Annuity Product Feature Comparison

Transcription

1 Annuity Product Feature Comparison Pruco Securities, LLC Insurance and annuity products issued by The Prudential Insurance Company of America and Pruco Life Insurance Company (except in NY) and Pruco Life Insurance Company of New Jersey (the foregoing, together with Pruco Securities, LLC, are Prudential Financial companies (Prudential )) or insurers unaffiliated with Prudential Form Usage/Completion Instructions: This form is to be used for financing and replacement transactions where either an existing life insurance policy or annuity contract is to be replaced by a new annuity contract. The Producer/Agent and Applicant must discuss those facts relevant to the sale, as documented, with both the Producer/Agent and Applicant to sign page 4. SECTION A PRODUCT FEATURE COMPARISON Company Name Contract/Policy Number Issue Date (Month/Year) Type of Product Provide current statement EXISTING POLICIES OR CONTRACTS TO BE REPLACED A B Proposed Annuity Annuity Product Fixed Variable Equity-Indexed Market Value Adjustment? No Yes If Fixed Annuity: Current Int. Rate: % Min. Guar. Rate: % Life Product Whole Life Variable Life Universal Life Other: Annuity Product Fixed Variable Equity-Indexed Market Value Adjustment? No Yes If Fixed Annuity: Current Int. Rate: % Min. Guar. Rate: % Life Product Whole Life Variable Life Universal Life Other: Value/Initial Deposit or Face Amount, if Life Insurance $ $ $ N/A N/A Annuity Product Fixed Variable Equity-Indexed Market Value Adjustment? No Yes If Fixed Annuity: Current Int. Rate (excluding additional interest rate): Minimum Guaranteed Rate: % % Current Estimated Surrender Charges (if any) For the proposed, indicate the surrender charge schedule in percentages. $ For the existing policy or contract, include any charges that may be imposed at the time of surrender. Current Death Benefit (if other than face amount shown) $ $ $ For the existing policy or contract, include any charges that may be imposed at the time of surrender. 1 year % 7 year % 2 year % 8 year % 3 year % 9 year % 4 year % 10 year % 5 year % 11 year % 6 year % N/A (continued) page 1 of 6

2 SECTION A Only Complete for Annuities Enhanced Annuity Benefits For the existing contract(s) indicate the benefits currently selected. For the proposed contract indicate the benefits selected. Refer to Section F for general descriptions of enhanced annuity benefits. Existing contract/policy fees verified from what source? PRODUCT FEATURE COMPARISON (continued) EXISTING POLICIES OR CONTRACTS TO BE REPLACED A B Death Benefits Currently Selected Death Benefits Currently Selected Basic DB Other If other, describe here: Income Benefit Income Type Source: Date: Internal Systems Current Client Statement Name of Contact: Outreach to Company Time: Basic DB Other If other, describe here: Income Benefit Income Type Death Benefits Selected Basic DB Return of Purchase Payments Death Benefit Legacy Protection Plus Death Benefit Living Benefits Highest Daily Lifetime Income v3.0 Spousal Highest Daily Lifetime Income v3.0 Highest Daily Lifetime Income v3.0 with Highest Daily Death Benefit Spousal Highest Daily Lifetime Income v3.0 with Highest Daily Death Benefit Highest Daily Lifetime Income v3.0 with Highest Annual Death Benefit 3 Spousal Highest Daily LifetimeIncome v3.0 with Highest Annual Death Benefit 3 Prudential Defined Income Single Life Prudential Defined Income Spousal Lives If other, describe here: Indicate Total Annual Fees and Charges. (Includes Mortality & Expense and Administration charges along with fees associated with Enhanced Annuity Benefits) 1, 2 % % % Answer if replacing an annuity: Are any of the Enhanced Annuity Benefits selected on the proposed contract currently available to be added to the existing contract? Yes No If yes, explain the reason for this replacement as opposed to adding the desired Enhanced Annuity Benefits to the existing contract and indicate the charges associated with those benefits. In the preceding 36 months, has the client replaced another annuity at any Broker Dealer (preceding 60 months for the states of California and Minnesota)? Yes No If yes, list each replacement and the circumstances and the reason(s) why each replacement occurred, including, if available, names of the applicable insurers and annuities, length of time the replaced annuity was owned, surrender charges incurred, benefits gained and/or lost, etc. 1 Excluding the annual maintenance fees and separate sub-account management fees. 2 For the Prudential Premier Investment VA, the Total Annual Fees and Charges is comprised of an account value based insurance charge (B Series is 0.55%; C Series is 0.68%; assessed daily) and a premium based insurance charge (B Series is 0.55%; C Series is 0.67%; assessed quarterly). If the Return of Purchase Payments Death Benefit was elected, the Total Annual Fees and Charges also includes, for both the B and C Series, an additional 0.15% account value based charge and a 0.15% premium based charge. Please see your prospectus for additional information. 3 Only available in NY page 2 of 6

