Discover What s Possible

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1 Discover What s Possible Smart Foundation Variable Annuities Smart Foundation Variable Annuities

2 Planning your retirement If properly planned, retirement can be the best time of your life an opportunity to celebrate what you have accomplished and to enjoy the peace of mind that comes with a guaranteed income stream. I want to discover new things.

3 To make your dreams a rewarding reality, you need an investment strategy that ensures your hard-earned savings last throughout retirement. It is important to take control of your retirement and make smart decisions that protect your income against the many factors that can affect your savings. Protecting Your Income When you retire, your paycheck comes from your savings instead of an employer. But taking too much income can cause shortfalls. For instance, if you take six percent of your assets per year as income, and your portfolio only grows by two percent per year, you may dramatically reduce your savings in just a few years. Impact of Inflation Rising inflation can consume your purchasing power over time. As prices rise, your money won t go as far. Your money will need to grow at least as quickly as the rate of inflation to retain its purchasing power. Longevity These days, retirees are living longer, more active lives. It s possible you will be retired for almost as many years as you worked and it is essential that your assets last throughout retirement. Market Volatility You want your investments to continue to grow. But without guarantees, staying invested during retirement can be risky. Market fluctuation can decrease your portfolio s value when you need it most. If your portfolio value doesn t rebound quickly enough, you risk outliving the income you rely on for your retirement. Imagine the possibilities 1

4 Secure your retirement income The key to a secure retirement is investing your assets so they will continue to grow, but also ensuring your assets are protected, so they will be there to support your desired lifestyle. While fixed investments such as CDs, money market accounts and bonds have traditionally provided retirees with protection from market volatility, these options have provided little to no growth in recent years. Variable annuities* are an attractive alternative because they can offer growth plus security. How can a variable annuity help? A variable annuity is a longterm investment vehicle designed for retirement purposes and can help you protect and grow your retirement savings. Why Variable Annuities? Variable annuities help secure your financial independence in retirement by providing a tax-deferred way to invest in the market with flexible payout options and death benefit protection. In that sense, variable annuities are the protect-and-spend portion of a well-rounded financial plan. You can customize a variable annuity to help meet your retirement needs with optional benefits that can provide additional guarantees including guaranteed income growth and guaranteed lifetime income.* Benefits of Variable Annuities Investing in a variable annuity with optional benefits can provide key advantages, including: Guarantees that your income will be there for you, regardless of market performance Tax-deferred growth to allow your money to work for you Flexible payout options allowing you to decide how and when to take your retirement income** A variety of quality investment options to help meet your evolving needs Death benefit options to provide additional security for your loved ones. * Variable annuities are long-term investment vehicles designed for retirement purposes. They are subject to market risk and may lose value. Optional benefits carry additional cost, and are available only through the purchase of a variable annuity product. All guarantees are based on the claims-paying ability of the insurer and do not apply to the performance of the variable investment options. ** Subject to contract terms and conditions. 2

5 Tax Deferral Advantage Variable annuities are tax-deferred and have distinct advantages over fully taxable investments. They allow your entire initial investment and potential subsequent earnings to compound tax-free, which could result in an account that can outpace a fully-taxable investment. Tax Deferral Helps Your Money Grow Faster* You can see the difference that compounding makes when you compare two hypothetical $100,000 investments one fully taxable and one tax-deferred. This chart assumes that each investment earns 8% annually and that income taxes are 35%. $800,000 $700,000 $689,073 $600,000 $500,000 $457,585 $400,000 $300,000 $275,623 $337,962 $200,000 $100,000 $166,019 $175,330 $0 10 Years 20 Years 30 Years Fully Taxable Investment Tax-Deferred Investment * The above chart is for illustration only and does not reflect actual performance of any investment. It also does not reflect any charges and/or annuity product fees, which could include surrender charges. If included, values would be lower. Please refer to the Additional Information section of this brochure for a full description of charges. Your own results will vary. Taxable investment earnings are taxed in the year in which they are earned. The tax-deferred investment assumes a lump-sum withdrawal at the end of each time period, with taxes paid at that time. Please note that lower minimum tax rates on capital gains and dividends would make the return of the taxable investment more favorable, thereby reducing the difference in performance between the accounts shown; and upon withdrawal, tax-deferred performance would be reduced by income taxes on the gains; for withdrawals prior to age 59 ½, a 10% federal tax penalty would be incurred; and tax rates and the tax treatment of earnings may impact comparative results; and investors may lose money by investing in a variable annuity. Consider your personal time horizon and tax bracket when making investment decisions. If a contract is held in a qualified account or plan, it provides no additional tax-deferral benefits beyond those provided by the qualified account or plan. 3

