on each subsequent Contract Anniversary up to and including the date
the Withdrawal Benefit Option is terminated.
For the first Contract Anniversary following the Rider Date, the SureIncome
Option Fee is equal to the number of full 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 on the first Contract Anniversary. For
subsequent Contract Anniversaries, the SureIncome Option Fee is equal to 0.50%
multiplied by the Benefit Base as of that Contract Anniversary.
For the first Contract Anniversary following the Rider Date, the SureIncome
Plus Option Fee and the SureIncome For Life Option Fee are each equal to the
number of full months from the Rider Date to the first Contract Anniversary,
divided by twelve, multiplied by 0.65%, with the result multiplied by the
Benefit Base on the first Contract Anniversary increased by purchase payments
and decreased by withdrawals, but prior to the Benefit Base being recalculated
based on the Contract Value. For subsequent Contract Anniversaries, the
SureIncome Plus Option Fee and the SureIncome For Life Option Rider Fee are
each equal to 0.65% multiplied by the Benefit Base on that Contract Anniversary
increased by purchase payments and
58 PROSPECTUS
decreased by withdrawals, but prior to the Benefit Base being recalculated
based on the Contract Value for any of the ten Contract Anniversaries after the
Rider Date. As previously stated, we will deduct Withdrawal Benefit Option Fees
on each Contract Anniversary up to and including the date you terminate the
Option.
If you terminate the SureIncome Option or the SureIncome Plus Option on a date
other than a Contract Anniversary, we will deduct the Withdrawal Benefit Option
Fee unless the termination is on the Payout Start Date or is due to the death
of the Contract Owner or Annuitant. If you terminate the SureIncome For Life
Option on a date other than a Contract Anniversary, we will deduct the
SureIncome For Life Option Fee unless the termination is on the Payout Start
Date or is due to the death of the Contract Owner, Annuitant, or the death of
the SureIncome Covered Life. The Withdrawal Benefit Option Fee will be
pro-rated to cover the period from the last Contract Anniversary to the date of
termination or, if you terminate the Withdrawal Benefit Option during the first
Benefit Year, from the Rider Date to the date of termination. For the
SureIncome Option, the pro-rated SureIncome Option Fee will be equal to the
number of full months from the Contract Anniversary to the date of termination
or, if you terminate the SureIncome 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. For the SureIncome Plus
Option and the SureIncome For Life Option, the pro-rated Withdrawal Benefit
Option Fee will be equal to the number of full months from the Contract
Anniversary to the date of termination or, if you terminate the Withdrawal
Benefit 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
0.65%, with the result multiplied by the Benefit Base immediately prior to the
withdrawal or termination. The Withdrawal Benefit Option 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 12. 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 53 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.
59 PROSPECTUS
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,
2. we receive your request for withdrawal and Due Proof of confinement no
later than 90 days following the end of your or the Annuitant's confinement at
the long term care facility or hospital, and
3. a physician must have prescribed the confinement and the confinement must
be medically necessary (as defined in the Contract).
"Due Proof " includes, but is not limited to, a letter signed by a physician
stating the dates the Owner or Annuitant was confined, the name and location of
the Long Term Care Facility or Hospital, a statement that the confinement was
medically necessary, and, if released, the date the Owner or Annuitant was
released from the Long Term Care Facility or Hospital.
Terminal Illness Waiver. We will waive the withdrawal charge on any applicable
withdrawal under your Contract if:
1. you or the Annuitant, if the Contract Owner is not a living person, are
diagnosed by a physician as having a terminal illness (as defined in the
Contract) at least 30 days after the Issue Date, and
2. you provide Due Proof of diagnosis to us before or at the time you request
the withdrawal.
"Due Proof " includes, but is not limited to, a letter signed by a physician
stating that the Owner or Annuitant has a Terminal Illness and the date the
Terminal Illness was first diagnosed.
Unemployment Waiver. We will waive the withdrawal charge on one partial or a
full withdrawal taken under your Contract, if you meet the following
requirements:
1. you or the Annuitant, if the Contract Owner is not a living person, become
unemployed at least one year after the Issue Date,
2. you or the Annuitant receive Unemployment Compensation for at least 30
consecutive days as a result of that unemployment, and
3. you or the Annuitant claim this benefit within 180 days of your or the
Annuitant's initial receipt of Unemployment Compensation.
Before we will waive any withdrawal charges, you must give us Due Proof prior
to, or at the time of, the withdrawal request, that you or the Annuitant have
been unemployed and have been granted Unemployment Compensation for at least 30
consecutive days.
"Unemployment Compensation" means unemployment compensation received from a
unit of state or federal government in the U.S. "Due Proof " includes, but is
not limited to, a legible photocopy of an unemployment compensation payment
that meets the above described criteria with regard to dates and a signed
letter from you stating that you or the Annuitant meet the above described
criteria.
You may exercise this benefit once over the term of the Contract. Amounts
withdrawn may be subject to Market Value Adjustments.
Please refer to your Contract for more detailed information about the terms and
conditions of these waivers.
60 PROSPECTUS
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
prospectuses for the Portfolios. For a summary of Portfolio annual expenses,
see pages 12-14. 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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WITHDRAWALS
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 64.
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 49.
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 a Withdrawal Benefit Option is
currently attached to your Contract. See "Withdrawal Benefit Options" above for
more information. 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 a Withdrawal Benefit
Option is currently attached to your Contract. See "Withdrawal Benefit Options"
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.
61 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 Morgan Stanley Financial Advisor or call us at
1-800-457-7617 for more information.
Any systematic withdrawal programs based upon IRS minimum distribution
requirements may be modified to ensure guarantees under any Withdrawal Benefit
Option currently attached to your Contract are not impacted by the withdrawals.
Withdrawals made outside of any systematic withdrawal program based upon IRS
minimum distribution requirements may impact the guarantees provided under any
Withdrawal Benefit Option currently attached to your Contract.
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 a Withdrawal Benefit Option is currently attached to your
Contract. See "Withdrawal Benefit Options" above for more information. 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;
62 PROSPECTUS
.. 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:
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.
63 PROSPECTUS
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. 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 the changes described above once each Contract
Year; on that single occasion you may make either change alone, or both
simultaneously. 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 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.
64 PROSPECTUS
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 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.
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
65 PROSPECTUS
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% of the average daily net Variable Account assets supporting the variable
income payments to which the Income Protection Benefit Option applies. We may
change the amount we charge, but it will not exceed 0.75% of the average daily
net Variable Account assets supporting the variable income payments to which
the Income Protection Benefit Option applies. 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,
66 PROSPECTUS
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
Morgan Stanley VIS Limited Duration - Class Y Sub-Account (4)
Morgan Stanley VIS Money Market - Class Y Sub-Account
Fidelity VIP Money Market - Service Class 2 Sub-Account
PIMCO VIT Real Return - Advisor Shares Sub-Account
PIMCO VIT Total Return - Advisor Shares 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 Capital Opportunities - Class Y Sub-Account/(6)/
Morgan Stanley VIS Dividend Growth - 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. Core Equity - Series II Sub-Account/(5)/
AllianceBernstein VPS Growth - Class B Sub-Account
AllianceBernstein VPS Growth and Income - Class B Sub-Account/(1)/
AllianceBernstein VPS International Value - Class B Sub-Account
AllianceBernstein VPS Large Cap Growth - Class B Sub-Account/(1)/
AllianceBernstein VPS Small/Mid Cap Value - Class B Sub-Account
AllianceBernstein VPS Utility Income - Class B Sub-Account
AllianceBernstein VPS Value - Class B Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Growth & Income - Service Class 2 Sub-Account
Fidelity VIP High Income - Service Class 2 Sub-Account
Fidelity VIP Mid Cap - Service Class 2 Sub-Account
FTVIP Franklin High Income Securities - Class 2 Sub-Account/(1)/
FTVIP Franklin Income Securities - Class 2 Sub-Account
FTVIP Mutual Discovery Securities - Class 2 Sub-Account
FTVIP Mutual Shares Securities - Class 2 Sub-Account
FTVIP Templeton Foreign Securities - Class 2 Sub-Account
Goldman Sachs VIT Structured U.S. Equity Sub-Account
Goldman Sachs VIT Growth and Income Sub-Account
Goldman Sachs VIT Mid Cap Value Sub-Account/(4)/
PIMCO VIT CommodityRealReturn(TM) Strategy - Advisor Shares Sub-Account
PIMCO VIT Emerging Markets Bond - Advisor Shares Sub-Account
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/(3)/
Putnam VT New Value - Class IB Sub-Account
Putnam VT Voyager - Class IB Sub-Account
UIF Capital Growth, Class II Sub-Account/(2)(7)/
UIF Equity and Income, Class II Sub-Account/(2)(7)/
UIF Global Franchise, Class II Sub-Account/(2)(7)/
UIF U.S. Mid Cap Value, Class II Sub-Account/(2)(7)/
UIF U.S. Real Estate, Class II Sub-Account/(2)(7)/
UIF International Growth Equity, Class II Sub-Account/(2)(7)/
Van Kampen LIT Comstock, Class II Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Excluded Variable Sub-Accounts. Currently, none of the following Variable
Sub-Accounts are available to support variable income payments.
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
Goldman Sachs VIT Structured Small Cap Equity Sub-Account
UIF Small Company Growth, Class II Sub-Account/(2)(7)/
UIF Emerging Markets Equity, Class II Sub-Account/(2)(7)/
UIF Mid Cap Growth, Class II Sub-Account/(2)(7)/
UIF Emerging Markets Debt, Class II Sub-Account/(1)(2)(7)/
Van Kampen LIT Capital Growth, Class II Sub-Account/(6)/
Van Kampen LIT Mid Cap Growth, Class II Sub-Account/(6)/
1)Effective May 1, 2005, the following Variable Sub-Accounts closed to new
investments: 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 AllianceBernstein VPS Growth and Income -
Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth - Class B
Sub-Account, the FTVIP Franklin High Income Securities - 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 Utilities - Class Y
Sub-Account, the Putnam VT Growth and Income - Class IB Sub-Account and the
UIF Emerging Markets Debt, Class II Sub-Account.*
2)Morgan Stanley Investment Management Inc., the adviser to the UIF Portfolios,
does business in certain instances using the name Van Kampen.
3)Effective May 1, 2004, the Putnam VT Investors - Class IB Sub-Account closed
to new investments.*
4)Effective May 1, 2006, the following Variable Sub-Accounts closed to new
investments: the Goldman Sachs VIT Mid Cap Value Sub-Account, the Morgan
Stanley VIS European Equity - Class Y Sub-Account and the Morgan Stanley VIS
Limited Duration - Class Y Sub-Account.*
5)Effective May 1, 2006, the AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2005, you enrolled in one of our automatic
transaction programs, through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II
Sub-Account), such as automatic additions, portfolio rebalancing, or dollar
cost averaging, we will continue to effect automatic transactions into the
AIM V.I. Core Equity - Series II Sub-Account in accordance with that program.
Outside of these automatic transaction programs, additional allocations will
not be allowed.*
6)Effective May 1, 2008, the Morgan Stanley VIS Equity Portfolio - Class Y
changed its name to the Morgan Stanley VIS Capital Opportunities Portfolio -
Class Y, the Van Kampen LIT Strategic Growth Portfolio, Class II changed its
name to Van Kampen LIT Capital Growth Portfolio, Class II and the Van Kampen
LIT Aggressive Growth Portfolio, Class II changed its name to the Van Kampen
LIT Mid Cap Growth Portfolio, Class II.
7)Effective May 1, 2008: the Van Kampen UIF Equity Growth Portfolio changed its
name to the UIF Capital Growth Portfolio; the Van Kampen UIF Emerging Markets
Debt Portfolio changed its name to UIF Emerging Markets Debt Portfolio; the
Van Kampen UIF Emerging Markets Equity Portfolio changed it's name to the UIF
Emerging Markets Equity Portfolio; the Van Kampen UIF U.S. Real Estate
Portfolio changed its name to the UIF U.S. Real Estate Portfolio; the Van
Kampen UIF Equity and Income Portfolio changed its name to the UIF Equity and
Income Portfolio;
67 PROSPECTUS
the Van Kampen UIF U.S. Mid Cap Value Portfolio changed its name to the UIF
U.S. Mid Cap Value Portfolio; the Van Kampen UIF Mid Cap Growth Portfolio
changed its name to the UIF Mid Cap Growth Portfolio; the Van Kampen UIF
Global Franchise Portfolio changed its name to the UIF Global Franchise
Portfolio; the Van Kampen UIF International Growth Equity Portfolio changed
its name to UIF International Growth Equity Portfolio; and the Van Kampen
Small Company Growth Portfolio changed its name to the UIF Small Company
Growth Portfolio.
* As noted above, certain Variable Sub-Accounts are closed to new investments.
If you invested in these Variable Sub-Accounts prior to the effective close
date, you may continue your investments. If you choose to add the Income
Protection Benefit Option on or after the effective close date, 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 it to your Contract.
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"), 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 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 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
68 PROSPECTUS
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.
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 10th 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 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
69 PROSPECTUS
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 85th 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 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 withdrawals that does not cumulatively
exceed 5% (3% in certain states).
On or after the first Contract Anniversary following the 85th 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 85th
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.
70 PROSPECTUS
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
The SureIncome Plus Option and SureIncome For Life Option also include a death
benefit option, the SureIncome Return of Premium Death Benefit ("SureIncome ROP
Death Benefit.")
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);
.. The Enhanced Beneficiary Protection (Annual Increase) Option (if selected);
or
.. The SureIncome ROP Death Benefit.*
The "Settlement Value" is the amount that would be paid in the event of a full
withdrawal of the Contract Value.
* The SureIncome ROP Death Benefit under the SureIncome For Life Option is only
included in the calculation of the Death Benefit upon the death of the
SureIncome Covered Life. If a Contract Owner, Annuitant or Co-Annuitant who is
not the SureIncome Covered Life dies, the SureIncome ROP Death Benefit is not
applicable.
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
71 PROSPECTUS
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," above), 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 80th 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 74 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 80th 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 (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 74, 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
72 PROSPECTUS
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 80th birthday of either the
oldest New Contract Owner or the oldest Annuitant, whichever is earlier.
(After the 80th 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"
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 74 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.
73 PROSPECTUS
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 74, 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 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
74 PROSPECTUS
.. 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 - Class Y 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 - Class Y 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. 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.
75 PROSPECTUS
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 - Class Y 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, 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.
.. On or after May 1, 2005, the Option may be added only 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 your 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
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 be only 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
76 PROSPECTUS
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.
.. 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.
.. On or after May 1, 2005, the CSP may be added only 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
77 PROSPECTUS
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.
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.
Effective June 1, 2006, Allstate Life entered into an agreement ("the
Agreement") with Prudential Financial, Inc. and its subsidiary, The Prudential
Insurance Company of America ("PICA") pursuant to which Allstate Life sold,
through a combination of coinsurance and modified coinsurance reinsurance,
substantially all of its variable annuity business. Pursuant to the Agreement
Allstate Life and PICA also have entered into an administrative services
agreement which provides that PICA or an affiliate will administer the Variable
Account and the Contracts after a transition period that may last up to two
years. The benefits and provisions of the Contracts have not been changed by
these transactions and agreements. None of the transactions or agreements have
changed the fact that we are primarily liable to you under your Contract.
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
78 PROSPECTUS
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 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. The Contracts are distributed exclusively by their principal
underwriter, Morgan Stanley & Co. Incorporated ("Morgan Stanley & Co."). Morgan
Stanley & Co., a wholly owned subsidiary of Morgan Stanley, is located at 1585
Broadway, New York, New York 10036. Morgan Stanley & Co. 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 FINRA. Contracts are sold through the
registered representatives of Morgan Stanley & Co. 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.
