-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TY6oSNwwe6cF8/r9bzyBwj/f9CB3Rd9W3zBCEr7iHUMicExzX8ajuEIb2G24arGN Y5XLM//+eSObk8dvx/o0SQ== 0000950110-97-000717.txt : 19970430 0000950110-97-000717.hdr.sgml : 19970430 ACCESSION NUMBER: 0000950110-97-000717 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 43 FILED AS OF DATE: 19970429 EFFECTIVENESS DATE: 19970429 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRUCO LIFE INSURANCE CO VARIABLE APPRECIABLE ACCOUNT CENTRAL INDEX KEY: 0000740870 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-89558 FILM NUMBER: 97589082 BUSINESS ADDRESS: STREET 1: 213 WASHINGTON ST CITY: NEWARK STATE: NJ ZIP: 07102 BUSINESS PHONE: 2018022000 485BPOS 1 REGISTRATION STATEMENT AS FILED WITH THE SEC ON ________________. REGISTRATION NO. 2-89558 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM S-6 POST-EFFECTIVE AMENDMENT NO. 26 FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 ---------- PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT (Exact Name of Trust) PRUCO LIFE INSURANCE COMPANY (Name of Depositor) 213 WASHINGTON STREET NEWARK, NEW JERSEY 07102-2992 (800) 437-4016, EXT. 46 (Address and telephone number of principal executive offices) ---------- THOMAS C. CASTANO ASSISTANT SECRETARY PRUCO LIFE INSURANCE COMPANY 213 WASHINGTON STREET NEWARK, NEW JERSEY 07102-2992 (Name and address of agent for service) Copy to: JEFFREY C. MARTIN SHEA & GARDNER 1800 MASSACHUSETTS AVENUE, N.W. WASHINGTON, D.C. 20036 ---------- Variable Appreciable Life Insurance Contracts--The Registrant has registered an indefinite amount of securities pursuant to Rule 24f-2 under the Investment Company Act of 1940. The Rule 24f-2 notice for fiscal year 1996 was filed on February 28, 1997. It is proposed that this filing will become effective (check appropriate space): |_| immediately upon filing pursuant to paragraph (b) of Rule 485 |X| on May 1, 1997 pursuant to paragraph (b) of Rule 485 ----------- (date) |_| 60 days after filing pursuant to paragraph (a) of Rule 485 |_| on ___________ pursuant to paragraph (a) of Rule 485 (date) CROSS REFERENCE SHEET (AS REQUIRED BY FORM N-8B-2) N-8B-2 ITEM NUMBER LOCATION - ------------------ -------- 1. Cover Page 2. Cover Page 3. Not Applicable 4. Sale of the Contract and Sales Commissions 5. Pruco Life Variable Appreciable Account 6. Pruco Life Variable Appreciable Account 7. Not Applicable 8. Not Applicable 9. Litigation 10. Brief Description of the Contract; Short-Term Cancellation Right, or "Free Look"; Contract Forms; Transfers; How a Contract's Cash Surrender Value Will Vary; How a Contract's Death Benefit Will Vary; Surrender of a Contract; Withdrawal of Excess Cash Surrender Value; When Proceeds are Paid; Contract Loans; Lapse and Reinstatement; Options on Lapse; Right to Exchange a Contract for a Fixed-Benefit Insurance Policy; Contracts Issued In Connection With Tax-Qualified Pension Plans; The Fixed-Rate Option; Voting Rights; Substitution of Series Fund Shares; Increases in Face Amount; Decreases in Face Amount 11. Brief Description of the Contract; Pruco Life Variable Appreciable Account 12. Cover Page; Brief Description of the Contract; The Prudential Series Fund Inc.; Sale of the Contract and Sales Commissions 13. Brief Description of the Contract; The Prudential Series Fund, Inc.; Premiums; Allocation of Premiums; Charges and Expenses; Reductions of Charges for Concurrent Sales to Several Individuals; Sale of the Contract and Sales Commissions 14. Brief Description of the Contract; Detailed Information for Prospective Contract Owners 15. Brief Description of the Contract; Premiums; Allocation of Premiums; Transfers; The Fixed Rate Option 16. Brief Description of the Contract; Detailed Information for Prospective Contract Owners 17. Surrender of a Contract; Withdrawal of Excess Cash Surrender Value; When Proceeds are Paid 18. Pruco Life Variable Appreciable Account; How a Contract's Cash Surrender Value Will Vary 19. Reports to Contract Owners N-8B-2 ITEM NUMBER LOCATION - ------------------ -------- 20. Not Applicable 21. Contract Loans 22. Not Applicable 23. Not Applicable 24. Other General Contract Provisions; The Prudential Series Fund, Inc. 25. Pruco Life Insurance Company; The Prudential Series Fund, Inc. 26. Brief Description of the Contract; The Prudential Series Fund, Inc.; Charges and Expenses 27. Pruco Life Insurance Company 28. Pruco Life Insurance Company; Directors and Officers 29. Pruco Life Insurance Company 30. Not Applicable 31. Not Applicable 32. Not Applicable 33. Not Applicable 34. Not Applicable 35. Pruco Life Insurance Company 36. Not Applicable 37. Not Applicable 38. Sale of the Contract and Sales Commissions 39. Sale of the Contract and Sales Commissions 40. Not Applicable 41. Sale of the Contract and Sales Commissions 42. Not Applicable 43. Not Applicable 44. Brief Description of the Contract; The Prudential Series Fund, Inc.; How a Contract's Cash Surrender Value Will Vary; How a Contract's Death Benefit Will Vary 45. Not Applicable 46. Brief Description of the Contract; Pruco Life Variable Appreciable Account; The Prudential Series Fund, Inc. 47. Pruco Life Variable Appreciable Account 48. Not Applicable 49. Not Applicable 50. Not Applicable 51. Not Applicable 52. Substitution of Series Fund Shares N-8B-2 ITEM NUMBER LOCATION - ------------------ -------- 53. Tax Treatment of Contract Benefits 54. Not Applicable 55. Not Applicable 56. Not Applicable 57. Not Applicable 58. Not Applicable 59. Financial Statements; Financial Statements of Pruco Life Variable Appreciable Account; Consolidated Financial Statements of Pruco Life Insurance Company and Subsidiaries PART I INFORMATION REQUIRED IN PROSPECTUS PROSPECTUS MAY 1, 1997 PRUCO LIFE INSURANCE COMPANY VARIABLE APPRECIABLE ACCOUNT VARIABLE APPRECIABLE LIFE(R)------------- INSURANCE CONTRACTS This prospectus describes certain variable life insurance contracts issued by Pruco Life Insurance Company ("Pruco Life"), a stock life insurance company that is a wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential"). Pruco Life calls these contracts its Variable APPRECIABLE LIFE(R) Insurance Contracts* (the "Contract"). As of May 1, 1992, these Contracts are no longer available for sale. These Contracts provide whole-life insurance protection. That is, they provide lifetime insurance coverage, as long as scheduled premiums are paid or charges are provided for by favorable investment experience. They also generally provide a cash surrender value for the owner if the Contract is terminated during the insured's lifetime. A purchaser may choose one form of this Contract which provides a death benefit that remains fixed in the amount initially selected (unless it is increased by Pruco Life to ensure that the Contract maintains its status as life insurance under the Internal Revenue Code) or a second form which provides a death benefit that varies daily with the investment performance of the subaccounts of the Pruco Life Variable Appreciable Account (the "Account") to which the owner allocates the invested portion of the premiums. Even under the second form of Contract, however, investment performance cannot cause the death benefit to be less than a guaranteed minimum amount (the face amount specified in the Contract). The cash surrender value of a Contract generally increases with the payment of each premium, and it also varies daily with investment performance. The cash surrender value also decreases to reflect the imposition of charges. There is no guaranteed minimum cash surrender value. A portion of the Contract's premiums and the earnings on those premiums will be held in one or more of the following ways. They can be invested in one or more of thirteen current subaccounts of the Account. They can be allocated to a FIXED-RATE OPTION. Or, they can be invested in the Pruco Life Variable Contract Real Property Account (the "REAL PROPERTY ACCOUNT") which is described in a prospectus that is attached to this one. If one or more of the subaccounts is chosen, the assets of each subaccount will be invested in a corresponding portfolio of The Prudential Series Fund, Inc. (the "Series Fund"). The attached prospectus for the Series Fund and its statement of additional information describe the investment objectives of and the risks of investing in the thirteen portfolios of the Series Fund currently available to Contract owners: the MONEY MARKET PORTFOLIO, the DIVERSIFIED BOND PORTFOLIO, the GOVERNMENT INCOME PORTFOLIO, the CONSERVATIVE BALANCED PORTFOLIO, the FLEXIBLE MANAGED PORTFOLIO, the HIGH YIELD BOND PORTFOLIO, the STOCK INDEX PORTFOLIO, the EQUITY INCOME PORTFOLIO, the EQUITY PORTFOLIO, the PRUDENTIAL JENNISON PORTFOLIO, the SMALL CAPITALIZATION STOCK PORTFOLIO, the GLOBAL PORTFOLIO, and the NATURAL RESOURCES PORTFOLIO. Other subaccounts and portfolios may be added in the future. Interest is credited daily upon any portion of the premium payment allocated to the fixed-rate option at rates periodically declared by Pruco Life in its sole discretion but never less than 4%. This prospectus describes the Contracts generally and the Pruco Life Variable Appreciable Account. THE REPLACEMENT OF LIFE INSURANCE IS GENERALLY NOT IN THE INTEREST OF THE CUSTOMER. IN MOST CASES, WHEN A CUSTOMER REQUIRES ADDITIONAL COVERAGE, A NEW POLICY SUPPLEMENTING THE EXISTING POLICY SHOULD BE REQUESTED, THEREBY PROTECTING THE BENEFITS OF THE ORIGINAL POLICY. IF YOU ARE CONSIDERING REPLACING A POLICY, YOU SHOULD COMPARE THE BENEFITS AND COSTS OF SUPPLEMENTING YOUR EXISTING POLICY WITH THE BENEFITS AND COSTS OF PURCHASING THE CONTRACT DESCRIBED IN THIS PROSPECTUS AND YOU SHOULD CONSULT WITH A QUALIFIED TAX ADVISOR. PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT IS ATTACHED TO A CURRENT PROSPECTUS FOR THE PRUDENTIAL SERIES FUND, INC. AND A CURRENT PROSPECTUS FOR THE PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PRUCO LIFE INSURANCE COMPANY 213 Washington Street Newark, New Jersey 07102-2992 Telephone: (800) 437-4016, Ext. 46 *APPRECIABLE LIFE is a registered mark of Prudential. VAL-1 Ed 5-97 Catalog #64696EO PROSPECTUS CONTENTS PAGE BRIEF DESCRIPTION OF THE CONTRACT..............................................1 GENERAL INFORMATION ABOUT PRUCO LIFE INSURANCE COMPANY, PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT, AND THE VARIABLE INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT.......................................................4 PRUCO LIFE INSURANCE COMPANY.............................................4 PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT..................................4 THE PRUDENTIAL SERIES FUND, INC..........................................4 PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT.......................5 WHICH INVESTMENT OPTION SHOULD BE SELECTED...............................5 DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS...........................6 REQUIREMENTS FOR ISSUANCE OF A CONTRACT..................................6 SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK".............................6 CONTRACT FORMS...........................................................6 PREMIUMS.................................................................7 CONTRACT DATE............................................................9 ALLOCATION OF PREMIUMS...................................................9 TRANSFERS...............................................................10 CHARGES AND EXPENSES....................................................10 REDUCTION OF CHARGES FOR CONCURRENT SALES TO SEVERAL INDIVIDUALS........14 HOW A CONTRACT'S CASH SURRENDER VALUE WILL VARY.........................15 HOW A CONTRACT'S DEATH BENEFIT WILL VARY................................15 WHEN A CONTRACT BECOMES PAID-UP.........................................16 FLEXIBILITY AS TO PAYMENT OF PREMIUMS...................................17 SURRENDER OF A CONTRACT.................................................17 WITHDRAWAL OF EXCESS CASH SURRENDER VALUE...............................17 INCREASES IN FACE AMOUNT................................................18 DECREASES IN FACE AMOUNT................................................19 LAPSE AND REINSTATEMENT.................................................20 WHEN PROCEEDS ARE PAID..................................................20 LIVING NEEDS BENEFIT....................................................20 ILLUSTRATIONS OF CASH SURRENDER VALUES, DEATH BENEFITS, AND ACCUMULATED PREMIUMS....................................................21 CONTRACT LOANS..........................................................23 REPORTS TO CONTRACT OWNERS..............................................24 OPTIONS ON LAPSE........................................................24 RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY.......24 SALE OF THE CONTRACT AND SALES COMMISSIONS..............................25 TAX TREATMENT OF CONTRACT BENEFITS......................................25 WITHHOLDING.............................................................26 CONTRACTS ISSUED IN CONNECTION WITH TAX-QUALIFIED PENSION PLANS.........27 THE FIXED-RATE OPTION...................................................27 LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT PREMIUMS AND BENEFITS.....28 OTHER GENERAL CONTRACT PROVISIONS.......................................28 RIDERS..................................................................28 VOTING RIGHTS...........................................................29 SUBSTITUTION OF SERIES FUND SHARES......................................29 STATE REGULATION........................................................29 EXPERTS.................................................................30 LITIGATION..............................................................30 ADDITIONAL INFORMATION..................................................30 FINANCIAL STATEMENTS....................................................30 DIRECTIORS AND OFFICERS.......................................................31 PAGE FINANCIAL STATEMENTS OF PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT...............A1 CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES........................................................B1 THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR THE SERIES FUND, AND THE PROSPECTUS FOR THE REAL PROPERTY ACCOUNT. BRIEF DESCRIPTION OF THE CONTRACT The Variable APPRECIABLE LIFE Insurance Contracts (the "Contract") described in this prospectus are in many respects similar to conventional "fixed-benefit" whole-life insurance. Like conventional whole-life insurance, the Contracts provide a guaranteed death benefit for the insured's lifetime if scheduled premiums are paid; due to the pooling of mortality risks, this death benefit is many times the scheduled annual premium. The Contracts also have similarities to what have become generally known as "universal life" insurance policies. Like universal life insurance policies, the Contracts permit an owner considerable flexibility in paying premiums and adjusting the face amount of insurance. To a significant extent the Contracts provide features and choices for the Contract owner that differ from those provided by either of those types of life insurance policies. As of May 1, 1992, these Contracts are no longer available for sale. The Contracts are first and foremost life insurance. They provide insurance protection for the entire lifetime of the insured. But the Contracts also have significant and useful investment features. The Contract owner decides in which investment option[s] the amounts held under the Contract--derived from the payment of premiums and the earnings thereon--will be invested, and the cash surrender value of the Contract will increase with favorable investment experience and decrease with unfavorable investment experience. The cash surrender value of a Contract also reflects the imposition of the various Contract charges. The Contract owner will be able, from time to time, to reallocate and transfer amounts invested under the Contract among the various subaccounts, the fixed-rate option, and the Real Property Account. The owner may choose either of two Contract Forms. Under Contract Form A, the death benefit remains fixed in amount (unless the Contract becomes paid-up or, under a newer version of the Contract that first began to be sold in most jurisdictions in September of 1986, unless the death benefit is increased to ensure that the Contract continues to satisfy the Internal Revenue Code's definition of life insurance) and only the cash surrender value will vary with investment experience. Under Contract Form B, both the death benefit and the cash surrender value will vary with investment experience, but the death benefit will never be less than the face amount regardless of investment experience. There is no minimum cash surrender value under either form of the Contract. (Throughout this prospectus, unless we specifically state otherwise, all descriptions of and references to the "Contract" apply to both old and new Form A and Form B Contracts.) There is a special feature applicable to Contracts issued on insureds who are 14 years of age or less. Under such Contracts, the face amount increases to 150% of the initial face