PruLife Survivorship Index UL

Transcription

1 PRULIFE SURVIVORSHIP INDEX UL PruLife Survivorship Index UL HE LP ING YOU BUILD A GREATER LE GACY. Issued by Pruco Life Insurance Company or Pruco Life Insurance Company of New Jersey

2 ABOUT THIS BROCHURE This brochure is intended to provide an overview of the key features of PruLife Survivorship Index UL. This brochure does not cover all of the terms and conditions of the policy or riders. For additional details, you must review the forms of the policy and riders, illustrations, and related disclosures. Your financial professional can provide you with a detailed illustration that includes additional information and important considerations about this product. In fact, the best way to understand how this life insurance policy works is with the help of a financial professional and a policy illustration. An illustration can show you the effects of various interestcrediting rates on your policy; and a financial professional can help you assess and offer solutions to meet your needs.

3 PRULIFE SURVIVORSHIP INDEX UL Protect & Grow What You ve Built Protecting and growing the wealth that you ve worked so hard to build over the years is not something to approach lightly. You want to protect what you have, build upon it if you can, and not suffer excessive taxation for yourself or your heirs. PRULIFE SURVIVORSHIP INDEX UL CAN HELP YOU BUILD A GREATER LEGACY. Keep your hard-earned wealth in your control today and tomorrow knowing you don t have to sacrifice growth potential for guarantees. You can get what you want for your legacy with this one powerful life insurance policy. PROTECTION GROWTH PROTECT YOUR LEGACY Efficiently transfer your wealth to your heirs when you re both gone. Ensure there are sufficient liquid assets to pay estate taxes and expenses. Protect against market-based losses. HELP YOUR LEGACY GROW Increase the value of your policy by potentially growing the cash value. Access the cash value if you need it with a loan or withdrawal. Enhance the value of your legacy over time for your heirs. Your financial professional can show you how PruLife Survivorship Index UL can help. THE ADVANTAGE OF CASH VALUE One of the key features of this policy is its ability to generate cash value. Cash value is a pool of money that can grow as interest accumulates in the policy. Over time, the policy may accrue a meaningful amount of cash value that you can use in different ways, which are discussed in later sections. 1

4 PROTECTION Protect Your Legacy with PruLife Survivorship Index UL This is permanent life insurance that insures two people in one policy with the death benefit paid to your beneficiary(ies) when both of the insured people die. It gives you a cost-effective and efficient way to pass on your legacy while retaining control while you re alive. It can help: PROVIDE A TAX-FREE LEGACY FOR YOUR HEIRS. One of the most significant advantages of life insurance is that the death benefit is generally income tax-free to the beneficiaries (according to IRC 101(a)). The death benefit that they receive won t increase their taxes and can also be used to offset any other taxes that might have to be paid on your estate, reducing their inheritance. HAVE GUARANTEED PROTECTION. You can feel confident knowing that your coverage can last with a No-Lapse Guarantee that ensures your policy will stay active, as long as sufficient premiums are paid and other guarantee requirements are met. There s a deeper discussion about how you can get and maintain the guarantee in the section Details About How Your Policy Works, Flexible Premiums and a No-Lapse Guarantee. Your financial professional and an illustration will also explain the guarantee in greater detail. 2