79 PROSPECTUS
We will pay commissions to Morgan Stanley & Co. for selling the Contracts. We
may pay to Morgan Stanley & Co. up to a maximum sales commission of 6.0% of
purchase payments. In addition, we may pay ongoing annual compensation of up to
1.40% of Contract value. To compensate Morgan Stanley for the costs of
distribution, insurance licensing, due diligence and other home office
services, we pay Morgan Stanley an additional percentage of purchase payments
not exceeding 0.80% and a percentage of Contract Value not exceeding 0.20%.
Commissions and annual compensation, when combined, could exceed 8.5% of total
premium payments. Individual representatives receive a portion of compensation
paid to Morgan Stanley & Co. in accordance with Morgan Stanley & Co.'s
practices.
We also make additional payments to Morgan Stanley & Co. 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 & Co. 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. Pursuant to the Agreement, we entered into
an administrative services agreement with PICA whereby, after a transition
period that may last up to two years, PICA or an affiliate will provide
administrative services to the Variable Account and the Contracts on our behalf.
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 at least annually. We will also send you
transaction confirmations. 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 or a confirmation. 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
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.
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
80 PROSPECTUS
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 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
81 PROSPECTUS
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:
.. 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.
82 PROSPECTUS
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. If no election is made or no U.S. taxpayer identification
number is provided 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. We
require an original IRS Form W-8BEN at issue to certify the owners' foreign
status. Withholding may be reduced or eliminated if covered by an income tax
treaty between the U.S. and the non-resident alien's country of residence if
the payee provides a U.S. taxpayer identification number on a fully completed
Form W8BEN. 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:
83 PROSPECTUS
.. 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. Effective December 31, 2005, the
IRS requires annuity contracts to include the actuarial present value of other
benefits for purposes of calculating the required minimum distribution amount.
These other benefits may include accumulation, income, or death benefits. Not
all income plans offered under the Contract satisfy the requirements for
minimum distributions. Because these distributions are required under the Code
and the method of calculation is complex, please see a competent tax advisor.
The Death Benefit and Tax Qualified Contracts. Pursuant to the Code and IRS
regulations, an IRA (e.g., traditional IRA, Roth IRA, SEP IRA and SIMPLE IRA)
may not invest in life insurance contracts. However, an IRA may provide a death
benefit that equals the greater of the purchase payments or the Contract Value.
The Contract offers a death benefit that in certain circumstances may exceed
the greater of the purchase payments or the Contract Value. We believe that the
Death Benefits offered by your Contract do not constitute life insurance under
these regulations.
It is also possible that certain death benefits that offer enhanced earnings
could be characterized as an incidental death benefit. If the death benefit
were so
84 PROSPECTUS
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)
.. made for a first time home purchase (up to a $10,000 lifetime limit and
applies only for IRAs), and
.. from an IRA or attributable to elective deferrals under a 401(k) plan,
403(b) annuity, or certain similar arrangements made to individuals who
(because of their being members of a reserve component) are ordered or
called to active duty after Sept. 11, 2001, and before Dec. 31, 2007, for a
period of more than 179 days or for an indefinite period; and made during
the period beginning on the date of the order or call to duty and ending at
the close of the active duty period.
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 the required 10% of the taxable amount. In certain states, if there is
federal withholding, then state withholding is also mandatory.
85 PROSPECTUS
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. We
require an original IRS Form W8BEN at issue to certify the owners' foreign
status. Withholding may be reduced or eliminated if covered by an income tax
treaty between the U.S. and the non-resident alien's country of residence if
the payee provides a U.S. taxpayer identification number on a fully completed
Form W8BEN. 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.
Charitable IRA Distributions. The Pension Protection Act of 2006 Included a
charitable giving incentive permitting tax-free IRA distributions for
charitable purposes.
For distributions in tax years beginning after 2005 and before 2008, the Act
provides an exclusion from gross income, up to $100,000, for otherwise taxable
IRA distributions from a traditional or Roth IRA that are qualified charitable
distributions. To constitute a qualified charitable distribution, the
distribution must be made (1) directly by the IRA trustee to a certain
qualified charitable organizations and (2) on or after the date the IRA owner
attains age 70 1/2. Distributions that are excluded from income under this
provision are not taken into account in determining the individual's deduction,
if any, for charitable contributions.
The IRS has indicated that an IRA trustee is not responsible for determining
whether a distribution to a charity is one that satisfies the requirements for
the new income tax exclusion added by the Pension Protection Act. As a result
the general rules for reporting IRA distributions apply.
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. For distributions after 2007, the Pension Protection Act of 2006
allows distributions from qualified retirement plans including tax sheltered
annuities and governmental Section 457 plans to be rolled over directly into a
Roth IRA, subject to the usual rules that apply to conversions from a
traditional IRA into a Roth IRA. The income portion of a conversion or rollover
distribution is taxable currently, but is exempted from the 10% penalty tax on
premature distributions. An individual with adjusted gross income (AGI) of
$100,000 or more won't be able to rollover amounts from an eligible retirement
plan into a Roth IRA. Please note, however, that the $100,000 AGI limit will be
eliminated for tax years beginning after December 31, 2009. Effective
January 1, 2005, the IRS requires conversions of annuity contracts to include
the actuarial present value of other benefits for purposes of valuing the
taxable amount of the conversion.
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.
If you have a contract issued as an IRA under Code Section 408(b) and request
to change the ownership to an IRA custodian permitted under Section 408, we
will treat a request to change ownership from an individual to a custodian as
an indirect rollover. We will send a Form 1099R to report the distribution and
the custodian should issue a Form 5498 for the contract value contribution.
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;
86 PROSPECTUS
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. SIMPLE IRA plans must include the provisions of
the Economic Growth and Tax Relief Reconciliation Act of 2007 (EGTRRA) to avoid
adverse tax consequences. If your current SIMPLE IRA plan uses IRS Model Form
5304-SIMPLE with a revision date of March 2002 or later, then your plan is up
to date. If your plan has a revision date prior to March 2002, please consult
with your tax or legal advisor to determine the action you need to take in
order to comply with this requirement.
To determine if you are eligible to contribute to any of the above listed IRAs
(traditional, Roth, SEP, or SIMPLE), please refer to IRS Publication 590 and
your competent tax advisor.
Tax Sheltered Annuities. Code Section 403(b) provides tax-deferred retirement
savings plans for employees of certain non-profit and educational
organizations. Under Section 403(b), any contract used for a 403(b) plan must
provide that distributions attributable to salary reduction contributions made
after 12/31/88, and all earnings on salary reduction contributions, may be made
only on or after the date the employee:
.. attains age 59 1/2,
.. severs employment,
.. dies,
.. becomes disabled, or
.. incurs a hardship (earnings on salary reduction contributions may not be
distributed on account of hardship).
These limitations do not apply to withdrawals where Allstate Life is directed
to transfer some or all of the Contract Value to another 403(b) plan.
Generally, we do not accept funds in 403(b) contracts that are subject to the
Employee Retirement Income Security Act of 1974 (ERISA).
Corporate and Self-Employed Pension and Profit Sharing Plans.
Section 401(a) of the Code permits corporate employers to establish various
types of tax favored retirement plans for employees. Self-employed individuals
may establish tax favored retirement plans for themselves and their employees
(commonly referred to as "H.R.10" or "Keogh"). Such retirement plans may permit
the purchase of annuity contracts. Allstate Life no longer issues annuity
contracts to employer sponsored qualified retirement plans.
There are two owner types for contracts intended to qualify under
Section 401(a): a qualified plan fiduciary or an annuitant owner.
.. A qualified plan fiduciary exists when a qualified plan trust that is
intended to qualify under Section 401(a) of the Code is the owner. The
qualified plan trust must have its own tax identification number and a
named trustee acting as a fiduciary on behalf of the plan. The annuitant
should be the person for whose benefit the contract was purchased.
.. An annuitant owner exists when the tax identification number of the owner
and annuitant are the same, or the annuity contract is not owned by a
qualified plan trust. The annuitant should be the person for whose benefit
the contract was purchased.
If a qualified plan fiduciary is the owner of the contract, the qualified plan
must be the beneficiary so that death benefits from the annuity are distributed
in accordance with the terms of the qualified plan. Annuitant owned contracts
require that the beneficiary be the annuitant's spouse (if applicable), which
is consistent with the required IRS language for qualified plans under
Section 401(a). A completed Annuitant Owned Qualified Plan Designation of
Beneficiary form is required in order to change the beneficiary of an annuitant
owned Qualified Plan contract.
87 PROSPECTUS
State and Local Government and Tax-Exempt Organization Deferred Compensation
Plans. Section 457 of the Code permits employees of state and local
governments and tax-exempt organizations to defer a portion of their
compensation without paying current taxes. The employees must be participants
in an eligible deferred compensation plan. In eligible governmental plans, all
assets and income must be held in a trust/ custodial account/annuity contract
for the exclusive benefit of the participants and their beneficiaries. To the
extent the Contracts are used in connection with a non-governmental eligible
plan, employees are considered general creditors of the employer and the
employer as owner of the Contract has the sole right to the proceeds of the
Contract. Under eligible 457 plans, contributions made for the benefit of the
employees will not be includible in the employees' gross income until
distributed from the plan. Allstate Life no longer issues annuity contracts to
employer sponsored qualified retirement plans.
Annual Reports and Other Documents
- --------------------------------------------------------------------------------
Allstate Life's Annual Report on Form 10-K for the year ended December 31,
2007, 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 Securities Exchange Act of 1934 are also incorporated herein by
reference, which means that they also legally become a part of this prospectus.
Statements in this prospectus, or in documents that we file later with the SEC
and that legally become a part of this prospectus, may change or supersede
statements in other documents that are legally part of this prospectus.
Accordingly, only the statement that is changed or replaced will legally be a
part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q electronically on the SEC's
"EDGAR" system using the identifying number CIK No. 0000352736. The SEC
maintains a Web site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
SEC. The address of the site is http://www.sec.gov. You also can view these
materials at the SEC's Public Reference Room at 100 F Street NE, Room 1580,
Washington, DC 20549-2001. For more information on the operations of 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 758565, Topeka, KS 66675-8565 or 1-800-457-7617.
88 PROSPECTUS
Statement of Additional Information
Table of Contents
- --------------------------------------------------------------------------------
Additions, Deletions, or Substitutions of Investments 2
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The Contracts 2
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Purchase of Contracts 2
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Tax-Free Exchange (1035 Exchanges, Rollovers and Transfers) 3
---------------------------------------------------------------------
Calculation of Accumulation Unit Values 3
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Net Investment Factor 3
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Calculation of Variable Income Payments 4
---------------------------------------------------------------------
Calculation of Annuity Unit Values 5
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General Matters 5
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Incontestability 5
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Settlements 5
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Safekeeping of the Variable Account's Assets 5
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Premium Taxes 6
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Tax Reserves 6
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Experts 6
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Financial Statements 6
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Appendix A - Accumulation Unit Values A-1
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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.
89 PROSPECTUS
Appendix A
Contract Comparison Chart
- --------------------------------------------------------------------------------
--------------------------------------------------------------
Allstate Variable Allstate Variable
Feature Annuity Annuity - L Share
--------------------------------------------------------------
--------------------------------------------------------------
3 to 6 month 3 to 6 month
transfer periods transfer periods
DCA Fixed Account 7 to 12 month 7 to 12 month
Option transfer periods transfer periods
--------------------------------------------------------------
--------------------------------------------------------------
1-, 3-*, 5-*, and
Standard Fixed 7-* year guarantee
Account Option periods N/A
--------------------------------------------------------------
--------------------------------------------------------------
3-, 5-, 7-, and 10- 3-, 5-, 7-, and 10-
MVA Fixed Account year guarantee year guarantee
Option** periods periods
--------------------------------------------------------------
--------------------- --------------------
Mortality and
Expense
Risk Charge
(Base Contract) 1.10% 1.50%
--------------------------------------------------------------
--------------------------------------------------------------
Withdrawal Charge
(% of purchase
payment) 7/ 7/ 6/ 5/ 4/ 3/ 2 7/ 6/ 5
--------------------------------------------------------------
Confinement, Confinement,
Terminal Terminal
Withdrawal Charge Illness, Illness,
Waivers Unemployment 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.
90 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 Board Statistical Release H.15. If such yields cease to be
available in Federal Reserve Board Statistical 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
Purchase Payment: $10,000 allocated to a Market Value Adjusted Fixed Guarantee 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 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 = $1500
Step 3: Calculate the Withdrawal Charge: = .06 X ($10,000 - $1,500) = $510
Step 4: Calculate the Market Value Adjustment: I = 4.50%
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 received by Contract owner as = $11,411.66 - $510 + $10.27 = $10,911.93
a result of full withdrawal at the end of Contract Year 3:
91 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 = $11,411.66 - $510 - $112.98 = $10,788.68
a 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.
92 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 Date: 65
----------------------------------------------------------------
Sex of Annuitant: male
----------------------------------------------------------------
Income Plan selected: 1
----------------------------------------------------------------
Payment frequency: monthly
----------------------------------------------------------------
Amount applied to variable income payments under the
Income Plan: $100,000.00
----------------------------------------------------------------
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 payment: 85% of the initial variable amount income 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.
93 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 Withdrawal (b) $60,000
- --------------------------------------------------------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal (c) $55,000
- --------------------------------------------------------------------------------------------------------------------------------
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 Withdrawal (b) $60,000
- --------------------------------------------------------------------------------------------------------------------------------
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal (assumes 181 days worth of
interest on $52,500 and $54,600, respectively) (c) $53,786
- --------------------------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (Corridor = 5% of Roll-Up Value on 1/1/04) (d) $ 2,625
- --------------------------------------------------------------------------------------------------------------------------------
Dollar for Dollar Withdrawal Adjustment (discounted for a half year's worth of interest) (e) = (d) * 1.05 ^-0.5 $ 2,562
- --------------------------------------------------------------------------------------------------------------------------------
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.
94 PROSPECTUS
Appendix E
Withdrawal Adjustment Example - Death Benefits*
- --------------------------------------------------------------------------------
Issue Date: January 1, 2007
Initial Purchase Payment: $50,000
Death Benefit Amount
--------------------------------
Beginning Contract Purchase Maximum Enhanced
Type of Contract Transaction Value After Payment Anniversary Beneficiary
Date Occurrence Value Amount Occurrence Value Value Value**
- -------------------------------------------------------------------------------------------------
1/1/ 2008 Contract Anniversary $55,000 _ $55,000 $50,000 $55,000 $52,500
- -------------------------------------------------------------------------------------------------
7/1/ 2008 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 Partial Withdrawal (c) $50,000
- -----------------------------------------------------------------------------------------------
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 Partial Withdrawal (c) $55,000
- -----------------------------------------------------------------------------------------------
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 on $52,500 and $54,600, respectively) (c) $53,786
- -----------------------------------------------------------------------------------------------
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.
95 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 death = $0
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).
96 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.
97 PROSPECTUS
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.
**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).
98 PROSPECTUS
Appendix G
Withdrawal Adjustment Example - TrueReturn Accumulation Benefit*
- --------------------------------------------------------------------------------
Issue Date: January 2, 2007
Initial Purchase Payment: $50,000
Initial Benefit Base: $50,000
Beginning Contract
Type of Contract Transaction Value After Benefit
Date Occurrence Value Amount Occurrence Base
----------------------------------------------------------------------------
1/2/ 2008 Contract Anniversary $ 55,000 _ $ 55,000 $ 50,000
----------------------------------------------------------------------------
7/2/ 2008 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 Partial Withdrawal (c) $50,000
- ------------------------------------------------------------------------------------------
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.