amount on the first Contract anniversary after the insured reaches the age of 21, provided the Contract is not then in default. This new face amount becomes the new guaranteed minimum death benefit. In addition, in those states where it is approved, a Contract owner may have the right under certain conditions to increase or decrease the face amount of insurance. In the case of an increase in face amount, one of the conditions is the provision of evidence of insurability satisfactory to Pruco Life Insurance Company ("Pruco Life"). See INCREASES IN FACE AMOUNT, page 18 and DECREASES IN FACE AMOUNT, page 19. One significant feature of the Contract is the flexibility it provides the Contract owner with respect to the payment of premiums. Each Contract has a scheduled premium payable annually, semi-annually, quarterly or monthly. But the Contract owner is generally permitted, within very broad limits, to pay greater than scheduled premiums and the net portion of such payments will promptly be invested in the manner previously selected by the owner. Cash surrender values will generally be increased whenever premiums are paid; and unless earlier unfavorable investment experience must first be offset, the amount payable upon death under Contract Form B will also generally be increased by the payment of premiums. Subsequent values under the Contract will increase or decrease with subsequent investment experience to reflect the amounts invested under the Contract. As long as scheduled premiums are paid on or before the due dates (or within a 61-day grace period after the scheduled due date) and missed premiums are made up later with interest, the Contract will not lapse, even if investment experience is unfavorable. Thus, the payment of scheduled premiums guarantees insurance protection at least equal to the face amount of the Contract. However, the failure to pay a minimum scheduled premium will not necessarily result in lapse of the Contract. If the net investment experience has been greater than the 4% assumed net rate of return used by Pruco Life's actuaries in designing this Contract, with a consequent increase in the amount invested under the Contract, and the Contract owner then fails to pay premiums when due, Pruco Life will use the "excess" amount to pay the charges due under the Contract and thus keep the Contract in force. See LAPSE AND REINSTATEMENT, page 20. In this case, so long as the excess amount is sufficient, the Contract will not lapse despite the owner's failure to pay scheduled premiums. The amount of the scheduled premium, for a specific face amount of insurance, depends upon the insured's sex (except where unisex rates apply), age at issue, and risk classification. The scheduled premium cannot be 1 increased until the Contract anniversary after the insured's 65th birthday or, if later, 10 years from the date the Contract is issued. A new, higher scheduled premium, called the "second premium amount," is payable after this period. The second premium amount will be stated in each Contract. It is calculated on the assumptions that only scheduled premiums have been paid, and they have been paid when due, that maximum mortality charges (covering the cost of insurance for the period in question) and expense charges have been deducted, and that the net investment return upon the amount invested under the Contract has been equal to the 4% assumed net rate of return. If the amount invested under the Contract is higher than would be the case if the above conservative assumptions are borne out by experience, which currently appears to be a reasonable expectation, premiums after the insured's 65th birthday (or at 10 years after the issue date, if later) will be lower than the second premium amount stated in the Contract (and may or may not be higher than the initial scheduled premium). In some cases the payment of greater than scheduled premiums or favorable investment experience may result in the Contract becoming paid-up so that no further premium payments will be necessary. If this happens, Pruco Life may refuse to accept any further premium payments. If a Contract becomes paid-up, the death benefit then in force becomes the guaranteed minimum death benefit; apart from this guarantee, the death benefit and the cash surrender value of the paid-up Contract will thereafter vary daily to reflect the investment experience of amounts invested under the Contract. Contracts sold beginning in September of 1986 in jurisdictions where all necessary approvals have been obtained will no longer become paid-up. Instead, the death benefit will be increased so that it is always at least as great as the Contract fund divided by the net single premium for the insured's attained age at such time. See HOW A CONTRACT'S DEATH BENEFIT WILL VARY, page 15. The term "Contract fund" refers generally to the total amount invested under the Contract and is defined under CHARGES AND EXPENSES on page 10. The term "net single premium," the factor which determines how much the death benefit will increase for a given increase in the Contract fund, is defined and illustrated under item 2 of HOW A CONTRACT'S DEATH BENEFIT WILL VARY on page 15. Whenever the death benefit is determined in this way, Pruco Life reserves the right to refuse to accept further premium payments, although in practice the payment of the lesser of 2 years' scheduled premiums or the average of all premiums paid over the last 5 years will generally be allowed. There are circumstances, such as the payment of premiums substantially in excess of scheduled premiums, under which the Contract may become a Modified Endowment Contract under federal tax law. If it does, loans and other pre-death distributions are includible in gross income on an income-first basis. A 10% penalty tax may be imposed on income distributed before the insured attains age 59 1/2. Prospective purchasers and Contract owners are advised to consult a qualified tax advisor before taking steps that may affect whether the Contract becomes a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. The owner of a Contract chooses the investment subaccount[s] of Pruco Life's Variable Appreciable Account (the "Account") in which the assets related to the Contract will be held. At present there are thirteen subaccounts. Each is currently invested in a corresponding portfolio of The Prudential Series Fund, Inc. (the "Series Fund"), a series mutual fund to which The Prudential Insurance Company of America ("Prudential") acts as investment advisor. The MONEY MARKET PORTFOLIO is invested in short-term debt obligations similar to those purchased by money market funds; the DIVERSIFIED BOND PORTFOLIO is invested primarily in high quality medium-term corporate and government debt securities; the GOVERNMENT INCOME PORTFOLIO is invested primarily in U.S. Government securities including intermediate and long-term U.S. Treasury securities and debt obligations issued by agencies of or instrumentalities established, sponsored or guaranteed by the U.S. Government; the CONSERVATIVE BALANCED PORTFOLIO is invested in a mix of money market instruments, fixed income securities, and common stocks, in proportions believed by the investment manager to be appropriate for an investor who desires diversification of investment who prefers a relatively lower risk of loss and a correspondingly reduced chance of high appreciation; the FLEXIBLE MANAGED PORTFOLIO is invested in a mix of money market instruments, fixed income securities, and common stocks, in proportions believed by the investment manager to be appropriate for an investor desiring diversification of investment who is willing to accept a relatively high level of loss in an effort to achieve greater appreciation; the HIGH YIELD BOND PORTFOLIO is invested primarily in high yield fixed income securities of medium to lower quality, also known as high risk bonds; the STOCK INDEX PORTFOLIO is invested in common stocks selected to duplicate the price and yield performance of the Standard & Poor's 500 Composite Stock Price Index; the EQUITY INCOME PORTFOLIO is invested primarily in common stocks and convertible securities that provide favorable prospects for investment income returns above those of the Standard & Poor's 500 Stock Index or the NYSE Composite Index; the EQUITY PORTFOLIO is invested primarily in common stocks; the PRUDENTIAL JENNISON PORTFOLIO is invested primarily in equity securities of established companies with above-average growth prospects; the SMALL CAPITALIZATION STOCK PORTFOLIO is invested primarily in equity securities of publicly-traded companies with small market capitalization; the GLOBAL PORTFOLIO is invested in common stocks and common stock equivalents (such as convertible debt securities) of foreign and domestic issuers; and the NATURAL RESOURCES PORTFOLIO is invested primarily in common stocks and convertible securities of natural resource companies, and in securities (typically debt securities or preferred stock) the terms of which are related to the market value of a natural resource; Further information about the Series Fund portfolios can be found under THE PRUDENTIAL SERIES FUND, INC. on page 4. 2 The Contract owner may also choose to invest part of his or her net premiums in the Pruco Life Variable Contract Real Property Account (the "Real Property Account"), which, through a partnership, invests primarily in income-producing real property. If a Contract owner elects to invest a portion of his or her net premiums in the Real Property Account, the assets will be maintained in a subaccount of the Real Property Account related to the Contract that provides the mechanism and maintains the records whereby the various Contract charges are made. The investment objectives of the Real Property Account and the partnership are described briefly under PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT on page 5. Because the assets that relate to the Contract are invested in these ways, the Contract offers an opportunity for the cash surrender value to appreciate more rapidly than it would under comparable fixed-benefit whole-life insurance. But the owner must accept the risk that if investment performance of the chosen option[s] is unfavorable the cash surrender value may not appreciate as rapidly and, indeed, may decrease in value. Contract owners who prefer at any time to accept a periodically declared fixed rate of return and avoid this risk may choose a fixed-rate option. See THE FIXED-RATE OPTION, page 27. Pruco Life deducts certain charges from each premium payment and from the amounts held in the designated investment options. In addition, Pruco Life makes certain additional charges if a Contract lapses or is surrendered during the first 10 Contract years. All these charges, which are largely designed to cover insurance costs and sales and administrative expenses, are fully described under CHARGES AND EXPENSES on page 10. In brief, and subject to that fuller description, the following charges may be made: (1) $2 is deducted from each premium payment to cover premium collection and processing costs; (2) a sales charge is deducted from each premium received in an amount up to 5% of the portion of the premium remaining after the $2 processing charge has been deducted (on a non-guaranteed basis, this charge is waived for premiums paid after total premiums paid under the Contract exceed 5 years of scheduled premiums on an annual basis); in addition, if the Contract lapses or is surrendered during the first 10 years, a deferred sales charge is assessed; the maximum deferred sales charge is 25% of the first year's scheduled premium and 5% of the scheduled premiums for the next 4 Contract years; beginning in the eighth month of year 6 this charge is reduced monthly until it disappears after year 10; (3) a premium tax charge (equal to 2.5% of the premium remaining after the $2 processing charge has been deducted) is deducted from each premium payment; (4) each month, the Contract fund is reduced by an administrative charge of $2.50 per Contract and up to $0.02 per $1,000 of face amount of insurance; (5) each month, the Contract fund is reduced by a guaranteed minimum death benefit risk charge of not more than $0.01 per $1,000 of face amount of insurance; (6) each month, a charge for anticipated mortality is deducted, with the maximum charge based on the 1980 Commissioners Standard Ordinary Mortality Table ("1980 CSO Table"); (7) a daily charge equivalent to an annual rate of 0.6% is deducted from the assets of the subaccounts for mortality and expense risks; (8) if a Contract lapses or is surrendered during the first 10 years, a contingent deferred administrative charge is assessed; during the first 5 years, this charge equals $5 per $1,000 of face amount, and it begins to decline monthly after the fifth Contract year, so that it disappears on the tenth Contract anniversary; (9) an administrative processing charge equal to the lesser of $15 or 2% of the amount withdrawn will be made in connection with each withdrawal of excess cash surrender value; (10) if the Contract includes riders, a monthly deduction from the Contract fund will be made for charges applicable to those riders; a deduction will also be made if the rating class of the insured results in an extra charge; and (11) certain fees and expenses are deducted from the assets of the Series Fund and Real Property Account. Because of these charges, and in particular because of the significant charges deducted upon early surrender or lapse, prospective purchasers should purchase a Contract only if they intend and have the financial capability to keep it in force for a substantial period. For a limited time, a Contract may be returned for a refund in accordance with the terms of its "free look" provision. See SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK," page 6. This Summary is intended to provide only a brief overview of the more significant aspects of the Contract. Further detail is provided in this prospectus and in the Contract document. That document, together with the application attached to it, constitutes the entire agreement between the owner and Pruco Life and should be retained. 3 GENERAL INFORMATION ABOUT PRUCO LIFE INSURANCE COMPANY, PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT, AND THE VARIABLE INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT PRUCO LIFE INSURANCE COMPANY Pruco Life Insurance Company ("Pruco Life") is a stock life insurance company, organized in 1971 under the laws of the State of Arizona. It is licensed to sell life insurance and annuities in the District of Columbia, Guam, and in all states except New York. Pruco Life is a wholly-owned subsidiary of Prudential, a mutual insurance company founded in 1875 under the laws of the State of New Jersey. As of December 31, 1996, it has invested over $442 million in Pruco Life in connection with Pruco Life's organization and operation. Prudential intends from time to time to make additional capital contributions to Pruco Life as needed to enable it to meet its reserve requirements and expenses in connection with its business. Prudential is under no obligation to make such contributions and its assets do not back the benefits payable under the Contract. Pruco Life's consolidated financial statements begin on page B1 and should be considered only as bearing upon Pruco Life's ability to meet its obligations under the Contracts. PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT The Pruco Life Variable Appreciable Account (the "Account") was established on January 13, 1984 under Arizona law as a separate investment account. The Account meets the definition of a "separate account" under the federal securities laws. The Account holds assets that are segregated from all of Pruco Life's other assets. The obligations to Contract owners and beneficiaries arising under the Contracts are general corporate obligations of Pruco Life. Pruco Life is also the legal owner of the assets in the Account. Pruco Life will maintain assets in the Account with a total market value at least equal to the reserve and other liabilities relating to the variable benefits attributable to the Account. These assets may not be charged with liabilities which arise from any other business Pruco Life conducts. In addition to these assets, the Account's assets may include funds contributed by Pruco Life to commence operation of the Account and may include accumulations of the charges Pruco Life makes against the Account. From time to time these additional assets will be transferred to Pruco Life's general account. Before making any such transfer, Pruco Life will consider any possible adverse impact the transfer might have on the Account. The Account is registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940 ("1940 Act") as a unit investment trust, which is a type of investment company. This does not involve any supervision by the SEC of the management or investment policies or practices of the Account. For state law purposes, the Account is treated as a part or division of Pruco Life. There are currently thirteen subaccounts within the Account, each of which invests in a single corresponding portfolio of the Series Fund. Additional subaccounts may be added in the future. The Account's