3 SECTION B THE EXISTING POLICY OR CONTRACT IS BEING REPLACED BECAUSE: (Provide SPECIFIC reason) THE PROPOSED CONTRACT WILL FURNISH THE CUSTOMER WITH THE FOLLOWING BENEFITS: IMPORTANT CONSIDERATIONS IF YOU ARE CONTEMPLATING REPLACING YOUR EXISTING POLICY OR CONTRACT A replacement may not be in your best interest, or your decision could be a good one. You should make a careful comparison of the costs and benefits of your existing policy or contract and the proposed policy or contract. One way to do this is to ask the company or agent that sold you your existing policy or contract to provide you with information concerning your existing policy or contract. This may include an illustration of how your existing policy or contract is working now and how it would perform in the future based on certain assumptions. Illustrations should not, however, be used as a sole basis to compare policies or contracts. You should discuss the following with your agent to determine whether replacement and/or financing your purchase makes sense: PREMIUMS: Are they affordable? Could they change? Are they flexible? You re older are premiums higher for the proposed new policy? How long will you have to pay premiums on the new policy? On the old policy? POLICY VALUES: New policies usually take longer to build cash values and to pay dividends. Acquisition costs for the old policy may have been paid; you will incur costs for the new one. What surrender charges does the contract/policy have? What expense and sales charges will you pay on the new policy? Does the new policy provide more or less insurance coverage? Does your current policy provide additional coverage for yourself, spouse or children through available riders? Does current policy provide a loan provision? If so, you should compare the loan interest rates. Have you considered the differences between a fixed and variable death benefit, given your particular needs and circumstances? INSURABILITY: If your health has changed since you bought your old policy, the new one could cost you more, or you could be turned down. You may need a medical exam for a new policy. Claims on most new policies for up to the first two years can be denied based on inaccurate statements. Suicide limitations will begin anew on the new coverage and generally last for two years. OTHER ISSUES TO CONSIDER FOR ALL TRANSACTIONS: What are the tax consequences of buying the new policy? Is this a tax-free exchange? (See your tax advisor.) Is there a benefit from favorable grandfathered treatment of the old policy under the federal tax code? Will the existing insurer be willing to modify the old policy? How does the quality and financial stability of the new company compare with your existing company? An annual maintenance fee may apply. Typically, the fee is the lesser of a fixed amount (generally $25 or $35 per year) or a percentage of the contract value (approximately 2% per year). (continued) page 3 of 6

