PRUDENTIAL PREMIER INVESTMENT VARIABLE ANNUITY With Premier Investment: Clients can benefit from tax advantages, including tax deferral and tax-free transfers An innovative pro-growth fee structure can help your clients grow their assets more efficiently Your clients will have access to a full range of investment strategies You can offer clients an optional Return of Purchase Payments Death Benefit 1004900-00001-00 ORD207961 Ed. 09/2018 1/8 Premier Investment
Tax efficiencies The hidden tax traps When it comes to helping your clients plan for retirement, making them aware of how taxes can affect their investments is key. Here are three hidden tax traps to consider: Turnover ratios Equity mutual funds average an annual 61% turnover rate, actively managed funds average 80%, and alternative funds average 216%. For bonds, taxable bond funds average 129%, and high yield bond funds average 83%. All result in higher taxable gains. 1 Rebalancing Do your clients realize that rebalancing their portfolio selling over-performing investments and buying under-performing investments can create a significant tax liability? Unpredictable year-end distributions Dividend and capital gain distributions can result in taxable events for your clients and may vary substantially from year to year. 1 Morningstar Direct, U.S. Open-End Funds; April 2018. In practical terms, the resulting percentage loosely represents the percentage of the portfolio s holdings that have changed over the past year. The power of tax deferral $176,000 34+33+33G $203,000 $550,000 GROWS TO $171,000 Rebalancing the portfolio would result in a $19,667 taxable event! This is a hypothetical example for illustrative purposes only. It does not reflect a specific annuity, an actual account value or the performance of any investment. Deferring taxes on any investment growth (until withdrawals begin at a later date) means more money will stay invested and working for your clients. Consider that a tax-deferred account growing at 7% will double in about 10 years. However, an investment at a 37% taxable rate will take about 16 years to double, or 6 years longer. ACCOUNT VALUE $400,000 $300,000 $200,000 $100,000 Tax-deferred investment Taxable investment with a 24% annual tax rate Taxable investment with a 37% annual tax rate 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 YEARS $166,666 34+33+33G $166,666 $500,000 $166,667 COST OF REBALANCING $386,968 ($318,096 after 24% tax) ($280,790 after 37% tax) $281,979 $237,051 A tax-deferred account growing at 7% annually will double in about 10 years. A 37% taxable investment will take about 16 years, or 6 years longer. Assumptions: 7% annual growth for all hypothetical accounts. The taxable investments assume taxes are withdrawn at 24% and 37% at the end of every year. Tax-deferred accounts are subject to ordinary income tax at the time of withdrawals. The hypothetical example above is for illustrative purposes only. It is not intended to represent an investment. The chart uses constant rates of return, unlike actual investments which will fluctuate in value, and is not guaranteed. It does not include fees, taxes or portfolio expenses, which would lower performance. It assumes no distributions are made during these periods. Withdrawals from a tax-deferred account are subject to income tax which may reduce the amount of a distribution available for use. However, lower maximum tax rates on capital gains and dividends would make the investment return for the taxable investment more favorable. Changes in tax rates and tax treatment of investment earnings may impact the comparative results. Actual returns will vary. It is important to note that the Years to Double example does not guarantee investment results or function as a predictor of how your clients investment will perform. It is simply an approximation of the impact a targeted rate of return would have. Investments are subject to fluctuating returns and there can never be a guarantee that any investment will double in value. growth rate YEARS TO DOUBLE tax-deferred 24% annual tax rate 37% annual tax rate 7% 10 13 16 2/8 Premier Investment
A pro-growth fee structure Premier Investment was built with an innovative pro-growth fee structure. This differs from a traditional annuity fee structure in that only part of the fee is charged on the account value. The other part is charged on the cumulative premiums. Traditional fee structures typically charge 100% on the account value. The advantage of this design is that your clients will have a lower overall effective fee with any account growth above their cumulative premiums. This can help fuel future growth of their money. Conversely, if your client s account value falls lower than their cumulative premiums, then the premium-based fee will represent a higher percentage of their account value and the effective fee will be higher than a traditional fee structure. Pro-growth in action If your clients are investing for long-term wealth accumulation, our pro-growth fee structure may help them achieve their goals. LOWER EFFECTIVE FEE If the account value grows above the cumulative premiums, then the effective fee declines due to the flat fee charged against the cumulative premiums. Over time, as long as the account value is higher than the cumulative premiums, the effective fee will remain lower than a traditional fee structure. CUMULATIVE PREMIUMS ($) HIGHER EFFECTIVE FEE If the account value falls below the cumulative premiums, then the effective fee will be higher than a traditional fee structure. The hypothetical example does not reflect a specific annuity, an actual account value or the performance of any investment. It does not include fees or portfolio expenses which would lower performance. Premier Investment 3/8