99 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).
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).
100 PROSPECTUS
Appendix I - SureIncome Plus 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 Plus Option at issue.
Your Benefit Base is $100,000, which is your initial purchase payment of
$100,000.
Your SureIncome ROP Death Benefit 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 SureIncome ROP Death Benefit is increased to $140,000, which is your prior
SureIncome ROP Death Benefit ($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 SureIncome ROP Death Benefit is reduced to $92,000, which is your prior
SureIncome ROP Death Benefit ($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, the SureIncome ROP Death Benefit
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 SureIncome ROP Death Benefit 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 SureIncome ROP Death Benefit is reduced to $55,000, determined by the
following calculation: the lesser of ($60,000 - $5,000) and ($92,000 - $5,000)
= $55,000.
101 PROSPECTUS
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 SureIncome ROP Death Benefit is increased to $95,000, which is your prior
SureIncome ROP Death Benefit ($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).
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 SureIncome ROP Death Benefit is reduced to $91,800, which is your prior
SureIncome ROP Death Benefit ($95,000) less your withdrawal ($3,200).
The Benefit Payment is unchanged, because the amount withdrawn does not exceed
the Benefit Payment Remaining, 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).
Example 8: Assume Example 1 is continued and on the first Contract Anniversary
the Contract Value prior to deduction of annual fees is $160,000.
The SureIncome Plus Option Fee is $650, which is 0.65% X the Benefit Base
($100,000) prior to updating the Benefit Base based on the Contract Value on
the Contract Anniversary.
The final Contract Value is $159,350, which the Contract Value on the Contract
Anniversary after deduction of annual fees (assume SureIncome Plus Option Fee
is the only annual fee applicable).
The Benefit Base is increased to $159,350, which is the greater of your current
Benefit Base ($100,000) and the final Contract Value on the Contract
Anniversary ($159,350).
The SureIncome ROP Death Benefit remains $100,000.
The Benefit Payment is increased to $12,748, which is the greater of your
current Benefit Payment ($8,000) and 8% X the final Contract Value on the
Contract Anniversary ($159,350).
The Benefit Payment Remaining is updated to $12,748, which is the Benefit
Payment on the Contract Anniversary.
Example 9: Assume Example 8 is continued, no withdrawals or purchase payments
are applied during the second Contract Year and on the second Contract
Anniversary the Contract Value prior to deduction of annual fees is $60,000.
The SureIncome Plus Option Fee is $1,035.78, which is 0.65% X the Benefit Base
($159,350) prior to updating the Benefit Base based on the Contract Value on
the Contract Anniversary.
The final Contract Value is $58,964.22, which the Contract Value on the
Contract Anniversary after deduction of annual fees (assume SureIncome Plus
Option Fee is the only annual fee applicable).
The Benefit Base remains $159,350, which is the greater of your current Benefit
Base ($159,350) and the final Contract Value on the Contract Anniversary
($58,964.22).
The SureIncome ROP Death Benefit remains $100,000.
The Benefit Payment is remains $12,748, which is the greater of your current
Benefit Payment $12,748 and 8% X the final Contract Value on the Contract
Anniversary ($58,964.22).
The Benefit Payment Remaining is updated to $12,748, which is the Benefit
Payment on the Contract Anniversary.
102 PROSPECTUS
Appendix J - SureIncome For Life Withdrawal Benefit
Option Calculation Examples
- --------------------------------------------------------------------------------
Example 1: Assume you purchase an Allstate Variable Annuity contract with
$100,000 initial purchase payment, are attained age 55 at issue, and add the
SureIncome For Life Option at issue (you are the SureIncome Covered Life).
Your Benefit Base is $100,000, which is your initial purchase payment of
$100,000.
Your SureIncome ROP Death Benefit is $100,000, which is your initial purchase
payment of $100,000.
Your Benefit Payment is $4,000, which is 4% of your initial purchase payment.
Your Benefit Payment Remaining for this Benefit Year is $4,000, which is equal
to your Benefit Payment at the beginning of this Benefit Year.
Note: The Benefit Payment remains $4,000 until you turn age 60 (as long as the
Contract Value on any of the prior Contract Anniversaries have not caused any
of the guarantees under the Option to be updated). At that point, if no
withdrawals have been taken, your Benefit Payment & Benefit Payment Remaining
are updated to 5% x current Benefit Base ($5,000 = 5% X $100,000, assuming your
Benefit Base is still $100,000).
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 SureIncome ROP Death Benefit is increased to $140,000, which is your prior
SureIncome ROP Death Benefit ($100,000) plus your additional purchase payment
($40,000).
The Benefit Payment is increased to $5,600, which is your prior Benefit Payment
($4,000) plus 4% of your additional purchase payment ($40,000).
The Benefit Payment Remaining is increased to $5,600, which is your prior
Benefit Payment Remaining ($4,000) plus 4% of your additional purchase payment
($40,000).
Note: The Benefit Payment remains $5,600 until you turn age 60 (for the
purposes of this example it is assumed the maximum anniversary value on any of
the prior Contract Anniversaries has not increased the Benefit Payment). At
that point, if no withdrawals have been taken, your Benefit Payment & Benefit
Payment Remaining are updated to 5% x current Benefit Base ($7,000 = 5% X
$140,000, assuming your Benefit Base is still $140,000).
Example 3a: Assume Example 1 is continued and the first withdrawal, equal to
$4,000, is made during the first Benefit Year.
The Benefit Base is reduced to $96,000, which is your prior Benefit Base
($100,000) less your withdrawal ($4,000).
The SureIncome ROP Death Benefit is reduced to $96,000, which is your prior
SureIncome ROP Death Benefit ($100,000) less your withdrawal ($4,000).
The Benefit Payment is unchanged and remains $4,000.
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($4,000) less your
withdrawal ($4,000).
Note: The Withdrawal Benefit Factor is locked at 4% because the age at first
withdrawal is age 55.
Example 3b: Assume Example 1 is continued and the first withdrawal, equal to
$5,000, is made during the sixth Benefit Year and you have attained age 60
(assume the Contract Values have not increased any SureIncome For Life Option
guarantees on any prior Contract Anniversaries).
The Benefit Base is reduced to $95,000, which is your prior Benefit Base
($100,000) less your withdrawal ($5,000).
The SureIncome ROP Death Benefit is reduced to $95,000, which is your prior
SureIncome ROP Death Benefit ($100,000) less your withdrawal ($5,000).
Because the first withdrawal occurs at attained age 60, the Benefit Payment and
Benefit Payment Remaining prior to the withdrawal are updated to 5% x current
Benefit Base (5% X $100,000 = $5,000).
The Benefit Payment remains $5,000 after withdrawal.
103 PROSPECTUS
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($5,000) less your
withdrawal ($5,000).
Note: The Withdrawal Benefit Factor is locked at 5% because the age at first
withdrawal is age 60.
Example 3c: Assume Example 1 is continued and the first withdrawal, equal to
$6,000, is made during the sixteenth Benefit Year and you have attained age 70
(assume the Contract Values have not increased any SureIncome For Life Option
guarantees on any prior Contract Anniversaries).
The Benefit Base is reduced to $94,000, which is your prior Benefit Base
($100,000) less your withdrawal ($6,000).
The SureIncome ROP Death Benefit is reduced to $94,000, which is your prior
SureIncome ROP Death Benefit ($100,000) less your withdrawal ($6,000).
Because the first withdrawal occurs at attained age 70, the Benefit Payment and
Benefit Payment Remaining prior to the withdrawal are updated to 6% X current
Benefit Base (6% X $100,000 = $6,000).
The Benefit Payment remains $6,000 after withdrawal.
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($6,000) less your
withdrawal ($6,000).
Note: The Withdrawal Benefit Factor is locked at 6% because the age at first
withdrawal is age 70.
Example 4a: 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, the SureIncome ROP Death Benefit
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 SureIncome ROP Death Benefit 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 is reduced to $3,000, determined by the following
calculation: the lesser of ($4,000) and (4% X $75,000) = $3,000.
There is no Benefit Payment Remaining because the withdrawal has reduced it to
$0.
Note: The Withdrawal Benefit Factor is locked at 4% because the age at first
withdrawal is age 55.
Example 4b: Assume Example 1 is continued and a withdrawal of $25,000 is made
during the sixth Benefit Year (assume the Contract Values have not increased
any SureIncome For Life Option guarantees on any prior Contract Anniversaries).
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, the SureIncome ROP Death Benefit 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 SureIncome ROP Death Benefit is reduced to $75,000, determined by the
following calculation: the lesser of ($130,000 - $25,000) and ($100,000 -
$25,000) = $75,000.
Because the first withdrawal occurs at attained age 60, the Benefit Payment and
Benefit Payment Remaining prior to the withdrawal are updated to 5% X current
Benefit Base prior to the withdrawal (5% X $100,000 = $5,000).
The Benefit Payment is reduced to $3,750, determined by the following
calculation: the lesser of ($5,000) and (5% X $75,000) = $3,750.
There is no Benefit Payment Remaining because the withdrawal has reduced it to
$0.
Note: The Withdrawal Benefit Factor is locked at 5% because the age at first
withdrawal is age 60.
Example 5: Assume Example 3a 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.
104 PROSPECTUS
The Benefit Base is reduced to $55,000, determined by the following
calculation: the lesser of ($60,000 - $5,000) and ($96,000 - $5,000) = $55,000.
The SureIncome ROP Death Benefit is reduced to $55,000, determined by the
following calculation: the lesser of ($60,000 - $5,000) and ($96,000 - $5,000)
= $55,000.
The Benefit Payment is reduced to $2,200, determined by the following formula:
the lesser of ($4,000) and (4% X $55,000) = $2,200.
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 SureIncome ROP Death Benefit is increased to $95,000, which is your prior
SureIncome ROP Death Benefit ($55,000) plus your additional purchase payment
($40,000).
The Benefit Payment is increased to $3,800, which is your prior Benefit Payment
($2,200) plus 4% of your additional purchase payment ($40,000).
The Benefit Payment Remaining is increased to $1,600, which is your Benefit
Payment Remaining prior to your additional purchase payment ($0) plus 4% of
your additional purchase payment ($40,000).
Example 7: Assume Example 6 is continued and an additional withdrawal of $1,600
is taken in the same year (the first Benefit Year).
The Benefit Base is reduced to $93,400, which is your prior Benefit Base
($95,000) less your withdrawal ($1,600).
The SureIncome ROP Death Benefit is reduced to $93,400, which is your prior
SureIncome ROP Death Benefit ($95,000) less your withdrawal ($1,600).
The Benefit Payment is unchanged and remains $3,800.
The Benefit Payment Remaining is reduced to $0, which is your Benefit Payment
Remaining prior to your withdrawal ($1,600) less your withdrawal ($1,600).
Example 8: Assume Example 1 is continued and on the first Contract Anniversary
the Contract Value prior to deduction of annual fees is $160,000.
The SureIncome For Life Option Fee is $650, which is 0.65% X the Benefit Base
($100,000) prior to updating the Benefit Base based on the Contract Value on
the Contract Anniversary.
The final Contract Value is $159,350, which the Contract Value on the Contract
Anniversary after deduction of annual fees (assume SureIncome For Life Option
Fee is the only annual fee applicable).
The Benefit Base is increased to $159,350, which is the greater of your current
Benefit Base ($100,000) and the final Contract Value on the Contract
Anniversary ($159,350).
The SureIncome ROP Death Benefit remains $100,000.
The Benefit Payment is increased to $6,374, which is the greater of your
current Benefit Payment ($4,000) and 4% of the final Contract Value on the
Contract Anniversary ($159,350).
The Benefit Payment Remaining is updated to $6,374, which is the Benefit
Payment on the Contract Anniversary.
Note: The Benefit Payment remains $6,374 until you turn age 60 (for the
purposes of this example it is assumed the maximum anniversary value on any of
the prior Contract Anniversaries has not increased the Benefit Payment). At
that point, if no withdrawals have been taken, your Benefit Payment and Benefit
Payment Remaining are updated to 5% X current Benefit Base ($7,967.50 = 5% X
$159,350, assuming your Benefit Base is still $159,350).
Example 9: Assume Example 8 is continued, no withdrawals or purchase payments
are applied during the second Contract Year and on the second Contract
Anniversary the Contract Value prior to deduction of annual fees is $60,000.
The SureIncome For Life Option Fee is $1,035.78, which is 0.65% X the Benefit
Base ($159,350) prior to updating for the Benefit Base based on the Contract
Value on the Contract Anniversary.
The final Contract Value is $58,964.22, which the Contract Value on the
Contract Anniversary after deduction of annual fees (assume SureIncome For Life
Option Fee is the only annual fee applicable).
105 PROSPECTUS
The Benefit Base is remains $159,350, which is the greater of your current
Benefit Base ($159,350) and the final Contract Value on the Contract
Anniversary ($58,964.22).
The SureIncome ROP Death Benefit remains $100,000.
The Benefit Payment is remains $6,374, which is the greater of your current
Benefit Payment $6,374 and 4% X the final Contract Value on the Contract
Anniversary ($58,964.22).
The Benefit Payment Remaining is updated to $6,374, which is the Benefit
Payment on the Contract Anniversary.
106 PROSPECTUS
Appendix K - Accumulation Unit Values
- --------------------------------------------------------------------------------
Appendix K 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 of Contract charges that affect Accumulation Unit Values for each
Contract. Please contact us at 1-800-457-7617 to obtain a copy of the Statement
of Additional Information.
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, and prior to October 17, 2005; effective October 17,
2005, and thereafter, the administrative expense charge applied to such
Contracts is 0.19%.