financial statements begin on page A1. THE PRUDENTIAL SERIES FUND, INC. The Prudential Series Fund, Inc. (the "Series Fund") is registered under the 1940 Act as an open-end diversified management investment company. Its shares are currently sold only to separate accounts of Prudential and certain other insurers that offer variable life insurance and variable annuity contracts. On October 31, 1986, the Pruco Life Series Fund, Inc., an open-end diversified management investment company which sold its shares only to separate accounts of Pruco Life and Pruco Life Insurance Company of New Jersey, was merged into the Series Fund. Prior to that date, the Account invested only in shares of Pruco Life Series Fund, Inc. The Account will purchase and redeem shares from the Series Fund at net asset value. Shares will be redeemed to the extent necessary for Pruco Life to provide benefits under the Contracts and to transfer assets from one subaccount to another, as requested by Contract owners. Any dividend or capital gain distribution received from a portfolio of the Series Fund will be reinvested immediately at net asset value in shares of that portfolio and retained as assets of the corresponding subaccount. Prudential is the investment advisor for the assets of each of the portfolios of the Series Fund. Prudential's principal business address is Prudential Plaza, Newark, New Jersey 07102-3777. Prudential has a Service Agreement with its wholly-owned subsidiary The Prudential Investment Corporation ("PIC"), which provides that, subject to Prudential's supervision, PIC will furnish investment advisory services in connection with the management of the Series Fund. In addition, Prudential has entered into a Subadvisory Agreement with its wholly-owned subsidiary Jennison Associates Capital Corporation ("Jennison"), under which Jennison furnishes investment 4 advisory services in connection with the management of the Prudential Jennison Portfolio. Further detail is provided in the prospectus and statement of additional information for the Series Fund. Prudential, PIC, and Jennison are registered as investment advisors under the Investment Advisers Act of 1940. As an investment advisor, Prudential charges the Series Fund a daily investment management fee as compensation for its services. In addition to the investment management fee, each portfolio incurs certain expenses, such as accounting and custodian fees. See CHARGES AND EXPENSES, page 10. It is conceivable that in the future it may become disadvantageous for both variable life insurance and variable annuity contract separate accounts to invest in the same underlying mutual fund. Although neither the companies which invest in the Series Fund, nor the Series Fund currently foresees any such disadvantage, the Series Fund's Board of Directors intends to monitor events in order to identify any material conflict between variable life insurance and variable annuity contract owners and to determine what action, if any, should be taken in response thereto. Material conflicts could result from such things as: (1) changes in state insurance law; (2) changes in federal income tax law; (3) changes in the investment management of any portfolio of the Series Fund; or (4) differences between voting instructions given by variable life insurance and variable annuity contract owners. A FULL DESCRIPTION OF THE SERIES FUND, ITS INVESTMENT OBJECTIVES, MANAGEMENT, POLICIES, AND RESTRICTIONS, ITS EXPENSES, THE RISKS ATTENDANT TO INVESTMENT THEREIN-INCLUDING ANY RISKS ASSOCIATED WITH INVESTMENT IN THE HIGH YIELD BOND PORTFOLIO, AND ALL OTHER ASPECTS OF ITS OPERATION IS CONTAINED IN THE ATTACHED PROSPECTUS FOR THE SERIES FUND AND IN ITS STATEMENT OF ADDITIONAL INFORMATION, WHICH SHOULD BE READ IN CONJUNCTION WITH THIS PROSPECTUS. THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES WILL BE MET. PRUCO LIFE VARIABLE CONTRACT REAL PROPERTY ACCOUNT The Pruco Life Variable Contract Real Property Account (the "Real Property Account") is a separate account of Pruco Life that, through a general partnership formed by Prudential and two of its subsidiaries, invests primarily in income-producing real property such as office buildings, shopping centers, agricultural land, hotels, apartments or industrial properties. It also invests in mortgage loans and other real estate-related investments, including sale-leaseback transactions. The objectives of the Real Property Account and the partnership are to preserve and protect capital, provide for compounding of income as a result of reinvestment of cash flow from investments, and provide for increases over time in the amount of such income through appreciation in the value of its assets. The partnership has entered into an investment management agreement with Prudential, under which Prudential selects the properties and other investments held by the partnership. Prudential charges the partnership a daily fee for investment management which amounts to 1.25% per year of the average daily gross assets of the partnership. A FULL DESCRIPTION OF THE REAL PROPERTY ACCOUNT, ITS MANAGEMENT, POLICIES, AND RESTRICTIONS, ITS CHARGES AND EXPENSES, THE RISKS ATTENDANT TO INVESTMENT THEREIN, THE PARTNERSHIP'S INVESTMENT OBJECTIVES, AND ALL OTHER ASPECTS OF THE REAL PROPERTY ACCOUNT'S AND THE PARTNERSHIP'S OPERATIONS IS CONTAINED IN THE ATTACHED PROSPECTUS FOR THE REAL PROPERTY ACCOUNT, WHICH SHOULD BE READ TOGETHER WITH THIS PROSPECTUS BY ANY CONTRACT OWNER CONSIDERING THE REAL ESTATE INVESTMENT OPTION. THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES WILL BE MET. WHICH INVESTMENT OPTION SHOULD BE SELECTED A broad objective of the Contract is to provide benefits that will increase in value if favorable investment results are achieved. Contract owners have a large number of options as to how the amounts credited to their Contracts will be invested. Historically, for investments held over relatively long periods, the investment performance of common stocks has generally been superior to that of short or long-term debt securities, even though common stocks have been subject to much more dramatic changes in value over short periods of time. Accordingly, the Stock Index, Equity Income, the Equity, Prudential Jennison, Small Capitalization Stock, Global or Natural Resources Portfolios, may be desirable options for Contract owners who are willing to accept such volatility in their Contract values. Each of these equity portfolios involves somewhat different investment risks, policies, and programs. Some Contract owners may prefer the somewhat greater protection against loss of principal (and reduced chance of high total return) provided by the Government Income or Diversified Bond Portfolios, while others, who desire even greater safety of principal, may prefer the Money Market Portfolio or the fixed-rate option, recognizing that the level of short-term rates may change rather rapidly. Contract owners not interested in common stocks but willing to take risks and seeking the possibility of a high total return may prefer the High Yield Bond Portfolio, recognizing that with higher yielding, lower quality bonds the risks are greater. Some Contract owners may wish to divide their funds among two or more of the portfolios. Some may wish to obtain diversification by relying on Prudential's judgment for an appropriate asset mix by choosing one of the Balanced Portfolios. The Real Property 5 Account permits a Contract owner to diversify his or her investment under the Contract to include an interest in a pool of income-producing real property, and real estate is often considered to be a hedge against inflation. Each Contract owner must make his or her own choice that takes into account how willing he or she is to accept investment risks, the manner in which his or her other assets are invested, and his or her own predictions about what investment results are likely to be in the future. Prudential recommends against frequent transfers among the several options as experience generally indicates that "market timing" investing, particularly by non-professional investors, is likely to prove unsuccessful. DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS REQUIREMENTS FOR ISSUANCE OF A CONTRACT As of May 1, 1992, these Contracts are no longer available for sale. Generally, the minimum initial guaranteed death benefit that can be applied for is $60,000. However higher minimums apply to insureds over the age of 75. Insureds 14 years of age or less may apply for a minimum initial guaranteed death benefit of $40,000. The Contract may generally be issued on insureds below the age of 81. Before issuing any Contract, Pruco Life requires evidence of insurability which may include a medical examination. Non-smokers who meet preferred underwriting requirements are offered the most favorable premium rate. A higher premium is charged if an extra mortality risk is involved. Certain classes of Contracts, for example a Contract issued in connection with a tax-qualified pension plan, may be issued on a "guaranteed issue" basis and may have a lower minimum initial death benefit than a Contract which is individually underwritten. These are the current underwriting requirements. The Company reserves the right to change them on a non-discriminatory basis. SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK" Generally, a Contract may be returned for a refund within 10 days after it is received by the Contract owner, within 45 days after Part I of the application for insurance is signed or within 10 days after Pruco Life mails or delivers a Notice of Withdrawal Right, whichever is latest. Some states allow a longer period of time during which a Contract may be returned for a refund. A refund can be requested by mailing or delivering the Contract to the representative who sold it or to the Home Office specified in the Contract. A Contract returned according to this provision shall be deemed void from the beginning. The Contract owner will then receive a refund of all premium payments made, plus or minus any change due to investment experience. However, if applicable law so requires, the Contract owner who exercises his or her short-term cancellation right will receive a refund of all premium payments made, with no adjustment for investment experience. CONTRACT FORMS A purchaser may select either of two forms of the Contract. The scheduled premium for the Contract will be the same for a given insured, regardless of which Contract Form is chosen. Contract Form A has a death benefit equal to the initial face amount of insurance. The death benefit of a Form A Contract does not vary with the investment performance of the investment options selected by the owner, unless the Contract becomes paid-up or, under a revised version of the Contract, unless the death benefit is increased to ensure that the Contract meets the Internal Revenue Code's definition of life insurance. See HOW A CONTRACT'S DEATH BENEFIT WILL VARY, page 15. Favorable investment results on the assets related to the Contract and greater than scheduled premiums will generally result in increases in the cash surrender value. See HOW A CONTRACT'S CASH SURRENDER VALUE WILL VARY, page 15. Contract Form B also has an initial face amount of insurance but favorable investment performance and greater than scheduled premiums generally result in an increase in the death benefit and, over time, in a lesser increase in the cash surrender value than under the Form A Contract. See HOW A CONTRACT'S CASH SURRENDER VALUE WILL VARY, page 15 and HOW A CONTRACT'S DEATH BENEFIT WILL VARY, page 15. Unfavorable investment performance will result in decreases in the death benefit (but never below the face amount stated in the Contract) and in the cash surrender value. Both Form A and Form B Contracts covering insureds of 14 years of age or less contain a special provision providing that the face amount of insurance will automatically be increased, on the Contract anniversary after the insured's 21st birthday, to 150% of the initial face amount, so long as the Contract is not then in default. The death benefit will also usually increase, at the same time, by the same dollar amount. In certain circumstances, however, it may increase by a smaller amount. See WHEN A CONTRACT BECOMES PAID-UP, page 16 and HOW A CONTRACT'S DEATH BENEFIT WILL VARY, page 15. This increase in death benefit will also generally increase the net amount at risk under the Contract, thus increasing the mortality charge deducted each month from amounts invested under the Contract. See item 6 under CHARGES AND EXPENSES, page 10. The automatic increase in the 6 face amount of insurance may affect future premium payments if the Contract owner wants to avoid the Contract being classified as a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. A Contract owner should consult his or her own tax advisor and Pruco Life representative before making unscheduled premium payments. Purchasers should select the Contract Form that best meets their needs and objectives. All whole-life insurance provides both protection for beneficiaries in the event of early death and the opportunity to accumulate savings for possible use in later years--for such things as college tuition or supplementary retirement income--when the need for insurance protection may be reduced. Pruco Life's Variable APPRECIABLE LIFE Contract provides more flexible investment opportunities than do more conventional life insurance policies because it permits the owner to decide how the assets held under the Contract will be invested, because it permits considerable flexibility in determining the amount and timing of premium payments, because it permits adjustment of the face amount of insurance (subject, in the case of an increase, to evidence of insurability), and because favorable investment returns result in an increase in Contract values. Purchasers who prefer to have favorable investment results and greater than scheduled premiums emerge partly in the form of an increased death benefit should choose Contract Form B. Purchasers who are satisfied with the amount of their insurance coverage and wish to have favorable investment results and additional premiums reflected to the maximum extent in increasing cash surrender values should choose Contract Form A. See HOW A CONTRACT'S CASH SURRENDER VALUE WILL VARY, page 15. In choosing a Contract Form, purchasers should also consider whether they intend to use the withdrawal feature. Purchasers of Form A Contracts should note that a withdrawal may result in a portion of the surrender charge being deducted from the Contract fund. Furthermore, a purchaser of a minimum face amount Form A Contract cannot make withdrawals. Purchasers of Form B Contracts will not incur a surrender charge for a withdrawal and are not restricted if they purchase a minimum size Contract. See WITHDRAWAL OF EXCESS CASH SURRENDER VALUE, page 17. Under the original versions of these Contracts, there are other distinctions between the Contract Forms that may influence a purchaser's selection. Thus, Contract Form A will become paid-up more rapidly than a comparable Form B Contract. But owners of Form A Contracts should be aware that since premium payments and favorable investment experience do not increase the death benefit unless the Contract has become paid-up, the beneficiary will not benefit from the possibility that the Contract will have a large cash surrender value at the time of the insured's death. Under a revised version of the Contract that was made available beginning in September of 1986 in jurisdictions where it is approved, the Contract will never become paid-up. Instead, the death benefit under these revised Contracts is always at least as great as the Contract fund divided by the net single premium. See HOW A CONTRACT'S DEATH BENEFIT WILL VARY, page 15. Thus, instead of becoming paid-up, the Contract's death benefit will always be large enough to meet the Internal Revenue Code's definition of life insurance. Whenever the death benefit is determined in this way, Pruco Life reserves the right to refuse to accept further premium payments, although in practice the payment of at least scheduled premiums will be allowed. PREMIUMS Scheduled premiums on the Contract are payable during the insured's lifetime on an annual, semi-annual, quarterly or monthly basis on due dates set forth in the Contract. If paid more often than annually, the aggregate annual premium will be higher to compensate Pruco Life both for the additional processing costs (see item 1 under CHARGES AND EXPENSES, page 10) and for the loss of interest (computed generally at an annual rate of 8%) incurred because premiums are paid throughout rather than at the beginning of each Contract year. The premium amount depends on the Contract's initial death benefit and the insured's age at issue, sex (except where unisex rates apply), and risk classification. Contract owners who pay premiums other than on a monthly basis will be notified, about 3 weeks before each due date, that a premium is due. Contract owners who pay premiums monthly will receive each year a book with twelve coupons that will serve as a reminder. With Pruco Life's consent, an owner may change the frequency of premium payments. A Contract owner may elect