Allstate Receives U.S. Patent Related To Treasury-Linked Annuities
Innovation Pays Off for Allstate, Producers and Consumers
Methods used in connection with Allstate's innovative deferred fixed annuity products, the Allstate® Treasury-Linked Annuity (T-Link) and Allstate® Treasury-Linked Annuity Plus (T-Link Plus), are now subject to patent protection through a patent issued to Allstate by the U.S. Patent and Trademark Office. Allstate first introduced T-Link in 2002 followed by T-Link Plus in 2003, both of which quickly stirred the interest of producers and consumers due to the unique ability of the products to keep pace with rising rates.
Allstate was awarded U.S. Patent 7,080,032 on July 18, 2006, for the innovative methods behind the fixed annuities, which give consumers the ability to earn additional interest based on increases in the U.S. Treasury Note Constant Maturity 5-year rate (U.S. Treasury 5-year rate). Consumers benefit from upward movement in the U.S. Treasury 5-year rate and, on the flip side, if the U.S. Treasury 5-year rate is down, the contract maintains the guaranteed interest rate.
"This is a significant milestone for Allstate," said Casey Sylla, chairman and president, Allstate Life Insurance Company, a subsidiary of Allstate Insurance Company. "It's truly inspiring to see a product go from the brainchild of two of our employees, to becoming a well received, and now patented product, that's helping consumers find a better way to save for retirement."
As Treasury interest rates have risen, so have sales of the products. Through the end of the second quarter of 2006, T-Link and T-Link Plus sales have more than tripled compared to the first six months of 2005. Producers who understand and are aware of the value of this product design will also know how well it can perform in today's interest rate environment. Customers buying either of these products may have benefited from the rising rates as well. For example, a contract owner who bought T-Link on April 1, 2003 would have received a rate of 2.3 percent in the first year, and renewal rates of 2.32 percent in 2004, 3.7 percent in 2005 and 4.34 percent in 2006.
The products appeal to investors who seek stability for their retirement monies. They particularly draw consumers who normally may have placed their additional retirement savings in other fixed income products, but value the tax deferred growth and other features of an annuity product, such as the ability to convert the contract value into a stream of guaranteed income payments for life or a certain period of time.
The Allstate Treasury-Linked Annuity is a flexible premium deferred annuity sold by licensed insurance agents in all distribution channels, which include: Allstate agencies, independent agents, financial institutions and broker-dealers. The Allstate Treasury-Linked Annuity is issued by: Allstate Life Insurance Company (ALIC), Northbrook, Ill.; Lincoln Benefit Life Company (LBL), Lincoln, Neb.; and in the state of New York by Allstate Life Insurance Company of New York, Hauppauge, NY. ALIC and LBL are not licensed to do business in New York.
The Allstate Treasury-Linked Annuity Plus is a single premium deferred annuity, with a market value adjustment, sold by prospectus only, issued by Allstate Life Insurance Company and underwritten by Allstate Distributors, LLC, Northbrook, IL; and sold through agreements with registered representatives or bank employees who are licensed insurance agents.
T-Link Plus has a Market Value Adjustment (MVA) feature. An MVA will be assessed to withdrawals based on the change in interest rates since the 5-year guarantee period was established. If the 5-year U.S. Treasury Rate has gone down since the purchase of the annuity, withdrawal values could be higher. If the 5-year U.S. Treasury Rate has gone up since the purchase of the annuity, withdrawal values could be lower. An MVA applies to withdrawals in excess of the free amount, withdrawals outside of the 45-day window period (at the end of each guaranteed period clients have 45 days to withdraw part or all of the current annuity value without withdrawal charges or MVA), and certain death benefit options. The MVA will be applied subject to requirements of state law. Please see the prospectus for details.
Withdrawal charges for both T-Link and T-Link Plus ranging from 0 percent to 9 percent for a range of 0-11 years may apply. Distributions taken prior to annuitization are generally considered to come from the gain in the contract first. If the contract is tax qualified, generally all payments and/or withdrawals are treated as ordinary income and, if taken prior to age 59 ˝, may be subject to an additional 10 percent federal tax penalty. All guarantees are based on the claims-paying ability of the issuing insurance company.
Annuities are long-term investments designed for retirement purposes. Before investing, you should carefully consider the investment objectives, risks and charges of the Allstate Treasury-Linked Annuity Plus. For additional information about these and other details, please refer to the prospectus. To obtain a prospectus, please contact your financial representative or call Allstate at 1-800-203-0068. Please read the prospectus carefully before purchasing a contract.
Now celebrating the 75th anniversary of the founding of Allstate Insurance Company, The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held personal lines insurer. Widely known through the "You're In Good Hands With Allstate®" slogan, Allstate helps individuals in approximately 17 million households protect what they have today and better prepare for tomorrow through approximately 14,100 exclusive agencies and financial professionals in the U.S. and Canada. Customers can access Allstate products and services such as auto insurance and homeowners insurance through Allstate agencies, or in select states at allstate.com and 1-800 Allstate®. EncompassSM and Deerbrook® Insurance brand property and casualty products are sold exclusively through independent agents. The Allstate Financial Group provides life insurance, supplemental accident and health insurance, annuity, banking and retirement products designed for individual, institutional and worksite customers that are distributed through Allstate agencies, independent agencies, financial institutions and broker-dealers.
FOR MORE INFORMATION:
Jennifer Topolewski, Allstate Media Relations, (847) 402-5600