The names of the following Sub-Accounts changed since December 31, 2007. The
names shown in the tables of Accumulation Units correspond to the name of the
Sub-Account as of December 31, 2007:
---------------------------------------------------
Sub-Account Name as of
December 31, 2007 (as
appears in the following
tables of Accumulation Sub-Account Name as of
Unit Values) May 1, 2008
---------------------------------------------------
Morgan Stanley VIS Morgan Stanley VIS
Equity Portfolio - Class Capital Opportunities
Y Portfolio - Class Y
---------------------------------------------------
Van Kampen UIF Equity
Growth Portfolio, Class UIF Capital Growth
II Portfolio, Class II
---------------------------------------------------
Van Kampen LIT Strategic Van Kampen LIT Capital
Growth Portfolio, Class Growth Portfolio, Class
II II
---------------------------------------------------
Van Kampen LIT Van Kampen LIT Mid Cap
Aggressive Growth Growth Portfolio, Class
Portfolio, Class II II
---------------------------------------------------
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)
- --------------------------------------------------------------------------------
Allstate Variable Annuity - Prospectus
Mortality & Expense = 1.1
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Aggressive Equity Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.234 $ 13.583 $ 16.455 $ 17.484
Accumulation Unit Value, End of Period $ 12.234 $ 13.583 $ 16.455 $ 17.484 $ 20.603
Number of Units Outstanding, End of Period 24,578 35,573 37,997 37,633 35,654
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.260 $ 13.095 $ 13.619 $ 14.900
Accumulation Unit Value, End of Period $ 12.260 $ 13.095 $ 13.619 $ 14.900 $ 15.280
Number of Units Outstanding, End of Period 237,797 556,690 590,383 513,182 433,504
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Equity Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.884 $ 13.005 $ 15.136 $ 15.526
Accumulation Unit Value, End of Period $ 11.884 $ 13.005 $ 15.136 $ 15.526 $ 18.273
Number of Units Outstanding, End of Period 180,194 463,438 529,631 475,152 433,093
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS European Equity Portfolio - Class Y (1)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.690 $ 14.090 $ 15.071 $ 19.322
Accumulation Unit Value, End of Period $ 12.690 $ 14.090 $ 15.071 $ 19.322 $ 21.998
Number of Units Outstanding, End of Period 65,859 102,460 94,898 90,663 81,637
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Advantage Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.603 $ 13.968 $ 14.677 $ 17.147
Accumulation Unit Value, End of Period $ 12.603 $ 13.968 $ 14.677 $ 17.147 $ 19.748
Number of Units Outstanding, End of Period 10,209 19,661 18,678 17,635 13,437
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Growth Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.971 $ 14.679 $ 15.385 $ 18.468
Accumulation Unit Value, End of Period $ 12.971 $ 14.679 $ 15.385 $ 18.468 $ 19.462
Number of Units Outstanding, End of Period 150,827 331,007 355,868 304,398 274,405
- ----------------------------------------------------------------------------------------------------------
107 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS High Yield Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.331 $ 12.255 $ 12.330 $ 13.268
Accumulation Unit Value, End of Period $ 11.331 $ 12.255 $ 12.330 $ 13.268 $ 13.607
Number of Units Outstanding, End of Period 95,060 191,354 181,345 165,461 142,464
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Builder Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.666 $ 12.750 $ 13.430 $ 15.108
Accumulation Unit Value, End of Period $ 11.666 $ 12.750 $ 13.430 $ 15.108 $ 15.339
Number of Units Outstanding, End of Period 83,633 132,998 130,194 112,840 84,148
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 10.311 $ 10.694 $ 10.881 $ 11.315
Accumulation Unit Value, End of Period $ 10.311 $ 10.694 $ 10.881 $ 11.315 $ 11.808
Number of Units Outstanding, End of Period 285,576 1,071,611 2,234,712 2,686,693 2,527,529
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Limited Duration Portfolio - Class Y (1)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 10.018 $ 10.005 $ 10.025 $ 10.295
Accumulation Unit Value, End of Period $ 10.018 $ 10.005 $ 10.025 $ 10.295 $ 10.446
Number of Units Outstanding, End of Period 337,847 691,339 1,064,766 1,070,500 951,430
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Money Market Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 9.936 $ 9.868 $ 9.988 $ 10.289
Accumulation Unit Value, End of Period $ 9.936 $ 9.868 $ 9.988 $ 10.289 $ 10.629
Number of Units Outstanding, End of Period 184,536 812,228 1,150,064 1,226,200 1,227,382
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS S&P 500 Index Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.114 $ 13.188 $ 13.596 $ 15.462
Accumulation Unit Value, End of Period $ 12.114 $ 13.188 $ 13.596 $ 15.462 $ 16.026
Number of Units Outstanding, End of Period 380,784 779,233 1,205,985 1,252,976 1,151,976
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Strategist Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.034 $ 13.080 $ 13.953 $ 15.805
Accumulation Unit Value, End of Period $ 12.034 $ 13.080 $ 13.953 $ 15.805 $ 16.907
Number of Units Outstanding, End of Period 156,369 290,870 341,132 321,608 283,081
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Utilities Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.505 $ 13.660 $ 15.420 $ 18.270
Accumulation Unit Value, End of Period $ 11.505 $ 13.660 $ 15.420 $ 18.270 $ 21.647
Number of Units Outstanding, End of Period 30,741 45,533 95,239 90,617 86,092
- ------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (2,3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.319 $ 12.299 $ 13.614 $ 14.891
Accumulation Unit Value, End of Period $ 11.319 $ 12.299 $ 13.614 $ 14.891 $ 15.638
Number of Units Outstanding, End of Period 32,114 141,903 159,451 158,346 147,971
- ------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 14.912 $ 18.105 $ 23.907 $ 32.371
Accumulation Unit Value, End of Period $ 14.912 $ 18.105 $ 23.907 $ 32.371 $ 44.878
Number of Units Outstanding, End of Period 35,093 100,831 166,567 223,116 201,793
- ------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.715 $ 12.423 $ 14.161 $ 14.512
Accumulation Unit Value, End of Period $ 11.715 $ 12.423 $ 14.161 $ 14.512 $ 17.427
Number of Units Outstanding, End of Period 121,087 179,761 189,322 176,167 199,929
- ------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.622 $ 12.793 $ 13.561 $ 15.070
Accumulation Unit Value, End of Period $ 11.622 $ 12.793 $ 13.561 $ 15.070 $ 15.374
Number of Units Outstanding, End of Period 125,143 215,383 424,921 488,356 463,892
- ------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.251 $ 13.637 $ 15.073 $ 18.080
Accumulation Unit Value, End of Period $ 12.251 $ 13.637 $ 15.073 $ 18.080 $ 19.591
Number of Units Outstanding, End of Period 91,178 311,486 581,451 726,809 683,552
- ------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF International Growth Equity Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.761
Accumulation Unit Value, End of Period - - - $ 10.761 $ 12.136
Number of Units Outstanding, End of Period - - - 66,650 72,239
- ------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.116 $ 15.727 $ 18.210 $ 19.618
Accumulation Unit Value, End of Period $ 13.116 $ 15.727 $ 18.210 $ 19.618 $ 23.743
Number of Units Outstanding, End of Period 104,776 190,348 270,496 310,882 294,553
- ------------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.621 $ 15.993 $ 17.821 $ 19.674
Accumulation Unit Value, End of Period $ 13.621 $ 15.993 $ 17.821 $ 19.674 $ 19.994
Number of Units Outstanding, End of Period 104,846 150,004 165,471 151,653 135,433
- ------------------------------------------------------------------------------------------------------------------------
108 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.408 $ 15.158 $ 16.781 $ 19.981
Accumulation Unit Value, End of Period $ 13.408 $ 15.158 $ 16.781 $ 19.981 $ 21.249
Number of Units Outstanding, End of Period 162,337 366,700 592,052 628,145 569,614
- --------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.785 $ 17.172 $ 19.791 $ 26.896
Accumulation Unit Value, End of Period $ 12.785 $ 17.172 $ 19.791 $ 26.896 $ 21.962
Number of Units Outstanding, End of Period 95,259 267,480 385,379 379,250 330,940
- --------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.864 $ 14.589 $ 16.001 $ 16.573
Accumulation Unit Value, End of Period $ 12.864 $ 14.589 $ 16.001 $ 16.573 $ 19.237
Number of Units Outstanding, End of Period 64,393 91,273 90,402 90,586 81,088
- --------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.525 $ 14.519 $ 14.921 $ 17.092
Accumulation Unit Value, End of Period $ 12.525 $ 14.519 $ 14.921 $ 17.092 $ 16.478
Number of Units Outstanding, End of Period 611,638 1,368,363 2,024,042 2,064,458 1,899,584
- --------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.853 $ 12.493 $ 13.275 $ 13.448
Accumulation Unit Value, End of Period $ 11.853 $ 12.493 $ 13.275 $ 13.448 $ 15.483
Number of Units Outstanding, End of Period 105,623 143,473 181,523 174,613 157,178
- --------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.423 $ 13.994 $ 15.157 $ 17.352
Accumulation Unit Value, End of Period $ 12.423 $ 13.994 $ 15.157 $ 17.352 $ 17.559
Number of Units Outstanding, End of Period 346,255 706,160 998,766 1,008,188 900,886
- --------------------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.922 $ 14.138 $ 14.713 $ 16.404
Accumulation Unit Value, End of Period $ 12.922 $ 14.138 $ 14.713 $ 16.404 $ 16.412
Number of Units Outstanding, End of Period 93,006 197,926 205,195 175,011 160,793
- --------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.268 $ 12.876 $ 13.801 $ 14.449
Accumulation Unit Value, End of Period $ 12.268 $ 12.876 $ 13.801 $ 14.449 $ 15.935
Number of Units Outstanding, End of Period 41,151 74,440 78,672 66,299 62,808
- --------------------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund - Series II (4)
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.804
Accumulation Unit Value, End of Period - - - $ 10.804 $ 11.504
Number of Units Outstanding, End of Period - - - 59,634 52,025
- --------------------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund - Series II (2)
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.826 $ 11.463 $ 12.559
Accumulation Unit Value, End of Period - $ 10.826 $ 11.463 $ 12.559 $ 13.547
Number of Units Outstanding, End of Period - 41,968 87,736 75,209 66,771
- --------------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth and Income Portfolio - Class B (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.313 $ 13.518 $ 13.957 $ 16.118
Accumulation Unit Value, End of Period $ 12.313 $ 13.518 $ 13.957 $ 16.118 $ 16.682
Number of Units Outstanding, End of Period 186,043 415,731 444,440 392,648 336,404
- --------------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth Portfolio - Class B
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.479 $ 14.108 $ 15.547 $ 15.157
Accumulation Unit Value, End of Period $ 12.479 $ 14.108 $ 15.547 $ 15.157 $ 16.855
Number of Units Outstanding, End of Period 84,678 170,808 369,989 387,737 356,669
- --------------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS International Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.902 $ 15.875
Accumulation Unit Value, End of Period - - $ 11 .902 $ 15.875 $ 16.544
Number of Units Outstanding, End of Period - - 347,354 662,259 645,090
- --------------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Large Cap Growth Portfolio - Class B (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.511 $ 12.311 $ 13.956 $ 13.688
Accumulation Unit Value, End of Period $ 11.511 $ 12.311 $ 13.956 $ 13.688 $ 15.350
Number of Units Outstanding, End of Period 61,318 104,368 129,269 116,723 109,489
- --------------------------------------------------------------------------------------------------------------------
109 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Small/Mid Cap Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.642 $ 16.034 $ 16.877 $ 19.026
Accumulation Unit Value, End of Period $ 13.642 $ 16.034 $ 16.877 $ 19.026 $ 19.066
Number of Units Outstanding, End of Period 128,236 220,201 394,485 422,123 377,632
- ----------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Utility Income Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.978 $ 13.383
Accumulation Unit Value, End of Period - - $ 10.978 $ 13.383 $ 16.121
Number of Units Outstanding, End of Period - - 46,526 85,825 86,127
- ----------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.757 $ 12.852
Accumulation Unit Value, End of Period - - $ 10.757 $ 12.852 $ 12.157
Number of Units Outstanding, End of Period - - 58,921 107,014 92,965
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.917 $ 13.108
Accumulation Unit Value, End of Period - - $ 11.917 $ 13.108 $ 15.177
Number of Units Outstanding, End of Period - - 557,027 934,340 953,870
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Growth & Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.114 $ 12.382
Accumulation Unit Value, End of Period - - $ 11.114 $ 12.382 $ 13.670
Number of Units Outstanding, End of Period - - 148,705 257,982 244,669
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.498 $ 11.506
Accumulation Unit Value, End of Period - - $ 10.498 $ 11.506 $ 11.645
Number of Units Outstanding, End of Period - - 130,227 227,510 234,374
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 12.136 $ 13.466
Accumulation Unit Value, End of Period - - $ 12.136 $ 13.466 $ 15.330
Number of Units Outstanding, End of Period - - 226,223 356,831 369,677
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.235
Accumulation Unit Value, End of Period - - - $ 10.235 $ 10.603
Number of Units Outstanding, End of Period - - - 114,860 159,940
- ----------------------------------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.178 $ 11.608
Accumulation Unit Value, End of Period - - $11 .178 $ 11.608 $ 13.099
Number of Units Outstanding, End of Period - - 40,690 94,418 92,942
- ----------------------------------------------------------------------------------------------------------
FTVIP Franklin High Income Securities Fund - Class 2 (2)
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.717 $ 10.930 $ 11.800
Accumulation Unit Value, End of Period - $ 10.717 $ 10.930 $ 11.800 $ 11.963
Number of Units Outstanding, End of Period - 126,010 201,704 182,881 173,502
- ----------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 11.263 $ 11.297 $ 13.185
Accumulation Unit Value, End of Period - $ 11.263 $ 11.297 $ 13.185 $ 13.503
Number of Units Outstanding, End of Period - 117,847 701,458 908,698 885,514
- ----------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.405 $ 13.854
Accumulation Unit Value, End of Period - - $ 11.405 $ 13.854 $ 15.294
Number of Units Outstanding, End of Period - - 76,341 155,329 183,230
- ----------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.974 $ 11.976 $ 13.995
Accumulation Unit Value, End of Period - $ 10.974 $ 11.976 $ 13.995 $ 14.294
Number of Units Outstanding, End of Period - 89,975 415,887 488,856 445,687
- ----------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 11.543 $ 12.553 $ 15.049
Accumulation Unit Value, End of Period - $ 11.543 $ 12.553 $ 15.049 $ 17.150
Number of Units Outstanding, End of Period - 91,246 664,497 828,191 745,295
- ----------------------------------------------------------------------------------------------------------
110 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured Small Cap Equity Fund
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.546 $ 12.598
Accumulation Unit Value, End of Period - - $ 10.546 $ 12.766 $ 10.356
Number of Units Outstanding, End of Period - - 109,697 149,560 463,960
- -------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured U.S. Equity Fund
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.401 $ 12.587
Accumulation Unit Value, End of Period - - $ 11.401 $ 13.074 $ 12.132
Number of Units Outstanding, End of Period - - 203,640 222,560 262,920
- -------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Fund
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.367 $ 12.766
Accumulation Unit Value, End of Period - - $ 11.367 $ 12.598 $ 12.633
Number of Units Outstanding, End of Period - - 347,710 450,996 161,324
- -------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured Small Cap Equity Fund
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.295 $ 12.598
Accumulation Unit Value, End of Period - - $ 11.295 $ 12.587 $ 10.356
Number of Units Outstanding, End of Period - - 154,801 252,665 463,960
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 9.517
Accumulation Unit Value, End of Period - - - $ 9.517 $ 11.567
Number of Units Outstanding, End of Period - - - 40,712 50,173
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Emerging Markets Bond Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.732
Accumulation Unit Value, End of Period - - - $ 10.732 $ 11.200
Number of Units Outstanding, End of Period - - - 10,024 13,492
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.146
Accumulation Unit Value, End of Period - - - $ 10.146 $ 11.073
Number of Units Outstanding, End of Period - - - 37,825 71,055
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.329
Accumulation Unit Value, End of Period - - - $ 10.329 $ 11.077
Number of Units Outstanding, End of Period - - - 311,062 456,710
- -------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 11.342 $ 12.114 $ 12.437 $ 13.740
Accumulation Unit Value, End of Period $11.342 $ 12.114 $ 12.437 $ 13.740 $ 13.692
Number of Units Outstanding, End of Period 59,242 89,594 105,484 97,467 92,913
- -------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 12.318 $ 13.510 $ 14.034 $ 16.057
Accumulation Unit Value, End of Period $12.318 $ 13.510 $ 14.034 $ 16.057 $ 14.892
Number of Units Outstanding, End of Period 8,159 83,914 93,677 80,043 74,546
- -------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 12.688 $ 14.553 $ 16.118 $ 20.321
Accumulation Unit Value, End of Period $12.688 $ 14.553 $ 16.118 $ 20.321 $ 21.736
Number of Units Outstanding, End of Period 71,672 165,086 239,237 238,989 222,845
- -------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB (5)
Accumulation Unit Value, Beginning of Period $10.000 $ 12.184 $ 13.547 $ 14.550 $ 16.364
Accumulation Unit Value, End of Period $12.184 $ 13.547 $ 14.550 $ 16.364 $ 15.317
Number of Units Outstanding, End of Period 8,159 5,886 4,547 3,355 3,106
- -------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.948 $ 12.538
Accumulation Unit Value, End of Period - - $ 10.948 $ 12.538 $ 11.770
Number of Units Outstanding, End of Period - - 254,363 372,360 355,677
- -------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 11.752 $ 12.184 $ 12.712 $ 13.230
Accumulation Unit Value, End of Period $11.752 $ 12.184 $ 12.712 $ 13.230 $ 13.780
Number of Units Outstanding, End of Period 63,955 135,230 164,024 169,816 155,642
- -------------------------------------------------------------------------------------------------------------
* The Allstate Variable Annuity Contracts and all of the Variable Sub-Accounts
shown below 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 Securities - Class 2 Sub-Account,
111 PROSPECTUS
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 VPS International Value - Class B
Sub-Account, the AllianceBernstein VPS Utility Income - Class B Sub-Account,
the AllianceBernstein VPS Value - Class B Sub-Account, the Fidelity VIP
Contrafund - 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
Structured Small Cap Equity Sub-Account, the Goldman Sachs VIT Structured
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, and the AIM V.I. Core Equity - Series II Sub-Account, the Fidelity
VIP Money Market - Service Class 2 Sub-Account, the PIMCO VIT
CommodityRealReturn Strategy - Advisor Shares Sub-Account, PIMCO VIT Emerging
Markets Bond - Advisor Shares Sub-Account, PIMCO VIT Real Return - Advisor
Shares Sub-Account, PIMCO VIT Total Return - Advisor Shares Sub-Account and
the Van Kampen UIF International Growth Equity - Class II Sub-Account which
were first offered under the Contracts on May 1, 2006. 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 May 1, 2006, the Goldman Sachs VIT Mid Cap Value Fund, Morgan
Stanley VIS European Equity Portfolio - Class Y and Morgan Stanley VIS
Limited Duration Portfolio - Class Y 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 investments. If, prior
to May 1, 2006, 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.
