What is a bailout?

"Bailout," is an insurance industry term that means customers have the opportunity to surrender all or part of their contracts — free of surrender charges — when certain conditions are met. The bailout option is triggered when a cap rate or fixed account interest rate drops below a certain level.


Why does this happen?

Today’s interest rate environment has forced us to lower caps in order to maintain viable product returns. Yields on the bonds in which we invest to back our annuities are at an all-time low, due to low Treasury rates and tight credit spreads. Rate adjustments are caused by the fact that most of our annuities were sold when interest rates were much higher than they are today.

In response to interest rate pressures, Allstate has reduced cap rates and added bailout amendments on certain contracts, which has triggered bailouts on many annuity contracts.

Affected contracts are fixed annuities with investment guarantees. Typically, the investments that support the contracts are in fixed securities like US Treasuries -- not in stock market investments.

Allstate is 100% committed to the annuity marketplace.

We continue to provide strong products that meet our customer’s needs. By offering competitive rates and attractive risk-adjusted returns, we can thrive in different economic environments.


Where is the opportunity?

Triggering bailouts creates new options for customers and new sales opportunities for you. It enables you to help customers realistically reset their expectations, based on new economic conditions. A triggered bailout option is an ideal opportunity for you to review retirement strategies and suitability with customers and make recommendations as appropriate.



FOR BROKER-DEALER OR AGENT USE ONLY – Not for public dissemination. May not be distributed, reprinted or shown to the public in oral, written or electronic form as sales material. Date of first issue 11/10

©2012 Allstate Insurance Company, Northbrook, IL. accessallstate.com 10/12

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Before investing in Allstate RightFit Annuity, customers should carefully consider how interest is credited, as well as the risks, charges and expenses associated with the contract. Additional information about these and other subjects can be found in the Allstate RightFit Annuity prospectus. To obtain a prospectus, please contact Allstate Life Insurance Company or visit accessallstate.com. Please read the prospectus carefully before selling a contract or sending money.

Allstate RightFit Annuity is issued through Allstate Life Insurance Company, Home Office, Northbrook, IL. Securities offered by Personal Financial Representatives through Allstate Financial Services, LLC (LSA Securities in LA and PA). Registered Broker-Dealer. Member FINRA, SIPC. Main Office: 2920 South 84th Street, Lincoln, NE 68506. (877) 525-5727.

The Saver’s Index® Annuity is single premium deferred annuity, and the Saver’s Index® Annuity III is a flexible premium deferred annuity. All were issued by Lincoln Benefit Life Company, Home Office, Lincoln, NE, a wholly owned subsidiary of Allstate Life Insurance Company, Northbrook, IL. Saver’s Index Annuity was available in most states with contract series AP9412. Saver’s Index Annuity III was available in most states with contract series AP9750 and certificate series GAP9750.

IncomeReady is a single premium immediate annuity issued by Lincoln Benefit Life Company; in New York, issued by Allstate Life Insurance Company of New York, Home Office: Hauppauge, NY. Both companies are wholly owned subsidiaries of Allstate Life Insurance Company, Home Office: Northbrook, IL. IncomeReady is available in most states with contract series AP0812 and rider series AR0814R-1 and AR0815 and in New York with contract form number NYLU738 and rider form numbers, NYLU740, NYLU741.

Protective ProSaver Secure II is issued by Protective Life Insurance Company, Home Office, Birmingham, AL. Investors should consider the contract and the underlying portfolios’ investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the prospectus, which can be obtained by contacting the National Sales Desk. Your clients should read the prospectus carefully before investing.

Variable annuities are issued by Pruco Life Insurance Company (in New York, by Pruco Life Insurance Company of New Jersey), Newark, NJ and distributed by Prudential Annuities Distributors, Inc., Shelton, CT. All are Prudential Financial companies and each is solely responsible for its own financial condition and contractual obligations. Prudential Annuities is a business of Prudential Financial, Inc. Allstate GrowthProtectorSM Annuity is a limited flexible premium deferred indexed annuity contract issued by Allstate Life Insurance Company, Home Office: Northbrook, IL. Allstate GrowthProtector Annuity is available in most states with contract series number LU11002 or ICC12-AF10. Filed in Illinois as a limited flexible premium modified guaranteed equity indexed annuity with contract series number LU10996IL.

Allstate IncomeProtector Annuity is a limited flexible premium fixed indexed annuity contract issued by Allstate Life Insurance Company, Home Office: Northbrook, IL. Allstate IncomeProtector Annuity is available in most states with contract series number LU10996. Riders/Endorsements: LU11001 Purchase Payment Bonus Endorsement, LU11003 Guaranteed Lifetime Withdrawal Benefit Rider, LU11005 Waiver of Charges, LU11021 WOC for LTC or Hospital, LU11022 WOC for Terminal Illness, LU11024 ADL Waiver of Charges.

Elite Index Universal Life Policy is issued by Allstate Life Insurance Company.