Income You Can Count On Prudential Defined Income Variable Annuity

What is a variable annuity?

A variable annuity is a contract with an insurance company. It's a long-term investment designed for retirement purposes. You invest money in professionally managed investment portfolios, where it accumulates tax-deferred. 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. When you retire, your investment can be used to generate a stream of regular income payments that are guaranteed for as long as you live. In addition, variable annuities may provide a guaranteed death benefit for your beneficiaries. It is important to remember that annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force.

Why does the company behind the annuity matter?

When the time comes for you to use the benefits that are offered by a variable annuity, it is important to remember that all guarantees, including the optional benefits, are backed by the claims-paying ability of the issuing insurance company and do not apply to the underlying investment options.

Who can help me determine if an annuity is right for me?

Your financial professional can help you determine if a variable annuity is suitable for you. Prudential Annuities and its distributors and representatives do not provide tax, accounting, or legal advice. Please consult your own attorney or accountant when making important investment decisions. Prudential Annuities does not provide investment advice. The selections you choose together with your financial professional are all dependent on your investment goals and your risk tolerance.

What happens if I need access to my money?

There are limitations and restrictions when making withdrawals. 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 proportionately.

What are the costs associated with the Prudential Defined Income Variable Annuity?

Defined Income 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 7th 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 Multi-Sector Fixed Income Portfolio. Additional fees, such as withdrawal fees, transfer fees and administrative fees also apply. Please see the prospectus for additional information.

What are the limitations and restrictions I need to consider?

Defined Income does not provide a diverse set of investment choices nor does it provide the option to allocate your purchase payments or account value among a variety of investment choices with different investment styles, objectives, strategies and risks. The performance of your account value will depend entirely on the performance of the AST Multi-Sector Fixed Income Portfolio. It's important to remember that 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.
Lastly, the benefit is part of your annuity and you may not cancel the benefit. However, upon specified events, the benefit may be terminated. See the prospectus for more information.

What happens if I take excess withdrawals from my account?

Withdrawals in excess of the Guaranteed Income Amount impact the value of your benefit and can also affect the certainty of your income. An excess withdrawal occurs when your cumulative Lifetime Withdrawals exceed your Guaranteed Income Amount in any annuity year. If an excess withdrawal is taken, only the portion of the Lifetime Withdrawal that exceeds the remaining Guaranteed Income Amount will proportionally and permanently reduce your Guaranteed 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.

What should I know about The Morningstar Rating^TM?

The 3-year rating for this fund is four stars out of 177 Corporate Bond investments. The 5-year rating for this fund is N/A out of 148 Corporate Bond investments. The 10-year rating for this fund is N/A out of 79 Corporate Bond investments. The Morningstar Rating^TM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10- year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

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 from your financial professional. Please read the prospectus carefully before investing.

P-BBND(2/13), P-RID-LI-DB(5/14) et al, or state variation thereof.

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