(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 AllianceBernstein VPS Growth and
Income - Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth -
Class B Sub-Account, the FTVIP Franklin High Income Securities - 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 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 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 1, 2006, AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2006, you enrolled in one of our automatic
transaction programs through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II Sub-
Account), such as automatic additions, portfolio rebalancing, or dollar cost
averaging, we will continue to effect automatic transactions into the AIM
V.I. Core Equity - Series II Sub-Account in accordance with that program,
unless you instruct us otherwise. Outside of these automatic transaction
programs, additional allocations will not be allowed.
(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 the Variable Sub- Account in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
112 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)
- --------------------------------------------------------------------------------
Mortality & Expense = 1.5
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Aggressive Equity Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.201 $ 13.491 $ 16.278 $ 17.226
Accumulation Unit Value, End of Period $ 12.201 $ 13.491 $ 16.278 $ 17.226 $ 20.216
Number of Units Outstanding, End of Period 6,634 10,689 21,194 26,698 22,494
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.227 $ 13.007 $ 13.473 $ 14.680
Accumulation Unit Value, End of Period $ 12.227 $ 13.007 $ 13.473 $ 14.680 $ 14.993
Number of Units Outstanding, End of Period 66,915 240,939 294,781 280,797 171,337
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Equity Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.852 $ 12.918 $ 14.973 $ 15.297
Accumulation Unit Value, End of Period $ 11.852 $ 12.918 $ 14.973 $ 15.297 $ 17.930
Number of Units Outstanding, End of Period 46,977 184,114 279,675 435,170 347,503
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS European Equity Portfolio - Class Y (1)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.656 $ 13.995 $ 14.909 $ 19.037
Accumulation Unit Value, End of Period $ 12.656 $ 13.995 $ 14.909 $ 19.037 $ 21.585
Number of Units Outstanding, End of Period 15,404 35,187 39,213 25,159 17,986
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Advantage Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.568 $ 13.874 $ 14.519 $ 16.894
Accumulation Unit Value, End of Period $ 12.568 $ 13.874 $ 14.519 $ 16.894 $ 19.377
Number of Units Outstanding, End of Period 11,186 16,323 16,425 14,916 11,065
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Growth Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.936 $ 14.580 $ 15.219 $ 18.195
Accumulation Unit Value, End of Period $ 12.936 $ 14.580 $ 15.219 $ 18.195 $ 19.096
Number of Units Outstanding, End of Period 78,822 127,171 144,625 123,985 99,611
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS High Yield Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.301 $ 12.172 $ 12.197 $ 13.072
Accumulation Unit Value, End of Period $ 11.301 $ 12.172 $ 12.197 $ 13.072 $ 13.351
Number of Units Outstanding, End of Period 65,540 163,222 175,113 142,566 93,648
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Builder Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.634 $ 12.664 $ 13.285 $ 14.885
Accumulation Unit Value, End of Period $ 11.634 $ 12.664 $ 13.285 $ 14.885 $ 15.051
Number of Units Outstanding, End of Period 21,733 47,530 54,141 49,117 36,595
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 10.283 $ 10.622 $ 10.764 $ 11.148
Accumulation Unit Value, End of Period $ 10.283 $ 10.622 $ 10.764 $ 11.148 $ 11.586
Number of Units Outstanding, End of Period 184,686 643,073 1,462,440 1,916,928 1,666,801
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Limited Duration Portfolio - Class Y (1)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 9.991 $ 9.937 $ 9.917 $ 10.143
Accumulation Unit Value, End of Period $ 9.991 $ 9.937 $ 9.917 $ 10.143 $ 10.249
Number of Units Outstanding, End of Period 206,331 413,637 657,808 667,110 522,713
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Money Market Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 9.909 $ 9.802 $ 9.881 $ 10.137
Accumulation Unit Value, End of Period $ 9.909 $ 9.802 $ 9.881 $ 10.137 $ 10.430
Number of Units Outstanding, End of Period 108,929 428,989 701,011 795,045 721,750
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS S&P 500 Index Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.081 $ 13.099 $ 13.449 $ 15.234
Accumulation Unit Value, End of Period $ 12.081 $ 13.099 $ 13.449 $ 15.234 $ 15.725
Number of Units Outstanding, End of Period 103,071 207,780 360,938 490,716 473,195
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Strategist Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.001 $ 12.992 $ 13.803 $ 15.572
Accumulation Unit Value, End of Period $ 12.001 $ 12.992 $ 13.803 $ 15.572 $ 16.589
Number of Units Outstanding, End of Period 70,971 147,140 196,467 247,410 178,415
- ----------------------------------------------------------------------------------------------------------------
113 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Utilities Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.474 $ 13.568 $ 15.254 $ 18.000
Accumulation Unit Value, End of Period $ 11.474 $ 13.568 $ 15.254 $ 18.000 $ 21.241
Number of Units Outstanding, End of Period 6,583 31,117 42,719 35,485 21,779
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (2,3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.288 $ 12.216 $ 13.468 $ 14.671
Accumulation Unit Value, End of Period $ 11.288 $ 12.216 $ 13.468$ $ 14.671 $ 15.344
Number of Units Outstanding, End of Period 9,598 69,282 111,007 95,830 62,789
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 14.872 $ 17.983 $ 23.650 $ 31.893
Accumulation Unit Value, End of Period $ 14.872 $ 17.983 $ 23.650 $ 31.893 $ 44.036
Number of Units Outstanding, End of Period 15,373 39,200 293,630 369,132 317,054
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.590 $ 12.707 $ 13.415 $ 14.847
Accumulation Unit Value, End of Period $ 11.590 $ 12.707 $ 13.415 $ 14.847 $ 15.086
Number of Units Outstanding, End of Period 31,795 121,831 355,800 514,333 413,713
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.683 $ 12.339 $ 14.009 $ 14.298
Accumulation Unit Value, End of Period $ 11.683 $ 12.339 $ 14.009 $ 14.298 $ 17.100
Number of Units Outstanding, End of Period 51,300 103,097 105,569 73,771 40,684
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.217 $ 13.545 $ 14.911 $ 17.813
Accumulation Unit Value, End of Period $ 12.217 $ 13.545 $ 14.911 $ 17.813 $ 19.223
Number of Units Outstanding, End of Period 64,033 234,429 673,072 953,357 887,941
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF International Growth Equity Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.731
Accumulation Unit Value, End of Period - - - $ 10.731 $ 12.054
Number of Units Outstanding, End of Period - - - 110,844 125,536
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.080 $ 15.621 $ 18.015 $ 19.329
Accumulation Unit Value, End of Period $ 13.080 $ 15.621 $ 18.015 $ 19.329 $ 23.297
Number of Units Outstanding, End of Period 56,943 107,152 468,020 587,636 505,179
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.584 $ 15.885 $ 17.630 $ 19.384
Accumulation Unit Value, End of Period $ 13.584 $ 15.885 $ 17.630 $ 19.384 $ 19.619
Number of Units Outstanding, End of Period 66,608 104,445 105,122 84,445 39,071
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.372 $ 15.056 $ 16.600 $ 19.686
Accumulation Unit Value, End of Period $ 13.372 $ 15.056 $ 16.600 $ 19.686 $ 20.850
Number of Units Outstanding, End of Period 88,639 199,551 428,687 494,479 407,795
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.750 $ 17.057 $ 19.578 $ 26.499
Accumulation Unit Value, End of Period $ 12.750 $ 17.057 $ 19.578 $ 26.499 $ 21.549
Number of Units Outstanding, End of Period 61,183 172,705 246,519 221,922 176,152
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.829 $ 14.490 $ 15.829 $ 16.329
Accumulation Unit Value, End of Period $ 12.829 $ 14.490 $ 15.829 $ 16.329 $ 18.876
Number of Units Outstanding, End of Period 14,674 22,291 23,151 22,049 13,222
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.491 $ 14.421 $ 14.760 $ 16.840
Accumulation Unit Value, End of Period $ 12.491 $ 14.421 $ 14.760 $ 16.840 $ 16.168
Number of Units Outstanding, End of Period 286,089 699,495 1,601,297 1,655,939 1,404,832
- ----------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.821 $ 12.409 $ 13.132 $ 13.249
Accumulation Unit Value, End of Period $ 11.821 $ 12.409 $ 13.132 $ 13.249 $ 15.192
Number of Units Outstanding, End of Period 67,081 101,974 176,876 193,340 158,278
- ----------------------------------------------------------------------------------------------------------------------
114 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ----------------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.390 $ 13.900 $ 14.994 $ 17.096
Accumulation Unit Value, End of Period $ 12.390 $ 13.900 $ 14.994 $ 17.096 $ 17.230
Number of Units Outstanding, End of Period 176,200 319,496 548,723 594,846 512,719
- ----------------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.887 $ 14.042 $ 14.555 $ 16.162
Accumulation Unit Value, End of Period $ 12.887 $ 14.042 $ 14.555 $ 16.162 $ 16.104
Number of Units Outstanding, End of Period 29,372 99,790 111,926 105,994 77,794
- ----------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.234 $ 12.789 $ 13.652 $ 14.235
Accumulation Unit Value, End of Period $ 12.234 $ 12.789 $ 13.652 $ 14.235 $ 15.635
Number of Units Outstanding, End of Period 12,830 21,060 20,111 19,172 12,902
- ----------------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund - Series II (4)
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.797 $ 10.000 $ 10.775
Accumulation Unit Value, End of Period - $ 10.797 $ 11.386 $ 10.775 $ 11.426
Number of Units Outstanding, End of Period - 21,750 58,290 21,343 15,644
- ----------------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.753 $ 12.189 $ 11.386 $ 12.424
Accumulation Unit Value, End of Period $ 11.753 $ 12.189 $ 12.626 $ 12.424 $ 13.346
Number of Units Outstanding, End of Period 5,582 15,922 20,572 52,964 45,968
- ----------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth and Income Portfolio - Class B (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.279 $ 13.427 $ 13.807 $ 15.880
Accumulation Unit Value, End of Period $ 12.279 $ 13.427 $ 13.807 $ 15.880 $ 16.369
Number of Units Outstanding, End of Period 54,387 166,492 447,898 413,771 345,766
- ----------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth Portfolio - Class B
Accumulation Unit Value, Beginning of Period $ 10.000 $ 12.446 $ 14.013 $ 15.380 $ 14.933
Accumulation Unit Value, End of Period $ 12.446 $ 14.013 $ 15.380 $ 14.933 $ 16.538
Number of Units Outstanding, End of Period 28,817 80,635 325,340 424,521 373,318
- ----------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS International Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.870 $ 15.768
Accumulation Unit Value, End of Period - - $ 11.870 $ 15.768 $ 16.365
Number of Units Outstanding, End of Period - - 200,944 538,385 527,670
- ----------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Large Cap Growth Portfolio - Class B (2)
Accumulation Unit Value, Beginning of Period $ 10.000 $ 11.480 $ 12.228 $ 13.806 $ 13.486
Accumulation Unit Value, End of Period $ 11.480 $ 12.228 $ 13.806 $ 13.486 $ 15.062
Number of Units Outstanding, End of Period 40,183 66,960 64,208 50,284 26,777
- ----------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Small/Mid Cap Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period $ 10.000 $ 13.605 $ 15.926 $ 16.696 $ 18.746
Accumulation Unit Value, End of Period $ 13.605 $ 15.926 $ 16.696 $ 18.746 $ 18.709
Number of Units Outstanding, End of Period 46,809 101,345 461,511 547,841 492,368
- ----------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Utility Income Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.948 $ 13.293
Accumulation Unit Value, End of Period - - $ 10.948 $ 13.293 $ 15.948
Number of Units Outstanding, End of Period - - 62,544 104,446 105,948
- ----------------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.728 $ 12.765
Accumulation Unit Value, End of Period - - $ 10.728 $ 12.765 $ 12.025
Number of Units Outstanding, End of Period - - 24,330 84,687 73,715
- ----------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.885 $ 13.020
Accumulation Unit Value, End of Period - - $ 11.885 $ 13.020 $ 15.013
Number of Units Outstanding, End of Period - - 588,555 1,179,793 1,070,999
- ----------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth & Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.084 $ 12.298
Accumulation Unit Value, End of Period - - $ 11.084 $ 12.298 $ 13.523
Number of Units Outstanding, End of Period - - 109,025 289,123 274,217
- ----------------------------------------------------------------------------------------------------------------
115 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.470 $ 11.428
Accumulation Unit Value, End of Period - - $ 10.470 $ 11.428 $ 11.520
Number of Units Outstanding, End of Period - - 105,832 211,031 228,615
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 12.103 $ 13.375
Accumulation Unit Value, End of Period - - $ 12.103 $ 13.375 $ 15.164
Number of Units Outstanding, End of Period - - 146,107 305,980 279,884
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.207
Accumulation Unit Value, End of Period - - - $ 10.207 $ 10.531
Number of Units Outstanding, End of Period - - - 105,566 233,662
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.148 $ 11.530
Accumulation Unit Value, End of Period - - $ 11.148 $ 11.530 $ 12.957
Number of Units Outstanding, End of Period - - 40,286 133,880 141,437
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin High Income Securities Fund - Class 2 (2)
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.688 $ 10.856 $ 11.673
Accumulation Unit Value, End of Period - $ 10.688 $ 10.856 $ 11.673 $ 11.786
Number of Units Outstanding, End of Period - 105,202 171,901 155,403 114,261
- --------------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 11.233 $ 11.221 $ 13.044
Accumulation Unit Value, End of Period - $ 11.233 $ 11.221 $ 13.044 $ 13.304
Number of Units Outstanding, End of Period - 86,915 769,097 1,446,601 1,392,292
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.374 $ 13.760
Accumulation Unit Value, End of Period - - $ 11.374 $ 13.760 $ 15.129
Number of Units Outstanding, End of Period - - 64,062 133,205 128,508
- --------------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 10.944 $ 11.896 $ 13.845
Accumulation Unit Value, End of Period - $ 10.944 $ 11.896 $ 13.845 $ 14.083
Number of Units Outstanding, End of Period - 51,882 475,155 564,827 513,207
- --------------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $ 10.000 $ 11.511 $ 12.468 $ 14.887
Accumulation Unit Value, End of Period - $ 11.511 $ 12.468 $ 14.887 $ 16.896
Number of Units Outstanding, End of Period - 36,969 860,022 1,019,766 920,177
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Fund
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.517 $ 12.680
Accumulation Unit Value, End of Period - - $ 10.517 $ 12.680 $ 12.497
Number of Units Outstanding, End of Period - - 76,141 154,410 172,441
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Value Fund (1)
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.370 $ 12.985
Accumulation Unit Value, End of Period - - $ 11.370 $ 12.985 $ 13.104
Number of Units Outstanding, End of Period - - 121,130 141,849 125,334
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured Small Cap Equity Fund
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.336 $ 12.513
Accumulation Unit Value, End of Period - - $ 11.336 $ 12.513 $ 10.244
Number of Units Outstanding, End of Period - - 303,063 551,622 540,006
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured U.S. Equity Fund
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 11.265 $ 12.502
Accumulation Unit Value, End of Period - - $ 11.265 $ 12.502 $ 12.001
Number of Units Outstanding, End of Period - - 108,569 255,308 267,974
- --------------------------------------------------------------------------------------------------------------
PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 9.491
Accumulation Unit Value, End of Period - - - $ 9.491 $ 11.489
Number of Units Outstanding, End of Period - - - 78,439 78,415
- --------------------------------------------------------------------------------------------------------------
116 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------
PIMCO VIT Emerging Markets Bond Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.703
Accumulation Unit Value, End of Period - - - $ 10.703 $ 11.124
Number of Units Outstanding, End of Period - - - 13,419 20,429
- ------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.118
Accumulation Unit Value, End of Period - - - $ 10.118 $ 10.998
Number of Units Outstanding, End of Period - - - 56,188 149,722
