A financial services giant will be using a contingent deferred annuity to increase older investors’ confidence in mutual funds.

Allstate Corp., Northbrook, Ill., says it will be selling the Allstate Guaranteed Lifetime Income annuity to some purchasers of the Allstate ClearTarget Retirement Funds mutual funds.

The ClearTarget funds are “target date” funds, with managers who automatically try to shift toward more conservative investment allocations as participants near their anticipated retirement dates.

The Guaranteed Lifetime Income annuities will be available to consumers who buy the funds aimed at workers ages 50 to 80 who intend to retire in 2005, 2010 or 2015, Allstate says.

The annual fee associated with the guarantee will be 1% of the fund account value, Allstate says.

Allstate Life Insurance Company, the company issuing the guarantee annuity, is responsible for backing the guarantees.

Allstate notes that it has the right to limit availability of the guarantees to holders of individual retirement accounts.