5 PRULIFE SURVIVORSHIP INDEX UL PROTECTION OTHER WAYS PRULIFE SURVIVORSHIP INDEX UL CAN HELP. The protection that the policy offers can be used in many different ways, including the three below. COVER AN ESTATE TAX BURDEN. The taxes that are due upon your and your spouse s deaths can significantly reduce the value of an inheritance and could cause financial hardships. This life insurance policy pays the death benefit upon the death of the surviving insured and can provide the money needed to pay taxes and liabilities. This policy is a smart and efficient way for your heirs to handle this burden by helping to ensure they will have funds available to pay taxes that may be due. CREATE A FAIR LEGACY (EQUALIZE YOUR ESTATE). Life insurance can be a way to provide your children or loved ones with an equal inheritance. If you own a business or farm where only some of your children are involved, leaving the business only to them may create an unequal inheritance for your other children. This life insurance policy can be used to equalize the overall inheritance for your other children, through the death benefit. And, because life insurance benefits are generally income tax-free, there s little fear of taxes depleting the amounts available. CARE FOR SPECIAL NEEDS. Having responsibility for someone with special needs requires careful planning for the future. You want to ensure his or her health and well-being but also protect any government benefits. The use of a Special Needs Trust can be an important part of any plan for someone with special needs and can keep you in control of his or her financial future even when you re gone. This policy can be a cornerstone to ensure your loved one is protected. TRUSTS A POWERFUL ESTATE PLANNING TOOL When used in conjunction with a life insurance policy, trusts can provide tax advantages other financial arrangements can t offer. This policy is designed to enhance such advantages. An Irrevocable Life Insurance Trust (ILIT) can be established in a way that passes the largest amount of assets to your beneficiaries and future generations. Your financial professional and other trusted advisors can discuss trust options in conjunction with this policy in much more detail. 3

6 GROWTH Your Policy Can Grow to Enhance Your Legacy CASH VALUE GIVES YOU FLEXIBLE OPTIONS IN YOUR POLICY. You can get more for your money with PruLife Survivorship Index UL because of its tax-deferred growth potential. As you pay your premiums, you choose to have part of that payment allocated to one of the two interest-bearing accounts. Their growth increases cash value, which can be used in two ways: ACCESS TO YOUR POLICY S CASH VALUES. 1 A valuable element of the policy, you can use the cash value for any reason, such as for a gift, a special purchase, or an emergency. You have easy access to cash values by taking a tax-advantaged loan or withdrawal.* THE POTENTIAL FOR A LARGER LEGACY. As cash value increases in the accounts, so does the potential for your overall death benefit if you choose a variable Death Benefit option. (See page 9 for an explanation.) If you don t take it out of the policy through a loan or withdrawal, any cash value accumulated can enhance the death benefit. Ultimately, this increase can give your heirs a larger overall death benefit when both people who are insured die. * This is an attractive feature, but there can be consequences to your policy guarantees if you re not careful. If you take a loan or withdrawal, depending on the amount you take, your policy can terminate or your premiums may need to increase to keep the policy in force. We always suggest that you speak with your financial professional before taking a loan or withdrawal. Account Options for Growing Cash Value The policy offers two different Interest Accounts, the Fixed Account and the Indexed Account, to grow cash value. Each account offers taxdeferred growth but earns it in different ways, and both offer protection from market-based downturns. You can choose only one account at a time, but you can shift to the other, if you change your mind. 4

7 PRULIFE SURVIVORSHIP INDEX UL GROWTH FIXED ACCOUNT MORE PREDICTABLE GROWTH. The Fixed Account offers the advantage of consistent, positive growth. Interest is earned daily and is based on the declared annual Fixed Account Interest Rate. It offers a minimum interest-crediting rate that is guaranteed to never be less than 2%. The Fixed Account interest crediting rate is subject to change throughout the year. 15% 10% 5% 0% -5% FIXED ACCOUNT INDEXED ACCOUNT HIGHER RETURN POTENTIAL. -10% You have an opportunity to earn more cash value through a potentially higher interest rate in this account. The amount of index interest credited is based on the performance of the S&P 500 Index (excluding dividends): Interest is credited annually. The index interest credited is based on an annual pointto-point period. This means the interest is based on 12 months of performance from the point it begins on the 15th of a month until the point it ends on the 15th of that same month one year later. 15% 10% MARKET UPSWINGS CAP The amount credited is subject to a Growth Cap and Floor. See the example to understand how these features work to your advantage. You can choose for your money to earn either 100% Index Interest or a combination of Index and Fixed Interest. 5% 0% -5% INDEXED ACCOUNT FLOOR Cash value allocated to the Indexed Account is not a direct investment in the S&P 500 itself. The policy is not a variable contract or an investment. -10% MARKET DOWNSWINGS 5