to have monthly premiums paid automatically under the "Pru-Matic Premium Plan" by pre-authorized transfers from a bank checking account. Currently, Contract owners selecting the Pru-Matic Premium Plan on Contracts issued after June 1, 1987 will have reduced current monthly expense charges. See item 4 under CHARGES AND EXPENSES, page 10. Some Contract owners may also be eligible to have monthly premiums paid by pre-authorized deductions from an employer's payroll. Each Contract sets forth two premium amounts. The initial premium amount is payable on the Contract date (the date the Contract is issued, as noted in each individual Contract) and on each subsequent due date until the Contract's anniversary immediately following the insured's 65th birthday (or until the Contract's tenth anniversary, if that is later). The second and higher premium amount set forth in the Contract is payable on and after that anniversary (the "premium change date"). However, if the amount invested under the Contract, net of any excess premiums, is higher than it would have been had only scheduled premiums been paid, had maximum contractual 7 charges been deducted, and had only an average net rate of return of 4% been earned, then the second premium amount will be lower than the maximum amount stated in the Contract. Indeed, under the original versions of these Contracts, if investment experience has been favorable enough, the Contract may become paid-up before or by the premium change date. Pruco Life reserves the right not to accept any further premium payments on a paid-up Contract. Contract owners will be told what the amount of the second premium will be. Pruco Life designed the Contracts to include a premium change date, with scheduled premiums potentially increasing after that date to a second premium amount, in order to provide Contract owners with both the flexibility to pay lower initial scheduled premiums and a guarantee of lifetime insurance coverage if all scheduled premiums are paid. The tables on pages T1 through T4 show how the second premium amount compares with the first premium amount under Contracts and for different hypothetical investment results. The following table shows, for two face amounts, representative initial preferred rating and standard rating annual premium amounts under either Form A or Form B Contracts issued on insureds who are not substandard risks: - -------------------------------------------------------------------------------- $60,000 FACE AMOUNT $100,000 FACE AMOUNT - -------------------------------------------------------------------------------- PREFERRED STANDARD PREFERRED STANDARD - -------------------------------------------------------------------------------- MALE, AGE $ 554.80 $ 669.40 $ 902.00 $1,093.00 35 AT ISSUE - -------------------------------------------------------------------------------- FEMALE, $ 698.80 $ 787.60 $1,142.00 $1,290.00 AGE 45 AT ISSUE - -------------------------------------------------------------------------------- MALE, AGE $1,556.20 $1,832.20 $2,571.00 $3,031.00 55 AT ISSUE - -------------------------------------------------------------------------------- The following table compares annual and monthly premiums for insureds who are in the preferred rating class. Note that in these examples the sum of 12 monthly premiums for a particular Contract is approximately 105% to 109% of the annual premium for that Contract. - -------------------------------------------------------------------------------- $60,000 FACE AMOUNT $100,000 FACE AMOUNT - -------------------------------------------------------------------------------- MONTHLY ANNUAL MONTHLY ANNUAL - -------------------------------------------------------------------------------- MALE, AGE $ 50.00 $ 554.80 $ 80.00 $ 902.00 35 AT ISSUE - -------------------------------------------------------------------------------- FEMALE, $ 62.60 $ 698.80 $101.00 $1,142.00 AGE 45 AT ISSUE - -------------------------------------------------------------------------------- MALE, AGE $136.40 $1,556.20 $224.00 $2,571.00 55 AT ISSUE - -------------------------------------------------------------------------------- If a Contract owner wishes, he or she may select a higher contemplated premium than the scheduled premium. Pruco Life will bill the owner for the chosen premium. In general, the regular payment of higher premiums will result in higher cash surrender values and, at least under Form B, in higher death benefits. Under the original versions of the Contracts, such payments may also provide a means of obtaining a paid-up Contract earlier than if only scheduled premiums are paid. The payment of premiums substantially in excess of scheduled premiums may cause the Contract to be classified as a Modified Endowment Contract for federal income tax purposes. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. 8 CONTRACT DATE When the first premium payment is paid with the application for a Contract, the Contract date will ordinarily be the later of the date of the application or the date of any medical examination. In most cases no medical examination will be necessary. If the first premium is not paid with the application, the Contract date will ordinarily be 2 or 3 days after the application is approved by Pruco Life so that it will coincide with or be shortly prior to the date on which the first premium is paid. However, Pruco Life will under certain circumstances permit a Contract to be back-dated but only to a date not earlier than six months prior to the date of the application. It may be advantageous for a Contract owner to have an earlier Contract date if that will result in the use by Pruco Life of a lower attained age in determining the amount of the scheduled premium. Pruco Life will require the payment of all premiums that would have been due had the application date coincided with the back-dated Contract date. The death benefit and cash surrender value under the Contract will be equal to what they would have been had the Contract been issued on the Contract date, all scheduled premiums been received on their due dates, and all Contract charges been made. See CHARGES AND EXPENSES, page 10. ALLOCATION OF PREMIUMS On the Contract date a $2 processing charge is deducted from the initial premium and up to 7.5% of the amount remaining is deducted to cover certain charges (described in detail below), and the first monthly deductions are made (also described below). The remainder of the initial scheduled premium will be allocated among the subaccounts, the fixed-rate option or the Real Property Account on the Contract date according to the desired allocation specified in the application form. The invested portion of any part of the first premium in excess of the scheduled initial premium, as well as the invested portion of all subsequent premiums, are placed in the selected investment option[s] on the date of receipt at a Home Office, but not earlier than the Contract date. Thus, to the extent that the receipt of the first premium precedes the Contract date, there will be a period during which the Contract owner's initial premium will not be invested. The $2 per payment charge and up to 7.5% deduction also apply to all subsequent premium payments; the remainder will be invested as of the end of the valuation period in which it is received at a Home Office in accordance with the allocation previously designated by the Contract owner. The "valuation period" means the period of time from one determination of the value of the amount invested in a subaccount to the next. Such determinations are made when the net asset values of the portfolios of the Series Fund are calculated, which is generally at 4:15 p.m. New York City time on each day during which the New York Stock Exchange is open. Provided the Contract is not in default, the Contract owner may change the way in which subsequent premiums are allocated by giving written notice to a Home Office or by telephoning that Home Office, provided the Contract owner is enrolled to use the Telephone Transfer System. There is no charge for reallocating future premiums among the investment options. If any portion of a premium is allocated to a particular subaccount, to the fixed-rate option or to the Real Property Account, that portion must be at least 10% on the date the allocation takes effect. All percentage allocations must be in whole numbers. For example, 33% can be selected but 331/3% cannot. Of course, the total allocation of all selected investment options must equal 100%. Additionally, a feature called Dollar Cost Averaging ("DCA") is available to Contract owners. Under this feature, premiums may be allocated to the portion of the Money Market subaccount used for this feature (the "DCA account"), and designated dollar amounts will be transferred monthly from the DCA account to other investment options available under the Contract, excluding the Money Market subaccount and the fixed-rate option, but including the Real Property Account. Automatic monthly transfers must be at least 3% of the amount allocated to the DCA account (that is, if $5,000 is designated, the minimum monthly transfer is $150), with a minimum of $20 transferred into any one investment option. These amounts are subject to change at Pruco Life's discretion. The minimum transfer amount will only be recalculated if the amount designated for transfer is increased. Currently, the amount initially designated to DCA must be at least $2,000. This minimum is subject to change at Pruco Life's discretion. After DCA has been established and as long as the DCA account has a positive balance, Contract owners may allocate or transfer amounts to the DCA account, subject to the limitations on premium payments and transfers generally. In addition, if premiums are paid on an annual or semi-annual basis, and the Contract owner has already established DCA, the premium allocation instructions may include an allocation of all or a portion of all your premium payments to the DCA account. Each automatic monthly transfer will take effect as of the end of the valuation period on the Monthly Date (i.e. the Contract Date and the same date in each subsequent month), provided the New York Stock Exchange ("NYSE") is open on that date. If the NYSE is not open on the Monthly Date, the transfer will take effect as of the end of the valuation period on the next day that the NYSE is open. If the Monthly Date does not occur in a particular month (e.g., February 30), the transfer will take effect as of the end of the valuation period on the last day of that month that the NYSE is open. Automatic monthly transfers will continue until the balance in the DCA account reaches zero, or until the Contract owner gives notification of a change in allocation or cancellation of the feature. If the Contract has outstanding premium allocation to the DCA account, but the DCA option has previously been 9 canceled, premiums allocated to the DCA account will be allocated to the Money Market subaccount. Currently, there is no charge for using the DCA feature. TRANSFERS Provided the Contract is not in default or is in force as variable reduced paid-up insurance (see OPTIONS ON LAPSE, page 24), the owner may, up to four times in each Contract year, transfer amounts from one subaccount to another subaccount, to the fixed-rate option or to the Real Property Account. Currently, you may make additional transfers with our consent. There is no charge. All or a portion of the amount credited to a subaccount may be transferred. In addition, the entire amount of the Contract fund (described in detail below) may be transferred to the fixed-rate option at any time during the first 2 Contract years. A Contract owner who wishes to convert his or her variable contract to a fixed-benefit contract in this manner must request a complete transfer of funds to the fixed-rate option and should also change his or her allocation instructions regarding any future premiums. Transfers among subaccounts will take effect as of the end of the valuation period in which a proper transfer request is received at a Home Office. The request may be in terms of dollars, such as a request to transfer $10,000 from one subaccount to another, or may be in terms of a percentage reallocation among subaccounts. In the latter case, as with premium reallocations, the percentages must be in whole numbers. The Contract owner may transfer amounts by proper written notice to a Home Office or by telephone, provided the Contract owner is enrolled to use the Telephone Transfer System. A Contract owner will automatically be enrolled to use the Telephone Transfer System unless the Contract is jointly owned or the Contract owner elects not to have this privilege. Telephone transfers may not be available on policies that are assigned, see ASSIGNMENT, page 28, depending on the terms of the assignment. Pruco Life has adopted procedures designed to ensure that requests by telephone are genuine. Pruco Life will not be held liable for following telephone instructions that it reasonably believes to be genuine. Pruco Life cannot guarantee that owners will be able to get through to complete a telephone transfer during peak periods such as periods of drastic economic or market change. Transfers from the fixed-rate option to other investment options are currently permitted once each Contract year and only during the 30-day period beginning on the Contract anniversary. The maximum amount which may currently be transferred out of the fixed-rate option each year is the greater of: (a) 25% of the amount in the fixed-rate option, or (b) $2,000. Such transfer requests received prior to the Contract anniversary will be effected on the Contract anniversary. Transfer requests received within the 30-day period beginning on the Contract anniversary will be effected as of the end of the valuation period in which a proper transfer request is received at a Home Office. These limits are subject to change in the future. Transfers to and from the Real Property Account are subject to restrictions described in the attached prospectus for the Real Property Account. Pruco Life may, on a non-discriminatory basis, permit the owner of an APPRECIABLE LIFE insurance policy issued by Pruco Life (this fixed-benefit policy is briefly described under RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY on page 24 ) to exchange his or her policy for a comparable Variable APPRECIABLE LIFE Contract with the same Contract date, scheduled premiums, and Contract fund. No charge will be made for the exchange. There is no new "free look" right when an APPRECIABLE LIFE contract owner elects to exchange his or her policy for a comparable Variable APPRECIABLE LIFE Contract. Although Pruco Life does not give tax advice, Pruco Life does believe, based on its understanding of federal income tax laws as currently interpreted, that the original date exchange of an APPRECIABLE LIFE contract for a Variable APPRECIABLE LIFE Contract should be considered to be a tax-free exchange under the Internal Revenue Code of 1986, as amended. It should be noted, however, that the exchange of an APPRECIABLE LIFE contract for a Variable APPRECIABLE LIFE Contract may impact the status of the Contract as a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. A contract owner should consult with his or her tax advisor and Pruco Life representative before making an exchange. CHARGES AND EXPENSES The amount relating to the Contract held in the Account is determined by the amount of premium payments, charges deducted from premiums before they are placed in the Account, deductions made from the Account, including any deductions made for a Contract loan (see CONTRACT LOANS, page 23), and the investment results of the selected subaccount[s]. The total amount invested under the Contract (the "Contract fund") consists of the amount related to the Contract held in the Account, any amount allocated to the fixed-rate option, any amount invested in the Real Property Account, and the principal amount of any Contract loan and interest credited thereon. All of the charges made by Pruco Life, whether deducted from premiums or from the Contract fund, are set forth below. 10 1. A charge of $2 is deducted from each premium payment to cover the cost of collecting and processing premiums. Thus, Contract owners who pay premiums annually will incur lower aggregate processing charges than those who pay premiums more frequently. During 1996, 1995 and 1994, Pruco Life received a total of approximately $4,422,000, $4,715,000 and $5,034,000, respectively, in processing charges. 