6 What s right for you Help Secure the Retirement Income You Expect Recognizing the diverse needs of retirement, Smart Foundation Variable Annuities are designed for different retirement needs and available up to age 85. There are three products to choose from, which can be customized with optional benefits that allow you to enjoy competitive withdrawal rates, flexible account access, inflation protection and protection for your loved ones. 1 Choosing the right variable annuity depends on how much you have to invest, your risk tolerance and when you will need access to your money. Working with your financial professional, you can decide which variable annuity will meet your needs. Smart Foundation Variable Annuities are available with single or joint lifetime income optional benefits. Smart Foundation Variable Annuity Smart Foundation is an annuity that allows you to make smaller purchase payments over a long period of time. Of the three Smart Foundation Variable Annuity products, the base Variable Annuity offers a lower cost structure and may be a good choice if you are: Starting to fund retirement or transferring qualified funds to an IRA 2 Cost-conscious and do not have an immediate need to access your funds A small business owner looking to make frequent smaller purchase payments into a retirement plan. 2 The minimum purchase amount for qualified plans is $1,000 with a minimum of $250 for subsequent payments. Other minimums and maximums may apply for non-qualified plans 3 and certain types of IRAs. If you purchase a variable annuity through a tax-advantaged retirement plan, such as an IRA, it will provide you no additional tax advantage beyond that already provided by the plan. Discover the possibilities 1 Withdrawals may be subject to current income taxes and if taken prior to age 59 1/2 may be subject to a 10 percent penalty tax. All optional benefits carry additional cost and restriction. 2 Purchasing a variable annuity through a tax-advantaged retirement plan, such as an IRA, does not include any additional tax advantages beyond what is already provided by the plan. 3 A non-qualified plan is an annuity purchased outside of tax advantaged retirement plan, such as an annuity purchased with after-tax money. These annuities are typically taxed as soon as they have matured or are surrendered. 4

7 Smart Foundation Flex Variable Annuity Smart Foundation Flex is designed for individuals who can make larger purchase payments. It has a slightly higher cost structure than the other Smart Foundation Variable Annuity options but offers a shorter commitment (surrender) period and may be a good choice if you are: Nearing retirement Concerned with tying up your money for long periods. The minimum purchase amount for qualified and non-qualified plans is $10,000 with a minimum of $1,000 for subsequent payments. Smart Foundation Plus Variable Annuity Smart Foundation Plus can kick-start your investments and provide greater accumulation potential over a longer period by providing a purchase payment enhancement on all purchase payments made into the contract.* Smart Foundation Plus is designed for individuals who can make a large initial purchase payment and additional purchase payments over a long period of time. This option may be a good choice if you are: Planning to roll-over larger accounts or consolidate multiple accounts A longer-term investor and don t need immediate access to your account value. Purchase Payment Enhancement Levels Purchase Payment Level Purchase Enhancement < $150,000 4% $150,000 - $999,999 5% $1 million + 6% Features to Help Maximize Your Retirement Flexible account access Surrender charge free contract withdrawals, up to 10% Medically and disability related withdrawals Standard Death Benefit Spousal continuation Broad array of investment options 3, 5 and 7 year fixed interest accounts 1 Automatic Asset Rebalancing Dollar Cost Averaging 2 The enhancement, which is a percentage of cumulative purchase payments made into the contract, adjusted for any withdrawals, will be added to the Contract Value. If a subsequent purchase payment results in the cumulative purchase payments reaching the next enhancement level, you will receive the increased percentage. The minimum purchase amount is $25,000. The minimum subsequent payment for qualified plans is $1,000. Other minimums and maximums may apply for non-qualified plans and certain types of IRAs.** * Withdrawals taken within 12 months of purchase payment will result in the forfeiture of the purchase enhancement (except in the state of CT). ** Purchasing a variable annuity through a tax-advantaged retirement plan, such as an IRA, does not include any additional tax advantages beyond what is already provided by the plan. 1 Not available in NY and not available for use with some optional benefits. 2 Investing regular amounts steadily over time (Dollar Cost Averaging) cannot guarantee a profit or protect against a loss. 5

