1 PruLife Index Advantage UL Life insurance protection with a potential cash value growth advantage. Issued by Pruco Life Insurance Company or Pruco Life Insurance Company of New Jersey Ed. 01/2015 Exp. 06/02/2016
2 ABOUT THIS BROCHURE. This brochure is intended to provide an overview of the key features of PruLife Index Advantage UL (IUL-2014). 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 an illustration that has 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 interest-crediting rates on your policy, and a financial professional can help you assess and offer solutions to meet your needs.
3 PruLife index advantage UL Life insurance protection for the challenges in life. When thinking about tomorrow, be prepared for the best and worst that can happen. A wellprepared strategy should be able to get you and your loved ones through life, even when the unexpected happens. Consider that chronic illness will affect 7 in 10 people age 65 and older 1 and can create a new reality for you or anyone who thought they had things figured out. Additional years in retirement, while good, can wreak havoc on your well-laid 20-year retirement plan. Market volatility and high tax rates can jeopardize what you re counting on for the future. Having options to do more with what you have is just plain smart. PruLife Index Advantage UL (Advantage UL) is a permanent life insurance policy that can help protect you and your family today and tomorrow. It offers death benefit protection and has the potential to provide an alternate source of income, financial support for a chronic or terminal illness, and flexibility to get you through the years ahead. Advantage UL can help you with your goals: Protecting your family in case something happens to you. When your family is growing and your income is critical to their livelihood, the death benefit can help protect their lifestyle. The death benefit is generally received income tax free (according to Internal Revenue Code 101(a)). This policy also has a guarantee feature that can ensure your policy won t lapse during your prime working years and even into early years of retirement as long as sufficient premiums are paid and other guarantee requirements are met. People are living an average of 23 years in retirement 2 You need your retirement income to last longer and withstand the ups and downs of market cycles in the process. This life insurance policy has potential to help with this need. 1 (Accessed November 25, 2013) Valuation Basic Table, Select and Ultimate Nonsmoker, which is based on U.S. insurance company individually underwritten mortality experience. This is the most recent table available.
4 PruLife index advantage UL Having a supplemental source of income in retirement. 3 This policy can provide an alternate source of income by its potential to build cash value. Advantage UL has two interest crediting options that work toward this goal: Basic Interest Account and Indexed Interest Account. Each offers tax-deferred growth but one is based on a fixed interest rate and the other is based on the performance of the S&P 500 Index (which excludes dividends), 4 subject to the Index Growth Cap. It includes protected growth in the interest accounts. When you want to benefit from the market ups but you don t want to lose values based on market downs, the Index Growth Cap and Floor offer just that. 1 The Indexed Account gives you the potential to earn a rate of interest up to the cap and gives you the protection of the floor if the S&P 500 Index performs negatively. Helping protect your lifestyle in case you become chronically or terminally ill. Advantage UL offers the optional BenefitAccess Rider. (Refer to the back cover for more important details about this rider.) It can be used to help you cope with the financial impact of a chronic or terminal illness. Once you qualify, you can use benefits in any way you feel best suits your personal needs. Since it accelerates the death benefit, there will be a reduction in the amount available for your beneficiaries. It is available for an additional charge; additional underwriting requirements apply. 3 You can access life insurance policy cash values by taking withdrawals and/or policy loans. Loans are charged interest; they are usually not taxable. 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 insured is 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. Access to policy withdrawals is restricted during periods in which BenefitAccess Chronic Illness benefit payments are being made. 4 This is not an investment in the S&P 500 itself. Refer to page 5 for more information about the Index Growth Cap. 2
5 Meet your challenges head on with Advantage UL. Protection from a Market Downturn. It s easy to underestimate the value of having a 0% floor in Advantage UL. The chart provides an example of how the floor helps preserve your cash value in the Indexed Account Segment even when the market goes down, in this case, by 9%. By contrast, a product without a floor would lose 9%. When the market improves by 9% the next year, Advantage UL can provide a cash value of $10,900 compared with a product without a floor, which would only have $9,919. This is a hypothetical example for illustrative purposes only of Index Segments being created two years in a row and does not include fees and charges that may be deducted. Credited interest rates are not actual rates of return due to policy charges. Policy charges will be taken from any values in the Basic Interest Account first and then from most recently created Indexed Account segments. (Refer to pg. 7 for discussion on segments.) $150,000 $11,500 $110,000 $11,000 $105,000 $10,500 $100,000 $10,000 $95,000 $9,500 $90,000 $9,000 $85,000 $8,500 Importance of the Floor on Indexed account Segment values. -9% = 0% $10,000-9% $9,100 0% floor NO Floor START YEAR 1 YEAR 2 +9% $10,900 +9% $9,919 The 0% floor protects your policy from market downturns. No money will be lost from your account because of a negative S&P 500 performance. 3
