UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) July 25, 2005

Allstate Life Insurance Company

(Exact Name of Registrant as Specified in Charter)

Illinois	0-31248	36-2554642
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)
3100 Sanders Road, Northbrook, Illinois		60062
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (847) 402-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02.Results of Operations and Financial Condition.

The registrant furnishes below its Condensed Consolidated Statements of Operations for the three-month and six- month periods ended June 30, 2005 and 2004 and Condensed Consolidated Statements of Financial Position as of June 30, 2005 and December 31, 2004, prepared in conformity with accounting principles generally accepted in the United States of America, and certain non-GAAP and operating measures:

ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	Est. 2005			2004			Est. 2005			2004
Revenues
Premiums	$	113		$	151		$	255		$	302
Contract charges	263			236			522			470
Net investment income	915			795			1,803			1,578
Realized capital gains and losses	24			(68		)	25			(95		)
	1,315			1,114			2,605			2,255
Costs and expenses
Contract benefits	337			313			684			649
Interest credited to contractholder funds	571			463			1,147			912
Amortization of deferred policy acquisition costs	164			109			333			224
Operating costs and expenses	110			123			226			225
	1,182			1,008			2,390			2,010
Loss on disposition of operations	(3		)	(14		)	(8		)	(17		)
Income from operations before income tax expense and cumulative effect of change in accounting principle, after-tax	130			92			207			228
Income tax expense	43			37			52			82
Income before cumulative effect of change in accounting principle, after-tax	87			55			155			146
Cumulative effect of change in accounting principle, after-tax	—			—			—			(175		)
Net income (loss)	$	87		$	55		$	155		$	(29	)

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ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in millions, except par value data)	June 30, 2005 (Est.)		December 31, 2004
Assets
Investments
Fixed income securities, at fair value (amortized cost $60,678 and $55,964)	$	64,453	$	59,291
Mortgage loans	7,598		7,318
Equity securities	272		214
Short-term	1,194		1,440
Policy loans	716		722
Other	529		704
Total investments	74,762		69,689
Cash	194		241
Deferred policy acquisition costs	3,297		3,176
Reinsurance recoverables, net	1,591		1,507
Accrued investment income	631		593
Other assets	404		818
Separate Accounts	14,341		14,377
Total assets	$	95,220	$	90,401
Liabilities
Contractholder funds	$	57,328	$	53,939
Reserve for life-contingent contract benefits	12,058		11,203
Unearned premiums	33		31
Payable to affiliates, net	120		79
Other liabilities and accrued expenses	4,407		3,721
Deferred income taxes	521		638
Long-term debt	92		104
Separate Accounts	14,341		14,377
Total liabilities	88,900		84,092
Shareholder’s Equity
Redeemable preferred stock – series A, $100 par value, 1,500,000 shares authorized, 49,230 and outstanding	5		5
Redeemable preferred stock – series B, $100 par value, 1,500,000 shares authorized, none issued	—		—
Common stock, $227 par value, 23,800 shares authorized and outstanding	5		5
Additional capital paid-in	1,108		1,108
Retained income	4,250		4,178
Accumulated other comprehensive income:
Unrealized net capital gains and losses	952		1,013
Total accumulated other comprehensive income	952		1,013
Total shareholder’s equity	6,320		6,309
Total liabilities and shareholder’s equity	$	95,220	$	90,401

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Definitions of Non-GAAP and Operating Financial Measures

We believe that investors’ understanding of our performance is enhanced by our disclosure of the following non-GAAP financial measure.  Our methods of calculating this measure may differ from those used by other companies and therefore comparability may be limited.

Operating income is income before cumulative effect of change in accounting principle, after-tax, excluding:

•realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments which are reported with realized capital gains and losses but included in operating income,

•amortization of deferred policy acquisition costs (“DAC”) and deferred sales inducements (“DSI”), to the extent that they resulted from the recognition of certain realized capital gains and losses,

•(loss) gain on disposition of operations, after-tax, and

•adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years.