8 The guarantees you want Optional Benefits You can tailor your annuity to meet your unique retirement needs by combining it with one or more optional benefits, including: A choice of one of the two available withdrawal benefits: Guaranteed Growth and Income Benefit 1 Inflation Protector Withdrawal Benefit 1 The Enhanced Death Benefit that can be combined with either withdrawal benefit The Guaranteed Minimum Accumulation Benefit. 2 Investment Option Diversity Whether in the deferral or withdrawal phases of your contract, you have a diversified investment menu you can choose from to suit your risk tolerance and investment style. Guaranteed Growth and Income Benefit 3 The Guaranteed Growth and Income Benefit allows you to gain from the market s upside potential to help maximize your retirement income and protect it against volatility. This optional benefit offers two key features guaranteed growth in the deferral phase of your contract and guaranteed lifetime income once you begin taking lifetime withdrawals. Features Guaranteed 7% Annual Growth of purchase payments, net of withdrawals, using simple interest will be credited to the Withdrawal Benefit Base for 10 years (up to age 95) 4 or until lifetime withdrawals begin 5 Annual Step-ups lock high Contract Values into the Withdrawal Benefit Base, which could increase future income Growth Period will extend an additional 10 years if you receive a market step-up prior to taking lifetime withdrawals Early Access Withdrawal option gives you access to your account without locking-in the withdrawal benefit 6 Guaranteed Lifetime Income ranging from % depending on your age at the time of first lifetime withdrawal and whether you have a single or joint benefit This optional benefit is available between the ages of 35 and 80 (85 if younger of joint covered lives is 80 or younger). 4 It is also available in combination with the Enhanced Death Benefit between the ages of 35 and The Guaranteed Growth and Income Benefit and the Inflation Protector Withdrawal Benefit are separate optional riders and are not available to be combined. 2 Not available with any of the other 3 benefits. 3 Not available with Inflation Protector Withdrawal Benefit or Guaranteed Minimum Accumulation Benefit. 4 Age is calculated based on Age Nearest Birthday. 5 The Withdrawal Benefit Base is used to determine the amount of money you will have for future lifetime income. 6 Exercising this option will reduce your Contract Value, Withdrawal Benefit Base and death benefit amounts. 6 All guarantees are based upon the claims-paying ability of the issuer. The currently available Guaranteed Growth and Income Benefit is referred to as Guaranteed Growth and Income Benefit II in the prospectus.

9 Lifetime Income The annual income you receive is based on a percentage of your Withdrawal Benefit Base at the time of first Lifetime Withdrawal. When you are ready to start taking withdrawals, your age will determine the guaranteed lifetime withdrawal rate you will receive.* Each year, this rate is multiplied by the Withdrawal Benefit Base to determine your annual income. Your lifetime withdrawal rate could potentially increase if your Withdrawal Benefit Base steps-up after you reach the next age level. Age Withdrawal Rates Single 5.00% 4.50% 4.00% Withdrawal Rates Joint 4.50% 4.00% 3.50% * All ages are based on the age of the younger covered life if contract is a joint guarantee. Withdrawals taken before age 59 1/2 may be subject to a 10 percent penalty tax. A joint benefit ensures your income will last for both of your lives. 7