2. There is a charge to compensate Pruco Life for the cost of selling the Contract. This cost includes sales commissions, advertising, and the printing of the prospectuses and sales literature. This charge is called the "sales load." The maximum sales load that will be charged will be 30% of the first year's scheduled premium, 10% of the scheduled premium for the second, third, fourth, and fifth years and 5% of each additional premium, whether scheduled or unscheduled. Part of this sales load will be deducted from each premium received in an amount up to 5% of the portion of the premium remaining after the $2 processing charge has been deducted. The remainder of the sales load will be deducted only if the Contract is surrendered or stays in default past its days of grace. This second part is called the deferred sales charge. The deferred sales charge will not be deducted at all, however, for Contracts that lapse or are surrendered on or after the Contract's tenth anniversary and it will be reduced for Contracts that lapse or are surrendered sometime between the eighth month of year 6 and the tenth anniversary. No deferred sales charge is applicable to the death benefit, no matter when that may become payable. For Contracts under which premiums are payable annually, the maximum deferred sales charge (equal to 25% of the scheduled premium for the first Contract year and 5% of the scheduled premium for the next 4 Contract years) will be made under Contracts that lapse or are surrendered during the fifth Contract year and the first 7 months of the sixth Contract year. Thereafter the sales charge will be the maximum charge reduced uniformly until it becomes zero at the end of the tenth Contract year. More precisely, the deferred sales charge will be the maximum charge reduced by a factor equal to the number of complete months that have elapsed between the end of the sixth month in the Contract's sixth year and the date of surrender or lapse, divided by 54 (since there are 54 months between that date and the Contract's tenth anniversary). The following table shows illustrative deferred sales load charges that will be made when such Contracts are surrendered or lapse. - -------------------------------------------------------------------------------- THE DEFERRED SALES WHICH IS EQUAL TO THE FOR CONTRACTS CHARGE WILL FOLLOWING PERCENTAGE SURRENDERED DURING BE THE FOLLOWING OF THE SCHEDULED PERCENTAGE PREMIUMS DUE TO DATE OF ONE SCHEDULED OF SURRENDER ANNUAL PREMIUM - -------------------------------------------------------------------------------- Entire Year 1 25% 25.00% Entire Year 2 30% 15.00% Entire Year 3 35% 11.67% Entire Year 4 40% 10.00% Entire Year 5 45% 9.00% First 7 Months of Year 6 45% 7.50% First Month of Year 7 40% 5.71% First Month of Year 8 30% 3.75% First Month of Year 9 20% 2.22% First Month of Year 10 10% 1.00% First Month of Year 11 and Thereafter 0% 0.00% - -------------------------------------------------------------------------------- For Contracts under which premiums are payable more frequently than annually, the deferred sales charge will be 25% of the first year's scheduled premiums due on or before the date of surrender or lapse and 5% of the scheduled premiums for the second through fifth Contract years due on or before the date of surrender or lapse. Thus, for such Contracts the maximum deferred sales charge will also be equal to 9% of the total scheduled premiums for the first 5 Contract years. This amount will be higher in dollar amount than it would have been had premiums been paid annually because the total of the scheduled premiums is higher. See PREMIUMS, page 7. To compensate for this, the reduction in the deferred sales charge will start slightly earlier for Contracts under which premiums are paid semi-annually, still earlier if premiums are paid quarterly and even earlier if premiums are paid monthly. The reductions are graded smoothly so that the dollar amount of the deferred sales charge for two persons of the same age, sex, contract size, and Contract date, will be identical beginning in the seventh month of the sixth Contract year without regard to the frequency at which premiums were paid. For purposes of determining the deferred sales charge, the scheduled premium is the premium payable for an insured in the preferred rating class, even if the insured is in a higher rated risk class. Moreover, if premiums 11 have been paid in excess of the scheduled premiums, the charge is based upon the scheduled premiums. If a Contract is surrendered when less than the aggregate amount of the scheduled premiums due on or before the date of surrender has been paid, the deferred sales charge percentages (25% for the first year and 5% for years 2 through 5) will be applied to the premium payments due on or before the fifth anniversary date that were actually paid, whether timely or not, before surrender. During 1996, 1995 and 1994, Pruco Life received a total of approximately $407,000, $871,000 and $1,408,000, respectively, in sales load charges. Pruco Life has determined to waive the portion of the sales load deducted from each premium (5% of the portion of the premium remaining after the $2 processing charge has been deducted) for premiums paid after total premiums paid under the Contract exceed 5 years of scheduled premiums on an annual basis. Thus, with respect to a premium paid after that total is reached, only the 2.5% premium tax charge and the $2 processing charge is deducted before the premium is allocated to the Account, fixed-rate option or the Real Property Account according to the owner's instructions. This concession is not contractually guaranteed and may be withdrawn or modified by Pruco Life on a uniform basis, although it does not currently intend to do so. If an owner elects to increase the face amount of his or her Contract, the rules governing the non-guaranteed waiver of the 5% front-end sales load will apply separately to the base Contract and the increase, as explained under INCREASES IN FACE AMOUNT on page 18. 3. There is a premium tax charge equal to 2.5% of the premium remaining after the $2 processing charge has been deducted. This charge is made to compensate Pruco Life for paying state and local premium taxes. (The 7.5% deduction referred to on page 9 is made up of the 5% sales load charge and the 2.5% premium tax charge.) State premium tax rates vary from jurisdiction to jurisdiction and generally range from 0.75% to 5%. Pruco Life may collect more for this charge than it actually pays for premium taxes. During 1996, 1995 and 1994, Pruco Life received a total of approximately $5,636,000, $6,031,000 and $6,598,000, respectively, in charges for payment of state and local premium taxes. 4. On each Monthly date, the Contract fund is reduced by an expense charge of $2.50 per Contract and up to $0.02 per $1,000 of face amount (excluding the automatic increase under Contracts issued on insureds of 14 years of age or less), except that currently this $0.02 per $1,000 charge will not be greater than $2 per month and for Contracts issued after June 1, 1987 on a Pru-Matic Plan basis, this $0.02 per $1,000 charge will currently be waived. Thus, for a Contract with the minimum face amount of $60,000, not issued on a Pru-Matic Plan basis, the aggregate amount deducted each year will be $44.40. This charge is to compensate Pruco Life for administrative expenses incurred, among other things, for processing claims, paying cash surrender values, making Contract changes, keeping records, and communicating with Contract owners. This charge will not be made if the Contract has become paid-up or has been continued in force, after lapse, as variable reduced paid-up insurance. During 1996, 1995 and 1994, Pruco Life received a total of approximately $13,709,000, $14,375,000 and $15,116,000, respectively, in monthly administrative charges. 5. On each Monthly date the Contract fund is reduced by a charge of $0.01 per $1,000 of face amount (excluding the automatic increase under Contracts issued on insureds of 14 years of age or less) to compensate Pruco Life for the risk it assumes by guaranteeing that, no matter how unfavorable investment experience may be, the death benefit will never be less than the face amount provided scheduled premiums are paid on or before the due date or during the grace period. This charge is not made after a Contract becomes paid-up or has been continued in force, after lapse, as variable reduced paid-up insurance. During 1996, 1995 and 1994, Pruco Life received a total of approximately $2,572,000, $2,648,000 and $2,785,000, respectively, for this risk charge. 6. Pruco Life deducts a mortality charge from the Contract fund on each Monthly date to cover anticipated mortality costs. When an insured dies, the amount paid to the beneficiary is larger than the Contract fund and significantly larger if the insured dies in the early years of a Contract. The mortality charges are designed to enable Pruco Life to pay this larger death benefit. The charge is determined by multiplying the "net amount at risk" under a Contract (the amount by which the Contract's death benefit, computed as if there were neither riders nor Contract debt, exceeds the Contract fund) by a rate based upon the insured's sex (except where unisex rates apply) and current attained age, and the anticipated mortality for that class of persons. The maximum rate that Pruco Life may charge is based upon the 1980 CSO Tables. Pruco Life may determine that a lesser amount than that called for by these mortality tables will be adequate to defray anticipated mortality costs for insureds of particular ages and may thus make a lower mortality charge for such persons. Pruco Life, however, reserves the right to charge full mortality charges based on the applicable 1980 CSO Table, and any lower current mortality charges are not applicable to Contracts in force pursuant to an option on lapse. See OPTIONS ON LAPSE, page 24. In addition, if a Contract has a face amount of at least $100,000 and the insured under the Contract has met strict underwriting requirements so that the Contract is in force on a "Select Rating" basis for the particular risk classification, current mortality charges for all ages may be lower still. 12 Certain Contracts, for example Contracts issued in connection with tax-qualified pension plans, may be issued on a "guaranteed issue" basis and may have current mortality charges which are different from those mortality charges for Contracts which are individually underwritten. These Contracts with different current mortality charges may be offered to categories of individuals meeting eligibility guidelines determined by Pruco Life. 7. A charge is made to compensate Pruco Life for assuming mortality and expense risks. This is done by deducting daily, from the assets of each of the subaccounts of the Account and/or from the subaccount of the Real Property Account relating to this Contract, a percentage of those assets equivalent to an effective annual rate of 0.6% (this amounts to a daily charge of approximately 0.001639%). The mortality risk assumed is that insureds may live for a shorter period of time than Pruco Life estimated. The expense risk assumed is that expenses incurred in issuing and administering the Contract will be greater than Pruco Life estimated. During 1996, 1995 and 1994, Pruco Life received a total of approximately $15,162,000, $13,208,000 and $11,999,000, respectively, in mortality and expense risk charges. This charge is not assessed against amounts allocated to the fixed-rate option. 8. There is an administrative charge of $5 for each $1,000 of face amount of insurance (excluding the automatic increase under Contracts issued on insureds of 14 years of age or less) to compensate Pruco Life for expenses incurred in connection with the issuance of the Contract, other than sales expenses. This charge is made to cover the costs of processing applications, conducting medical examinations, determining insurability and the insured's risk class, and establishing records relating to the Contract. However, this charge will not be assessed upon issuance of the Contract, nor will it ever be deducted from any death benefit payable under the Contract. Rather, it will be deducted only if the Contract is surrendered or lapses when it is in default past its days of grace, and even then it will not be deducted at all for Contracts that stay in force through the end of the Contract's tenth year. And the charge will be reduced for Contracts that lapse or are surrendered before then but after the Contract's fifth anniversary. Specifically, the charge of $5 per $1,000 will be assessed upon surrenders or lapses occurring on or before the Contract's fifth anniversary. For each additional full month that the Contract stays in force on a premium paying basis, this charge is reduced by $0.0833 per $1,000 of initial face amount, so that it disappears on the tenth anniversary. During 1996, 1995 and 1994, Pruco Life received a total of approximately $3,580,000, $5,134,000 and $7,980,000, respectively, from surrendered or lapsed Contracts. Additionally, if a Contract has a face amount of at least $100,000 and was issued on other than a Select Rating basis (see item 6, above), the owner may request that the Contract be reclassified to a Select Rating basis. Requests for reclassification to a Select Rating basis may be subject to an underwriting fee of up to $250, but Pruco Life currently intends to waive that charge if the reclassification is effected concurrently with an increase in face amount. 9. A charge of $15 will be made in connection with each partial withdrawal of the cash surrender value of a Contract. See WITHDRAWAL OF EXCESS CASH SURRENDER VALUE, page 17. 10. If the Contract includes riders, a monthly deduction from the Contract fund will be made for charges applicable to those riders. A deduction will also be made if the rating class of the insured results in an extra charge. 11. An investment advisory fee is deducted daily from each portfolio at a rate, on an annualized basis, from 0.35% for the Stock Index Portfolio to 0.75% for the Global Portfolio. The expenses incurred in conducting the investment operations of the portfolios (such as custodian fees and preparation and distribution of annual reports) are paid out of the portfolio's income. These expenses also vary from portfolio to portfolio. The total expenses of each portfolio for the year 1996 expressed as a percentage of the average assets during the year are shown below: 13 - -------------------------------------------------------------------------------- Other Total Investment Expenses Expenses PORTFOLIO Advisory (after expense (after expense Fee reimbursement)* reimbursement)* - -------------------------------------------------------------------------------- MONEY MARKET 0.40% 0.00%* 0.40%* DIVERSIFIED BOND 0.40% 0.00%* 0.40%* GOVERNMENT INCOME 0.40% 0.06% 0.46% CONSERVATIVE BALANCED 0.55% 0.00%* 0.40%* FLEXIBLE MANAGED 0.60% 0.00%* 0.40%* HIGH YIELD BOND 0.55% 0.08% 0.63% STOCK INDEX 0.35% 0.05% 0.40% EQUITY INCOME 0.40% 0.05% 0.45% EQUITY 0.45% 0.00%* 0.40%* PRUDENTIAL JENNISON 0.60% 0.06% 0.66% SMALL CAPITALIZATION STOCK 0.40% 0.16% 0.56% GLOBAL 0.75% 0.17% 0.92% NATURAL RESOURCES 0.45% 0.07% 0.52% - -------------------------------------------------------------------------------- *Some investment management fees and expenses charged to the Series Fund may be higher than those that were previously charged to the Pruco Life Series Fund, Inc. (0.4%), in which the Account previously invested. For the Money Market, Diversified Bond, Equity, Conservative Balanced, and Flexible Managed Portfolios, Pruco Life will make daily adjustments that will offset the effect on Contract owners of any higher investment management fees and expenses charged against the Series Fund. Without such adjustments the portfolio expenses indirectly borne by a Contract owner, expressed as a percentage of the average daily net assets by portfolio, would have been 0.44% for the Money Market Portfolio, 0.45% for the Diversified Bond Portfolio, 0.59% for the Conservative Balanced Portfolio, 0.64% for the Flexible Managed Portfolio and 0.50% for the Equity Portfolio. No such offset will be made with respect to the remaining portfolios, which had no counterparts in the Pruco Life Series Fund, Inc. In several instances Pruco Life uses the terms "maximum charge" and "current charge." The "maximum charge," in each instance, is the highest charge that Pruco Life is entitled to make under the Contract. The "current charge" is the lower amount that Pruco Life is now charging. However, if circumstances change, Pruco Life reserves the right to increase each current charge, up to but no more than the maximum charge, without giving any advance notice. The earnings of the Account are taxed as part of the operations of Pruco Life. No charge is being made currently to the Account for Company federal income taxes. Pruco Life will review the question of a charge to the Account for Company federal income taxes periodically. Such a charge may be made in future years for any federal income taxes that would be attributable to the Contracts. Under current laws Pruco Life may incur state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not significant and they are not charged against the Contracts or the Account. If there is a material change in applicable state or local tax laws, the imposition of any such taxes upon Pruco Life that are attributable to the Account may result in a corresponding charge against the Account. The investment management fee and other expenses charged against the Real Property Account are described in the attached prospectus for that investment option. REDUCTION OF CHARGES FOR CONCURRENT SALES TO SEVERAL INDIVIDUALS Pruco Life may reduce the sales charges and/or other charges on individual Contracts sold to members of a class of associated individuals, or to a trustee, employer or other entity representing a