4 IF YOU ARE SURRENDERING AN ANNUITY OR INTEREST SENSITIVE LIFE PRODUCT: Will you pay surrender charges on your old contract? Have you considered interest rate guarantees for the old and/or new contract, including any Market Value Adjustment, and whether it is negative or positive? Have you compared the contract charges or other policy expenses? IF YOU ARE SURRENDERING AN ANNUITY: Do you know what the total cost of the annuity replacement or exchange will be? Have you considered your needs for liquid cash assets? Will the new product features result in an extension of the period for which surrender charges will apply? Have you considered whether higher mortality, expense or other charges or fees may apply to the new contract? Have you considered any new product features that may be available, whether those features are important to you, and are worth any additional costs, given your particular needs and circumstances? Have you considered the loss of any product features on your existing annuity product, such as an enhanced living or death benefit or protected income value? Do you know what the tax consequences are if you replace or exchange an existing contract or policy? Are surrender charges based on contract issue date or deposit date? If you have had another annuity replacement within the past 36 months (preceding 60 months for the states of California and Minnesota), are you aware that an annuity is meant to be a long-term investment? Have you considered that for variable annuity contracts, there are separate sub-account management fees associated with the contract being replaced as well as the proposed contract? IF YOU ARE KEEPING THE OLD POLICY AS WELL AS THE NEW POLICY: How are premiums for both policies being paid? How will the premiums on your existing policy be affected? Will a loan be deducted from death benefits? What values from the old policy are being used to pay premiums? SECTION C PRODUCER/AGENT S REPLACEMENT CERTIFICATION A. Have you discussed the advantages and any disadvantages of replacement/financing with the applicant? Yes No B. Have you determined that replacement/financing is appropriate for the applicant? Yes No C. By signing below, I acknowledge I have determined that the replacement is suitable, taking into consideration: whether the customer would incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits (such as death, living, or other contractual benefits), or be subject to increased fees or charges (such as mortality and expense fees, sub-account management fees, or charges for riders and similar product enhancements); whether the customer would benefit from product enhancements and improvements; whether the customer has replaced another annuity within the preceding 36 months (preceding 60 months for the states of California and Minnesota); and that I have provided the customer with a current prospectus (as applicable) and any supplements for the Annuity (which may include summary descriptions of the underlying investment options); have used only current approved sales material; and have left copies of the sales material noted in Section E with the applicant. I certify that, to the best of my knowledge, all information contained in this form is true, accurate, appropriate and complete. Producer/Agent Signature Printed Name Date Month Day Year BY SIGNING BELOW, I ACKNOWLEDGE AND CONFIRM THAT THE INFORMATION COMPLETED IN SECTIONS A, B, C and D (if completed) OF THIS FORM IS TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE AND THAT THE ADVANTAGES AND DISADVANTAGES OF THIS TRANSACTION HAVE BEEN FULLY EXPLAINED TO ME BY THE PRODUCER/AGENT AND ARE FULLY UNDERSTOOD BY ME. Applicant s Signature Printed Name Date Month Day Year page 4 of 6

5 SECTION D CONSIDER THE FOLLOWING FOR FINANCING TRANSACTIONS Complete this section for all life to annuity financing transactions. Please answer these questions if you are financing using your existing life insurance to purchase a new annuity. These questions provide a summary of the factors you should consider in making your decision. For variable contracts, you should carefully review the prospectus before making a decision. Do you understand that the proposed financing may reduce the death benefit under the policy? Yes No Do you understand that the death benefit payable under the contract may not be as large as may be payable under a life insurance policy and does not pass to your beneficiary income-tax free? Yes No Do you understand the charges that will be imposed under the proposed annuity contract? Yes No Do you understand that withdrawals from an annuity contract are taxed differently than a life insurance policy and may also be subject to a surrender charge? Yes No Do you understand that taking a loan or withdrawal from your life insurance policy will reduce the death benefit if the loan or withdrawal is not repaid and that interest will accrue on the loan? Yes No Do you understand that if your policy lapses or is surrendered with an outstanding loan, you may have taxable income? Yes No Since the values and premiums stated on this form may change over time, the estimated date upon which you must begin making premium/purchase payments from your own funds for the current policy and/or proposed contract may also change. The date when policies are estimated to terminate or payments to resume are based on the assumed continuation of current (or guaranteed factors, and the payment of any premiums or interest due on loans). The estimated dates may occur earlier or later depending upon a variety of factors, including: the actual dividends paid or investment returns on your policy, which are not guaranteed and can vary; whether you pay premium payments on your current policy and actual interest on loans when due; and the interest rate(s) and charges applicable. Please indicate below the sources of funds that will be used to help fund your current policy or proposed contract: A dividend estimated to be in the amount of $ will be taken from the value of my current policy each (mode) starting in year for years*. $ will be used to pay premiums for the current policy and $ will be used to pay premiums for the proposed policy. A loan (include an Automatic Premium Loan election) in the amount of $ will be taken from the value of my current policy each (mode) bearing a current loan interest rate of %**, starting in year for years*. $ will be used to pay premiums for the current policy and $ will be used to pay premiums for the proposed policy. A partial surrender or withdrawal in the amount of $ help pay premiums/purchase payments for the proposed policy. will be taken from the value of my current policy to Premiums of $ will be paid out of pocket for the current policy. $ will be used to pay premiums/ purchase payments for the proposed policy. * If the policy values of your current policy are used as a source of funding for the purchase of an additional policy or contract, your current policy may terminate. In order to maintain the desired death benefits for both policies, you may be required to make premium payments for both policies. Ask your producer/agent. **This may be a variable rate. Ask your producer/agent. If the policy values of your CURRENT POLICY are used as a source of funding for the purchase of an annuity contract, your CURRENT POLICY will terminate on (date) assuming there are no future changes in dividend or other non-guaranteed elements of your policies, and you use the policy values to pay premiums as described and you make no out-of-pocket payments. In order to maintain the desired death benefit from your current policy, you must begin making total out-of-pocket payments in the amount of $ to be paid each (mode). For variable contracts Your licensed financial professional can provide you with an illustration on your current policy showing a range of hypothetical results based on the proposed financing and several investment return and charges scenarios, some of which may show the policy terminating. After the termination date any payments for both the current policy and the proposed contract will need to be made out of pocket. THIS WORKSHEET IS A SUMMARY OF IMPORTANT FACTORS TO CONSIDER. IT CAN BE ACCOMPANIED BY A FULL POLICY ILLUSTRATION FOR YOUR CURRENT POLICY WHICH YOU SHOULD CAREFULLY CONSIDER BEFORE MAKING A DECISION. page 5 of 6