10 Inflation Protector Withdrawal Benefit 1 The Inflation Protector Withdrawal Benefit provides growth by allowing you to stay invested in the market, while protecting your income from market volatility and inflation. This living benefit adjusts automatically on anniversary with positive changes in the Consumer Price Index (CPI-U) annually, in both the deferral and withdrawal phases of your contract, ensuring that your income will increase to keep pace with inflation, regardless of market performance. 2 Features Guaranteed retirement income that will grow by at least the rate of inflation, up to 6% 3 and will never be less than zero Annual Step-ups lock in high Contract Values into the Withdrawal Benefit Base, What is CPI-U? Not all inflation statistics are created equal. The CPI-U (Consumer Price Index for all Urban Consumers) is the most comprehensive inflation measurement and compares prices for necessities that directly affect your lifestyle in retirement, including: Food and Beverages Housing (including rent and fuel oil) Apparel Transportation (including gasoline) Recreation Medical Care (including prescription drugs) Education and Communication Other Goods and Services (including tobacco) The average rate of inflation for the last 30 years was 2.8%.* * Source: U.S. Department of Labor, Bureau of Labor Statistics Consumer Price Index changes from December 1983 through December which could increase future income Waiting Bonus 4 if you select the Lifetime Withdrawal Option Freedom to take income how and when you want it with a variety of withdrawal options 5 Early Access Withdrawal option gives you access to your account without locking-in the withdrawal benefit 6 This optional benefit is available between the ages of 35 and 80 (85 if younger of joint covered lives is 80 or younger). 7 It is also available in combination with the Enhanced Death Benefit between the ages of 35 and 75. Your Withdrawal Options The Inflation Protector Withdrawal Benefit provides you with flexible access to your money. You have the benefit of an Early Access Withdrawal, which gives you access to your investment without impacting your withdrawal options. In addition, when you are ready to start taking income, you will receive one of two withdrawal options lifetime or standard. The annual income you receive is based on a percentage of your Withdrawal Benefit Base, which determines the amount you have available for future withdrawals. During the deferral and withdrawal phases of your contract your income adjusts automatically on contract anniversary with positive changes in the CPI-U to keep pace with inflation. 8 No matter which withdrawal option you choose, your income will be enhanced by annual inflation adjustments so your Withdrawal Benefit Base has an annual opportunity to grow. 1 Not available with Guaranteed Growth and Income Benefit or Guaranteed Minimum Accumulation Benefit. 2 Inflation Increases are subject to a 6% cap (4% cap in New York) and will cease after expiration of the Inflation Increase Period. 3 Up to 4% in New York. 4 Not applicable in New York. 5 Subject to contract terms and conditions. 6 Exercising this option will reduce your Contract Value, Withdrawal Benefit Base and death benefit amounts. 7 Age is calculated based on Age Nearest Birthday. 8 Inflation Increases are subject to a 6% cap and will cease after expiration of the Inflation Increase Period. 8