- ------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $ 10.000 $ 10.300
Accumulation Unit Value, End of Period - - - $ 10.300 $ 11.002
Number of Units Outstanding, End of Period - - - 333,924 541,720
- ------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 11.311 $ 12.033 $ 12.303 $ 13.538
Accumulation Unit Value, End of Period $11.311 $ 12.033 $ 12.303 $ 13.538 $ 13.435
Number of Units Outstanding, End of Period 50,397 50,051 295,949 78,718 42,032
- ------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 12.285 $ 13.419 $ 13.883 $ 15.820
Accumulation Unit Value, End of Period $12.285 $ 13.419 $ 13.883 $ 15.820 $ 14.612
Number of Units Outstanding, End of Period 28,104 34,565 45,145 30,417 26,162
- ------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 12.654 $ 14.455 $ 15.945 $ 20.022
Accumulation Unit Value, End of Period $12.654 $ 14.455 $ 15.945 $ 20.022 $ 21.328
Number of Units Outstanding, End of Period 57,292 104,567 199,020 301,515 267,807
- ------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB (5)
Accumulation Unit Value, Beginning of Period $10.000 $ 12.151 $ 13.455 $ 14.394 $ 16.123
Accumulation Unit Value, End of Period $12.151 $ 13.455 $ 14.394 $ 16.123 $ 15.030
Number of Units Outstanding, End of Period 1,120 1,114 1,108 192 191
- ------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - - $ 10.000 $ 10.918 $ 12.453
Accumulation Unit Value, End of Period - - $ 10.918 $ 12.453 $ 11.643
Number of Units Outstanding, End of Period - - 162,309 324,998 289,114
- ------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $ 11.720 $ 12.102 $ 12.575 $ 13.035
Accumulation Unit Value, End of Period $11.720 $ 12.102 $ 12.575 $ 13.035 $ 13.521
Number of Units Outstanding, End of Period 44,404 93,142 148,490 154,681 111,462
- ------------------------------------------------------------------------------------------------------
* The Allstate Variable Annuity-L Share Contracts and all of the Variable
Sub-Accounts shown below 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 Securities - 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 VPS International Value - Class B Sub-Account, the
AllianceBernstein VPS Utility Income - Class B Sub-Account, the
AllianceBernstein VPS Value - Class B Sub-Account, the Fidelity VIP
Contrafund - 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
Structured Small Cap Equity Sub-Account, the Goldman Sachs VIT Structured
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, and the AIM V.I. Core Equity - Series II Sub-Account, the
Fidelity VIP Money Market - Service Class 2 Sub-Account, the PIMCO VIT
CommodityRealReturn Strategy - Advisor Shares Sub-Account, PIMCO VIT Emerging
Markets Bond - Advisor Shares Sub-Account, PIMCO VIT Real Return - Advisor
Shares Sub-Account, PIMCO VIT Total Return - Advisor Shares Sub-Account and
the Van Kampen UIF International Growth Equity, Class II Sub-Account which
were first offered under the Contracts on May 1, 2006. 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 May 1, 2006, the Goldman Sachs VIT Mid Cap Value Fund, Morgan
Stanley VIS European Equity Portfolio - Class Y and Morgan Stanley VIS
Limited Duration Portfolio - Class Y 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 investments. If, prior
to May 1, 2006, 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.
(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 AllianceBernstein VPS Growth and
Income - Class B Sub-Account, the AllianceBernstein
117 PROSPECTUS
VPS Large Cap Growth - Class B Sub-Account, the FTVIP Franklin High Income
Securities - 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 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 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 1, 2006, AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2006, you enrolled in one of our automatic
transaction programs through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II Sub-
Account), such as automatic additions, portfolio rebalancing, or dollar cost
averaging, we will continue to effect automatic transactions into the AIM
V.I. Core Equity - Series II Sub-Account in accordance with that program,
unless you instruct us otherwise. Outside of these automatic transaction
programs, additional allocations will not be allowed.
(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 the Variable Sub- Account in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
118 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))
- --------------------------------------------------------------------------------
Allstate Variable Annuity - Prospectus
Mortality & Expense = 2.0
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Aggressive Equity Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $ 12.159 $ 13.377 $ 16.058 $16.908
Accumulation Unit Value, End of Period $12.159 $ 13.377 $ 16.058 $ 16.908 $19.741
Number of Units Outstanding, End of Period 189 951 951 951 951
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $ 12.185 $ 12.897 $ 13.291 $14.408
Accumulation Unit Value, End of Period $12.185 $ 12.897 $ 13.291 $ 14.408 $14.641
Number of Units Outstanding, End of Period 20,116 18,199 22,604 20,625 19,418
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Equity Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $ 11.812 $ 12.808 $ 14.771 $15.014
Accumulation Unit Value, End of Period $11.812 $ 12.808 $ 14.771 $ 15.014 $17.509
Number of Units Outstanding, End of Period 22,754 25,327 23,766 22,872 19,501
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS European Equity Portfolio - Class Y (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 12.613 $ 13.877 $ 14.708 $18.685
Accumulation Unit Value, End of Period $12.613 $ 13.877 $ 14.708 $ 18.685 $21.078
Number of Units Outstanding, End of Period 3,061 3,942 3,940 3,935 3,931
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Advantage Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 12.526 $ 13.757 $ 14.323 $16.581
Accumulation Unit Value, End of Period $12.526 $ 13.757 $ 14.323 $ 16.581 $18.922
Number of Units Outstanding, End of Period 979 0 0 0 0
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Growth Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $ 12.892 $ 14.457 $ 15.014 $17.859
Accumulation Unit Value, End of Period $12.892 $ 14.457 $ 15.014 $ 17.859 $18.647
Number of Units Outstanding, End of Period 5,234 11,314 12,341 11,659 11,536
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS High Yield Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.262 $ 12.069 $ 12.033 $12.830
Accumulation Unit Value, End of Period $11.262 $ 12.069 $ 12.033 $ 12.830 $13.037
Number of Units Outstanding, End of Period 5,624 5,399 7,464 7,040 6,708
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Builder Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $10.000 $ 11.595 $ 12.556 $ 13.106 $14.610
Accumulation Unit Value, End of Period $11.595 $ 12.556 $ 13.106 $ 14.610 $14.697
Number of Units Outstanding, End of Period 388 388 6,319 5,300 4,876
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $ 10.248 $ 10.532 $ 10.619 $10.942
Accumulation Unit Value, End of Period $10.248 $ 10.532 $ 10.619 $ 10.942 $11.314
Number of Units Outstanding, End of Period 36,354 31,834 50,822 41,532 42,065
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Limited Duration Portfolio - Class Y (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 9.957 $ 9.853 $ 9.783 $ 9.955
Accumulation Unit Value, End of Period $ 9.957 $ 9.853 $ 9.783 $ 9.955 $10.008
Number of Units Outstanding, End of Period 22,303 25,373 23,571 22,489 21,727
- --------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Money Market Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $ 9.875 $ 9.719 $ 9.747 $ 9.950
Accumulation Unit Value, End of Period $ 9.875 $ 9.719 $ 9.747 $ 9.950 $10.185
Number of Units Outstanding, End of Period 45,906 100,138 106,824 102,072 9,365
- --------------------------------------------------------------------------------------------------------
119 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- -----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS S&P 500 Index Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $12.040 $12.988 $13.268 $14.953
Accumulation Unit Value, End of Period $12.040 $12.988 $13.268 $14.953 $15.355
Number of Units Outstanding, End of Period 15,094 15,844 23,949 22,947 28,701
- -----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Strategist Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $11.961 $12.882 $13.617 $15.284
Accumulation Unit Value, End of Period $11.961 $12.882 $13.617 $15.284 $16.199
Number of Units Outstanding, End of Period 14,926 15,995 13,820 12,721 11,588
- -----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Utilities Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $10.000 $11.435 $13.453 $15.048 $17.668
Accumulation Unit Value, End of Period $11.435 $13.453 $15.048 $17.668 $20.742
Number of Units Outstanding, End of Period 1,101 1,096 1,052 1,007 962
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (2,3)
Accumulation Unit Value, Beginning of Period $10.000 $11.250 $12.113 $13.286 $14.400
Accumulation Unit Value, End of Period $11.250 $12.113 $13.286 $14.400 $14.984
Number of Units Outstanding, End of Period 15,238 793 676 593 508
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $14.821 $17.831 $23.331 $31.304
Accumulation Unit Value, End of Period $14.821 $17.831 $23.331 $31.304 $43.002
Number of Units Outstanding, End of Period 12,008 578 1,273 1,273 1,297
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $11.551 $12.599 $13.234 $14.573
Accumulation Unit Value, End of Period $11.551 $12.599 $13.234 $14.573 $14.731
Number of Units Outstanding, End of Period 4,382 8,845 7,060 7,902 5,965
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $11.643 $12.234 $13.820 $14.033
Accumulation Unit Value, End of Period $11.643 $12.234 $13.820 $14.033 $16.697
Number of Units Outstanding, End of Period 732 1,444 2,590 2,582 2,573
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $12.176 $13.430 $14.710 $17.484
Accumulation Unit Value, End of Period $12.176 $13.430 $14.710 $17.484 $18.771
Number of Units Outstanding, End of Period 1,170 4,254 12,144 12,292 11,242
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF International Growth Equity Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.695
Accumulation Unit Value, End of Period - - - $10.695 $11.951
Number of Units Outstanding, End of Period - - - 0 7,868
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $13.036 $15.489 $17.772 $18.972
Accumulation Unit Value, End of Period $13.036 $15.489 $17.772 $18.972 $22.750
Number of Units Outstanding, End of Period 6,524 7,472 7,621 7,340 9,962
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $13.538 $15.751 $17.392 $19.025
Accumulation Unit Value, End of Period $13.538 $15.751 $17.392 $19.025 $19.158
Number of Units Outstanding, End of Period 12,094 7,725 7,880 7,706 7,661
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $13.327 $14.928 $16.376 $19.322
Accumulation Unit Value, End of Period $13.327 $14.928 $16.376 $19.322 $20.360
Number of Units Outstanding, End of Period 13,892 9,406 10,565 10,421 12,160
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $12.707 $16.912 $19.314 $26.009
Accumulation Unit Value, End of Period $12.707 $16.912 $19.314 $26.009 $21.043
Number of Units Outstanding, End of Period 2,217 7,785 8,404 7,578 7,640
- -----------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $12.785 $14.368 $15.616 $16.027
Accumulation Unit Value, End of Period $12.785 $14.368 $15.616 $16.027 $18.433
Number of Units Outstanding, End of Period 428 1,015 429 427 424
- -----------------------------------------------------------------------------------------------------------
120 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $12.449 $14.299 $14.561 $16.529
Accumulation Unit Value, End of Period $12.449 $14.299 $14.561 $16.529 $15.788
Number of Units Outstanding, End of Period 73,598 44,257 49,881 49,325 50,066
- -------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $11.781 $12.304 $12.955 $13.004
Accumulation Unit Value, End of Period $11.781 $12.304 $12.955 $13.004 $14.835
Number of Units Outstanding, End of Period 7,119 5,330 4,868 4,578 4,090
- -------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $12.347 $13.782 $14.792 $16.780
Accumulation Unit Value, End of Period $12.347 $13.782 $14.792 $16.780 $16.825
Number of Units Outstanding, End of Period 52,658 27,103 32,255 30,931 29,153
- -------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.843 $13.924 $14.359 $15.863
Accumulation Unit Value, End of Period $12.843 $13.924 $14.359 $15.863 $15.725
Number of Units Outstanding, End of Period 2,967 4,311 3,964 3,935 3,632
- -------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.193 $12.681 $13.468 $13.972
Accumulation Unit Value, End of Period $12.193 $12.681 $13.468 $13.972 $15.268
Number of Units Outstanding, End of Period 1,401 895 890 885 880
- -------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund - Series II (4)
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.738
Accumulation Unit Value, End of Period - - - $10.738 $11.329
Number of Units Outstanding, End of Period - - - 8,630 8,588
- -------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund - Series II (2)
Accumulation Unit Value, Beginning of Period - $10.000 $10.760 $11.290 $12.256
Accumulation Unit Value, End of Period - $10.760 $11.290 $12.256 $13.099
Number of Units Outstanding, End of Period - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth and Income Portfolio - Class B (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.238 $13.313 $13.621 $15.586
Accumulation Unit Value, End of Period $12.238 $13.313 $13.621 $15.586 $15.984
Number of Units Outstanding, End of Period 30,085 30,581 32,696 30,707 24,486
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth Portfolio - Class B
Accumulation Unit Value, Beginning of Period $10.000 $12.403 $13.894 $15.172 $14.657
Accumulation Unit Value, End of Period $12.403 $13.894 $15.172 $14.657 $16.149
Number of Units Outstanding, End of Period 5,243 6,926 6,809 6,796 6,783
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS International Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $10.000 $11.829 $15.635
Accumulation Unit Value, End of Period - - $11.829 $15.635 $16.144
Number of Units Outstanding, End of Period - - 3,437 3,209 11,918
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Large Cap Growth Portfolio - Class B (2)
Accumulation Unit Value, Beginning of Period $10.000 $11.441 $12.124 $13.620 $13.237
Accumulation Unit Value, End of Period $11.441 $12.124 $13.620 $13.237 $14.708
Number of Units Outstanding, End of Period 5,752 11,686 11,685 11,263 11,262
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Small/Mid Cap Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period $10.000 $13.558 $15.791 $16.471 $18.399
Accumulation Unit Value, End of Period $13.558 $15.791 $16.471 $18.399 $18.269
Number of Units Outstanding, End of Period 5,419 7,226 7,449 7,250 5,854
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Utility Income Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $10.000 $10.911 $13.180
Accumulation Unit Value, End of Period - - $10.911 $13.180 $15.732
Number of Units Outstanding, End of Period - - 1,315 293 273
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $10.000 $10.691 $12.657
Accumulation Unit Value, End of Period - - $10.691 $12.657 $11.863
Number of Units Outstanding, End of Period - - 0 0 0
- -------------------------------------------------------------------------------------------------------
121 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.844 $12.910
Accumulation Unit Value, End of Period - - $11.844 $12.910 $14.810
Number of Units Outstanding, End of Period - - 6,441 6,854 5,944
- ---------------------------------------------------------------------------------------------
Fidelity VIP Growth & Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.046 $12.194
Accumulation Unit Value, End of Period - - $11.046 $12.194 $13.340
Number of Units Outstanding, End of Period - - 366 1,882 6,674
- ---------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.434 $11.331
Accumulation Unit Value, End of Period - - $10.434 $11.331 $11.364
Number of Units Outstanding, End of Period - - 3,328 2,044 1,883
- ---------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $12.062 $13.262
Accumulation Unit Value, End of Period - - $12.062 $13.262 $14.959
Number of Units Outstanding, End of Period - - 290 269 251
- ---------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.172
Accumulation Unit Value, End of Period - - - $10.172 $10.441
Number of Units Outstanding, End of Period - - - 0 4,439
- ---------------------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.110 $11.432
Accumulation Unit Value, End of Period - - $11.110 $11.432 $12.782
Number of Units Outstanding, End of Period - - 0 0 5,150
- ---------------------------------------------------------------------------------------------
FTVIP Franklin High Income Securities Fund - Class 2
(2) Accumulation Unit Value, Beginning of Period - $10.000 $10.652 $10.764 $11.515
Accumulation Unit Value, End of Period - $10.652 $10.764 $11.515 $11.568
Number of Units Outstanding, End of Period - 1,781 2,337 2,364 3,061
- ---------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.000 $11.194 $11.126 $12.868