6 PruLife index advantage UL How the policy can work for your goals. Two interest accounts can work toward your cash value growth goal. 5 There are two interest accounts that give the policy the potential to grow its cash values. Both accounts are protected from market downturns. The Basic Interest Account is a fixed-interest account and provides a guaranteed interest amount. This account can help offset some of the fluctuations that are expected with the Indexed Interest Account. Basic Interest Account Crediting Example Earns fixed interest on a daily basis and the effective annual interest rate will equal the interest rate declared by Prudential. For example: If the Basic Interest Account rate is 3%, that will be the rate used to credit your Basic Interest Account. The Basic Interest Account rate is subject to change throughout the year. The Indexed Interest Account gives you an opportunity to have higher interest credited based on the performance of the S&P 500 Index (which excludes dividends). It is not a direct investment in the S&P 500 itself. Indexed Interest Account Crediting Example Earns interest on each premium segment on an annual basis and the amount is based on the performance of the S&P 500 Index, subject to a Growth Cap and Floor. For example (assuming a 12% Growth Cap and 0% Floor): If the S&P 500 has a 14% gain for the 12-month period your segment has been in existence, and that segment s cap is 12%, you will be credited 12% for that segment. If the S&P 500 has a performance of -10% for the 12-month period your segment has been in existence, and the floor is 0%, you will be credited 0%. If the S&P 500 has a 5% gain for the year, you will be credited 5%. 4 5 The potential to build cash value in the Indexed Account is based on the performance of the S&P 500 Index (using an Index Growth Cap and Floor) on an annual point-to-point basis based on a 100% participation rate (subject to change). Money that is placed in the Indexed Account is not a direct investment in the S&P 500 Index. If amounts in the Indexed Account are withdrawn prior to the end of the one-year term, no interest will be credited. The policy is not a variable contract or an investment.
7 The Index Growth Cap and the floor. 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. This means that if the S&P 500 performs below 0%, no money from your account will be lost based on market performance, nor will any be gained. This visual shows the S&P 500 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 12% because of the cap. Conversely, in the years where the S&P 500 has experienced great loss, there would be no market-based losses, thanks to the floor. Please note that policy charges still apply. INDEXED INTEREST ACCOUNT vs. S&P 500 Index Average annual historical Index Growth Rate (excluding dividends) for a 25-year period ending on 12/31/13 S&P 500 Index Return RATE INDEXed INTEREST ACCOUNT RATE CAP Floor This is a hypothetical example for illustrative purposes only. Past performance is not a guarantee of future results. This does not reflect the performance of an actual account value. 5
8 PruLife index advantage UL Living benefits can help protect you financially from a chronic or terminal illness. THE CHALLENGE OF CHRONIC AND TERMINAL ILLNESS. 7 in 10 people age 65 and older will need chronic illness care later in life. 6 80% of people who are chronically ill live in a private home and 80% are cared for by family and friends. 7,8 13% 5% 2% 7 in10 80% Usually, life insurance benefits are paid to your beneficiaries when you die; living benefits are ones that allow you to accelerate the death benefit while you re alive. Please note that, when you accelerate the death benefit, it reduces and may eliminate the amount that your beneficiaries will receive. PruLife Index Advantage UL offers two options that allow you to accelerate the policy s death benefit while you are living. BenefitAccess Rider: This feature enables you to accelerate the death benefit to help you cope with a chronic or terminal illness, subject to the terms and conditions of the rider. It is available for an additional charge, and additional underwriting requirements apply. This rider can be chosen only at policy issue (See the back cover and the BenefitAccess Rider brochure for more important details about this rider.) Living Needs Benefit SM : This feature enables you to accelerate the death benefit if you become terminally ill. (Refer to the back cover for more important details about this rider.) Other riders can further customize your policy. Advantage UL also offers a number of other riders. Please refer to the inside back cover for more information. community-based residences with supportive services Assisted living and other residential care facilities Nursing homes Private homes 6 (Accessed November 25, 2013). 7 (Accessed November 25, 2013). 8 Hagen S, et al. Rising demand for long-term services and supports for elderly people. Congressional Budget Office. June 26, 2013, p.20. 6
