NEWARK, N.J.–(BUSINESS WIRE)–Prudential Annuities, the domestic annuity business of Prudential
Financial, Inc. (NYSE:PRU), today adjusted its popular annuity optional
benefits, which allow investors to ‘lock in’ the highest daily value of
their annuity contract, for income purposes, each day the market is open.
Highest Daily Lifetimesm 6 Plus and Spousal Highest Daily
Lifetimesm 6 Plus can be purchased for an additional fee with
a variable annuity from Prudential issuing companies. They offer a
Protected Withdrawal Value based on 6% annual compounded growth on the
highest daily account value and daily opportunities to capture greater
lifetime income with a 4-6% income stream, depending on age at first
Lifetime Withdrawal, guaranteed for life.
The Highest Daily Lifetime 6 Plus optional benefits replace the Highest
Daily Lifetime 7 Plus benefits in all states where Highest Daily
Lifetime 6 Plus has been approved.
“The peace of mind that guaranteed retirement income can provide in
today’s uncertain economic climate is immeasurable,” said Stephen
Pelletier, president of Prudential Annuities. “Today’s announcement
reflects our commitment to offering these valuable guarantees, while
ensuring that in the event of significant market declines, the
protection we provide responsibly manages risk for our clients as well
as for our company.
“Highest Daily Lifetime 6 Plus offers one of the strongest lifetime
income guarantees in the industry,” Pelletier said.
Demonstrating the value investors are placing on retirement income
guarantees in light of the turbulent economy, overall election rates for
Prudential Annuities’ award winning optional living benefits on variable
annuities grew to 90% during the second quarter of 2009. Total account
values with guaranteed withdrawal benefits for life at the end of that
same period were $23.2 billion.
Educational Video Developed
To help investor’s learn more about guaranteeing their retirement
income, Prudential Annuities also announced today the launch of a new
, which features a seven-minute educational video, simple navigation,
and consumer-friendly language about HD Lifetime 6 Plus.
Key Features HD Lifetime 6 Plus and Spousal HD Lifetime 6 Plus include:
Daily Step Ups Before Withdrawals
Begin: HD Lifetime 6 Plus and Spousal HD Lifetime 6 Plus
give investors the opportunity to increase their Protected Withdrawal
Value (the basis for guaranteed lifetime income) every day the market
is open for trading. The Protected Withdrawal Value is determined by
comparing every daily account value growing at an annual 6% compounded
rate of return until an investor’s first Lifetime Withdrawal. The
Protected Withdrawal Value is only available through withdrawals. It
is not available as cash or a lump sum.
Guaranteed Lifetime Income:
HD Lifetime 6 Plus and Spousal HD Lifetime 6 Plus offer a lifetime
annual income stream ranging from 4-6% of the Protected Withdrawal
Value, with the potential for future increases and no annuitization
required. (Annuitization at a particular age may be required by the
terms of the base annuity.)
Proprietary Risk Management Model:
HD Lifetime 6 Plus and Spousal HD Lifetime 6 Plus incorporate the
fundamentals of a proven proprietary risk management model that
monitors an investor’s account daily, and, only if specified by the
model, systematically transfers amounts between the variable
investment portfolios and the AST Investment Grade Bond Portfolio.
Post-Withdrawal Step-Up Opportunities:
After Lifetime Withdrawalsbegin, HD Lifetime 6 Plus and
Spousal HD Lifetime 6 Plus provide annual opportunities for increased
income based on the account’s highest daily value.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with
approximately $580 billion of assets under management as of June 30,
2009, has operations in the United States, Asia, Europe, and Latin
America. Leveraging its heritage of life insurance and asset management
expertise, Prudential is focused on helping approximately 50 million
individual and institutional customers grow and protect their wealth.
The company’s well-known Rock symbol is an icon of strength, stability,
expertise and innovation that has stood the test of time. Prudential’s
businesses offer a variety of products and services, including life
insurance, annuities, retirement-related services, mutual funds,
investment management, and real estate services. 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.
