Allied Life: Policyholder Complaint




                               

          ALLIED LIFE FINANCIAL CORPORATION ANNOUNCEMENT
                Contact Wendell Crosser (515)280-4622                     


Des Moines, Iowa, April 10, 1998-- ALLIED Life Financial Corporation (NASDAQ
symbol ALFC) (the "Company") announced on January 29, 1998 that a complaint had
been filed by Sharlotte G. Harbott, a policyholder of the Company's principal
subsidiary, ALLIED Life Insurance Company ("ALLIED Life"), in Superior Court in
the State of California for the County of Los Angeles.  The Complaint was cast
as a class action and alleged that ALLIED Life fraudulently increased the cost
of insurance rates charged to policyholders in breach of the terms of its
universal life policies, its fiduciary obligations,and its obligations of good
faith and fair dealing toward its policyholders and without adequate notice. 
The plaintiff, an insured under a universal life policy issued by ALLIED
Life, seeks actual, consequential, and punitive damages in unspecified amounts
as well as interest, attorney's fees, an accounting for moneys allegedly
improperly charged to policyholders, and injunctive relief, on behalf of
herself and all policyholders of ALLIED Life with similar universal life
policies.

While the outcome of the litigation remains uncertain, the Company currently
estimates that a reasonable range of cost with respect to this litigation,
including attorney fees, would be, on an after tax basis, $700,000 to
$1,500,000.  Accordingly, the Company has decided to set up an after tax charge
in the amount of $1,320,000 in connection with the lawsuit. The litigation
charge will reduce the first quarter earnings by the amount of $.29 per share. 
The Company expects operating earnings for the first quarter of 1998, before
the litigation charge, to be in line with analysts' expectations.

For the first quarter of 1998, death claims are estimated to be approximately
$2,000,000, net of reinsurance, as compared with $2,326,092 in the first
quarter of 1997.  First quarter earnings are expected to be released after the
close of the market on April 23, 1998.



The Company's estimates set forth in the two immediately preceding paragraphs
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 ("Reform Act").  These forward-looking statements
are made pursuant to the safe harbor provisions of the Reform Act.  Investors
are cautioned that there are important factors that could cause actual results
to differ materially from those in these forward-looking statements.  Such
factors include, without limitation, risks and uncertainties inherent in any
litigation and specifically those uncertainties in predicting how the universal
life policy referred to above may be interpreted by the judge or the jury
hearing the lawsuit allegations and the legal standards found to be applicable.

ALLIED Life Financial Corporation is a holding company that, through its
principal subsidiary, ALLIED Life Insurance Company, underwrites, markets, and
distributes life insurance and annuity products in rural and suburban areas of
the United States. 



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