8 GROWTH S&P 500 RETURN INDEX INTEREST CREDITED INDEXED ACCOUNT CREDITING EXAMPLE Assumes a 10% Growth Cap, 0% Floor, and 100% index interest allocation: 15% 10% 5% 0% -5% -10% -15% YEAR 14% S&P 500 RETURN INDEXED INTEREST CREDITED 1 10% 14% 10% 2-10% 0% 3 5% 5% 0% -10% 5% 5% CAP FLOOR }} YEAR 1: If the S&P 500 has a 14% gain for the 12-month period your cash value has been in the Indexed Account, and the cap is 10%, you will be credited 10%. }} YEAR 2: If the S&P 500 has a performance of -10% for the 12-month period your cash value has been in the Indexed Account, and the floor is 0%, you will be credited 0%. YEAR 1 YEAR 2 YEAR 3 }} YEAR 3: If the S&P 500 has a 5% gain for the year, you will be credited 5%. For a more detailed explanation of how your cash value can earn interest in the accounts, please refer to page 11, Details About How Your Policy Works, How your net premiums move to the interest accounts section, or a policy illustration, or speak with your financial professional. Check online at for the current Fixed Interest Account rate, Index Growth Cap, and Floor. 6

9 PRULIFE SURVIVORSHIP INDEX UL GROWTH The Index Growth Cap and Floor Help You Manage Market Volatility INDEXED ACCOUNT INTEREST RATE vs. S&P 500 INDEX Average annual historical Index Growth Rate (excluding dividends) for a 25-year period. 40% 30% 20% 10% 0% -10% -20% -30% -40% YOU BENEFIT FROM POTENTIAL HIGHER RETURNS AND ARE PROTECTED FROM MARKET-BASED LOSSES. The Index Growth Cap and the floor work in very straightforward ways. The cap is the maximum amount of interest that will be credited to the Indexed Account in a 12-month period of time, regardless of changes to the S&P 500. The floor is the least amount of interest that can be credited to your account and is 0%. This means that if the S&P 500 performs below 0%, no cash value from your account will be lost based on market S&P performance, 500 nor INDEXED will any be gained. I N DE X RE T U RN ACCOUNT YEAR RATE INTEREST RATE The visual below shows the S&P performance over the last 25 years. Note that when the S&P 500 has had years of extreme growth, the most interest earned would be 10% because of the cap. Conversely, in the years where the S&P 500 has experienced great 1991 loss, there would be no 11market-based losses, thanks to the floor. Please note that 1992 policy 4.46 charges still apply 4.46 so if no interest is earned during a 12-month period 1993 of time 7.06 because of negative 7.06 S&P 500 performance, the policy charges will 1994 reduce the cash value S&P 500 INDEX RETURN RATE INDEXED ACCOUNT INTEREST RATE This is a hypothetical example for illustrative purposes only. Past performance is not a guarantee 11 of future results. This does not reflect the performance of an actual account 2013 value This chart 11 does not take into consideration the cost of insurance, policy charges, and fees; 2014these 7.81 are all deducted 7.81 on a monthly basis from an account regardless of the policy s performance. CAP FLOOR 7

10 GROWTH A STRATEGY TO HELP BALANCE MARKET UNCERTAINTY. You can try to avoid the negative impact of bad timing due to when cash value is moved into the Indexed Account by using the Designated Transfer Amount option. You select the dollar amount, called the Designated Transfer Amount, which will be transferred into the Indexed Account on a monthly basis. It spreads the premium over multiple segments within the Indexed Account, each of which may end with a different interest rate. This diversifies your market-based interest risk, in the spirit of don t put all of your eggs in one basket. By transferring cash value into the Indexed Account on a monthly basis, you have the potential opportunity to earn a higher total amount of interest than if you had one large transfer into a segment when the market is performing poorly. Please note, however, that diversifying the timing of the amounts transferred does not guarantee a higher credited amount of interest. For a detailed discussion of how money moves into the two accounts, what happens when you pay your premium, and other important information about this policy, please look at the section Details About How Your Policy Works. 8