This material was prepared to support the promotion and marketing of
variable annuities available through Prudential. Prudential, its
affiliates, its distributors and their respective representatives do not
provide tax, accounting or legal advice. Any tax statements contained
herein were not intended or written to be used, and cannot be used for
the purpose of avoiding U.S. federal, state or local tax penalties.
Please consult your own independent advisor as to any tax, accounting or
legal statements made herein.
Your needs and the suitability of an annuity product should be carefully
considered before investing. When evaluating your needs, please consider
other variable annuities available from Prudential Financial companies.
Highest Daily Lifetime 6 Plus and Spousal Highest Daily Lifetime 6 Plus
use a predetermined mathematical formula to help manage your guarantee
through all market cycles. Each business day, the formula determines if
any portion of the 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
(ii) How long you have owned Highest Daily Lifetime 6 Plus or
Spousal Highest Daily Lifetime 6 Plus;
(iii) The amount invested in, and the performance of, the permitted
(iv) The amount invested in, and the performance of, the Bond
(v) The impact of additional purchase payments made to and
withdrawals taken from the annuity.
Categories: Uncategorized Tags: bond portfolio, daily lifetime, hd lifetime, highest daily, lifetime income, protected withdrawal, prudential annuities, prudential financial, spousal hd, spousal highest, variable annuities
NEWARK, N.J.–(BUSINESS WIRE)–Prudential Annuities, the domestic annuity business for Prudential
Financial, Inc. (NYSE:
PRU) today launched Legacy
Protection Plus, a new optional enhanced death benefit available on
Prudential’s Premier Retirement variable annuities. Legacy Protection
Plus is designed to help protect, grow and transfer wealth, creating a
legacy for beneficiaries.
“We carefully designed Legacy Protection Plus for investors who have
committed themselves to a lifetime of hard work, investing wisely and
planning for their retirement and beyond. Legacy Protection Plus offers
the ability to protect their legacy, benefit from tax deferral, and
guarantee their legacy will grow regardless of market performance,” said
Jim Mullery, head of Distribution and Sales for Prudential Annuities.
“In addition to being able to control how their payouts are distributed,
Legacy Protection Plus also allows investors who are passionate about a
charity or organization to name it as their beneficiary.”
Legacy Protection Plus offers:
Protection: A roll-up death benefit guarantee that protects an
investor’s legacy no matter how their investments perform.
Growth: Launching at a 7 percent guaranteed simple interest
roll-up rate, one of the highest in the industry, and credited on each
Investment Choices: Ability for investors to either allocate
assets into any of Prudential’s asset allocation models or build their
own custom portfolio, choosing from a range of high-quality investment
strategies to help meet their needs and goals.
Wealth Transfer: Beneficiaries will receive the greater of the
roll-up death benefit, up to 200 percent of the original investment,
or the account value.
Tax Deferral: Investments compound on a tax-deferred basis,
providing control over the timing of taxes as well as tax-free
Legacy Control: Investors have the flexibility to control how
and when their legacy is distributed.
Probate Efficiency: Annuities with properly named beneficiaries
pass outside the probate system, avoiding expense and delay.
“Today’s launch not only reinforces our commitment to the industry, but
showcases our growing range of valuable solutions that enable financial
advisors to help Americans meet their financial planning, retirement and
legacy needs,” said Mullery. Learn
more about Legacy Protection Plus.
About Prudential Financial, Inc.
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 news.prudential.com.
1The roll-up rate and a roll-up cap are set at the time the
contract is issued and will not change for the life of the contract. The
roll-up rate is no longer applied once the roll-up cap is reached.
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.
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. Annuity contracts contain
exclusions, limitations, reductions of benefits, and terms for keeping
them in force. Your licensed financial professional can provide you with
Variable annuities offered by Prudential Financial companies are
available at a total annual insurance cost of 0.55% to 1.95% (depending
on the product chosen) with an additional fee related to the
professionally managed investment options. The benefit fee is in
addition to the fees and charges associated with the basic annuity.