Accumulation Unit Value, End of Period - $11.194 $11.126 $12.868 $13.057
Number of Units Outstanding, End of Period - 1,924 2,412 2,245 1,492
- ---------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.335 $13.644
Accumulation Unit Value, End of Period - - $11.335 $13.644 $14.925
Number of Units Outstanding, End of Period - - 3,984 3,791 3,586
- ---------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.000 $10.907 $11.795 $13.658
Accumulation Unit Value, End of Period - $10.907 $11.795 $13.658 $13.822
Number of Units Outstanding, End of Period - 7,597 8,427 8,625 8,002
- ---------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.000 $11.472 $12.363 $14.686
Accumulation Unit Value, End of Period - $11.472 $12.363 $14.686 $16.583
Number of Units Outstanding, End of Period - 0 1,345 1,891 1,366
- ---------------------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Fund
Accumulation Unit Value, Beginning of Period - - $10.000 $10.481 $12.573
Accumulation Unit Value, End of Period - - $10.481 $12.573 $12.327
Number of Units Outstanding, End of Period - - 693 531 551
- ---------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Value Fund
Accumulation Unit Value, Beginning of Period - - $10.000 $11.331 $12.875
Accumulation Unit Value, End of Period - - $11.331 $12.875 $12.926
Number of Units Outstanding, End of Period - - 0 0 0
- ---------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured Small Cap Equity Fund
Accumulation Unit Value, Beginning of Period - - $10.000 $11.298 $12.407
Accumulation Unit Value, End of Period - - $11.298 $12.407 $10.106
Number of Units Outstanding, End of Period - - 607 1,238 1,346
- ---------------------------------------------------------------------------------------------
122 PROSPECTUS
For the Year Ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ---------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured U.S. Equity Fund
Accumulation Unit Value, Beginning of Period - - $10.000 $11.226 $12.397
Accumulation Unit Value, End of Period - - $11.226 $12.397 $11.839
Number of Units Outstanding, End of Period - - 791 1,419 6,517
- ---------------------------------------------------------------------------------------------------------
PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $10.000 $ 9.458
Accumulation Unit Value, End of Period - - - $ 9.458 $11.391
Number of Units Outstanding, End of Period - - - 0 796
- ---------------------------------------------------------------------------------------------------------
PIMCO VIT Emerging Markets Bond Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.666
Accumulation Unit Value, End of Period - - - $10.666 $11.029
Number of Units Outstanding, End of Period - - - 0 0
- ---------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.084
Accumulation Unit Value, End of Period - - - $10.084 $10.905
Number of Units Outstanding, End of Period - - - 0 416
- ---------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.265
Accumulation Unit Value, End of Period - - - $10.265 $10.908
Number of Units Outstanding, End of Period - - - 0 11,176
- ---------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $11.273 $11.931 $12.137 $13.287
Accumulation Unit Value, End of Period $11.273 $11.931 $12.137 $13.287 $13.119
Number of Units Outstanding, End of Period 0 1,133 0 0 0
- ---------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.243 $13.306 $13.695 $15.528
Accumulation Unit Value, End of Period $12.243 $13.306 $13.695 $15.528 $14.269
Number of Units Outstanding, End of Period 14,285 12,788 11,515 10,443 5,977
- ---------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $12.611 $14.333 $15.730 $19.651
Accumulation Unit Value, End of Period $12.611 $14.333 $15.730 $19.651 $20.827
Number of Units Outstanding, End of Period 128 2,233 1,975 1,950 1,940
- ---------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB (5)
Accumulation Unit Value, Beginning of Period $10.000 $12.109 $13.342 $14.199 $15.825
Accumulation Unit Value, End of Period $12.109 $13.342 $14.199 $15.825 $14.676
Number of Units Outstanding, End of Period 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - - $10.000 $10.881 $12.348
Accumulation Unit Value, End of Period - - $10.881 $12.348 $11.485
Number of Units Outstanding, End of Period - - 1,554 902 5,080
- ---------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $11.680 $11.999 $12.405 $12.794
Accumulation Unit Value, End of Period $11.680 $11.999 $12.405 $12.794 $13.203
Number of Units Outstanding, End of Period 2,470 2,601 2,052 2,064 201
- ---------------------------------------------------------------------------------------------------------
* The Allstate Variable Annuity Contracts and all of the Variable Sub-Accounts
shown below 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
Securities - 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 VPS
International Value - Class B Sub-Account, the AllianceBernstein VPS Utility
Income - Class B Sub-Account, the AllianceBernstein VPS Value - Class B
Sub-Account, the Fidelity VIP Contrafund - 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 Structured Small Cap Equity Sub-Account, the Goldman Sachs
VIT Structured 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, and the AIM V.I. Core Equity - Series II
Sub-Account, the Fidelity VIP Money Market - Service Class 2 Sub-Account, the
PIMCO VIT CommodityRealReturn Strategy - Advisor Shares Sub-Account, PIMCO
VIT Emerging Markets Bond - Advisor Shares Sub-Account, PIMCO VIT Real Return
- Advisor Shares Sub-Account, PIMCO VIT Total Return - Advisor Shares
Sub-Account and the Van Kampen UIF International Growth Equity, Class II
Sub-Account which were first offered under the Contracts on May 1, 2006. 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%.
123 PROSPECTUS
(1)Effective May 1, 2006, the Goldman Sachs VIT Mid Cap Value Fund, Morgan
Stanley VIS European Equity Portfolio - Class Y and Morgan Stanley VIS
Limited Duration Portfolio - Class Y 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 investments. If, prior to
May 1, 2006, 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.
(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 AllianceBernstein VPS Growth and
Income - Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth -
Class B Sub-Account, the FTVIP Franklin High Income Securities - 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 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 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 1, 2006, AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2006, you enrolled in one of our automatic
transaction programs through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II
Sub-Account), such as automatic additions, portfolio rebalancing, or dollar
cost averaging, we will continue to effect automatic transactions into the
AIM V.I. Core Equity - Series II Sub-Account in accordance with that
program, unless you instruct us otherwise. Outside of these automatic
transaction programs, additional allocations will not be allowed.
(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 the Variable Sub-Account in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
124 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*
- --------------------------------------------------------------------------------
Mortality & Expense = 2.4
(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 Year ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Aggressive Equity Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $12.126 $13.286 $15.884 $16.656
Accumulation Unit Value, End of Period $12.126 $13.286 $15.884 $16.656 $19.367
Number of Units Outstanding, End of Period 975 2,497 2,217 2,744 2,507
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Dividend Growth Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $12.152 $12.809 $13.147 $14.194
Accumulation Unit Value, End of Period $12.152 $12.809 $13.147 $14.194 $14.363
Number of Units Outstanding, End of Period 9,726 13,250 9,282 8,259 8,238
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Equity Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $11.780 $12.721 $14.611 $14.791
Accumulation Unit Value, End of Period $11.780 $12.721 $14.611 $14.791 $17.177
Number of Units Outstanding, End of Period 8,629 6,633 9,698 11,219 10,970
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS European Equity Portfolio - Class Y (1)
Accumulation Unit Value, Beginning of Period $10.000 $12.579 $13.782 $14.548 $18.407
Accumulation Unit Value, End of Period $12.579 $13.782 $14.548 $18.407 $20.679
Number of Units Outstanding, End of Period 2,328 3,942 3,757 3,535 1,743
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Advantage Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.492 $13.663 $14.168 $16.334
Accumulation Unit Value, End of Period $12.492 $13.663 $14.168 $16.334 $18.563
Number of Units Outstanding, End of Period 1,841 1,851 1,841 1,807 1,798
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Global Dividend Growth Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $12.857 $14.359 $14.851 $17.593
Accumulation Unit Value, End of Period $12.857 $14.359 $14.851 $17.593 $18.294
Number of Units Outstanding, End of Period 5,126 15,771 10,533 11,598 11,832
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS High Yield Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $11.232 $11.987 $11.902 $12.639
Accumulation Unit Value, End of Period $11.232 $11.987 $11.902 $12.639 $12.790
Number of Units Outstanding, End of Period 5,462 8,598 7,542 6,543 6,326
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Builder Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $10.000 $11.563 $12.471 $12.964 $14.392
Accumulation Unit Value, End of Period $11.563 $12.471 $12.964 $14.392 $14.419
Number of Units Outstanding, End of Period 3,527 4,145 4,121 2,203 2,185
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Income Plus Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $10.220 $10.460 $10.504 $10.779
Accumulation Unit Value, End of Period $10.220 $10.460 $10.504 $10.779 $11.100
Number of Units Outstanding, End of Period 13,208 30,413 27,233 29,123 28,661
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Limited Duration Portfolio - Class Y (1)
Accumulation Unit Value, Beginning of Period $10.000 $ 9.930 $ 9.786 $ 9.677 $ 9.807
Accumulation Unit Value, End of Period $ 9.930 $ 9.786 $ 9.677 $ 9.807 $ 9.819
Number of Units Outstanding, End of Period 28,903 45,574 46,747 22,019 21,492
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Money Market Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $ 9.848 $ 9.652 $ 9.641 $ 9.801
Accumulation Unit Value, End of Period $ 9.848 $ 9.652 $ 9.641 $ 9.801 $ 9.992
Number of Units Outstanding, End of Period 34 3,303 3,661 18,115 5,039
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS S&P 500 Index Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $12.007 $12.900 $13.124 $14.730
Accumulation Unit Value, End of Period $12.007 $12.900 $13.124 $14.730 $15.064
Number of Units Outstanding, End of Period 10,343 11,431 15,174 18,338 15,588
- -----------------------------------------------------------------------------------------------------
Morgan Stanley VIS Strategist Portfolio - Class Y
Accumulation Unit Value, Beginning of Period $10.000 $11.928 $12.794 $13.469 $15.056
Accumulation Unit Value, End of Period $11.928 $12.794 $13.469 $15.056 $15.893
Number of Units Outstanding, End of Period 4,574 11,396 10,665 13,938 14,434
- -----------------------------------------------------------------------------------------------------
125 PROSPECTUS
For the Year ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- -----------------------------------------------------------------------------------------------------------
Morgan Stanley VIS Utilities Portfolio - Class Y (2)
Accumulation Unit Value, Beginning of Period $10.000 $11.404 $13.362 $14.885 $17.405
Accumulation Unit Value, End of Period $11.404 $13.362 $14.885 $17.405 $20.349
Number of Units Outstanding, End of Period 4,063 5,082 2,882 87 87
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Debt Portfolio - Class II (2,3)
Accumulation Unit Value, Beginning of Period $10.000 $11.219 $12.030 $13.142 $14.186
Accumulation Unit Value, End of Period $11.219 $12.030 $13.142 $14.186 $14.700
Number of Units Outstanding, End of Period 819 1,348 1,248 1,494 694
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Emerging Markets Equity Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $14.781 $17.709 $23.078 $30.838
Accumulation Unit Value, End of Period $14.781 $17.709 $23.078 $30.838 $42.188
Number of Units Outstanding, End of Period 0 6 1,380 2,220 3,775
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $11.611 $12.151 $13.670 $13.824
Accumulation Unit Value, End of Period $11.611 $12.151 $13.670 $13.824 $16.381
Number of Units Outstanding, End of Period 6,422 6,273 5,131 5,492 5,417
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Equity and Income Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $11.519 $12.514 $13.090 $14.356
Accumulation Unit Value, End of Period $11.519 $12.514 $13.090 $14.356 $14.452
Number of Units Outstanding, End of Period 4,613 6,479 4,656 3,982 3,982
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Global Franchise Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $12.143 $13.339 $14.550 $17.223
Accumulation Unit Value, End of Period $12.143 $13.339 $14.550 $17.223 $18.416
Number of Units Outstanding, End of Period 3,320 6,166 7,995 8,811 11,096
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF International Growth Equity Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.665
Accumulation Unit Value, End of Period - - - $10.665 $11.869
Number of Units Outstanding, End of Period - - - 0 1,317
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Mid Cap Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $13.000 $15.384 $17.579 $18.689
Accumulation Unit Value, End of Period $13.000 $15.384 $17.579 $18.689 $22.319
Number of Units Outstanding, End of Period 10,978 11,035 10,793 10,759 11,169
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF Small Company Growth Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $13.501 $15.644 $17.203 $18.742
Accumulation Unit Value, End of Period $13.501 $15.644 $17.203 $18.742 $18.795
Number of Units Outstanding, End of Period 1,773 3,184 2,113 4,660 7,471
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Mid Cap Value Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $13.290 $14.827 $16.199 $19.035
Accumulation Unit Value, End of Period $13.290 $14.827 $16.199 $19.035 $19.975
Number of Units Outstanding, End of Period 9,060 15,617 13,461 12,152 11,997
- -----------------------------------------------------------------------------------------------------------
Van Kampen UIF U.S. Real Estate Portfolio - Class II (3)
Accumulation Unit Value, Beginning of Period $10.000 $12.672 $16.797 $19.105 $25.622
Accumulation Unit Value, End of Period $12.672 $16.797 $19.105 $25.622 $20.644
Number of Units Outstanding, End of Period 9,699 9,204 8,525 7,469 9,257
- -----------------------------------------------------------------------------------------------------------
Van Kampen LIT Aggressive Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $12.750 $14.270 $15.446 $15.788
Accumulation Unit Value, End of Period $12.750 $14.270 $15.446 $15.788 $18.083
Number of Units Outstanding, End of Period 4,072 4,072 4,218 4,206 4,220
- -----------------------------------------------------------------------------------------------------------
Van Kampen LIT Comstock Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $12.415 $14.201 $14.403 $16.282
Accumulation Unit Value, End of Period $12.415 $14.201 $14.403 $16.282 $15.489
Number of Units Outstanding, End of Period 54,058 67,986 63,782 44,758 44,340
- -----------------------------------------------------------------------------------------------------------
Van Kampen LIT Strategic Growth Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $11.749 $12.220 $12.814 $12.811
Accumulation Unit Value, End of Period $11.749 $12.220 $12.814 $12.811 $14.554
Number of Units Outstanding, End of Period 9,005 12,541 12,307 10,564 5,242
- -----------------------------------------------------------------------------------------------------------
126 PROSPECTUS
For the Year ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio - Class II
Accumulation Unit Value, Beginning of Period $10.000 $12.314 $13.689 $14.631 $16.530
Accumulation Unit Value, End of Period $12.314 $13.689 $14.631 $16.530 $16.506
Number of Units Outstanding, End of Period 10,194 22,591 25,043 23,686 18,625
- -------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.808 $13.829 $14.203 $15.627
Accumulation Unit Value, End of Period $12.808 $13.829 $14.203 $15.627 $15.427
Number of Units Outstanding, End of Period 7,325 7,540 7,400 6,351 4,004
- -------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund - Series II (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.160 $12.595 $13.322 $13.764
Accumulation Unit Value, End of Period $12.160 $12.595 $13.322 $13.764 $14.979
Number of Units Outstanding, End of Period 7,325 3,493 3,628 3,264 3,130
- -------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund - Series II (4)
Accumulation Unit Value, Beginning of Period - $10.000 $10.730 $11.213 $12.123
Accumulation Unit Value, End of Period - $10.730 $11.213 $12.123 $12.904