Net income is the GAAP measure that is most directly comparable to operating income.

We use operating income to evaluate our results of operations. It reveals trends in our insurance and financial services business that may be obscured by the net effect of realized capital gains and losses, (loss) gain on disposition of operations and adjustments for other significant non-recurring, infrequent or unusual items.  Realized capital gains and losses and (loss) gain on disposition of operations may vary significantly between periods and are generally driven by business decisions and economic developments such as market conditions, the timing of which is unrelated to the insurance underwriting process.  Moreover, we reclassify periodic settlements on non-hedge derivative instruments into operating income to report them in a manner consistent with the economically hedged investments, replicated assets or product attributes (e.g. net investment income and interest credited to contractholder funds) and by doing so, appropriately reflect trends in product performance.  Non-recurring items are excluded because, by their nature, they are not indicative of our business or economic trends. Therefore, we believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. We use adjusted measures of operating income in incentive compensation. Operating income should not be considered as a substitute for net income and does not reflect the overall profitability of our business.

The following table reconciles operating income and net income.

	Three Months Ended June 30,						Six Months Ended June 30,
($ in millions)	Est. 2005			2004			Est. 2005			2004
Operating income	$	126		$	118		$	269		$	242
Realized capital gains and losses	24			(68		)	25			(95		)
Income tax (expense) benefit	(9		)	24			(9		)	34
Realized capital gains and losses, after-tax	15			(44		)	16			(61		)
DAC and DSI amortization relating to realized capital gains and losses, after-tax	(43		)	(3		)	(104		)	(13		)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	(10		)	(7		)	(22		)	(11		)
Loss on disposition of operations, after-tax	(1		)	(9		)	(4		)	(11		)
Income before cumulative effect of change in accounting principle, after-tax	87			55			155			146
Cumulative effect of change in accounting principle, after-tax	—			—			—			(175		)
Net income (loss)	$	87		$	55		$	155		$	(29	)

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Operating Measures

We believe that investors’ understanding of our performance is enhanced by our disclosure of the following operating financial measures.  Our method of calculating these measures may differ from that used by other companies and therefore comparability may be limited.

Premiums and deposits is an operating measure that we use to analyze production trends for sales.  It includes premiums on insurance policies and annuities and all deposits and other funds received from customers on deposit-type products, which we account for under GAAP as increases to liabilities rather than as revenue.

The following table illustrates where premiums and deposits are reflected in the condensed consolidated financial statements.

	Three Months Ended June 30,						Six Months Ended June 30,
($ in millions)	Est. 2005			2004			Est. 2005			2004
Total Premiums and deposits	$	3,784		$	4,221		$	7,513		$	7,476
Deposits to contractholder funds	(3,291		)	(3,588		)	(6,540		)	(6,331		)
Deposits to separate accounts	(379		)	(323		)	(722		)	(690		)
Change in unearned premiums and other adjustments	(1		)	(159		)	4			(153		)
Premiums	$	113		$	151		$	255		$	302

New sales of financial products by Allstate exclusive agencies is an operating measure that we use to quantify the current year sales of financial products by the Allstate Agency proprietary distribution channel.  New sales of financial products by Allstate exclusive agencies includes annual premiums on new insurance policies, initial premiums and deposits on annuities, net new deposits in the Allstate Bank, sales of other companies’ mutual funds, and excludes renewal premiums.  New sales of financial products by Allstate exclusive agencies for the second quarter of 2005 and second quarter of 2004 totaled est. $588 million and $518 million, respectively.  New sales of financial products by Allstate exclusive agencies for the six months ended June 30, 2005 and 2004 totaled est. $1.10 billion and $1.01 billion, respectively.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ALLSTATE LIFE INSURANCE COMPANY
	By	/s/ Samuel H. Pilch
	Name:		Samuel H. Pilch
	Title:		Group Vice President and Controller
July 25, 2005

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