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Why People Like Annuities

Why People Like Annuities

People include annuities as a part of their overall financial strategy because they can offer guaranteed income, tax deferral, investment choices and legacy protection. But there is more to the story.

People also like them because they feel annuities help make it easier to manage a budget in retirement, allow them to get income in retirement more efficiently than many other financial products, and can help plan for a more secure future.*

*Greenwald and Associates, 2015 Guaranteed Lifetime Income Study, consumers ages 55-75.

 

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Common Annuity Myths

 

Myth #1: Annuities are too complicated

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Truth

Annuities can be complicated, especially if you add an optional living benefit. But a variable annuity with an optional living benefit can provide guaranteed income for your client’s entire life. And if your client co-owns a variable annuity with a spouse, their variable annuity can be structured to guarantee income for the duration of both of their lives. A “simple” product just can’t offer features like that.

If you have any questions about our annuities, you can call your wholesaler or the Sales Desk for answers. And we can provide you with client materials that help explain our variable annuities in easy-to-understand language.

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Myth #2: Annuities have higher fees than other investments

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Truth

Yes, there are fees associated with annuities. However, in exchange for these fees your clients can take advantage of valuable benefits such as a guaranteed minimum death benefit and income guarantees — none of which may be available with other investment products. Because investors are transferring their risk to an insurance company, fees are charged for this added value. Many investors find the trade-off between higher fees and higher value to be a sensible one.

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Myth #3: Clients are afraid they’ll lose control of their money

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Truth

With previous generations of annuities, your clients needed to give up control of their money in return for lifetime income. However, some of today’s annuities are far more flexible, giving your clients the option of withdrawing a portion of their funds before electing income, sometimes without a penalty and some may even offer access after your clients begin taking income. It is true that once your clients annuitize, they can’t access the money or transfer it out of the annuity and into other investment vehicles.

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Myth #4: The sales process is difficult to maneuver

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Truth

We help you every step of the way in our sales process, and then help you manage your business with us. We are constantly looking for ways to make doing business with us easier for you. For instance, with our Account Viewer, you have an easy and secure way to view your client account details on new and current business at any time and on any device.

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Partner with us, and we’ll invest in you.

Contact your wholesaler today and have our team of experts and resources work for you.

Call us at 1-844-207-6976

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footnote

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 on the prospectus page or by contacting the National Sales Desk. Your clients should read the prospectus carefully before investing.

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 reduce the account value and the living and death benefits.

Annuity contracts contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. A licensed financial professional can provide complete details.

Prudential Annuities and its distributors and representatives do not provide tax, accounting, or legal advice. Please consult your own attorney or accountant.

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

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 for more information.

Withdrawals in excess of the Annual Income Amount impact the value of your client’s benefit and can also affect the certainty of their income. An excess withdrawal occurs when your client’s cumulative Lifetime Withdrawals exceed the Annual Income Amount in any annuity year. If an excess withdrawal is taken, only the portion of the Lifetime Withdrawal that exceeds the remaining Annual Income Amount will proportionally and permanently reduce your client’s Protected Withdrawal Value and your client’s Annual Income Amount for future years. If an excess withdrawal reduces the account value to zero, no further amount would be payable and the contract terminates.

For Compliance Use Only: 1002164-00005-00

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