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TMCNet:  Prudential Annuities Launches Highest Daily Lifetime Income v3.0

[February 10, 2014]

Prudential Annuities Launches Highest Daily Lifetime Income v3.0

NEWARK, N.J. --(Business Wire)--

Prudential Annuities, the domestic annuity business of Prudential Financial, Inc. (NYSE:PRU), today announced the launch of a new version of its innovative Highest Daily variable annuity optional living benefits, which allow investors to 'lock in' the highest daily value of their annuity contract, for income purposes, each day the market is open.

Responding to unprecedented market demand for products that guarantee retirement income, Highest Daily Lifetime Income v3.0 and Spousal Highest Daily Lifetime Income v3.0 offer:

Dynamic Rate Setting: the flexibility to change the roll-up rate and/or the withdrawal percentages for new contracts in response to market conditions. The introductory rates include a 5 percent roll-up rate, and withdrawal percentages that range from 3-6 percent, including a 5 percent guaranteed lifetime annual withdrawal starting at age 65. Spousal versions are .50 percent lower for all age bands.

Secure Value Account: designed to help minimize volatility, the secure value account is a fixed-rate account that provides growth and stability to the annuity's account value regardless of market conditions. Ten percent of each purchase payment will be allocated to the secure value account.

Investment Platform Updates: the addition of two new asset allocation portfolios: the AST T. Rowe Price Growth Opportunities Portfolio, an 85/15 (equity/bond) model; and the AST FI Pyramis® Quantitative Portfolio, a 65/35 (equity/bond) model. This brings the total number of asset allocation portfolios to 22.

"Today's launch reinforces our commitment to providing Americans with income certainty in retirement," said Bruce Ferris, president, Prudential Annuity Distributors. "Our innovative Highest Daily benefits continue to provide investors with a strong minimum lifetime income guarantee, daily lock-ins of account value highs for income purposes, and the potential to benefit from rising equity markets, as well as help secure protection in unfavorable ones."

Highest Daily Lifetime Income v3.0 replaces Highest Daily Lifetime Income v2.1 and Spousal Highest Daily Lifetime Income v2.1 benefits, subject to state approval. Launched in 2006 and available for an additional fee with a variable annuity from Prudential issuing companies, Prudential Annuities' Highest Daily suite of living benefits offer daily lock-ins for retirement income purposes-and immediately grow them until the first lifetime withdrawal or 10 years from election. Key features include:

  • Daily step-ups: 100% certainty in capturing account value gains for income purposes, until first lifetime withdrawal.
  • Daily benefit base growth: Benefit base grows every day regardless of market conditions due to immediate credit of the growth rate, until the 10th benefit anniversary or the first lifetime withdrawal, whichever is sooner.
  • Innovative investment platform: Offering 22 actively managed asset allocation portfolios that help to drive daily step-ups.
  • Proprietary Risk Management: A proprietary mathematical formula that monitors an investor's account daily and automatically transfers amounts between the chosen variable investment portfolios and the AST Investment Grade Bond Portfolio.
  • Highest Daily Death Benefit: Offers legacy protection through an optional integrated death benefit that locks in account highs daily, for an additional fee.

"Our growing range of income solutions enables financial professionals to help Americans meet the challenges of retirement income planning, while ensuring we provide a compelling value proposition both for clients and Prudential," said Ferris.


Prudential Financial, Inc. (NYSE: PRU), a financial services leader, has operations in the United States, Asia, Europe, and Latin America. Prudential's diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential's iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/

All references to income certainty and guarantees, including optional benefits, are backed by the claims-paying ability of the issuing company and do not apply to the underlying investment options.

Investors should consider the features of the contract and the underlying portfolios' investment objectives, policies, management, risks, charges and expenses carefully before investing. This and other important information is contained in the prospectus, which can be obtained from your financial professional. Please read the prospectus carefully before investing.

Variable annuities are issued by Pruco Life Insurance Company (in New York, by Pruco Life Insurance Company of New Jersey), Newark, NJ (main office) and 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.

