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Prudential Annuities Launches Prudential Defined Income Variable Annuity
and Highest Daily Lifetime Income v2.1
Newark, N.J.—To help address the changing financial challenges of retirement, Prudential Annuities, the domestic annuity business of Prudential Financial, Inc. (NYSE: PRU), today announced the launch of its new Prudential Defined Income® variable annuity and Prudential Highest Daily Lifetime Income® v2.1, the latest version of its innovative Highest Daily variable annuity optional benefit.
Prudential Defined Income is a long-term retirement investment that provides clients with the security of knowing exactly what their guaranteed lifetime income will be, whether they take income immediately or in the future.
Prudential’s new defined income product, available to investors as young as age 45, invests 100 percent of the premiums in the AST Long Duration Bond Portfolio, where returns accumulate on a tax deferred basis.
Prudential Defined Income offers:
- Guaranteed lifetime income growth: The income withdrawal amount is guaranteed to grow every day until lifetime income begins, while maintaining the flexibility of access to the investment.
- Defined lifetime income: The amount of income guaranteed for life and the level of deferred income growth is known at issue.
- Flexibility and Control: Investors decide when to take income, how much income to take, and continue to have access to their account value if they need it. Provides investors with control of their assets for legacy planning.
- Bond portfolio: Designed to create higher yield through investment primarily in a diversified mix of longer-duration investment grade bonds.
Prudential Defined Income provides investors in The Retirement Red Zone® access to a higher level of guaranteed minimum income than generally found with other variable annuities. For example, at launch, PDI offers clients aged 65 a 5% annual lifetime withdrawal rate based on their premiums and the opportunity to grow their guaranteed income amount by 5.5% annually for as long as they defer taking lifetime income. The product is also designed so that these rates can be dynamically adjusted for new contracts based on prevailing interest rates as well as other factors.
“Now more than ever, Americans need product alternatives that help them transition from accumulation to retirement income. Prudential Defined Income is our latest innovation: a bond-driven strategy that offers income certainty, the benefit of the potential for higher expected yields of the AST Long Duration Bond Fund, and age-based guaranteed income rates,” says Bruce Ferris, head of Sales and Distribution for Prudential Annuities. “Prudential Defined Income provides the income certainty that many clients are seeking, while helping to alleviate their concerns with equity market volatility. The addition of Prudential Defined Income allows us to provide guaranteed income options for investors that are both equity and bond based.”
Prudential Annuities also announced today the launch of Highest Daily Lifetime® Income v2.1 and Spousal Highest Daily Lifetime Income v2.1, which replaces Highest Daily Lifetime Incomev2.0 and Spousal Highest Daily Lifetime Income v2.0 benefits.
Prudential’s Highest Daily Lifetime Income benefits, available for an additional fee with a variable annuity from Prudential issuing companies, allow investors the opportunity to ‘lock in’ the highest daily value of their annuity contract, for income purposes, each day the market is open. The benefits offer a Protected Withdrawal Value (the basis for guaranteed lifetime income) based on the Highest Daily account value plus an immediate 5% annual compounded growth until the 10th benefit anniversary or until lifetime withdrawals begin, whichever is sooner.
Depending on age at the first withdrawal of lifetime income, individuals will receive between 3% - 6% of their protected withdrawal value annually. Spousal versions are .50% lower for all age bands.
“Our Highest Daily benefits provide investors with a strong minimum income guarantee, the benefits of daily lock-in of account value highs, and the potential to benefit from rising equity markets,” said Ferris. “Reflecting the current interest rate environment, we have continued to adjust our Highest Daily benefit to ensure that it provides a compelling value proposition both for clients and Prudential.”
Launched in 2006, 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 portfolio 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 10th benefit anniversary or the first lifetime withdrawal, whichever is sooner.
- Innovative investment platform: Offering 19 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.
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/
Investors 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 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 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. 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.
All guarantees, including optional benefits, are backed by the claims-paying ability of the issuing company and do not apply to the underlying investment options.
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.
Optional 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 for more information.
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 AST 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:
(i) The difference between the account value and the Protected Withdrawal Value;
(ii) How long you have owned the benefit;
(iii) The amount invested in, and the performance of, the permitted subaccounts;
(iv) The amount invested in, and the performance of, the Bond Portfolio; and
(v) 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.
The Prudential Defined Income Variable Annuity offered by Prudential Financial companies is available at an annual product charge of 1.10%, plus an additional benefit fee of 0.80%, for a total annual product charge of 1.90%. We reserve the right to increase the benefit fee up to a maximum of 1.50% at any time on or after the 5th annuity anniversary on existing contracts. This would increase the total annual product charge to a maximum of 2.60%. Note: There is also an additional fee for the AST Long Duration Bond Portfolio.
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 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 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 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 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 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 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.
Issued on contracts: P-BLX/IND(2/10), P-CR/IND(2/10), P-BBND(2/13) or state variation thereof
Issued on riders: P-RID-HD(2/13), P-RID-HD(2/13)-NY, P-RID-HD-HDB (2/13), P-RID-HD-HAB (2/13)-NY, P-RID-LI-DB(2/13), P-RID-LI-DB(2/13)-NY