ALLSTATE LIFE INSURANCE COMPANY
Supplement, dated April 17, 2012, to
the Allstate© RightFit™ Prospectus dated March 16, 2012
Issued by
This supplement amends the above-referenced prospectus for your annuity contract issued by Allstate Life Insurance Company.
Effective April 17, 2012, the following changes are made to your prospectus.
In the Investment Option Interim Value subsection on page 14, the table detailing the calculation of the Investment Option Interim Value is deleted and replaced with the following table:
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Investment Option Interim Value = A × (1+B) × C, where
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A
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=
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On the Issue Date, this amount equals the portion of the Purchase Payment allocated to that particular Investment Option.
Thereafter this amount equals the Investment Option Maturity Value as of the later of the Issue Date, the last day on which a withdrawal was taken, or the beginning of the current Contract Year.
If the valuation date is a Contract Anniversary, this amount equals the Investment Option Maturity Value as of the previous Contract Anniversary.
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B
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=
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Investment Option Performance, as described in the “Performance” section.
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C
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=
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The Adjustment for changes in the Fair Value Index, calculated as ((1+D)/(1+E))F, where
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D
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=
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The Fair Value Index, computed as of the Issue Date, based upon the U.S. Constant Maturity Treasury rate of a length corresponding to the applicable Investment Option Period you selected plus the Option Adjusted Spread of the Barclays Capital U.S. Corporate Investment Grade Index.
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E
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=
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The Fair Value Index, computed as of the current date, based upon the U.S. Constant Maturity Treasury rate of a length corresponding to the applicable Investment Option Period you selected plus the Option Adjusted Spread of the Barclays Capital U.S. Corporate Investment Grade Index.
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F
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=
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Number of whole and partial years from the current date until the end of the applicable Investment Option Period you selected. If E does not correspond to the length of an observed financial instrument as defined in the Fair Value Index, we will linearly interpolate based on the values of observed financial instruments, of maturities closest to F, to determine D and E above.
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An example of this calculation may be found in Appendix A.
Appendix A on page 35 is deleted and replaced with the following appendix:
Appendix A - Determination of Maturity Value and Interim Value for an Investment Option Including Calculation of Fair Value Index
Hypothetical Example illustrating contract values for an Investment Option given fluctuating Fair Value Index rates.
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Contract
Year 1
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Contract
Year 2
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| Maturity Value calculation | |||||
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Values shown for Year 1 calculations
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Issue Date
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1/1/2011
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1/1/2011
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Ending Date
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1/1/2012
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7/1/2012
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Investment Option Period
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10
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10
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Years remaining in Investment Option Period
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9.0
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8.5
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Purchase Payment
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$95,000
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$95,000
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Beginning Maturity Value
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$95,000
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$100,000
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Ceiling Rate
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20.00%
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20.00%
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Floor Rate
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-10.00%
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-10.00%
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Beginning Index Value
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950
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1000
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Ending Index Value
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1000
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1050
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Index Growth as Percentage
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1000/950 – 1 =
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5.26%
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5.00%
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| Investment Option Performance Rate |
Greater of 5.26% or -10.00%, no more than 20.00% =
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5.26% | 5.00% | ||
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Investment Option Performance
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$95,000 × 5.26% =
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$5,000
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$5,000
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Ending Maturity Value
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$95,000 + $5,000 =
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$100,000
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$105,000
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Interim Value calculation
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Contract Year 1
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Contract Year 2
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Rising Fair Value Index
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Falling Fair Value Index
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Beginning Fair Value Index
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7.00%
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7.00%
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7.00%
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Ending Fair Value Index
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7.50%
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9.00%
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5.00%
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| Adjustment for the Change in the Fair Value Index | ((1 + 7.00%) / (1 + 7.50%)) 9.0 = | 95.89% |
85.44%
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117.40% | |
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Interim Value
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$100,000 × 95.89% =
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$95,891
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$89,707
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$123,266
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| Maximum Ending Interim Value |
$95,000 × (1 + 20.00%) =
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$114,000
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$120,000
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$120,000
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| Ending Interim Value |
Lesser of $95,891 or $114,000 =
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$95,891
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$89,707
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$120,000
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Values are rounded for display purposes only.