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.

A variable annuity is a long-term investment designed for retirement purposes. 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, sometimes referred to as an additional income tax. Withdrawals, other than from IRAs or employer retirement plans, are deemed to be gains out first for tax purposes. Withdrawals reduce the account value, death benefits, and the annual amount of living benefit available.

Asset allocation does not ensure a profit or protect against a loss.

Variable annuities offered by Prudential Financial companies are available at a total annual insurance cost of 0.55% to 1.95%, with an additional fee related to the professionally managed investment options. Note: All products may not be available through all third party broker/dealers. {[HD Lifetime Income v3.0 is available for an additional annual fee of 1.00% based on the greater of the account value and the Protected Withdrawal Value.] [Spousal HD Lifetime Income v3.0 is available for an additional annual fee of 1.10% based on the greater of the account value and the Protected Withdrawal Value.] [HD Lifetime Income v3.0 with Highest Daily Death Benefit is available for an additional annual fee of 1.50% based on the greater of the account value and the Protected Withdrawal Value.] [Spousal HD Lifetime Income v3.0 with Highest Daily Death Benefit is available for an additional annual fee of 1.60% based on the greater of the account value and the Protected Withdrawal Value.] [HD Lifetime Income v3.0 with Highest Annual Death Benefit is available for an additional annual fee of 1.40% based on the greater of the account value and the Protected Withdrawal Value.] [Spousal HD Lifetime Income v3.0 with Highest Annual Death Benefit is available for an additional annual fee of 1.50% based on the greater of the account value and the Protected Withdrawal Value.]} Please see the prospectus for additional information.

Highest Daily Lifetime Income [v3.0] suite of benefits uses a predetermined mathematical formula to mitigate some of the financial risks we incur in providing the guarantees under the optional benefits through all market cycles. Each business day, the formula determines if any portion of the account value in the permitted subaccounts (asset allocation portfolios), including any DCA MVA options needs to be automatically transferred into or out of the AST Investment Grade Bond Portfolio (the "Bond Portfolio"). Amounts transferred by the formula depend on a number of factors unique to your clients' individual annuity and include:

(i) The difference between the account value and the Protected Withdrawal Value;

(ii) How long your client has owned the benefit;

(iii) The amount invested in, and the performance of, the permitted subaccounts, the Bond Portfolio, and the Secure Value Account and;

(iv) The impact of additional purchase payments made to, and withdrawals taken from, the annuity.

The formula will not transfer amounts to or from the Secure Value Account. On any given day, no more than 30% of the account value in the Permitted Sub-accounts (plus any DCA MVA options) may be transferred to the Bond Portfolio pursuant to the formula. Therefore, at any given time, some, most or none of the account value from the permitted subaccounts 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. Your clients may not allocate purchase payments or transfer account value into or out of the Bond Portfolio.

The formula could mean that your clients miss opportunities for investment gains in the Permitted Sub-accounts while amounts are allocated to the Bond Portfolio. The formula's allocation of amounts to the Bond Portfolio however, could also protect your clients' account value from losses that may occur in the permitted subaccounts. Please note: We are not providing investment advice through the formula. See the prospectus for complete details.

The Protected Withdrawal Value is only used to calculate the guaranteed lifetime income and the charge for the benefit. 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.

Please note lock-ins do not apply to the account value. The account value is not guaranteed, can fluctuate, and may lose value.

Equity Securities Risk - The value or price of a particular stock or other equity or equity-related security owned by a portfolio could go down and you could lose money.

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. The prices of longer-term bonds are generally more sensitive to changes in interest rates than those of shorter-term bonds.

© [2013] The Prudential Insurance Company of America.

Issued on contracts: P-BLX/IND(2/10) and P-CR/IND(2/10), et al. or state variation thereof.

Issued on riders: P-RID-HD(3/13), P-RID-HD(3/13)-NY, P-RID-HD(2/14) and P-RID-HD(2/14)-NY, P-RID-HD-HAB(2/14)-NY, P-RID-HD-HAB(2/14)

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