11 Lifetime Withdrawal Option If you start withdrawals at age 55 1 or older, the Lifetime Withdrawal Option provides guaranteed income for life at a rate that is determined by your age at the time of your first withdrawal. And your lifetime income could increase with a Waiting Bonus, that provides an additional 0.10% higher payout rate for each year you wait before taking your first Lifetime Withdrawal (up to 1.00% maximum). Each eligible purchase payment has its own Waiting Bonus. The Effective Waiting Bonus is the weighted average of the individual Waiting Bonuses. The Effective Waiting Bonus is added to the age-banded lifetime withdrawal rate. You have the opportunity to reach the next eligible Lifetime Withdrawal Rate if your Withdrawal Benefit Base steps-up to Contract Value at anniversary. Withdrawal rates are age-banded based on age of the younger covered life (if joint) at the time the Lifetime Withdrawal Guarantee is exercised: Lifetime Withdrawal Rates (Single Life) Age at first withdrawal % 5.10% 5.50% 6.00% 4.50% 4.60% 5.00% 5.50% 4.00% 4.10% 4.50% 5.00% 3.50% 3.60% 4.00% 4.50% 3.00% 3.10% 3.50% 4.00% 0 Years 1 Year 5 Years 10 Years If you make an initial purchase payment at age 57 and wait 8 years to take a withdrawal (withdrawal at age 65), the lifetime withdrawal rate would be 4.8% (includes a 0.8% Waiting Bonus) with a single life guarantee. Years waited since initial purchase payment before first withdrawal 2 Withdrawal Rates (Joint Life): Rates are 0.50% less than the rates that apply for a single life guarantee Same Waiting Bonus applies Standard Withdrawal Option 3 The Standard Withdrawal Option is another option to consider if you are not concerned about having guaranteed income for life. For example, if you need more income than the Lifetime Withdrawal Option provides or if you have other sources of income that can be accessed later, then the Standard Withdrawal Option may suit your needs. The Standard Withdrawal Option permits withdrawals at two different percentages, each with their distinct minimum period of guaranteed income. 4 You select the rate at the time you elect the Standard Withdrawal Option. Withdrawals at 6% provide guaranteed income for 16 years. Withdrawals at 5% provide guaranteed income for 20 years. If there is Contract Value remaining at the end of the guaranteed period, you can reset your income stream and start a new guarantee period. 1 All ages are based on the age of the younger covered life if contract is a joint guarantee. 2 This assumes no subsequent purchase payments were made. 3 Certain availability restrictions apply. 4 If the contract holder takes more than the rate they choose (5% or 6%) or if they die, then the period will no longer be guaranteed. 9

12 Enhanced Death Benefit The Enhanced Death Benefit provides added protection for your loved ones by maximizing your death benefit value. It ensures that your heirs will receive the greater of the Standard Death Benefit,* which is included with the base product, or your highest anniversary Contract Value, reduced by any withdrawals. Features Locks market gains into the Enhanced Death Benefit Base, which is used to determine the death benefit enhancement Pays your beneficiary the Standard Death Benefit plus the value of the death benefit enhancement (up to $1 million) This optional benefit is available up to age 75.** It is also available in combination with the Guaranteed Growth and Income Benefit or the Inflation Protector Withdrawal Benefit between the ages of 35 and 75. Guaranteed Minimum Accumulation Benefit The Guaranteed Minimum Accumulation Benefit allows you to invest in the market without losing your initial investment. It protects your investments by guaranteeing that the first year s purchase payments will be returned to you at the end of 10 years regardless of future market conditions. Features Guarantees return of principal after 10 years, if you surrender, assuming no withdrawals are taken Step-up opportunity to lock-in your market gains on any contract anniversary starting from the fifth year of the benefit period and again five years after a step-up occurs New guarantee period of 10 years upon market step-up This optional benefit is available as a single benefit up to age 85** and may not be combined with any other benefit. * The Standard Death Benefit is the amount payable upon death of the Single Annuitant or later death of Joint Annuitants; the value to which the Death Benefit Enhancement amount is added when electing the Enhanced Death Benefit. Note that the Standard Death Benefit may not always apply. ** Age is based on Age Nearest Birthday. 10

13 Investing with confidence Penn Mutual offers a wide selection of investment options within the Smart Foundation Variable Annuities. The investment options, managed by some of the most experienced and highly regarded investment firms, offer you quality choices in every major asset class and category. You can create your own customized portfolio of investments to meet your unique needs, or you can choose from one of our LifeStyle Asset Allocation Funds, which are a complete and broadly diversified* portfolio of investment options designed for different risk tolerances. Our investment managers have gone through a rigorous review process that considers each firm s philosophy and investment process, their expertise, the fund performance, management and ownership structure and commitment to ethical practices. In addition, Penn Mutual regularly reviews the performance and positioning of each investment option to ensure that it continues to meet the highest standards and that its objectives continue to be achieved. For complete details on the Penn Mutual family of investment funds, see the Variable Investment Options brochure. These variable investment options are only available with Penn Mutual s variable products and are not offered to the general public. As with all variable products, they are subject to market fluctuations and may lose value. * There is no assurance that a diversified portfolio will achieve a better return than a non-diversified portfolio. 11