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Appendix B on page 36 is deleted and replaced with the following appendix:
Appendix B - Determination of Maturity Value, Interim Value and Return of Premium (“ROP”) Death Benefit for an Investment Option after a $20,000 withdrawal
Hypothetical example illustrating contract value calculations after a withdrawal given fluctuating Fair Value Index Rates.
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Assumptions
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Contract Year 2
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Issue Date
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1/1/2011
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Purchase Payment
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$95,000
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Maturity Value on 1/1/2012 (see Appendix A)
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$100,000
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Maturity Value on 7/1/2012 (see Appendix A)
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$105,000
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Preferred Withdrawal Amount Percentage
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10%
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Withdrawal Date
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7/1/2012
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Withdrawal Amount
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$20,000
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Withdrawal Charge
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10%
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Calculation of Preferred Withdrawal Amount
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Maturity Value on 1/1/2012
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$100,000
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Preferred Withdrawal Amount Percentage
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10%
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Preferred Withdrawal Amount
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$100,000 × 10% =
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$10,000
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Contract Value Calculations After Preferred Withdrawal Amount
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Maturity Value on 7/1/2012
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$105,000
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Preferred Withdrawal Amount
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$10,000
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Maturity Value After Preferred Withdrawal
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$105,000 - $10,000 =
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$95,000
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| Maturity Value after Preferred Withdrawal, as Percentage of Maturity Value Prior to Preferred Withdrawal |
$95,000 / $105,000 =
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90.48% | ||||||||
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ROP Death Benefit (Purchase Payment) on 7/1/2012
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$95,000
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ROP Death Benefit After Preferred Withdrawal
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$95,000 × 90.48% =
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$85,952
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Rising Fair Value Index
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Falling Fair Value Index
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Interim Value on 7/1/2012
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$89,707
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$120,000
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Interim Value after Preferred Withdrawal
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$89,707 × 90.48% =
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$81,163
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$120,000 × 90.48% =
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$108,571
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Contract Values After Excess Withdrawal Amount, adjustments and Withdrawal Charges
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Excess Withdrawal Amount
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$20,000 - $10,000 =
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$10,000
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$20,000 - $10,000 =
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$10,000
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Interim Value after Excess Withdrawal
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$81,163 - $10,000 =
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$71,163
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$108,571 - $10,000 =
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$98,571
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Interim Value after Excess Withdrawal, as percentage of Interim Value prior to Excess Withdrawal
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$71,163 / $81,163 =
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87.68%
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$98,571 / $108,571 =
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90.79%
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Maturity Value after Excess Withdrawal
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$95,000 × 87.68% =
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$83,295
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$95,000 × 90.79% =
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$86,250
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ROP Death Benefit after Excess Withdrawal
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$85,952 × 87.68% =
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$75,362
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$85,952 × 90.79% =
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$78,036
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Withdrawal Charges
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$10,000 × 10% =
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$1,000
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$10,000 × 10% =
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$1,000
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Ending Maturity Value
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$83,295 - $1,000 =
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$82,295
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$86,250 - $1,000 =
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$85,250
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Ending Interim Value
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$71,163 - $1,000 =
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$70,163
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$98,571 - $1,000 =
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$97,571
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Ending Return of Premium Death Benefit
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$75,362 - $1,000 =
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$74,362
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$78,036 - $1,000 =
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$77,036
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Values are rounded for display purposes only.
If you have any questions, please contact your financial representative or our Customer Service Center at (800) 457-7617.
Please read the prospectus supplement carefully and then file it with your important papers. No other action is required of you.