Investment expertise from a brand you trust Put the advantages of Prudential s brand and scale to work for you For over 140 years, Prudential Financial has been helping individuals and institutions manage and grow their wealth, and over that time, the Rock symbol has become an icon for financial strength and stability. Today, Prudential is one of the most recognized companies in the world and manages over $1 trillion in assets. 1 Prudential s PGIM Investments, LLC team is a top 10 global asset manager 2 and serves 22 of the 25 largest corporate U.S. pension plans. 3 The size and scale of Prudential provides us access to investment ideas from the industry s premier money management firms. The result is a diverse range of investments to help your clients plan for a successful retirement. Extensive research and oversight We strive to provide your clients with investments that have the potential for long-term, superior performance. To help us build and manage our innovative platform, we look to the Strategic Investment Research Group (SIRG), which is part of PGIM Investments. SIRG has over 30 years of manager research experience, and its members have an average of 15+ years industry experience. SIRG provides: Research to platforms totaling over $397 billion in assets 1 Experienced professionals that serve as portfolio managers to over $51 billion in assets 1 Access to 300+ asset management relationships 1 SIRG carefully researches portfolios across various asset classes, strategies and styles to uncover who we believe are the best-in-class managers. Through intensive research and rigorous oversight, SIRG: Helps us create a customized investment platform based on sub-advised portfolios Identifies consistent and repeatable performance by using a combination of quantitative and qualitative measures Evaluates a portfolio s active share one measure used to identify skill over luck when evaluating a manager s portfolio relative to its performance 4 Ensures the managers on our platform perform up to our standards If managers underperform, we have a thorough, efficient and swift process for replacing them 89% of our manager replacements, in place for five years or more, have outperformed their index since the manager change; 89% outperform their peers in their category 5 As the final piece of our investment oversight process, a dedicated outside Insurance Fund Board of Trustees has fiduciary responsibility of oversight, approvals and disapprovals of proposals related to our investment platform. Leading-edge investment platforms for our holistic product suite Our full range of investment options from traditional to alternatives can help you create diversified portfolios to help your clients plan for a more secure future. And we design each of our product s investment platforms using the advantages of Prudential s brand and scale to help create positive outcomes for your clients. 1 As of 03/31/2018. 2 Pensions & Investments Top Money Managers list, 5/28/18; based on Prudential Financial total worldwide assets under management as of 12/31/17. 3 Based on U.S. Plan Sponsor rankings in Pensions & Investments as of December 31, 2016, published February 2017. 4 Active share is defined as the proportion of a portfolio s holdings that differ from its benchmark. 5 SIRG Manager Replacement Record 6/30/2017. 4/8 Premier Investment
Insightful investing The Premier Investment platform The Premier Investment Variable Annuity offers a full range of investment strategies and portfolios all in a simple, easy-to-manage platform. Your clients have the freedom and flexibility to invest in any combination of around 60 portfolios that include 40+ single asset class portfolios and a variety of asset allocation portfolios. And our guided models can help you and your clients allocate their money according to their specific investment needs. EQUITY LARGE-CAP GROWTH AST Jennison Large-Cap Growth* AST Loomis Sayles Large-Cap Growth* AST MFS Growth* AST T. Rowe Price Large-Cap Growth* LARGE-CAP BLEND AST AQR Large-Cap* AST ClearBridge Dividend Growth* AST QMA Large-Cap* AST QMA US Equity Alpha* PSF Stock Index LARGE-CAP VALUE AST Goldman Sachs Large-Cap Value* AST Hotchkis & Wiley Large-Cap Value* AST MFS Large-Cap Value* AST T. Rowe Price Large-Cap Value* MID-CAP GROWTH AST Goldman