14 Additional Information For more detailed information, please see the prospectus. Maximum purchase amount: $2 million per owner/ annuitant across all Penn Mutual variable annuity contracts Variable Annuity Charges: Administration Charge: 0.15% Annual Contract Charge: lesser of $40 or 2% of Variable Account Value (not applicable if Variable Contract Value is $50,000 or more) Mortality and Expense Risk Charge: Smart Foundation: 1.25% Smart Foundation Flex: 1.50% Smart Foundation Plus: 1.45% Total Net Fund Expenses (2014): Range from 0.40% % Surrender Charges: Smart Foundation Age of Purchase Payment % of Net Purchase Payment Smart Foundation Flex Age of Purchase Payment % of Net Purchase Payment Smart Foundation Plus* Age of Purchase Payment % of Net Purchase Payment % 7% 6% 5% 4% 3% 1.5% 0% % 7% 6% 5% 0% % 8% 8% 7% 6% 5% 4% 3% 2% 0% * For contracts issued in CT, the percent of Net Purchase Payment is 9% in year 1 and 9% in year 2. All other percentages are the same. ** For NY, rates for the Inflation Protector Withdrawal Benefit are 1.05% for single and 1.30% for joint. Optional Benefit Charges: Guaranteed Growth and Income Benefit: Single: 1.10%, Joint: 1.25%, Max: 2.00% Assessed quarterly as a percentage of the monthly average Withdrawal Benefit Base Inflation Protector Withdrawal Benefit:** Single: 1.25%, Joint: 1.50%, Max: 2.50% Assessed quarterly as a percentage of the monthly average Withdrawal Benefit Base Enhanced Death Benefit: Single or Joint: 0.35%, Max: 0.75% Enhanced Death Benefit when purchased with Guaranteed Growth and Income Benefit or Inflation Protector Withdrawal Benefit: Single or Joint: 0.20%, Max: 0.75% Assessed quarterly as a percentage of the monthly average Enhanced Death Benefit Base Guaranteed Minimum Accumulation Benefit: Single: 0.60%, Max: 1.00% Assessed annually as a percentage of the monthly average Variable Account Value Revocability: Guaranteed Growth and Income Benefit: Benefit may be dropped at any time on or after the third contract anniversary. If paired with the Enhanced Death Benefit, they cannot be terminated separately. Inflation Protector Withdrawal Benefit: Benefit may be dropped at any time on or after the third contract anniversary. If paired with the Enhanced Death Benefit, they cannot be terminated separately. Enhanced Death Benefit: Benefit may be dropped at any time on or after the first contract anniversary. If paired with the Guaranteed Growth and Income Benefit or the Inflation Protector Withdrawal Benefit, they may be canceled on or after the third contract anniversary. They cannot be terminated separately. Guaranteed Minimum Accumulation Benefit: Benefit may be dropped on any contract anniversary. 12

