The following is a supplement to your Allstate Variable Annuities (Allstate Variable
Annuity, Allstate Variable Annuity - L Share) prospectus. Please review and retain this
supplement with your current prospectus. If you have any questions, call 1-800-654-2397.
Allstate Life Insurance Company
Allstate Financial Advisors Separate Account I
Supplement, dated October 17, 2005
to the
Prospectus dated April 30, 2005 for
The Allstate Variable Annuities
(Allstate Variable Annuity, Allstate Variable Annuity - L Share)
This supplement amends the above-referenced prospectus for the Allstate Variable Annuity and
the Allstate Variable Annuity - L Share variable annuity contracts (the "Contracts"), offered by
Allstate Life Insurance Company. Please keep this supplement for future reference together with
your prospectus. All capitalized terms have the same meaning as those included in the prospectus.
The supplement describes a change to the administrative expense charge for Contracts issued on
or after January 1, 2005 and prior to October 17, 2005, and for Contracts issued on or after
October 17, 2005.
Page 4: Replace the section under the heading "Overview of Contracts" with the following:
The Contracts offer many of the same basic features and benefits. They differ primarily with
respect to the charges imposed, as follows:
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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; |
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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%.
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Page 6: Replace the first bulletpoint under the subheading "All Contracts" under
the heading "The Contracts at a Glance" with the following:
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).
Page 11: Replace the section under the subheading "Variable Account Annual
Expenses" under the heading “Expense Table” starting with the expense charge table with the
following:
If you select the basic Contract without any optional benefits, your Variable Account expenses
would be as follows:
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Basic Contract (without any optional benefit) |
Mortality and Expense Risk Charge |
Administrative Expense Charge* |
Total Variable Account Annual Expense |
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Allstate Variable Annuity |
1.10% |
0.19% |
1.29% |
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Allstate Variable Annuity - |
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.
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MAV Death Benefit Option |
0.20% (up to 0.30% for Options added in the future) |
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Enhanced Beneficiary Protection (Annual Increase) Option |
0.30%
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Earnings Protection Death Benefit Option (issue age |
0.25% (up to 0 .35% for Options added in the future) |
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Earnings Protection Death Benefit Option (issue age 71-79) |
0 .40% (up to 0 .50% for Options added in the future) |
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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:
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Contract with the MAV Death Benefit Option, Enhanced Beneficiary Protection (Annual Increase) Option, Earnings Protection Death Benefit Option (issue age 71-79)
|
Mortality and Expense |
Administrative Expense |
Total Variable Account 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%.
Page 18: Replace "Example 1" under the heading “Expense Table” with the
following:
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 an annual administrative
expense charge of 0.19%), and Portfolio fees and expenses.
The example shows the dollar amount of expenses that you would bear directly or indirectly if
you:
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invested $10,000 in the Contract for the time periods indicated; |
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earned a 5% annual return on your investment; |
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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; |
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elected the MAV Death Benefit Option and the Enhanced Beneficiary Protection (Annual Increase) Option; |
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elected the Earnings Protection Death Benefit Option (assuming issue age 71-79); |
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elected RIG 2 (assuming Income Base A); and |
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elected the Spousal Protection Benefit (Co-Annuitant) Option. |
The example does not include any taxes or tax penalties you may be required to
pay if you surrender your Contract.
Page 18: Replace the expense example table under the subheading "Example 1" under the
heading “Expense Table” with the following:
Example 1
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.
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Allstate Variable Annuity |
Allstate Variable Annuity-L Share | |||||||
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1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years | |
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Costs Based on |
$1,128 |
$2,029 |
$2,936 |
$5,397 |
$1,084 |
$1,721 |
$2,864 |
$5,710 |
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Costs Based on |
$970 |
$1,569 |
$2,194 |
$4,055 |
$926 |
$1,264 |
$2,135 |
$4,422 |
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Page 18: Replace the expense example table under the subheading “Example 2” under the
heading “Expense Table” with the following:
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.
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Allstate Variable Annuity |
Allstate Variable Annuity-L Share | |||||||
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1 Year |
3 Years |
5 Years |
10 Years |
1 Year |
3 Years |
5 Years |
10 Years | |
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Costs Based on |
$533 |
$1,604 |
$2,681 |
$5,397 |
$574 |
$1,721 |
$2,864 |
$5,710 |
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| Costs Based on Minimum Annual Portfolio Expenses |
$375 |
$1,144 |
$1,939 |
$4,055 |
$416 |
$1,264 |
$2,135 |
$4,422 |
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Please remember that you are looking at examples and not a representation of past or future
expenses. Your rate of return may be higher or lower than 5%, which is not guaranteed. The
examples do not assume that any portfolio expense waivers or reimbursement arrangements are
in effect for the periods presented. The examples reflect the free withdrawal amounts, if
applicable, and the deduction of the annual contract maintenance charge of $30 each year. The
above examples assume you have selected the MAV Death Benefit Option and the Enhanced
Beneficiary Protection (Annual Increase) Option, the Earnings Protection Death Benefit Option
(assuming the oldest Contract Owner or Annuitant is age 71 or older, and all are age 79 or
younger on the Rider Application Date), RIG 2 and that Income Base A is applied, and the
Spousal Protection Benefit (Co-Annuitant) Option.
If any or all of these features were not
elected, the expense figures shown above would be slightly lower.
Page 19: Replace the last paragraph under the heading “Financial Information” with the
following:
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%.
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Page 50: Replace the first sentence in the first paragraph under the subheading
"Administrative Expense Charge" under the heading "Expenses" with the following three
sentences:
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.
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