Sachs Mid-Cap Growth* MID-CAP VALUE AST Neuberger Berman/LSV Mid-Cap Value* AST WEDGE Capital Mid-Cap Value* SMALL-CAP GROWTH AST Small-Cap Growth* AST Small-Cap Growth Opportunities* SMALL-CAP BLEND PSF Small Capitalization Stock SMALL-CAP VALUE AST Goldman Sachs Small-Cap Value* AST Small-Cap Value* INTERNATIONAL EQUITY DEVELOPED MARKETS AST International Growth* AST International Value* AST MFS Global Equity* AST QMA International Core Equity* EMERGING MARKETS AST AQR Emerging Markets Equity* AST Parametric Emerging Markets Equity* FIXED INCOME DOMESTIC AST BlackRock/Loomis Sayles Bond* AST BlackRock Low Duration Bond* AST Government Money Market* AST Prudential Core Bond* AST Western Asset Core Plus Bond* HIGH YIELD AST High Yield* INTERNATIONAL AST AB Global Bond* AST Goldman Sachs Global Income* AST Templeton Global Bond* AST Wellington Management Global Bond* EMERGING MARKETS AST Western Asset Emerging Markets Debt* NON-TRADITIONAL AST PIMCO Dynamic Bond* ALTERNATIVES AST Cohen & Steers Realty* AST FQ Absolute Return Currency AST Global Real Estate* AST Jennison Global Infrastructure AST Morgan Stanley Multi-Asset AST Neuberger Berman Long/Short* AST T. Rowe Price Natural Resources* AST Wellington Management Real Total Return* ASSET ALLOCATION AST Columbia Adaptive Risk Allocation AST Emerging Managers Diversified AST Franklin Templeton K2 Global Absolute Return AST Goldman Sachs Global Growth Allocation* AST Managed Alternatives* AST Managed Equity* AST Managed Fixed Income* AST Prudential Flexible Multi-Strategy* AST Quantitative Modeling* AST T. Rowe Price Diversified Real Growth BlackRock Global Allocation V.I. Fund JPMorgan Insurance Trust Income Builder * These subaccounts invest in underlying Portfolios or invest in other Portfolios that are subject to a predetermined mathematical formula applicable to benefits that are not available with this Annuity. Before you allocate to these subaccounts, you should consider the impact the formula will have on each Portfolio s risk profile, expenses and performance. See page 8 (Asset Transfer Program Risk) and the prospectus for additional information. Asset allocation does not ensure a profit or protect against a loss. Diversification does not ensure against loss in a declining market. All investment options may not be available with all broker/dealers. 5/8 Premier Investment
A guided approach to asset allocation Our guided approach includes five examples of diversified allocations based on differing levels of client risk tolerance and the importance of potential portfolio growth in your client s investment strategy. AGGRESSIVE (Target: 100% Equities) MODERATELY AGGRESSIVE (Target: 80% Equities) MODERATE (Target: 60% Equities) MODERATELY CONSERVATIVE (Target: 40% Equities) CONSERVATIVE (Target: 20% Equities) 45+20+25+10C 35+15+20+20+4+6C 30+10+14+25+14+7C 25+10+45+12+8C 13+4+73+4+6C n 40-50% Large-Cap Equity n 15-25% Mid/Small-Cap Equity n 20-35% International/Global Equity n 0% Core Fixed Income n 0% Non-Core Fixed Income n 30-40% Large-Cap Equity n 10-20% Mid/Small-Cap Equity n 15-30% International/Global Equity n 15-25% Core Fixed Income n 0-10% Non-Core Fixed Income n 25-35% Large-Cap Equity n 5-15% Mid/Small-Cap Equity n 10-25% International/Global Equity n 20-30% Core Fixed Income n 10-20% Non-Core Fixed Income n 20-30% Large-Cap Equity n 0% Mid/Small-Cap Equity n 5-20% International/Global Equity n 40-50% Core Fixed Income n 5-15% Non-Core Fixed Income n 10-20% Large-Cap Equity n 0% Mid/Small-Cap Equity n 0-15% International/Global Equity n 70-80% Core Fixed Income n 0-10% Non-Core Fixed Income Managed Asset Allocation a platform built for your clients Through extensive research and analysis, we carefully developed a platform of asset allocation portfolios designed to help your clients successfully navigate market cycles and strategically allocate their money. These asset allocation portfolios may use tactical, unconstrained and alternative strategies to help protect against market volatility, inflation and other investor concerns, while also seeking to take advantage of global market opportunities. Potential risk vs. potential return AST Managed Equity Portfolio AST Prudential Flexible Multi-Strategy Portfolio AST Quantitative Modeling Portfolio AST T. Rowe Price Diversified Real Growth Portfolio POTENTIAL RETURN AST Goldman Sachs Global Growth Allocation Portfolio AST Columbia Adaptive Risk Allocation Portfolio BlackRock Global Allocation V.I. Fund AST Franklin Templeton K2 Global Absolute Return Portfolio AST Managed Alternatives Portfolio AST Managed Fixed Income Portfolio AST Emerging Managers Diversified Portfolio JPMorgan Insurance Trust Income Builder POTENTIAL RISK This illustration is hypothetical and is based on how these portfolios might perform over time, based on their risk and return characteristics. Past performance does not guarantee future results. Premier Investment 6/8