15 All Funds are available in the deferral phase and Funds indicated in blue are available in the withdrawal phase for the Guaranteed Growth and Income Benefit and Inflation Protector Withdrawal Benefit. Large Cap Large Growth Stock Fund T. Rowe Price Associates Large Core Growth Fund Wells Capital Management Large Cap Growth Fund MFS Investment Management Index 500 Fund* State Street Global Advisors Large Core Value Fund Eaton Vance Management Large Cap Value Fund Loomis, Sayles & Company International International Equity Fund Vontobel Asset Management Developed International Index Fund State Street Global Advisors Emerging Markets Equity Fund Morgan Stanley Investment Management Balanced Flexibly Managed Fund T. Rowe Price Associates Balanced Fund Mid Cap Mid Cap Growth Fund Ivy Funds Mid Cap Value Fund Neuberger Berman Management Mid Core Value Fund American Century Investment Management SMID Cap SMID Cap Growth Fund Wells Capital Management SMID Cap Value Fund AllianceBernstein Small Cap Small Cap Growth Fund Janus Capital Management Small Cap Index Fund State Street Global Advisors Small Cap Value Fund Goldman Sachs Asset Management Specialty Real Estate Securities Fund Cohen & Steers Capital Management Fixed Income Money Market Fund Limited Maturity Bond Fund Quality Bond Fund High Yield Bond Fund T. Rowe Price Associates LifeStyle Asset Allocation Funds Aggressive Allocation Fund Moderately Aggressive Allocation Fund Moderate Allocation Fund Moderately Conservative Allocation Fund Conservative Allocation Fund Unlock the possibilities Why Penn Mutual? At Penn Mutual, we are singularly committed to helping individuals, families and small business owners unlock the possibilities of life through our life insurance and annuity options. We have never failed to meet an obligation to a policyholder. With our financial strength and stability standing behind our guarantees, we are committed to the brighter futures and best interests of all of our policyholders. * Please see the back of this brochure for important information.

16 You Tube Facebook.com/PennMutual LinkedIn.com/company/penn-mutual YouTube.com/user/PennMutualLife Our Noble Purpose Since 1847, Penn Mutual has been driven by our noble purpose to create a world of possibilities, one individual, one family and one small business at a time. As an original pioneer of mutual life insurance in America, we believe that purchasing life insurance is the most protective, responsible and rewarding action a person can take to build a solid foundation today and create a brighter future for generations to come. Guarantees are based on the claims-paying ability of the insurer, and do not relate to the performance of the variable investment options. Withdrawals will reduce the Contract Value, Withdrawal Benefit Base and death benefit amounts, may be subject to income taxes and surrender charges; and, when taken before age 59 1/2, may be subject to an additional 10 percent penalty tax. Death benefits are considered income in respect of a decedent, but a spouse has certain options to continue favorable tax treatment, including the ability to step-in to continue the contract, but without any single life withdrawal rider that applied to the contract. A variable annuity is a long-term financial retirement vehicle, subject to market fluctuations and may lose value, and is subject to certain fees and expenses, which are not normally associated with other investment vehicles. Withdrawals may be subject to income taxes and if taken before age 59 1/2 may be subject to an additional 10 percent federal penalty tax. Please note that these riders are optional, carry additional cost, and are available only through the purchase of a variable annuity product. * The S&P 500 Index is a product of S&P Dow Jones Indices LLC ( SPDJI ), and has been licensed for use by Penn Mutual Life Insurance Company. 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 Penn Mutual Life Insurance Company. Penn Mutual s variable products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index. Not FDIC Insured No Bank Guarantee May Lose Value Not a Deposit Not Insured by Any Federal Government Agency This brochure must be preceded or accompanied by the Smart Foundation Variable Annuities prospectus and the underlying funds prospectus. Investors should carefully consider funds objectives, risks, charges and fees before investing. This information, as well as other information, is contained in the product and underlying funds prospectuses, which should be read carefully before investing. Product and/or features may not be available in all states. Policy form numbers: ICC11-VA-C, (Policy form numbers may vary by state). Statements about the taxation of annuities are based on Penn Mutual s understanding of current tax laws, which are subject to change. For specific questions about your personal situation, you should consult a qualified tax advisor. Penn Mutual s variable products are primarily offered through Hornor, Townsend & Kent (HTK), Registered Investment Advisor, Member FINRA/ SIPC, 600 Dresher Road, Horsham, PA 19044, HTK is a wholly owned subsidiary of The Penn Mutual Life Insurance Company The Penn Mutual Life Insurance Company, Philadelphia, PA PM /14 A4YK E3