11 PRULIFE SURVIVORSHIP INDEX UL Other Features to Customize the Policy for You THE DEATH BENEFIT OPTIONS HELP INCREASE YOUR LEGACY. The type of death benefit option you choose will make a difference when it s time for your policy claim to be paid to your beneficiary. You can choose between Fixed (Type A), Variable (Type B), or Return of Premium (Type C). Choosing the Variable or Type B Death Benefit Option will increase the total amount that is paid to your beneficiaries because it will pay the face amount plus any net cash values that have accumulated through the interest-bearing accounts. Please note that any loans or withdrawals will reduce the overall death benefit. FIXED (TYPE A) VARIABLE (TYPE B) RETURN OF PREMIUM (TYPE C) The death benefit generally remains constant. It is usually equal to the face amount. The amount payable at death is generally equal to the face amount minus any outstanding loans. The death benefit generally changes in direct relation to the value of your Contract Fund. The death benefit proceeds will generally equal the face amount plus the value of the Contract Fund minus any outstanding loans. The death benefit generally varies in direct relation to total premiums paid into the contract, minus any withdrawals. The death benefit proceeds will generally equal the face amount plus the total premiums paid into the contract, minus any loans and withdrawals. Total Death Benefit Total Death Benefit Face Amount Total Death Benefit Face Amount Face Amount Contract Fund Contract Fund Contract Fund Contract Fund Premiums Paid Contract Fund Riders Make Your Policy More Valuable Your financial professional can provide you with costs and additional details including exclusions, limitations, and terms for keeping them in force. FEEL ADDITIONAL CONFIDENCE WITH FEATURES YOU MAY WANT. GUARANTEED POLICY SPLIT RIDER ICC15 PLI or PLI Maintain coverage if you and your spouse get a divorce. This feature will allow the policy to be split into two individual life insurance policies. There is no additional charge for this rider. ESTATE PROTECTION RIDER ICC15 VL 194 C-2015 or VL 194 C-2015 Ensure your estate tax liabilities are taken care of if the unexpected happens. If you and the other insured die within 4 years of the policy issue date, the death benefit can increase by up to 100%. There is an additional charge for this rider. [ENHANCED CASH VALUE RIDER ICC15 PLI or PLI With Death Benefit Type C ICC15 PLI 492E-2015 or PLI 492E-2015 Have access to higher early year cash surrender values in case you need to surrender your policy. There is an additional charge for this rider.] 9

12 Details About How Your Policy Works PruLife Survivorship Index UL has features that are important to understand so you can make sure your policy is working the way you hope. Here are additional details about it. Please speak with your financial professional for further explanation about these aspects of this policy. THINGS YOU SHOULD KNOW ABOUT YOUR PREMIUM PAYMENTS. YOU PAY YOUR PREMIUM. The premiums you pay, less any policy charges and taxes, become your Contract Fund. The Contract Fund is used to pay ongoing policy charges and will determine, in part, whether your contract will remain in force or go into default. The Contract Fund is also used to determine the amount of cash value available to you for loans and withdrawals. PREMIUMS YOU PAY - CHARGES & TAXES NET PREMIUMS FEES & CHARGES CHARGES ARE TAKEN OUT. There are different types of policy charges that apply to cover the cost of offering insurance benefits and certain features, and can impact your policy s cash value. CONTRACT FUND ACCESS TO CASH VALUE Premium-based charges: These charges are applied to each premium and include an administrative charge of 2.50% and a sales expense charge of 5.5%. Monthly charges: These are ongoing charges within the policy. Administrative Charges These charges include a per policy fee ($7.50 current, $10.00 max); an asset-based charge (0.75% for first 30 policy years); and a charge per thousand of coverage, which varies by gender, issue age, duration, premium class, and rating class of the insureds. Cost of Insurance (COI) These charges, which help cover the risk the insurance company is taking on the policy, are specific to each policy; they are based on factors such as gender, issue age, premium class, rating class, and policy face amount. The insurance contract provides the maximum rates the company may charge. Rider Charges Some optional riders and benefits have additional charges associated with them. Interest loans: While interest on any outstanding loan is not technically a policy charge, a loan balance will accrue with interest on a daily basis. Transactional charges: May be assessed when you elect or exercise certain provisions and benefits, including taking a withdrawal. Charges for cancelling your policy: If you choose to cancel your policy within the first 14 years, you will incur a surrender charge. The surrender charge, which declines over 14 years, will reduce the policy s cash surrender value in the early years. The policy s cash surrender value is the Contract Fund less the surrender charge and any outstanding loan [(unless the Enhanced Cash Value Rider is elected).] 10