Number of Units Outstanding, End of Period - 0 0 0 0
- -------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund - Series II (2)
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.709
Accumulation Unit Value, End of Period - - - $10.709 $11.252
Number of Units Outstanding, End of Period - - - 943 852
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth and Income Portfolio - Class B (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.204 $13.222 $13.473 $15.354
Accumulation Unit Value, End of Period $12.204 $13.222 $13.473 $15.354 $15.681
Number of Units Outstanding, End of Period 7,429 13,342 17,762 14,584 14,359
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Growth Portfolio - Class B
Accumulation Unit Value, Beginning of Period $10.000 $12.369 $13.800 $15.008 $14.439
Accumulation Unit Value, End of Period $12.369 $13.800 $15.008 $14.439 $15.843
Number of Units Outstanding, End of Period 5,816 16,835 10,239 13,771 9,151
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS International Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $10.000 $11.797 $15.528
Accumulation Unit Value, End of Period - - $11.797 $15.528 $15.968
Number of Units Outstanding, End of Period - - 9,446 15,798 19,309
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Large Cap Growth Portfolio - Class B (2)
Accumulation Unit Value, Beginning of Period $10.000 $11.410 $12.042 $13.472 $13.040
Accumulation Unit Value, End of Period $11.410 $12.042 $13.472 $13.040 $14.429
Number of Units Outstanding, End of Period 3,318 4,534 6,063 6,062 5,877
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Small/Mid Cap Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period $10.000 $13.521 $15.684 $16.292 $18.125
Accumulation Unit Value, End of Period $13.521 $15.684 $16.292 $18.125 $17.923
Number of Units Outstanding, End of Period 6,234 11,695 12,398 20,551 19,903
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Utility Income Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $10.000 $10.881 $13.091
Accumulation Unit Value, End of Period - - $10.881 $13.091 $15.560
Number of Units Outstanding, End of Period - - 0 4,381 5,000
- -------------------------------------------------------------------------------------------------------
AllianceBernstein VPS Value Portfolio - Class B
Accumulation Unit Value, Beginning of Period - - $10.000 $10.662 $12.571
Accumulation Unit Value, End of Period - - $10.662 $12.571 $11.733
Number of Units Outstanding, End of Period - - 1,874 20,333 3,520
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.812 $12.822
Accumulation Unit Value, End of Period - - $11.812 $12.822 $14.649
Number of Units Outstanding, End of Period - - 6,639 18,110 15,101
- -------------------------------------------------------------------------------------------------------
Fidelity VIP Growth & Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.016 $12.111
Accumulation Unit Value, End of Period - - $11.016 $12.111 $13.194
Number of Units Outstanding, End of Period - - 2,529 2,146 2,099
- -------------------------------------------------------------------------------------------------------
127 PROSPECTUS
For the Year ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $10.405 $11.254
Accumulation Unit Value, End of Period - - $10.405 $11.254 $11.240
Number of Units Outstanding, End of Period - - 249 0 0
- ------------------------------------------------------------------------------------------------------
Fidelity VIP Mid Cap Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $12.029 $13.172
Accumulation Unit Value, End of Period - - $12.029 $13.172 $14.796
Number of Units Outstanding, End of Period - - 0 5,260 7,956
- ------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio - Service Class 2
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.144
Accumulation Unit Value, End of Period - - - $10.144 $10.370
Number of Units Outstanding, End of Period - - - 0 5,931
- ------------------------------------------------------------------------------------------------------
FTVIP Franklin Flex Cap Growth Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.079 $11.354
Accumulation Unit Value, End of Period - - $11.079 $11.354 $12.643
Number of Units Outstanding, End of Period - - 0 3,810 3,613
- ------------------------------------------------------------------------------------------------------
FTVIP Franklin High Income Securities Fund - Class 2 (2)
Accumulation Unit Value, Beginning of Period - $10.000 $10.623 $10.691 $11.390
Accumulation Unit Value, End of Period - $10.623 $10.691 $11.390 $11.395
Number of Units Outstanding, End of Period - 0 0 0 0
- ------------------------------------------------------------------------------------------------------
FTVIP Franklin Income Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.000 $11.164 $11.050 $12.728
Accumulation Unit Value, End of Period - $11.164 $11.050 $12.728 $12.862
Number of Units Outstanding, End of Period - 0 20,756 13,478 10,456
- ------------------------------------------------------------------------------------------------------
FTVIP Mutual Discovery Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - - $10.000 $11.304 $13.551
Accumulation Unit Value, End of Period - - $11.304 $13.551 $14.762
Number of Units Outstanding, End of Period - - 0 0 0
- ------------------------------------------------------------------------------------------------------
FTVIP Mutual Shares Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.000 $10.877 $11.715 $13.510
Accumulation Unit Value, End of Period - $10.877 $11.715 $13.510 $13.616
Number of Units Outstanding, End of Period - 1,636 7,047 6,203 17,832
- ------------------------------------------------------------------------------------------------------
FTVIP Templeton Foreign Securities Fund - Class 2
Accumulation Unit Value, Beginning of Period - $10.000 $11.441 $12.279 $14.527
Accumulation Unit Value, End of Period - $11.441 $12.279 $14.527 $16.336
Number of Units Outstanding, End of Period - 410 2,533 2,484 2,216
- ------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured Small Cap Equity Fund
Accumulation Unit Value, Beginning of Period - - $10.000 $11.267 $12.323
Accumulation Unit Value, End of Period - - $11.267 $12.323 $ 9.995
Number of Units Outstanding, End of Period - - 5,369 215 391
- ------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Structured U.S. Equity Fund
Accumulation Unit Value, Beginning of Period - - $10.000 $11.195 $12.312
Accumulation Unit Value, End of Period - - $11.195 $12.312 $11.710
Number of Units Outstanding, End of Period - - 6,796 227 242
- ------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Growth and Income Fund
Accumulation Unit Value, Beginning of Period - - $10.000 $10.453 $12.487
Accumulation Unit Value, End of Period - - $10.453 $12.487 $12.193
Number of Units Outstanding, End of Period - - 2,234 2,533 2,505
- ------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Value Fund (1)
Accumulation Unit Value, Beginning of Period - - $10.000 $11.300 $12.788
Accumulation Unit Value, End of Period - - $11.300 $12.788 $12.785
Number of Units Outstanding, End of Period - - 1,182 1,177 1,172
- ------------------------------------------------------------------------------------------------------
PIMCO VIT CommodityRealReturn Strategy Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $10.000 $ 9.432
Accumulation Unit Value, End of Period - - - $ 9.432 $11.313
Number of Units Outstanding, End of Period - - - 0 0
- ------------------------------------------------------------------------------------------------------
128 PROSPECTUS
For the Year ending December 31,
Sub-Accounts 2003 2004 2005 2006 2007
- --------------------------------------------------------------------------------------------------
PIMCO VIT Emerging Markets Bond Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.637
Accumulation Unit Value, End of Period - - - $10.637 $10.954
Number of Units Outstanding, End of Period - - - 0 0
- --------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.056
Accumulation Unit Value, End of Period - - - $10.056 $10.830
Number of Units Outstanding, End of Period - - - 0 0
- --------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio - Advisor Shares
Accumulation Unit Value, Beginning of Period - - - $10.000 $10.237
Accumulation Unit Value, End of Period - - - $10.237 $10.834
Number of Units Outstanding, End of Period - - - 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $11.242 $11.850 $12.005 $13.089
Accumulation Unit Value, End of Period $11.242 $11.850 $12.005 $13.089 $12.870
Number of Units Outstanding, End of Period 2,556 2,552 2,548 2,544 2,539
- --------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund - Class IB (2)
Accumulation Unit Value, Beginning of Period $10.000 $12.210 $13.215 $13.547 $15.297
Accumulation Unit Value, End of Period $12.210 $13.215 $13.547 $15.297 $13.999
Number of Units Outstanding, End of Period 0 0 0 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $12.577 $14.235 $15.559 $19.359
Accumulation Unit Value, End of Period $12.577 $14.235 $15.559 $19.359 $20.432
Number of Units Outstanding, End of Period 6,690 10,996 10,092 10,327 9,971
- --------------------------------------------------------------------------------------------------
Putnam VT Investors Fund - Class IB (5)
Accumulation Unit Value, Beginning of Period $10.000 $12.076 $13.251 $14.045 $15.589
Accumulation Unit Value, End of Period $12.076 $13.251 $14.045 $15.589 $14.399
Number of Units Outstanding, End of Period 0 0 0 0 0
- --------------------------------------------------------------------------------------------------
Putnam VT New Value Fund - Class IB
Accumulation Unit Value, Beginning of Period - - $10.000 $10.851 $12.264
Accumulation Unit Value, End of Period - - $10.851 $12.264 $11.360
Number of Units Outstanding, End of Period - - 528 130 142
- --------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund - Class IB
Accumulation Unit Value, Beginning of Period $10.000 $11.648 $11.917 $12.271 $12.603
Accumulation Unit Value, End of Period $11.648 $11.917 $12.271 $12.603 $12.953
Number of Units Outstanding, End of Period 1,000 1,219 1,737 1,733 1,776
- --------------------------------------------------------------------------------------------------
* The Allstate Variable Annuity-L Share Contracts and all of the Variable
Sub-Accounts shown below 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 Securities - 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 VPS International Value - Class B Sub-Account, the
AllianceBernstein VPS Utility Income - Class B Sub-Account, the
AllianceBernstein VPS Value - Class B Sub-Account, the Fidelity VIP
Contrafund - 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
Structured Small Cap Equity Sub-Account, the Goldman Sachs VIT Structured
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, and the AIM V.I. Core Equity - Series II Sub-Account, the
Fidelity VIP Money Market - Service Class 2 Sub-Account, the PIMCO VIT
CommodityRealReturn Strategy - Advisor Shares Sub-Account, PIMCO VIT Emerging
Markets Bond - Advisor Shares Sub-Account, PIMCO VIT Real Return - Advisor
Shares Sub-Account, PIMCO VIT Total Return - Advisor Shares Sub-Account and
the Van Kampen UIF International Growth Equity, Class II Sub-Account which
were first offered under the Contracts on May 1, 2006. 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 May 1, 2006, the Goldman Sachs VIT Mid Cap Value Fund, Morgan
Stanley VIS European Equity Portfolio - Class Y and Morgan Stanley VIS
Limited Duration Portfolio - Class Y 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 investments. If, prior to
May 1, 2006, 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.
129 PROSPECTUS
(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 AllianceBernstein VPS Growth and
Income - Class B Sub-Account, the AllianceBernstein VPS Large Cap Growth -
Class B Sub-Account, the FTVIP Franklin High Income Securities - 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 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 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 1, 2006, AIM V.I. Core Equity - Series II Sub-Account is no
longer available for new investments. If you are currently invested in the
AIM V.I. Core Equity - Series II Sub-Account you may continue your
investment. If, prior to May 1, 2006, you enrolled in one of our automatic
transaction programs through the AIM V.I. Premier Equity - Series II
Sub-Account (the predecessor of the AIM V.I. Core Equity - Series II
Sub-Account), such as automatic additions, portfolio rebalancing, or dollar
cost averaging, we will continue to effect automatic transactions into the
AIM V.I. Core Equity - Series II Sub-Account in accordance with that
program, unless you instruct us otherwise. Outside of these automatic
transaction programs, additional allocations will not be allowed.
(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 the Variable Sub-Account in
accordance with that program. Outside of these automatic transaction
programs, additional allocations will not be allowed.
130 PROSPECTUS
41501
[LOGO]
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.)
(4)(ag) Form of SureIncome Plus Withdrawal Benefit Rider (Previously file in
Post-Effective Amendment No. 4 to this Registration Statement
(File No. 333-100068) dated April 18, 2006.)
(4)(ah) Form of SureIncome for Life Withdrawal Benefit Rider (Previously file
in Post-Effective Amendment No. 4 to this Registration Statement
(File No. 333-100068) dated April 18, 2006.)
(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 (Previously filed in
Post-Effective Amendment No. 3 to this Form S-3 Registration Statement
(File No. 333-100068) dated April 25, 2005.)
(5)(e) Opinion and Consent of General Counsel re: Legality (Previously file in
Post-Effective Amendment No. 4 to this Registration Statement
(File No. 333-100068) dated April 18, 2006.)
(8)None
(11)None
(12)None
(15) None
(23)(a) Consent of Independent Registered Public Accounting Firm. Filed
herewith.
(24)(a) Powers of Attorney for David A. Bird, John C. Lounds, Samuel H. Pilch,
John C. Pintozzi, Eric A. Simonson, Kevin R. Slawin,Casey J. Sylla, Michael J.
Velotta, Douglas B. Welch, and Thomas J. Wilson, II (Previously file in
Post-Effective Amendment No. 4 to this Registration Statement (File
No. 333-100068) dated April 18, 2006.)
(24)(b) Powers of Attorney for Michael B. Boyle, James W. Hohmann, George E.
Ruebenson and Thomas J. Wilson II (Previously filed in Post-Effective Amendment
No. 5 to this Registration Statement (File No. 333-100068) dated April 19, 2007.
(25) None
(26) None
(27) Not applicable
ITEM 17.UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this 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.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that the undertakings set forth in paragraphs (i), (ii) and
(iii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in reports filed with
or furnished to the Commission by the Registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of this 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) 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.
(4) That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of
a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
(5) That, for the purpose of determining liability of the Registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned Registrant undertakes that in a primary offering of securities
of the undersigned Registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of
any of the following communications, the undersigned Registrant will be a
seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned Registrant
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned Registrant or used or referred to by the undersigned
Registrant;
(iii) The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned Registrant or its
securities provided by or on behalf of the undersigned Registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned Registrant to the purchaser.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 ("Act") may be permitted to directors, officers and controlling persons
of the Registrant 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 the
Registrant of expenses incurred or paid by a director, officers 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 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, 2008.
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, 2008.
/*/DAVID A. BIRD Director and Senior Vice President
- ----------------------
David A. Bird
/*/MICHAEL B. BOYLE Director and Senior Vice President
- ----------------------
Michael B. Boyle
/*/JOHN C. LOUNDS Director and Senior Vice President
- ----------------------
John C. Lounds
/*/GEORGE E. REUBENSON Director
- ----------------------
George E. Reubenson
/*/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
/*/JAMES E. HOHMANN Director, Chief Exectutive Officer
- ---------------------- and
James E. Hohmann President (Principal Executive
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 and Chairman of the Board
- ----------------------
Thomas J. Wilson II
/*/ By Michael J. Velotta, pursuant to Power of Attorney, previously filed.
EXHIBIT LIST
The following exhibits are filed herewith:
Exhibit No. Description
(23)(a) Consent of Independent Registered Public Accounting Firm.