What is a Variable Annuity?
It's a long-term investment designed for retirement purposes. Your money is allocated to professionally
managed investment portfolios that you select, where it accumulates tax-deferred. When you retire, your
savings can be used to generate a stream of regular income payments that are guaranteed for as long as
you live. In addition, variable annuities provide a guaranteed death benefit for your beneficiaries. Variable
annuities offered by Prudential companies are available at an annual cost of 0.55 basis points to 1.95 basis
points for mortality expense and administration fees, with an additional fee related to the professional
investment options. The fees will vary depending on the underlying annuity and investment options
selected. Variable annuities also offer optional benefits, such as HD Lifetime Income, which, for an additional
annual fee of 1.00% based on the greater of the Account Value and Protected Withdrawal Value, can help
you avoid the risk of outliving your retirement income. Account Value is not guaranteed, is subject to market
fluctuations, and may lose value. The Protected Withdrawal Value is separate from the Account Value, and
not available as a lump sum.
Investment returns and the principal value of an investment will fluctuate so that an investor's units, when
redeemed, may be worth more or less than the original investment. Withdrawals or surrenders may be
subject to contingent deferred sales charges. Withdrawals and distributions of taxable amounts are subject
to ordinary income tax and, if made prior to age 59½, may be subject to an additional 10% federal income
tax penalty. Withdrawals, other than from IRAs or employer retirement plans, are deemed to be gains out
first for tax purposes. Withdrawals reduce the account value and the living and death benefits. A financial
professional can determine if a variable annuity is suitable for his or her client. For more details, see the
product prospectus.
An excess withdrawal occurs when your cumulative Lifetime Withdrawals exceeds the income amount allowed by the
product or living benefit in an annuity year. If an excess withdrawal is taken, only the portion of the Lifetime
Withdrawal that exceeds the remaining income amount for that year will proportionally reduce the guarantee for
future years. If a withdrawal in excess of the income amount reduces the account value to zero, no further amount
would be payable and the contract terminates. Your retirement income guarantees will be reduced if withdrawals in
excess of the total annual income amount are taken.
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Prudential Financial, Inc. of the United States is not affiliated with Prudential plc. which is headquartered in the United Kingdom.
Optional living and death benefits may not be available in every state and may not be elected in conjunction with certain optional benefits. Optional benefits have certain investment, holding period, liquidity, and withdrawal limitations and restrictions. The benefit fees are in addition to fees and charges associated with the basic annuity. Please see the prospectus.
The Highest Daily Lifetime Income suite of benefits uses a predetermined mathematical formula to help us
manage your guarantee through all market cycles. Each business day, the formula determines if any portion
of your account value needs to be transferred into or out of the ASTTM Investment Grade Bond Portfolio (the
"Bond Portfolio"). Amounts transferred by the formula depend on a number of factors unique to your
individual annuity and include:
- The difference between the account value and the Protected Withdrawal Value;
- How long you have owned the benefit;
- The amount invested in, and the performance of, the permitted subaccounts;
- The amount invested in, and the performance of, the Bond Portfolio; and
- The impact of additional purchase payments made to and withdrawals taken from the annuity.
Therefore, at any given time, some, most, or none of the account value may be allocated to the Bond
Portfolio. Transfers to and from the Bond Portfolio do not impact any income guarantees that have already
been locked in. The Protected Withdrawal Value is only used to calculate the guaranteed lifetime income and
the benefit fee. It is separate from the account value and is not available as a lump sum withdrawal. The
account value is not guaranteed, can fluctuate, and may lose value.
Any amounts invested in the Bond Portfolio will affect your ability to participate in a subsequent market
recovery within the permitted subaccounts. Conversely, the account value may be higher at the beginning of
the market recovery; e.g., more of the account value may have been protected from decline and volatility
than it otherwise would have been had the benefit not been elected. Please note: We are not providing
investment advice through the formula. You may not allocate purchase payments or transfer account value
into or out of the Bond Portfolio. See the prospectus for complete details.
Fixed income investments are subject to risk, including credit and interest rate risk. Because of these risks,
a subaccount’s share value may fluctuate. If interest rates rise, bond prices usually decline. If interest rates
decline, bond prices usually increase.
All references to account value assume no investment in any available Market Value Adjustment Options.
The benefit payment obligations arising under the annuity contract guarantees, rider guarantees, or optional
benefits and any fixed account crediting rates or annuity payout rates are backed by the claims-paying
ability of the issuing insurance company. Those payments and the responsibility to make them are not the
obligations of the third party broker/dealer from which this annuity is purchased or any of its affiliates. They
are also not obligations of any affiliates of the issuing insurance company. None of them guarantees the
claims-paying ability of the issuing insurance company. All guarantees, including optional benefits, do not
apply to the underlying investment options.
Fixed income investments are subject to risk, including credit and interest rate risk. Because of these risks,
a subaccount's share value may fluctuate. If interest rates rise, bond prices usually decline. If interest rates
decline, bond prices usually increase.
Your needs and suitability of annuity products and benefits should be carefully considered before investing.
Issued on riders: P-BBND(2/13), P-RID-LI-DB(2/13), P-RID-HD(2/13), et al. or state variation thereof.
You 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 from a financial professional or from the
prospectus page. Read it carefully before investing.
Annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force.
Your licensed financial professional can provide you with complete details.
Variable annuities are 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.
© 2013 Prudential Annuities, Prudential, the Prudential logo, the Rock symbol and The Retirement Red Zone
are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
0165398-00025-00 Ed. 3/2013