Product specifications Features Specifications Minimum purchase payment Initial: $10,000 / Subsequent: $100 1 Maximum issue age May vary by broker/dealer Latest annuity date 85 (79 if electing the optional Return of Purchase Payments Death Benefit) Contracts may not be issued on or after the 86th birthday of the oldest of all owners and annuitant No later than the first day of the calendar month following the 95th birthday of the oldest of all owners and annuitant Free transfers Ability to make 20 free transfers between investment options each annuity year; $10 per transfer thereafter 2 Death Benefit 3 The basic death benefit is equal to the account value and available at no additional cost Fees and charges B SERIES C SERIES Annual Insurance Charge (M&E&A): Account value-based M&E&A charge 0.55% 0.68% Premium-based M&E&A charge 0.55% 0.67% Annual maintenance fee Contingent Deferred Sales Charge (CDSC) Based on the age of each purchase payment. Assessed on withdrawals in excess of free withdrawal amounts during the first 5 years after each purchase payment is made Free withdrawals Lesser of $50 per year or 2% of the account value Waived if the sum of all purchase payments totals $100,000 or more 5 years: 7%, 7%, 6%, 6%, 5% None Up to 10% of each purchase payment (non-cumulative) per annuity year. Access to 100% of each purchase payment without a CDSC 5 years after it is made Access to the full account value at any time, with no initial sales charge or CDSC Optional Return of Purchase Payments (ROP) Death Benefit 4 Benefit must be elected at contract issue and cannot be cancelled 3 (Available with all investment options) Your clients beneficiaries will receive the greater of: The sum of all purchase payments, reduced proportionally for any withdrawals, or The account value Maximum issue age 79 Death benefit fee: Account value-based fee 0.18% Premium-based fee 0.17% For more information about Premier Investment, please call us at 800-513-0805. Please note: If your clients purchase this Annuity within a tax advantaged retirement plan, such as an IRA, SEP-IRA, Roth IRA, 401(a) plan, or non-erisa 403(b) plan, they will get no additional tax advantage through the Annuity itself. Because there is no additional tax advantage when a variable annuity is purchased through one of these plans, the reasons for purchasing the Annuity inside a qualified plan are limited to the ability to elect the Return of Purchase Payments Death Benefit, the opportunity to annuitize the contract and the various investment options, which might make the Annuity an appropriate investment for your clients. Your clients should consult their tax and financial advisors regarding such features and benefits prior to purchasing this Annuity for use with a tax-qualified plan. Account value-based fees are assessed daily based on an annualized rate charged against the assets allocated to the subaccounts. Premium-based fees are assessed quarterly against the Charge Basis (please see the section of the prospectus called Fees, Charges and Deductions for information on the Charge Basis) and are taken pro-rata from the subaccounts. Withdrawals in excess of growth in the account value reduce the Charge Basis dollar for dollar. Additional fees related to the professionally managed investment options apply. 1 Prudential Annuities reserves the right to limit, restrict, suspend or reject additional purchase payments at any time or on a non-discriminatory basis. 2 Transfers made as part of a Dollar Cost Averaging or Automatic Rebalancing program are not counted toward the 20 free transfers. Please see the prospectus for this and other information regarding transfers. 3 All death benefit protection terminates upon contract annuitization or if your clients account value reaches zero. 4 The optional Return of Purchase Payments Death Benefit may not be available in every state or through all broker/dealers. Fees charged for the death benefit are in addition to fees and charges associated with the basic annuity. We reserve the right to pay a death benefit equal to the account value if we do not receive due proof of death within one year. Certain broker/dealers may require election of this benefit with qualified investments. Premier Investment 7/8
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 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. This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any of your clients or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your client s retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional. 