With Defined Income You Can Offer Your Clients:
This hypothetical example is for illustrative purposes only. It does not reﬂect a specific annuity, an actual account value or the performance of any investment. 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 is a variable annuity?
A variable annuity is a contract with an insurance company. It's a long-term investment designed for retirement purposes. Your clients 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 your clients retire, their investment can be used to generate a stream of regular income payments that are guaranteed for as long as they live. In addition, variable annuities may provide a guaranteed death benefit for their 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 your clients 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.
- Can Prudential help me determine if an annuity is right for my clients?
It's up to you to determine if a variable annuity is suitable for your clients. Prudential Annuities does not provide investment advice. The selections you choose together with your clients are all dependent on their investment goals and their risk tolerance.
- What happens if my clients need access to their 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 limitations and restrictions my clients need to consider?
Defined Income does not provide a diverse set of investment choices nor does it provide the option to allocate your clients' purchase payments or account value among a variety of investment choices with different investment styles, objectives, strategies and risks. The performance of your clients' 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 clients' annuity and they may not cancel the benefit. However, upon specified events, the benefit may be terminated. See the prospectus for more information.
- What should my clients know about The Morningstar RatingTM?
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 RatingTM 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 by contacting the National Sales Desk. Your clients should 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.
Issued on contracts: P-BBND(2/13), P-RID-LI-DB(5/14) et al, or state variation thereof.
For Compliance Use Only: 1001977-00006-00