9 How your policy works. Basic Interest Account. The fixed interest rate for the Basic Interest Account is declared by Prudential and is subject to change, but guaranteed to be at least 1%. (check online at for the current Basic Interest Account rate) 100% of eligible funds may be allocated to this account; however, doing so may result in higher premium payments needed to keep the policy in force in the future. All premiums are initially deposited into this account. Net premiums will be held in this account until there is enough to cover anticipated monthly charges for a full year. Subject to product rules, policy values over that amount can then be transferred to the Indexed Interest Account if you wish. Indexed interest Account. Has a minimum, or floor, of 0% to protect your account from S&P 500 performance below 0%. 9 Has a maximum, or cap, on how much interest is credited. The cap, called the Index Growth Cap, is subject to change, both up and down, based on the company s discretion, 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 to the Index Growth Cap could result in different values than shown here. 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 [www.prudential.com] to find out the latest Index Growth Cap. 2 Money that is transferred into the Indexed Interest Account creates a segment. The segment will mature 12 months from the date it is created and, at that time, it will earn 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 a cap and floor. Any amount between 0% and 100% of eligible funds can be transferred into this account on the 15th of the month, once the required minimum amount has been retained in the Basic Interest Account. 100% of eligible funds may be allocated to this account. You designate the percentage (between 0% and 100%) of eligible funds to be transferred into the Indexed Interest Account on the transfer date. You may change your percentage allocation up to 12 times a year. Go to [www.prudential.com] to find out the current Index Growth Cap prior to allocating funds. 9 Index Growth Caps and Floors may be different in select states. 7
10 PruLife index advantage 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. Advantage UL has a Limited No-Lapse Guarantee. This protects the policy for 20 years or to age 70, whichever comes first, but never less than 10 years. The Limited No-Lapse Guarantee is a premium-based guarantee, which means that in order to maintain the guarantee a certain level of premiums (net of withdrawals) must be paid into the policy. The No- Lapse Guarantee may not extend for the life of the policy. Also, the Limited No-Lapse Guarantee will not protect the policy from lapse caused by excess policy debt. It is important that you pay your scheduled premiums when they are due. Missed or late premium payments may cause your lapse protection to end. Payments to restore the guarantee may be higher than those you were originally paying. Please note that, by paying only the minimum premium required, you may be forgoing the potential to build tax-deferred cash value. Contract Fund. The premiums you pay, less any policy charges, 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 available to you for loans and withdrawals. Access to cash value for income and needs. Any cash value built up in the policy can be accessed through loans and withdrawals. If you no longer need the entire death benefit for protection, you can use the cash value in your policy for other purposes. For example, you can pay an unexpected expense or use it to help supplement your income. If you choose to take a loan or withdrawal, depending on the amount of loan you take, your policy can terminate or your premiums may need to increase to keep the policy in force in later years. Your financial professional can provide you specific details. 8
11 Alternate Contract Fund (ACF). This policy features an alternate contract fund, which guarantees a cumulative return of 1% annually on net premiums, regardless of Indexed Interest Account performance. The ACF is accumulated 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. The death Benefit options. You can choose either a Fixed (A) or Variable (B) death benefit. Total Death Benefit Total Death Benefit Face Amount Face Amount Fixed (type A): The death benefit generally remains constant and is usually equal to the face amount. The net amount payable at death is generally equal to the death benefit minus any outstanding policy debt. Variable (type B): The death benefit generally fluctuates in direct relation to the value of your Contract Fund. The net death benefit proceeds will generally equal the face amount (also called the basic insurance amount) plus the Contract Fund minus any outstanding policy debt. 9
12 PruLife index advantage 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 and growing 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 participation rates. The current Indexed Account factors as of the date the statement is produced. These rates will be subject to change. The charges in your policy. Policy Charges. There are different types of policy charges that apply, to cover the cost of offering these insurance benefits. Premium-based charge: Consists of administrative charges not more than 3.75% of each premium and sales charges of not more than 8% of each premium. Monthly charges: Cost of insurance charges; administrative charges; and charges for additional riders and benefits. Asset-based charge: A monthly charge for administrative expenses. The amount of this charge is not more than 0.75% (0.0623% a month) of the Contract Fund (excluding the amount of any loan). Administrative charges: Transactional charges that may result from a withdrawal; or reduction in the basic insurance amount; and additional transactional charges that are assessed when one of the following benefits is exercised: Living Needs Benefit SM, BenefitAccess Rider, or Overloan Protection Rider. Surrender charge: A charge that applies to any partial or full surrender made from your policy within the first 15 years of the date the policy is issued. Interest charges: An annual charge applicable to any outstanding loans. 10