class, where it is expected that such multiple sales will result in savings of sales or administrative expenses. Pruco Life determines both the eligibility for such reduced charges, as well as the amount of such reductions, by considering the following factors: (1) the number of individuals; (2) the total amount of premium payments expected to be received from these Contracts; (3) the nature of the association between these individuals, and the expected persistency of the individual Contracts; (4) the purpose for which the individual Contracts are purchased and whether that purpose makes it likely that expenses will be reduced; and (5) any other circumstances which Pruco Life believes to be relevant in determining whether reduced sales or administrative expenses may be expected. Some of the reductions in charges for these sales may be contractually guaranteed; other reductions may be withdrawn or 14 modified by Pruco Life on a uniform basis. Pruco Life's reductions in charges for these sales will not be unfairly discriminatory to the interests of any individual Contract owners. HOW A CONTRACT'S CASH SURRENDER VALUE WILL VARY A Contract has a cash surrender value which the owner may get while the insured is living by surrender of the Contract. Unlike traditional fixed-benefit whole-life insurance, however, a Contract's cash surrender value is not known in advance, even if it is assumed that only scheduled premiums will be paid, because it varies daily with the investment performance of the subaccount[s] and/or Real Property Account in which the Contract participates. On the Contract date, the Contract fund value is the invested portion of the initial premium less the first monthly deductions. This amount is placed in the investment option[s] designated by the owner. Thereafter the Contract fund value changes daily, reflecting increases or decreases in the value of the securities in which the assets of the subaccount[s] have been invested, the investment performance of the Real Property Account if that option has been selected, interest credited on amounts allocated to the fixed-rate option, as well as the daily asset charge for mortality and expense risk equal to 0.001639% of the assets of the subaccount[s] of the Account and the subaccount of the Real Property Account relating to this Contract. The Contract fund value also changes to reflect the receipt of additional premium payments and the monthly deductions described in the preceding section. A Contract's cash surrender value on any date will be the Contract fund value reduced by the deferred sales and administrative charges, if any, and any Contract debt. Upon request, Pruco Life will tell a Contract owner the cash surrender value of his or her Contract. It is possible that the cash surrender value of a Contract could decline to zero because of unfavorable investment experience, even if a Contract owner continues to pay scheduled premiums when due. If the net investment return in the selected investment option[s] is greater than 4%, the Contract fund and cash surrender value for a Form B Contract can be expected to be less than the Contract fund and cash surrender value for a Form A Contract with identical premiums and investment experience. This is because the monthly mortality charges under the Form B Contract will be higher to compensate for the higher amount of insurance. The tables on pages T1 through T4 of this prospectus illustrate what the cash surrender values would be for representative Contracts, assuming uniform hypothetical investment results in the selected Series Fund portfolio[s], and also provide information about the aggregate scheduled premiums payable under those Contracts. Illustrated also is what the death benefit would be under Form B Contracts given the stated assumptions. The tables also show the premium amount that would be required on the premium change date to guarantee the Contract against lapse regardless of investment performance for each illustrated Contract under each of the assumed investment returns. HOW A CONTRACT'S DEATH BENEFIT WILL VARY As noted above, there are two forms of the Contract, Form A and Form B. Moreover, in September 1986 Pruco Life began issuing revised versions of both Form A and Form B Contracts. The primary difference between the original Contract and the revised Contract is that the original Contract may become paid-up, while the death benefit under the revised Contract operates differently and accordingly such Contract will not become paid-up. 1. ORIGINAL CONTRACTS. If a Form A Contract is chosen, the death benefit will not vary (except for Contracts issued on insureds of age 14 or less, see REQUIREMENTS FOR ISSUANCE OF A CONTRACT on page 6) regardless of the payment of additional premiums or the investment results of the selected investment options unless the Contract becomes paid-up. See WHEN A CONTRACT BECOMES PAID-UP, page 16. The death benefit does reflect a deduction for the amount of any Contract debt. See CONTRACT LOANS, page 23. If a Form B Contract is chosen, the death benefit will vary with investment experience and premium payments. Assuming no Contract debt, the death benefit under a Form B Contract will, on any day, be equal to the face amount of insurance plus the amount (if any) by which the Contract fund value exceeds the applicable "tabular Contract fund value" for the Contract. The "tabular Contract fund value" for each Contract year is an amount that is slightly less than the Contract fund value that would result as of the end of such year if only scheduled premiums were paid, they were paid when due, the selected investment options earned a net return at a uniform rate of 4% per year, full mortality charges based upon the 1980 CSO Table were deducted, maximum sales load and expense charges were deducted, and there was no Contract debt. Each Contract contains a table that sets forth the tabular Contract fund value as of the end of each of the first 20 years of the Contract. Tabular Contract fund values between Contract anniversaries are determined by interpolation. Thus, under a Form B Contract with no Contract debt, the death benefit will equal the face amount if the Contract fund equals the tabular Contract fund value. If, due to investment results greater than a net return of 4%, or to greater than scheduled premiums, or to smaller than maximum charges, the Contract fund value is a given amount greater than the tabular Contract fund value, the death benefit will be the face amount plus that excess amount. 15 If, due to investment results less favorable than a net return of 4%, the Contract fund value is less than the tabular Contract fund value, and the Contract nevertheless remains in force because scheduled premiums have been paid, the death benefit will not fall below the initial face amount stated in the Contract; however, this unfavorable investment experience must subsequently be offset before favorable investment results or greater than scheduled premiums will increase the death benefit. The death benefit will also reflect a deduction for the amount of any Contract debt. See CONTRACT LOANS, page 23. A Contract owner may also increase or decrease the face amount of his or her Contract, subject to certain conditions. See INCREASES IN FACE AMOUNT, page 18 and DECREASES IN FACE AMOUNT, page 19. 2. REVISED CONTRACTS. Under the revised Contracts issued since September of 1986 in jurisdictions where all necessary approvals have been obtained, the death benefit will be calculated as follows. Under a Form A Contract, the death benefit will be the greater of (1) the face amount; or (2) the Contract fund divided by the net single premium per $1 of death benefit at the insured's attained age on that date. In other words, the second alternative ensures that the death benefit will not be less than the amount of life insurance that could be provided for an invested single premium amount equal to the amount of the Contract fund. Under a Form B Contract, the death benefit will be the greater of (1) the face amount plus the excess, if any, of the Contract fund over the tabular Contract fund value; or (2) the Contract fund divided by the net single premium per $1 of death benefit at the insured's attained age on that date. Thus, under the revised Contracts, the death benefit may be increased based on the size of the Contract fund and the insured's attained age and sex. This ensures that the Contract will satisfy the Internal Revenue Code's definition of life insurance. The net single premium is used only in the calculation of the death benefit, not for premium payment purposes. The following is a table of illustrative net single premiums for $1 of death benefit. - ------------------------------------ -------------------------------------- INCREASE IN INCREASE IN INSURANCE INSURANCE MALE NET AMOUNT PER FEMALE NET AMOUNT PER ATTAINED SINGLE $1 INCREASE ATTAINED SINGLE $1 INCREASE AGE PREMIUM IN CONTRACT AGE PREMIUM IN CONTRACT FUND FUND - ------------------------------------ -------------------------------------- 5 .09884 $10.12 5 .08198 $12.20 25 .18455 $ 5.42 25 .15687 $ 6.37 35 .25596 $ 3.91 35 .21874 $ 4.57 55 .47352 $ 2.11 55 .40746 $ 2.45 65 .60986 $ 1.64 65 .54017 $ 1.85 - ------------------------------------ -------------------------------------- Whenever the death benefit is determined in this way, Pruco Life reserves the right to refuse to accept further premium payments, although in practice the payment of the lesser of 2 years' scheduled premiums or the average of all premiums paid over the last 5 years will generally be allowed. A Contract owner may also increase or decrease the face amount of his or her Contract, subject to certain conditions. See INCREASES IN FACE AMOUNT, page 18 and DECREASES IN FACE AMOUNT, page 19. WHEN A CONTRACT BECOMES PAID-UP Under the original Contracts, it is possible that favorable investment experience, either alone or in conjunction with greater than scheduled premium payments, will cause the Contract fund to increase to the point where no further payment of premiums is necessary to provide for the then existing death benefit for the remaining life of the insured. If this should occur, Pruco Life will notify the owner that no further premium payments need be paid. Pruco Life reserves the right to refuse to accept further premiums after the Contract becomes paid-up. The purchase of an additional fixed benefit rider may, in some cases, affect the point at which the Contract becomes paid-up. See RIDERS, page 28. The revised Contracts will not become paid-up. Once a Contract becomes paid-up, Pruco Life guarantees that the death benefit then in force will not be reduced by the investment experience of the investment options in which the Contract participates. The cash surrender value of a paid-up Contract continues to vary daily to reflect investment experience and monthly to reflect continuing mortality charges, but the other monthly deductions (see items 4 and 5 under CHARGES AND EXPENSES, page 10 ) will not be made. The death benefit of a paid-up Contract on any day (whether the Contract originally was Form A or Form B) will be equal to the amount of paid-up insurance that can be purchased with the Contract fund on that day, but never less than the guaranteed minimum amount. As noted earlier, Contracts issued on insureds of 14 years of age or less include a special provision under which the face amount of insurance increases automatically to 150% of the initial face amount on the Contract 16 anniversary after the insured reaches the age of 21. If a Contract would have been paid-up prior to that anniversary, Pruco Life, in anticipation of the increase in the face amount to 150% of the initial face amount, will, instead of declaring the Contract to be paid-up, increase the death benefit by the amount necessary to keep the Contract in force as a premium paying Contract. If this should occur, the increase in the death benefit on the Contract anniversary after the insured reaches the age of 21 will be smaller, in dollar amount, than the increase in the face amount of insurance. FLEXIBILITY AS TO PAYMENT OF PREMIUMS A significant feature of this Contract is that it permits the owner to pay greater than scheduled premiums. Conversely, payment of a scheduled premium need not be made if the Contract fund is sufficiently large to enable the charges due under the Contract to be made without causing the Contract to lapse. See LAPSE AND REINSTATEMENT, page 20. In general, Pruco Life will accept any premium payment if the payment is at least $25. Pruco Life does reserve the right, however, to limit unscheduled premiums to a total of $10,000 in any Contract year; to refuse to accept premiums once a Contract becomes paid-up; and to refuse to accept premiums that would immediately result in more than a dollar-for-dollar increase in the death benefit. The flexibility of premium payments provides Contract owners with different opportunities under the two forms of Contract. Greater than scheduled payments under an original version Form A Contract increase the Contract fund and make it more likely that the Contract will become paid-up. Greater than scheduled payments under an original version Form B Contract increase both the Contract fund and the death benefit, but it is less likely to become paid-up than a Form A Contract on which the same premiums are paid. For all Contracts, the privilege of making large or additional premium payments offers a way of investing amounts which accumulate without current income taxation. There may, however, be a disadvantage if substantial premiums are made. The federal income tax laws, discussed more fully under TAX TREATMENT OF CONTRACT BENEFITS, page 25, may impose an income tax, as well as a penalty tax, upon distributions to contract owners under life insurance contracts that are classified as Modified Endowment Contracts. This contract should not be so classified if the initial scheduled premiums are paid or even if additional premiums are paid that are not substantially higher, assuming no changes in benefits under the contract. It is possible, however, to make premium payments that are high enough to cause the Contract to fall into that classification. A Contract owner should consult with his or her own tax advisor and Pruco Life representative before making a large premium payment. SURRENDER OF A CONTRACT A Contract may be surrendered in whole or in part for its cash surrender value while the insured is living. Partial surrender involves splitting the Contract into two Contracts. One is surrendered for its cash surrender value; the other is continued in force on the same terms as the original Contract except that premiums and cash surrender values will be proportionately reduced based upon the reduction in the face amount of insurance. The Contract continued must have a face amount of insurance at least equal to the minimum face amount applicable to the insured's Contract. See REQUIREMENTS FOR ISSUANCE OF A CONTRACT, page 6. For paid-up Contracts, both the death benefit and the guaranteed minimum death benefit will be reduced. The death benefit immediately after the partial withdrawal must be at least equal to the minimum face amount applicable to the insured's Contract. To surrender a Contract in whole or in part, the owner must deliver or mail it, together with a written request in a form that meets Pruco Life's needs, to a Home Office. The cash surrender value of a surrendered or partially surrendered Contract (taking into account the deferred sales and administrative charges, if any) will be determined as of the date such request is received in the Service Office. Surrender of all or part of a Contract may have tax consequences. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. WITHDRAWAL OF EXCESS CASH SURRENDER VALUE An alternative to surrender or partial surrender of a Contract, available only before such Contracts become paid up, is a partial withdrawal of cash surrender value without splitting the Contract into two Contracts. A partial withdrawal may be made only if the following conditions are satisfied. The basic limiting condition is that a withdrawal may be made only to the extent that the cash surrender value plus any Contract loan exceeds the applicable tabular cash surrender value. (The "tabular cash surrender value" refers to the tabular Contract fund value minus any applicable surrender charges.) But because this excess over the applicable tabular cash surrender value may be made up in part by an outstanding Contract loan, there is a further condition that the amount withdrawn may not be larger than an amount sufficient to reduce the cash surrender value to zero. The amount withdrawn must be at least $2,000 under a Form A Contract and at least $500 under a Form B Contract. An owner may make no more than four such withdrawals in a Contract year, and there is a fee of $15 for each such withdrawal. An amount withdrawn may not be repaid except as a scheduled or unscheduled premium subject to the Contract charges. Upon request, Pruco Life will tell a Contract owner how much he or she may withdraw. 17 Withdrawal of part of the cash surrender value may have tax consequences. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. Whenever a partial withdrawal is made, the death benefit payable will immediately be reduced, generally by the amount of the withdrawal. This will not change the guaranteed minimum amount of insurance under a Form B Contract (i.e., the face amount) or the amount of the scheduled premium that will be payable thereafter on such a Contract. Under a Form A Contract, however, the guaranteed minimum amount of insurance will be reduced by the amount of the partial withdrawal, and no partial withdrawal will be permitted under a Form A Contract if it would result in a new face amount of less than the minimum face amount applicable to the insured's Contract. See REQUIREMENTS FOR ISSUANCE OF A CONTRACT, page 6. It is important to note, however, that if the face amount is decreased at any time during the first 7 Contract years, there is a danger that the Contract might be classified as a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. Before making any withdrawal which causes a decrease in face amount a Contract owner should consult with his or her Pruco Life representative. In addition, the amount of the scheduled premiums due thereafter under a Form A Contract will be reduced to reflect the lower face amount of insurance. Since a withdrawal under a Form A Contract results in a decrease in the face amount of insurance, the Contract fund may be reduced, not only by the amount withdrawn but also by a proportionate part of any surrender charges then applicable, based upon the percentage reduction in face amount. Contract owners of a Form A Contract who make a partial withdrawal will be sent replacement Contract pages showing the new face amount, new tabular values and, if applicable, a new table of surrender charges. Withdrawal of part of the cash surrender value increases the risk that the Contract fund may be insufficient to provide for benefits under the Contract. If such a withdrawal is followed by unfavorable investment experience, the Contract may lapse even if scheduled premiums continue to be paid when due. This is because, for purposes of determining whether a lapse has occurred, Pruco Life treats withdrawals as a return of premium. INCREASES IN FACE AMOUNT An attractive feature of this Contract is that an owner who wishes to increase the amount of his or her insurance may do so by increasing the face amount of the Contract (which is also the guaranteed minimum death benefit), subject to state approval and underwriting requirements determined by Pruco Life. An increase in face amount is in many ways similar to the purchase of a second Contract, but it differs in the following respects: the minimum permissible increase is $25,000 while the minimum for a new Contract is $60,000; monthly fees are lower because only a single $2.50 per month administrative charge is made rather than two; a combined premium payment results in deduction of a single $2 per premium processing charge while separate premium payments for separate Contracts would involve two charges; the monthly expense charge of $0.02 per $1,000 of face amount may be lower if the increase is to a face amount greater than $100,000; and, the Contract will lapse or become paid-up as a unit, unlike the case if two separate Contracts are purchased. These differences aside, the decision to increase face amount is comparable to the purchase of a second Contract in that it involves a commitment to higher scheduled premiums in exchange for greater insurance benefits. A Contract owner may elect to increase the face amount of his or her Contract no earlier than the first anniversary of the Contract. The following conditions must be met: (1) The owner must ask for the increase in writing on an appropriate form meeting Pruco Life's needs. (2) The amount of the increase in face amount must be at least $25,000. (3) The insured must supply evidence of insurability for the increase satisfactory to Pruco Life. (4) If Pruco Life requests, the owner must send in the Contract to be suitably endorsed. (5) The Contract must be neither paid-up nor in default on the date the increase takes effect. (6) The owner must pay an appropriate premium at the time of the increase. (7) Pruco Life has the right to deny more than one increase in a Contract year. (8) If Pruco Life has, between the Contract date and the date that any requested increase in face amount will take effect, changed any of the bases on which benefits and charges are calculated under newly issued Contracts, Pruco Life has the right to deny the increase. An increase in face amount resulting in a total face amount under the Contract of at least $100,000 may, subject to strict underwriting requirements, render the Contract eligible for a Select Rating basis, which provides lower current cost of insurance rates. Upon an increase in face amount, Pruco Life will recompute the Contract's scheduled premiums, deferred sales and administrative charges, tabular values, and monthly deductions from the Contract fund. The Contract owner has a choice, limited only by applicable state law, as to whether the recomputation will be made as of the prior or next Contract anniversary. There will be a payment required on the date of increase; the amount of the payment will depend, in part, on which Contract anniversary the Contract owner selects for the recomputation. Pruco Life will tell the owner the amount of the required payment. It should also be noted that an increase in face amount may impact the status of the Contract as a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. Therefore, before increasing the face amount, a Contract owner should consult with his or her own tax advisor and Pruco Life representative. 18 Provided the increase is approved, the new insurance will take effect once the proper forms, any medical evidence necessary to underwrite the additional insurance and any amount needed by the company have been received. Pruco Life will supply the Contract owner with pages which show the increased face amount, the effective date of the increase, and the recomputed items described two paragraphs above. The pages will also describe how the increase in face amount affects the various provisions of the Contract, including a statement that, for the amount of the increase in face amount, the period stated in the Incontestability and Suicide provisions (see OTHER GENERAL CONTRACT PROVISIONS, page 28) will run from the effective date of the increase. There will be assessed upon lapse or surrender following an increase in face amount the sum of (a) the deferred sales and administrative charges that would have been assessed if the initial base Contract had not been amended and had lapsed or been surrendered; and (b) the deferred sales and administrative charges that would have been assessed if the increase in death benefit had been achieved by the issuance of a new Contract, and that Contract had lapsed or been surrendered. All premiums paid after the increase will, for purposes of determining the deferred sales charge applicable in the event of surrender or lapse, be deemed to have been made partially under the base Contract, and partially in payment of the increase, in the same proportion as that of the original scheduled premium and the increase in scheduled premiums. Because an increase in face amount triggers new contingent deferred sales and administrative charges, a Contract owner contemplating a total or partial surrender or a decrease in the face amount of insurance should not elect to increase the face amount of his or her Contract. An increase in face amount will be treated comparably to the issuance of a new Contract for purposes of the non-guaranteed waiver of the 5% front-end sales load, described under item 2 of CHARGES AND EXPENSES on page 10. Thus, premiums paid after the increase will, for purposes of determining whether the 5% front-end sales load will be waived, be allocated to the base Contract and to the increase based on the proportional premium allocation rule just described. The waiver will apply with respect to the premiums paid after the increase only after the premiums so allocated exceed five scheduled annual premiums for the increase. Thus, an owner considering an increase in face amount should be aware that such an increase will entail sales charges comparable to the purchase of a new Contract. Each Contract owner who elects to increase the face amount of his or her Contract will receive a "free-look" right and a right to convert to a fixed-benefit contract, which rights will apply only to the increase in face amount, not the entire Contract. These rights are comparable to the rights afforded to a purchaser of a new Contract. See SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK", page 6 and RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY, page 24. The "free-look" right would have to be exercised no later than 45 days after execution of the application for the increase or, if later, within 10 days after either receipt of the Contract as increased or receipt of the withdrawal right notice by the owner. Upon exercise of the "free-look" right, the owner will receive a refund in the amount of the aggregate premiums paid since the increase was requested and attributable to the increase, not the base Contract, as determined pursuant to the proportional premium allocation rule described above. There will be no adjustment for investment experience. Moreover, charges deducted since the increase will be recomputed as though no increase had been effected. The right to convert the increase in face amount to a fixed-benefit policy will exist for 24 months after the increase is issued and the form of exchange right will be the same as that available under the base Contract purchased. There may be a cash payment required upon the exchange. See RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY, page 24. DECREASES IN FACE AMOUNT As explained earlier, a Contract owner may effect a partial surrender of a Contract (see SURRENDER OF A CONTRACT, page 17) or a partial withdrawal of excess cash surrender value (see WITHDRAWAL OF EXCESS CASH SURRENDER VALUE, page 17). A Contract owner also has the additional option of decreasing the face amount (which is also the guaranteed minimum death benefit) of his or her Contract without withdrawing any cash surrender value. Contract owners who conclude that, because of changed circumstances, the amount of insurance is greater than needed will thus be able to decrease their amount of insurance protection without decreasing their current cash surrender value. This will result in a decrease in the amount of future scheduled premiums and in the monthly deductions for the cost of insurance. The cash surrender value of the Contract on the date of the decrease will not change, except that an administrative processing fee of $15 may be deducted from that value (unless that fee is separately paid at the time the decrease in face amount is requested). The Contract's Contract fund value, however, will be reduced by deduction of a proportionate part of the then applicable contingent deferred sales and administrative charges, if any. Scheduled premiums for the Contract will also be proportionately reduced. The Contracts of owners who exercise the right to reduce face amount will be amended to show the new face amount, tabular values, scheduled premiums, monthly charges, and if applicable, the remaining contingent deferred sales and administrative charges. The minimum permissible decrease is $10,000. No decrease will be permitted that causes the face amount of the Contract to drop below the minimum face amount applicable to the insured's Contract. See REQUIREMENTS FOR ISSUANCE OF A CONTRACT, page 6. No reduction will be permitted to the extent that it would cause the Contract to 19 fail to qualify as "life insurance" for purposes of section 7702 of the Internal Revenue Code. If the face amount of a Contract in force on a Select Rating basis is reduced below $100,000, it is no longer eligible for the Select Rating. It is important to note, however, that if the face amount is decreased at any time during the first 7 Contract years, there is a danger that the Contract might be classified as a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. Before making any withdrawal which causes a decrease in face amount, a Contract owner should consult with his or her own tax advisor and Pruco Life representative. LAPSE AND REINSTATEMENT The Contract has an advantageous feature that is not typically found in similar types of life insurance contracts. If scheduled premiums are paid on or before each due date or within the grace period after each due date, (or missed premiums are paid later with interest) and there are no withdrawals, a Contract will remain in force even if the investment results of that Contract's variable investment option[s] have been so unfavorable that the Contract fund has decreased to zero or less. Therefore, unlike most similar types of life insurance contracts that lapse when the cash surrender value decreases to zero even if premiums are paid, this Contract ensures that as long as scheduled premiums are paid, insurance protection remains in effect. In fact, even if a scheduled premium is not paid, the Contract will remain in force as long as the Contract fund on any Monthly date is equal to or greater than the tabular Contract fund value on the next Monthly date. This could occur because of such factors as favorable investment experience, deduction of less than the maximum permissible charges, or the previous payment of greater than scheduled premiums. However, if a scheduled premium is not paid, and the Contract fund is insufficient to keep the Contract in force, the Contract will go into default. Should this happen, Pruco Life will send the Contract owner a notice of default setting forth the payment necessary to keep the Contract in force on a premium paying basis. This payment must be received at a Home Office within the 61 day grace period after the notice of default is mailed or the Contract will lapse. A Contract that lapses with an outstanding Contract loan may have tax consequences. See TAX TREATMENT OF CONTRACT BENEFITS on page 25. A Contract that has lapsed may be reinstated within 3 years after the date of default unless the Contract has been surrendered for its cash surrender value. To reinstate a lapsed Contract, Pruco Life requires renewed evidence of insurability, and submission of certain payments due under the Contract. If a Contract does lapse, it may still provide some benefits. Those benefits are described under OPTIONS ON LAPSE, page 24. WHEN PROCEEDS ARE PAID Pruco Life will generally pay any death benefit, cash surrender value, loan proceeds or partial withdrawal within 7 days after receipt at a Home Office of all the documents required for such a payment. Other than the death benefit, which is determined as of the date of death, the amount will be determined as of the end of the valuation period in which the necessary documents are received at a Home Office. However, Pruco Life may delay payment of proceeds from the subaccount[s] and the variable portion of the death benefit due under the Contract if the disposal or valuation of the Account's assets is not reasonably practicable because the New York Stock Exchange is closed for other than a regular holiday or weekend, trading is restricted by the SEC or the SEC declares that an emergency exists. With respect to the amount of any cash surrender value allocated to the fixed-rate option, and with respect to a Contract in force as extended term insurance, Pruco Life expects to pay the cash surrender value promptly upon request. However, Pruco Life has the right to delay payment of such cash surrender value for up to 6 months (or a shorter period if required by applicable law). Pruco Life will pay interest of at least 3% a year if it delays such a payment for more than 30 days (or a shorter period if required by applicable law). LIVING NEEDS BENEFIT Contract applicants may elect to add the LIVING NEEDS BENEFIT(sm) to their Contracts at issue. The benefit may vary state-by-state. It can generally be added only to Contracts of $50,000 or more. Subject to state regulatory approval, the LIVING NEEDS BENEFIT allows the Contract owner to elect to receive an accelerated payment of all or part of the Contract's death benefit, adjusted to reflect current value, at a time when certain special needs exist. The adjusted death benefit will always be less than the death benefit, but will generally be greater than the Contract's cash surrender value. One or both of the following options may be available. A Pruco Life representative should be consulted as to whether additional options may be available. 