13 PRULIFE SURVIVORSHIP INDEX UL FLEXIBLE PREMIUMS AND A NO-LAPSE GUARANTEE. The policy s No-Lapse Guarantee ensures that, for a certain time period, your policy will stay active no matter what happens to your policy s values. Generally, the more premiums you pay, the longer the guarantee will last. However, the length of the adjustable No-Lapse Guarantee period can be dialed up or down, based on: The timeliness of your premium payments. The amount of your premium payments. The frequency of your premium payments. Taking any policy loans or withdrawals. Changes to the death benefit. The No-Lapse Guarantee may not extend for the life of the policy. It is important that you pay your scheduled premiums when they are due. Missed or late premium payments may shorten or eliminate the policy s guarantee. Payments to restore the guarantee may be higher than those you were originally paying. Please also note that, by paying only the minimum premium required, you may be forgoing the potential to build tax-deferred cash value. HOW YOUR NET PREMIUMS MOVE TO THE INTEREST ACCOUNTS. As you pay your premiums, you decide if you want your money to go in the Fixed Account or the Indexed Account. All premiums are initially deposited into the Fixed Account; either your money can stay in that account and earn Fixed Interest or it can be moved into the Indexed Account where you have the potential to earn a higher return it s your choice. FIXED ACCOUNT All premiums are initially deposited into the Fixed Account. If you ve chosen that your money be allocated to the Fixed Account, your net premiums (after fees and charges) will stay in the Fixed Account and will earn a predictable, Fixed Rate of interest. 100% of eligible funds may be allocated to this account. INDEXED ACCOUNT All premiums are still initially deposited into the Fixed Account. If you ve chosen that your money be allocated to the Indexed Account, you have the option of either having your entire net premiums (after fees and charges) transferred to the Indexed Account all at once or selecting a Designated Transfer Amount. All transfers occur on the 15th of the month. Any time money is transferred to the Indexed Account, an Index Segment is created. The Index Segment begins on the day it s created and matures 12 months from that date. When an Index Segment matures, it earns interest based on the change in the S&P 500 Index (which excludes dividends) for that 12-month period of time, subject to the Index Growth Cap and Floor. Has a participation rate of 100%. The participation rate determines the percentage of the gain (if any) in the designated index that will be credited to the policy, subject to the Index Growth Cap and Floor. 11

14 INDEX GROWTH CAP AND FLOOR The Index Growth Cap is the maximum amount of interest that can be credited to an Index Segment. It is subject to change, but will never be less than 3%. The Index Growth Cap is declared for each Index Segment in advance of a segment being created and will not change for the duration of the segment. Changes are not tied to the performance of the underlying index and may be based on interest rates, market volatility, and other factors. Go to to find out the latest Index Growth Cap. The Floor is the minimum amount of interest that can be credited to an Indexed Interest Segment. It is subject to change, but will never be less than 0%. The Floor is declared for each Index Segment in advance of a segment being created and will not change for the duration of the segment. Note that a segment will never earn greater interest than the Index Growth Cap and never earn less than the Floor. EARN A COMBINATION OF INDEXED AND FIXED INTEREST You can elect to have 100% of your money earn Indexed Interest or you can choose for your money to earn a combination of Indexed and Fixed Interest. You can specify the type of interest credited to each Index Segment. For example: Specify Index Interest Percentage (between 10% and 100%) 80% Specify Fixed Interest Percentage (between 0% and 90%) 20% Total Interest 100% CHANGING ACCOUNT OPTIONS You have the ability to change account selections after your policy has been issued. All you need to do is send a request to Prudential. Changing from the Fixed Account If you have chosen the Fixed Account but decide to change to the Indexed Account, any money in the Fixed Account will be allocated to the Indexed Account (either the full amount or your DTA election) on the next available Transfer Date (on the 15th of the month). Changing from the Indexed Account If you have chosen the Indexed Account and decide to change your account allocation instructions, any money in an active Index Segment will be transferred upon reaching its segment maturity date. ALTERNATE CONTRACT FUND (ACF). This policy features an alternate contract fund, which guarantees a cumulative return of 1% annually on the contract fund value, regardless of Indexed Account performance. The ACF is determined by adding the net premiums, deducting the same withdrawals and charges as the Contract Fund (except for the Asset Based Charge), and crediting an annual rate of 1.00% each year. If the ACF is greater than the calculated Contract Fund, the ACF is used in place of the Contract Fund for most policy provisions, including the calculation of surrender value, available loan amount, amount at risk, and death benefits. See your policy for more information on the impact of the alternate contract fund on these and other values. 12