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 death benefits. All products and benefits may not be available in all states or through all broker/dealers. Premier Investment may not be available for qualified investments through all broker/dealers. Mutual funds and annuities have different benefits and risks. For instance, mutual fund fees will likely be lower than total annuity fees and charges. Mutual funds are subject to capital gains taxes, which may be lower than ordinary income taxes. For higher-income taxpayers, income from mutual funds and annuities, including capital gains, may also be subject to the 3.8% tax on investment income in the year that the amounts are included in taxable income. While most traditional VAs assess insurance charges daily based on account value, the insurance charge for the Premier Investment VA is assessed partially on account value and partially on cumulative purchase payments (adjusted for withdrawals). When we refer to the pro-growth charge structure, we are illustrating that when compared to most traditional VAs, any growth in your client s account value will result in an overall insurance charge that represents a smaller percentage of account value (a lower effective charge ). This is because the portion of the charge based on cumulative purchase payments remains constant. Conversely, if your client s account value were to decline below cumulative purchase payments (adjusted for withdrawals), this would result in a higher effective charge. Prudential Annuities and its distributors and representatives do not provide tax, accounting, or legal advice. Please have your clients consult their own attorney or accountant. PGIM Investments LLC and/or AST Investment Services, Inc. serve as the investment advisers to the portfolios of Advanced Series Trust and The Prudential Series Fund, each a registered investment company. These portfolios have been developed by PGIM and AST. All rights reserved. QMA is a wholly-owned subsidiary of PGIM, Inc. (formerly Prudential Investment Management, Inc.) and an indirect, wholly-owned subsidiary of Prudential Financial, Inc. Alternative Investments Risk Alternative investments may use leverage, short sales, derivatives, or engage in other speculative practices. These practices include a high degree of risk and may increase the size and velocity of investment losses. The fees and expenses associated with alternative investments are generally higher than those for traditional investments. Asset Transfer Program Risk Premier Investment offers certain subaccounts that invest in other portfolios or have other portfolios that invest in them which are also available in other variable annuity contracts we offer. Those other variable annuity contracts offer certain optional living benefits that utilize predetermined mathematical formulas to manage the guarantees offered in connection with those optional benefits. These formulas may result in large-scale asset flows into and out of the Portfolio, which could adversely affect the Portfolio, including its risk profile, expenses and performance. For example, the asset flows may adversely affect performance by requiring the Portfolio to purchase or sell securities at inopportune times, by otherwise limiting the subadviser s ability to fully implement the Portfolio s investment strategies, or by requiring the Portfolio to hold a larger portion of its assets in highly liquid securities than it otherwise would hold. The asset flows may also result in high turnover, low asset levels and high operating expense ratios for the Portfolio. The efficient operation of the asset flows depends on active and liquid markets. If market liquidity is strained, the asset flows may not operate as intended which in turn could adversely affect performance. Equity Securities Risk The value of a particular stock or equity-related security held by a Portfolio could fluctuate, perhaps greatly, in response to a number of factors, such as changes in the issuer s financial condition or the value of the equity markets or a sector of those markets. Such events may result in losses to the Portfolio. Fixed Income Securities Risk- Investment in fixed income securities involves a variety of risks, including that: an issuer or guarantor of a security will be unable to pay obligations when due; due to decreases in liquidity, the Portfolio may be unable to sell its securities holdings at the price it values the security or at any price; the Portfolio s investment may decrease in value when interest rates rise. Volatility in interest rates and in fixed income markets may increase the risk that the Portfolio s investment in fixed income securities will go down in value. Risks associated with rising interest rates are currently heightened because interest rates in the U.S. are at, or near, historic lows but may be expected to increase in the future with unpredictable effects on the markets and the Portfolio s investments. International Equity/Debt Risk International equity and debt securities may be adversely affected by: changes in currency exchange rates; differing regulatory and taxation requirements; alternative financial reporting standards, including less publicly available information; and political, social and economic changes. International markets, and in particular Emerging Markets (EM), are generally more volatile than U.S. markets. 2018 Prudential Financial, Inc. and its related entities. Prudential Annuities, Prudential, the Prudential logo, the Rock symbol, and Bring Your Challenges are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. [REF# 2623879] 8/8 Premier Investment