6 SECTION E REPLACEMENT SALES MATERIAL CHECKLIST Please check below the sales materials used in your presentation. There is no need to submit a copy of these materials to the Home Office. These materials will be sent by the Home Office to the replaced insurer for their review when required by state regulations. Sales Material. Includes product specific brochures, illustrations, or similar type materials used in the sales presentation (including electronic materials). Sales material does NOT include fact finders, Survivor Needs Analysis, Asset Allocation Questionnaire and Output, or similar type materials. I represent that I have left copies of the following sales material with the applicant: lllustrations Optional Benefits Brochure Investments Brochure Product Brochure Other Company approved materials (please include brochure name) SECTION F GLOSSARY OF TERMS Basic Death Benefit* is equal to the greater of: The sum of all Purchase Payments (not including any purchase credits) adjusted by withdrawals The sum of your account value in the sub accounts and the fixed rate options (less the amount of any Purchase Credits applied within 2 months prior to the date of death) *Does not apply to the Premier Investment Variable Annuity where the basic death benefit is return of your Account Value. GMWB (Guaranteed Minimum Withdrawal Benefit) This benefit guarantees that owners can make withdrawals, subject to a specified maximum per year, that will equal at least a certain minimum (e.g., premiums paid less withdrawals). Owners are not entitled to lifetime withdrawals under this benefit. Typically, benefit has no waiting period. GLWB (Guaranteed Lifetime Withdrawal Benefit) This benefit guarantees that owners can make withdrawals, subject to a specified maximum per year, that will equal at least a certain minimum (e.g., premiums paid less withdrawals) or for life. Owners are not required to annuitize to receive this benefit. Typically, benefit has no waiting period. GMAB (Guaranteed Minimum Accumulation Benefit) This benefit entitles the contract owner to receive the minimum amount, equal to some percentage of premiums received less withdrawals, at a specified future date (i.e., maturity). GMIB (Guaranteed Minimum Income Benefit) This benefit allows the contract owner to receive lifetime income based on a guaranteed amount and annuity rates specified within the benefit, at or after maturity. Owners must choose to annuitize after benefit maturity in order to utilize the benefit. IAB (Income Appreciator Benefit) IAB is defined as an optional, supplemental income benefit that provides an additional income amount during the accumulation period or upon annuitization. The Income Appreciator Benefit is designed to provide you with additional funds that can be used to help defray the impact taxes may have on distributions from your contract. page 6 of 6