15 PRULIFE SURVIVORSHIP INDEX UL MAINTAIN YOUR POLICY TO STAY ON TRACK. Reviewing policy values is important. Monitoring your policy on a regular basis can help ensure that your cash value is earning interest the way you anticipated. Variations in interest crediting will affect your policy s cash values. If the amount that s credited is lower than anticipated, your premiums may need to increase to keep your policy in force in later years. You may need to make adjustments to your premiums to help make sure your protection lasts as long as you need it to. Once each year you will receive an annual statement of policy values. This statement will provide: The value of your policy as of the last day of the policy year. Details on new index segments created or matured during the statement period. For matured segments, you will see the interest rate credited on the segment, based on the performance of the index and applicable caps, floors, and any specified index interest percentages or fixed interest percentages you have selected. The current Indexed Account Cap and Floor as of the date the statement is produced. These rates will be subject to change. Work with your Financial Professional to further explore how this policy can help secure your legacy. Ask for a customized illustration today.

16 PRUDENTIAL THE CHOICE FOR THE LONG ROAD For over 140 years, Prudential Financial has been making promises to clients to be there when you need us most and has been living up to these promises by paying claims and standing by our clients families. Prudential Financial is a worldwide financial leader with a long tradition of serving the public interest. Prudential Financial has approximately 50 million customers, and the well-known Rock symbol is an icon of strength, stability, expertise, and innovation that has stood the test of time. Produced with the environment in mind Produced on Recycled Paper with 10% Post-Consumer Waste 1 Loans are charged interest; they are usually not taxable. The current standard loan rate is a low 3%; the preferred loan rate is 2.05%. Withdrawals are generally taxable to the extent they exceed basis in the policy. Loans that remain unpaid when the policy lapses or is surrendered while the insureds are alive will be taxed immediately to the extent of gain in the policy. For policies that are Modified Endowment Contracts (MECs), distributions (including loans) are taxable to the extent of income in the policy; an additional 10% federal income-tax penalty may apply. Consult your tax advisor for advice about your own situation. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ( SPDJI ). It has been licensed for use by The Prudential Insurance Company of America for itself and affiliates including Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey (collectively Pruco Life ). Standard & Poor s, S&P, and S&P 500 are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ); and these trademarks have been licensed for use by SPDJI; and sublicensed for certain purposes by Pruco Life. Pruco Life s products are not sponsored, endorsed, sold, or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates. None of such parties make any representation regarding the advisability of purchasing such product(s); nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index. S&P 500 Index values are exclusive of dividends. PruLife Survivorship Index UL is issued by Pruco Life Insurance Company in all states except in New York, where, if available, it is issued by Pruco Life Insurance Company of New Jersey. Both are Prudential Financial companies located in Newark, NJ, and are solely responsible for their own financial condition and contractual obligations. The contract number is SIUNLG-2015 or ICC15 SIUNLG Guarantees are based on the claims-paying ability of the issuing insurance company. Prudential and its representatives do not give legal or tax advice. Please consult your own advisors. We do not provide tax, accounting or legal advice. Clients should consult their own independent advisors as to any tax, accounting or legal statements made herein. Life insurance policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. A financial professional can provide you with costs and complete details. Investment and Insurance Products: Not Insured by FDIC, NCUSIF, or Any Federal Government Agency. May Lose Value. Not a Deposit of or Guaranteed by Any Bank, Credit Union, Bank Affiliate, or Credit Union Affiliate. Prudential, Prudential Financial, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities Prudential Financial, Inc. and its related entities Ed. 04/2017 Exp. 10/30/2018