All references to guarantees are backed by the claims-paying ability of
the issuing company and do not apply to the underlying investment
options. Prudential does not provide tax, accounting or legal advice.
Issued on contract/rider P-BLX/IND(2/10), P-CR/IND(2/10),
P-RID-DBROLL(5/17), et al. or state variation thereof.
Categories: Uncategorized Tags: death benefit, financial companies, financial professional, insurance company, investment options, legacy protection, life insurance, nyse pru, original investment, pruco life, prudential annuities, prudential financial, variable annuities
The concepts of variable annuities and mutual funds are quite similar to each other, by the virtue of general mechanism and overall working of the investment and returns. Though the working of the two is quite similar, and the rate of return offered by both types of investments is almost the same, there is a subtle line of difference between these.
How do Variable Annuities Compare to Mutual Funds?
In comparing variable annuities with mutual funds, it is first important to understand the definitions and basic structure of both these types of investments. A mutual fund is said to be an investment vehicle, which is made with the help of a pool of money which is contributed by several members. The pool is sometimes made up of several shares. So basically it’s a large contributed sum of money which the fund managers, systematically invest into several sources that range from companies, corporations, stock markets and money markets.
Mutual funds have an option of reinvesting the returns. The mutual fund company shares the profits made from the investments with the owners of the shares or mutual fund investors. The investment contribution is either a one time payment, or is done in a set of several installments. The repayments or returns are however, done with the help of several payments. In case of reinvestment of the funds, a specified lock-in period is prescribed, before which the share or contribution can be withdrawn.
Now this is the most important part, the returns of a mutual fund are subject to market risks and even if the portfolio of investments is managed by professional fund managers, the returns are always in proportion with the portfolio performance, hence basically a mutual fund is completely subject to all market risks.
An annuity, on the other hand, is principally a contract of insurance wherein the annuitant or the owner of the annuity makes certain payments to the company which like in the case above, invest into professionally managed investment destinations. The company repays the annuity owner or contributor the returns on the basis of periodic intervals.
Now in the case of fixed annuities, the returns are fixed and predetermined. However, in case of variable annuities, the individual repayment is made up of Guaranteed Minimum Income Benefits, meaning that this sum is paid to the annuitant irrespective of the portfolio’s performance. The second part of the returns is compromised of what is known as a bonus. This bonus depends upon the portfolio performance. Thus in short, the returns are partially subject to market risks.
There are equal number of pros and cons of variable annuities, if you compare them with mutual funds. One big advantage of variable annuities is that they have a great death benefit, meaning that the annuitant’s surviving relatives receive a set of returns which are subject to withdrawals from the annuity, if any.
Variable Annuities Vs. Mutual Funds
Here is a table depicting the differences in the two types investments and their features that distinguish them from one another.
|Particulars of Comparison||Variable Annuity||Mutual Fund|
|Type of investment||Quasi-insurance||Investment fund|
|Returns||Semi-variable||Subject to market risk and variable|
|Appropriate investor age||40 years or above||Below 40 years|
|Term /average time period||Mainly long term, reaching about 10 years||Found in all time periods, short, long and medium|
|Withdrawal||Permitted till a certain percentage||Permitted but after a stipulated lock in period|
|Tax implication||Chiefly tax differed, but taxed upon returns||Returns taxes as capital gains|
|Rate of return||Quite low as compared to mutual funds||Higher than mutual funds|
|Level of risk||Less risky than mutual funds||More risky than annuity|
|Guarantee of income||Guarantee of income till a certain point||No guaranteed income|
|Death Benefit||Assured death benefit||No death benefit|
Though you can take help of the aforementioned table, points of comparison and other factors, calculating the rate of return and then assessing and making a decision, always works out.