13 Riders Riders can customize your policy to help better meet your individual needs. TYPE NAME BENEFIT Living Benefits Waiver of Premium Children s Rider BenefitAccess Rider VL 145 B and ICC13 VL 145 B (State variations apply.) Living Needs Benefit SM ORD P (ORD P MA in MA) (State variations apply.) Enhanced Disability Benefit VL 100 B-2013 (State variations apply.) Children Level Term Rider VL 182 B-2005 (State variations apply.) A rider that can accelerate the death benefit to help ease the financial burden on you and your loved ones if you become chronically or terminally ill. Available for an additional cost. Additional underwriting requirements and limits may apply. A benefit that, if you become terminally ill, will advance a portion of your death benefit to help ease the financial burden you and your loved ones could face. Please note that, if you receive a partial Living Needs Benefit SM claim payment while there is a loan on your policy, a portion of the benefit payment will be used to reduce the loan on a pro-rata basis. The benefit you receive will be reduced by the amount of the loan repayment. A benefit that will pay your policy premiums if you become disabled so that your valuable life insurance coverage can remain intact. There is an additional charge for this rider. A feature that gives you the option to provide life insurance on your children while they are young. There is an additional charge for this rider. Accidental Other Accidental Death Benefit VL 110-B-2000 Not Available In MA (State variations apply.) Enhanced Cash Value Rider PLI and ICC13 PLI (State variations apply.) Overloan Protection Rider PLI (PLY NY in NY) A benefit that pays an additional amount of death benefit if death is the direct result of an accident. There is an additional charge for this rider. A rider that helps your policy gain higher cash value in the early years of the policy in case of surrender. There is an additional charge for this rider. A benefit that, for a one-time charge when exercised, may keep your policy from lapsing if you have an outstanding loan. Riders contain exclusions, limitations, and terms for keeping them in force. A financial professional can provide you with costs and additional details. They are not available in all states and some have an additional cost. 11
14 PruLife Index Advantage UL Life Insurance Protection for the Challenges in Life
15 A financial leader for nearly 140 years. Prudential Financial is a worldwide financial leader with a long tradition of serving the public interest. Prudential Financial has approximately 50 million customers. The well-known Rock symbol is an icon of strength, stability, expertise, and innovation that has stood the test of time.
16 Produced with the environment in mind Printed Printed on on Recycled Paper With with % 10% Post Post-Consumer Waste Benefits paid under the BenefitAccess Rider are intended to be treated for federal tax purposes as accelerated life insurance death benefits under IRC 101(g)(1)(b). Tax laws related to the receipt of accelerated death benefits are complex. Benefits received may be taxable in certain circumstances. Receipt of benefits may affect eligibility for public assistance programs such as Medicaid. Accelerated benefits paid under the terms of the Terminal Illness portion of the rider are subject to a $150 processing fee ($100 in Florida). Clients should consult tax and legal advisors prior to initiating any claim. A licensed health care practitioner must certify that the insured is chronically or terminally ill to qualify for benefits. Chronic illness claims will require recertification by a licensed health care practitioner. Other terms and conditions may apply. This rider is not Long- Term Care (LTC) insurance; it is not intended to replace LTC. The rider may not cover all of the costs associated with chronic or terminal illness. The rider is a life insurance accelerated death benefit product; is generally not subject to health insurance requirements; and may not be available in all states. Access to policy withdrawals is restricted during periods in which BenefitAccess Chronic Illness benefit payments are being made. The Living Needs Benefit SM is an accelerated death benefit and is not a health, nursing home, or long-term care insurance benefit and is not designed to eliminate the need for insurance of these types. There is no charge for this rider but, when a claim is paid under this rider, the death benefit is reduced for early payment, and a $150 processing fee ($100 in Florida) is deducted. If more than one policy is used for the claim, each policy will have a processing fee of up to $150 deducted ($100 in Florida). Portions of the Living Needs Benefit SM payment may be taxable, and receiving an accelerated death benefit may affect your eligibility for public assistance programs. The federal income tax treatment of payments made under this rider depends upon whether the insured is the recipient of the benefit and is considered terminally ill or chronically ill. We suggest the policyowner seek assistance from a personal tax advisor regarding the implications of receiving Living Needs Benefit SM payments. This rider is not available in Minnesota to new purchasers over age 65 until the policy has been in force for one year, and the nursing home option is not available in Connecticut, Florida, Massachusetts, New York, or the District of Columbia. This rider is not available in Washington State. 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 Index Advantage 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 IUL-2014 or ICC14 IUL The policy is not a variable contract or an investment. Securities and Insurance Products: Not Insured by FDIC or Any Federal Government Agency. May Lose Value. Not a Deposit of or Guaranteed by Any Bank or Bank Affiliate. Guarantees are based on the claims-paying ability of the issuing insurance company. 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. Not for use in CA. Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities Prudential Financial, Inc. and its related entities Ed. 01/2015 Exp. 06/02/2016