20 TERMINAL ILLNESS OPTION. This option is available if the insured is diagnosed as terminally ill with a life expectancy of 6 months or less. When satisfactory evidence is provided, Pruco Life will provide an accelerated payment of the portion of the death benefit selected by the Contract owner as a LIVING NEEDS BENEFIT. The Contract owner may (1) elect to receive the benefit in a single sum or (2) receive equal monthly payments for 6 months. If the insured dies before all of the payments have been made, the present value of the remaining payments will be paid to the beneficiary designated in the LIVING NEEDS BENEFIT claim form in a single sum. NURSING HOME OPTION. This option is available after the insured has been confined to an eligible nursing home for 6 months or more. When satisfactory evidence is provided, including certification by a licensed physician, that the insured is expected to remain in the nursing home until death, Pruco Life will provide an accelerated payment of the portion of the death benefit selected by the Contract owner as a LIVING NEEDS BENEFIT. The Contract owner may (1) elect to receive the benefit in a single sum or (2) receive equal monthly payments for a specified number of years (not more than 10 nor less than 2), depending upon the age of the insured. If the insured dies before all of the payments have been made, the present value of the remaining payments will be paid to the beneficiary designated in the LIVING NEEDS BENEFIT claim form in a single sum. All or part of the Contract's death benefit may be accelerated under the LIVING NEEDS BENEFIT. If the benefit is only partially accelerated, a death benefit of at least $25,000 must remain under the Contract. Pruco Life reserves the right to determine the minimum amount that may be accelerated. The LIVING NEEDS BENEFIT is available only to the extent regulatory approval has been obtained. If desired by a Contract owner, the benefit must be requested on the Contract's application. There is no charge for adding the benefit to the Contract. However, an administrative charge (not to exceed $150) will be made at the time the LIVING NEEDS BENEFIT is paid. No benefit will be payable if the Contract owner is required to elect it in order to meet the claims of creditors or to obtain a government benefit. Pruco Life can furnish details about the amount of LIVING NEEDS BENEFIT that is available to an eligible Contract owner under a particular Contract, and the adjusted premium payments that would be in effect if less than the entire death benefit is accelerated. The Contract owner should consider whether adding this settlement option is appropriate in his or her given situation. Adding the LIVING NEEDS BENEFIT to the Contract has no adverse consequences; however, electing to use it could. With the exception of certain business-related policies, the recently enacted Health Insurance Portability and Accountability Act of 1996 excludes from income the LIVING NEEDS BENEFIT if the insured is terminally ill or chronically ill as defined in the tax law (although the exclusion in the latter case may be limited). Contract owners should consult a qualified tax advisor before electing to receive this benefit. Receipt of a LIVING NEEDS BENEFIT payment may also affect a Contract owner's eligibility for certain government benefits or entitlements. ILLUSTRATIONS OF CASH SURRENDER VALUES, DEATH BENEFITS, AND ACCUMULATED PREMIUMS The following tables have been prepared to help show how values under the Contract change with investment performance of the Account. The tables assume that no portion of the Contract fund is allocated to the fixed-rate option or the Real Property Account. The tables illustrate how cash surrender values (reflecting the deduction of deferred sales load and administrative charges, if any) and death benefits of Contracts with the minimum scheduled premium issued on an insured of a given age would vary over time if the return on the assets held in the selected Series Fund portfolios were a uniform, gross, after tax, annual rate of 0%, 4%, 8% and 12%. The death benefits and cash surrender values would be different from those shown if the returns averaged 0%, 4%, 8% and 12% but fluctuated over and under those averages throughout the years. The tables also provide information about the premiums payable on and after the premium change date. These tables reflect values under the revised Contracts. These values are also applicable to the original Contracts except where the death benefit has been increased to the Contract fund divided by the net single premium, in which case the cash surrender value and death benefit figures shown on the table are not applicable to the original Contracts. Footnotes to the tables indicate when the values cease to be applicable to the original Contracts and when the original Contracts would become paid-up for a given return. The death benefits and cash surrender values shown in the first two tables on pages T1 and T2 reflect Pruco Life's current charges. As explained earlier, Pruco Life makes monthly mortality charges that are generally lower than those based on the 1980 CSO Table. The values shown in the tables are calculated upon the assumption that Pruco Life will continue to use the mortality rates that it is currently using, even though it is permitted under the Contract to use the higher mortality charges specified in the 1980 CSO Table. Moreover, those tables reflect Pruco Life's current practice of waiving the front-end sales load of 5% after total premiums paid exceeds five scheduled annual premiums. See item 2 under CHARGES AND EXPENSES, page 10. The tables also reflect Pruco Life's current practice of increasing the Contract fund on a percentage basis based on the attained age of the insured. While 21 Pruco Life does not currently intend to withdraw or modify these reductions in charges or additions to the Contract fund, it reserves the right to do so. The tables are not applicable to Contracts issued on a guaranteed issue basis or to Contracts where the risk classification is on a multiple life basis. The death benefits and cash surrender values shown in the next two tables on pages T3 and T4 are calculated upon the assumption that the maximum mortality charges specified by the 1980 CSO Table are made throughout the life of the Contract, and reflect neither the waiver of the front-end sales load nor the monthly additions to the Contract fund that further reduce the cost of insurance charge. The amounts shown for the death benefit and cash surrender value as of each Contract year reflect the fact that the net investment return on the assets held in the subaccounts is lower than the gross return of the portfolios. This is because the tables assume a total Series Fund expense ratio of 0.51% (taking into account the offsets described on page 5), and also reflect a daily mortality and expense risk charge to the Account equal to an effective annual charge of 0.6%. The actual fees and expenses of the portfolios associated with a particular Contract may be more or less than 0.51% and will depend on which subaccounts are selected. Based on the above assumptions, gross annual rates of return of 0%, 4%, 8% and 12% thus correspond to approximate net annual rates of return of -1.11%, 2.89%, 6.89% and 10.89% and this fact is reflected in the column headings. The tables also reflect the fact that no charges for federal or state income taxes are currently made against the Account. If such a charge is made in the future, it will take a higher gross rate of return to produce net after-tax returns of -1.11%, 2.89%, 6.89% or 10.89% than it does now. Upon request, Pruco Life will furnish a comparable illustration based on the proposed insured's age and sex (except where unisex rates apply) and on the guaranteed minimum death benefit or premium amount requested. Such an illustration will assume that the insured is in the preferred rating class (or, on request, a different rating class) and that the premium will be paid at the frequency chosen. 22 ILLUSTRATIONS ------------- VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT FORM A -- FIXED DEATH BENEFIT MALE PREFERRED ISSUE AGE 35 $60,000 GUARANTEED DEATH BENEFIT $554.80 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3) USING CURRENT SCHEDULE OF CHARGES
DEATH BENEFIT (2) CASH SURRENDER VALUE (2) ---------------------------------------------------- ---------------------------------------------------- ASSUMING HYPOTHETICAL GROSS (AND NET) ASSUMING HYPOTHETICAL GROSS (AND NET) PREMIUMS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF END OF ACCUMULATED ---------------------------------------------------- ---------------------------------------------------- POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS 0% GROSS 4% GROSS 8% GROSS 12% GROSS YEAR PER YEAR (3) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) ------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ 1 $ 577 $60,000 $60,000 $ 60,000 $ 60,000 $ 0 $ 0 $ 0 $ 0 2 $ 1,177 $60,000 $60,000 $ 60,000 $ 60,000 $ 187 $ 234 $ 282 $ 331 3 $ 1,801 $60,000 $60,000 $ 60,000 $ 60,000 $ 469 $ 559 $ 654 $ 755 4 $ 2,450 $60,000 $60,000 $ 60,000 $ 60,000 $ 740 $ 887 $ 1,047 $ 1,221 5 $ 3,125 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,000 $ 1,218 $ 1,461 $ 1,733 6 $ 3,827 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,387 $ 1,690 $ 2,039 $ 2,438 7 $ 4,557 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,788 $ 2,191 $ 2,667 $ 3,228 8 $ 5,317 $60,000 $60,000 $ 60,000 $ 60,000 $ 2,176 $ 2,694 $ 3,322 $ 4,083 9 $ 6,106 $60,000 $60,000 $ 60,000 $ 60,000 $ 2,551 $ 3,198 $ 4,005 $ 5,010 10 $ 6,927 $60,000 $60,000 $ 60,000 $ 60,000 $ 2,913 $ 3,704 $ 4,719 $ 6,019 15 $ 11,553 $60,000 $60,000 $ 60,000 $ 60,000 $ 4,078 $ 5,876 $ 8,545 $ 12,509 20 $ 17,182 $60,000 $60,000 $ 60,000 $ 60,000 $ 4,750 $ 8,015 $13,691 $ 23,575 25 $ 24,029 $60,000 $60,000 $ 60,000 $ 78,859 $ 4,629 $ 9,846 $20,636 $ 42,620 30 (AGE 65) $ 32,361 $60,000 $60,000 $ 60,000 $121,544 $ 3,245 $10,918 $30,238 $ 74,125 35 $ 52,358 $60,000 $60,000 $ 64,863 $184,915 $14,711 $20,504 $44,027 $125,513 40 $ 76,687 $60,000 $60,000 $ 84,378 $279,942 $24,836 $30,978 $62,794 $208,333 45 $106,288 $60,000 $60,000 $109,077 $424,399 $33,551 $43,231 $87,407 $340,088
(1) IF PREMIUMS ARE PAID MORE FREQUENTLY THAN ANNUALLY, THE INITIAL PAYMENTS WOULD BE $284.80 SEMI-ANNUALLY, $145.40 QUARTERLY OR $50 MONTHLY. THE ULTIMATE PAYMENTS WOULD BE $1,775.20 SEMI-ANNUALLY, $897.80 QUARTERLY OR $302.60 MONTHLY. THE DEATH BENEFITS AND CASH SURRENDER VALUES WOULD BE SLIGHTLY DIFFERENT FOR A CONTRACT WITH MORE FREQUENT PREMIUM PAYMENTS. (2) ASSUMES NO CONTRACT LOAN HAS BEEN MADE. (3) VALUES SHOWN IN THE TABLE ARE APPLICABLE TO BOTH THE ORIGINAL CONTRACTS (THE "1984 CONTRACTS") AND THE REVISED CONTRACTS THAT FIRST BEGAN TO BE ISSUED IN SEPTEMBER OF 1986 (THE "1986 CONTRACTS"), EXCEPT WHERE THE DEATH BENEFIT HAS BEEN INCREASED TO THE CONTRACT FUND DIVIDED BY THE NET SINGLE PREMIUM, IN WHICH CASE THE CASH SURRENDER VALUE AND DEATH BENEFIT FIGURES SHOWN ARE APPLICABLE ONLY TO THE 1986 CONTRACTS. THIS FIRST OCCURS AT THE TIME WHEN THE 1984 CONTRACTS WOULD BECOME PAID-UP. FOR A HYPOTHETICAL GROSS INVESTMENT RETURN OF 0%, THE SECOND SCHEDULED PREMIUM WILL BE $3,477.40. FOR A GROSS RETURN OF 4%, THE SECOND SCHEDULED PREMIUM WILL BE $2,305.36. FOR A GROSS RETURN OF 8%, THE SECOND SCHEDULED PREMIUM WILL BE $554.80. FOR A GROSS RETURN OF 12%, THE SECOND SCHEDULED PREMIUM WILL BE $554.80. THE PREMIUMS ACCUMULATED AT 4% INTEREST IN COLUMN 2 ARE THOSE PAYABLE IF THE GROSS INVESTMENT RETURN IS 4%. FOR AN EXPLANATION OF WHY THE SCHEDULED PREMIUM MAY INCREASE ON THE PREMIUM CHANGE DATE, SEE PREMIUMS. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. T1 VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT FORM B -- VARIABLE DEATH BENEFIT MALE PREFERRED ISSUE AGE 35 $60,000 GUARANTEED DEATH BENEFIT $554.80 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3) USING CURRENT SCHEDULE OF CHARGES
DEATH BENEFIT (2) CASH SURRENDER VALUE (2) ---------------------------------------------------- ---------------------------------------------------- ASSUMING HYPOTHETICAL GROSS (AND NET) ASSUMING HYPOTHETICAL GROSS (AND NET) PREMIUMS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF END OF ACCUMULATED ---------------------------------------------------- ---------------------------------------------------- POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS 0% GROSS 4% GROSS 8% GROSS 12% GROSS YEAR PER YEAR (3) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) ------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ 1 $ 577 $60,000 $60,000 $60,013 $ 60,030 $ 0 $ 0 $ 0 $ 0 2 $ 1,177 $60,000 $60,000 $60,039 $ 60,088 $ 186 $ 233 $ 280 $ 330 3 $ 1,801 $60,000 $60,000 $60,081 $ 60,181 $ 467 $ 557 $ 652 $ 753 4 $ 2,450 $60,000 $60,000 $60,139 $ 60,312 $ 738 $ 884 $ 1,044 $ 1,217 5 $ 3,125 $60,000 $60,000 $60,215 $ 60,486 $ 998 $ 1,214 $ 1,456 $ 1,727 6 $ 3,827 $60,000 $60,000 $60,342 $ 60,738 $ 1,385 $ 1,686 $ 2,032 $ 2,428 7 $ 4,557 $60,000 $60,021 $60,493 $ 61,048 $ 1,786 $ 2,186 $ 2,658 $ 3,213 8 $ 5,317 $60,000 $60,050 $60,671 $ 61,423 $ 2,174 $ 2,687 $ 3,309 $ 4,061 9 $ 6,106 $60,000 $60,082 $60,879 $ 61,871 $ 2,549 $ 3,190 $ 3,987 $ 4,979 10 $ 6,927 $60,000 $60,120 $61,120 $ 62,400 $ 2,911 $ 3,694 $ 4,695 $ 5,975 15 $ 11,553 $60,000 $60,632 $63,244 $ 67,111 $ 4,092 $ 5,873 $ 8,484 $ 12,352 20 $ 17,182 $60,000 $61,542 $67,006 $ 76,468 $ 4,786 $ 8,003 $13,466 $ 22,929 25 $ 24,029 $60,000 $63,158 $73,240 $ 93,886 $ 4,689 $ 9,747 $19,829 $ 40,475 30 (AGE 65) $ 32,361 $60,000 $65,984 $83,112 $125,087 $ 3,329 $10,484 $27,612 $ 69,587 35 $ 53,919 $60,380 $66,429 $82,756 $174,099 $14,682 $20,731 $37,058 $118,171 40 $ 80,147 $60,850 $67,877 $85,470 $265,002 $24,460 $31,487 $49,080 $197,215 45 $112,058 $60,701 $70,840 $92,798 $403,763 $32,439 $42,579 $64,537 $323,552
(1) IF PREMIUMS ARE PAID MORE FREQUENTLY THAN ANNUALLY, THE INITIAL PAYMENTS WOULD BE $284.80 SEMI-ANNUALLY, $145.40 QUARTERLY OR $50 MONTHLY. THE ULTIMATE PAYMENTS WOULD BE $1,775.20 SEMI-ANNUALLY, $897.80 QUARTERLY OR $302.60 MONTHLY. THE DEATH BENEFITS AND CASH SURRENDER VALUES WOULD BE SLIGHTLY DIFFERENT FOR A CONTRACT WITH MORE FREQUENT PREMIUM PAYMENTS. (2) ASSUMES NO CONTRACT LOAN HAS BEEN MADE. (3) VALUES SHOWN IN THE TABLE ARE APPLICABLE TO BOTH THE ORIGINAL CONTRACTS (THE "1984 CONTRACTS") AND THE REVISED CONTRACTS THAT FIRST BEGAN TO BE ISSUED IN SEPTEMBER OF 1986 (THE "1986 CONTRACTS"), EXCEPT WHERE THE DEATH BENEFIT HAS BEEN INCREASED TO THE CONTRACT FUND DIVIDED BY THE NET SINGLE PREMIUM, IN WHICH CASE THE CASH SURRENDER VALUE AND DEATH BENEFIT FIGURES SHOWN ARE APPLICABLE ONLY TO THE 1986 CONTRACTS. THIS FIRST OCCURS AT THE TIME WHEN THE 1984 CONTRACTS WOULD BECOME PAID-UP. FOR A HYPOTHETICAL GROSS INVESTMENT RETURN OF 0%, THE SECOND SCHEDULED PREMIUM WILL BE $3,477.40. FOR A GROSS RETURN OF 4%, THE SECOND SCHEDULED PREMIUM WILL BE $2,582.48. FOR A GROSS RETURN OF 8%, THE SECOND SCHEDULED PREMIUM WILL BE $554.80. FOR A GROSS RETURN OF 12%, THE SECOND SCHEDULED PREMIUM WILL BE $554.80. THE PREMIUMS ACCUMULATED AT 4% INTEREST IN COLUMN 2 ARE THOSE PAYABLE IF THE GROSS INVESTMENT RETURN IS 4%. FOR AN EXPLANATION OF WHY THE SCHEDULED PREMIUM MAY INCREASE ON THE PREMIUM CHANGE DATE, SEE PREMIUMS. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. T2 VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT FORM A -- FIXED DEATH BENEFIT MALE PREFERRED ISSUE AGE 35 $60,000 GUARANTEED DEATH BENEFIT $554.80 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3) USING MAXIMUM CONTRACTUAL CHARGES
DEATH BENEFIT (2) CASH SURRENDER VALUE (2) ---------------------------------------------------- ---------------------------------------------------- ASSUMING HYPOTHETICAL GROSS (AND NET) ASSUMING HYPOTHETICAL GROSS (AND NET) PREMIUMS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF END OF ACCUMULATED ---------------------------------------------------- ---------------------------------------------------- POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS 0% GROSS 4% GROSS 8% GROSS 12% GROSS YEAR PER YEAR (3) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) ------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ 1 $ 577 $60,000 $60,000 $60,000 $ 60,000 $ 0 $ 0 $ 0 $ 0 2 $ 1,177 $60,000 $60,000 $60,000 $ 60,000 $ 184 $ 231 $ 279 $ 328 3 $ 1,801 $60,000 $60,000 $60,000 $ 60,000 $ 460 $ 550 $ 645 $ 746 4 $ 2,450 $60,000 $60,000 $60,000 $ 60,000 $ 722 $ 868 $ 1,028 $ 1,201 5 $ 3,125 $60,000 $60,000 $60,000 $ 60,000 $ 969 $ 1,185 $ 1,426 $ 1,696 6 $ 3,827 $60,000 $60,000 $60,000 $ 60,000 $1,311 $ 1,610 $ 1,953 $ 2,348 7 $ 4,557 $60,000 $60,000 $60,000 $ 60,000 $1,662 $ 2,056 $ 2,522 $ 3,072 8 $ 5,317 $60,000 $60,000 $60,000 $ 60,000 $1,993 $ 2,495 $ 3,106 $ 3,848 9 $ 6,106 $60,000 $60,000 $60,000 $ 60,000 $2,306 $ 2,927 $ 3,706 $ 4,680 10 $ 6,927 $60,000 $60,000 $60,000 $ 60,000 $2,598 $ 3,351 $ 4,323 $ 5,575 15 $ 11,553 $60,000 $60,000 $60,000 $ 60,000 $3,144 $ 4,719 $ 7,094 $ 10,668 20 $ 17,182 $60,000 $60,000 $60,000 $ 60,000 $2,876 $ 5,497 $10,203 $ 18,603 25 $ 24,029 $60,000 $60,000 $60,000 $ 60,000 $1,271 $ 5,039 $13,372 $ 31,372 30 (AGE 65) $ 32,361 $60,000 $60,000 $60,000 $ 85,015 $ 0 $ 2,248 $16,125 $ 51,847 35 $ 58,960 $60,000 $60,000 $60,000 $121,748 $3,939 $11,074 $27,931 $ 82,638 40 $ 91,322 $60,000 $60,000 $60,000 $172,197 $6,073 $18,359 $44,501 $128,149 45 $130,695 $60,000 $60,000 $83,237 $242,075 $ 0 $22,278 $66,701 $193,984
(1) IF PREMIUMS ARE PAID MORE FREQUENTLY THAN ANNUALLY, THE PAYMENTS WOULD BE $284.80 SEMI-ANNUALLY, $145.40 QUARTERLY OR $50 MONTHLY. THE DEATH BENEFITS AND CASH SURRENDER VALUES WOULD BE SLIGHTLY DIFFERENT FOR A CONTRACT WITH MORE FREQUENT PREMIUM PAYMENTS. (2) ASSUMES NO CONTRACT LOAN HAS BEEN MADE. (3) VALUES SHOWN IN THE TABLE ARE APPLICABLE TO BOTH THE ORIGINAL CONTRACTS (THE "1984 CONTRACTS") AND THE REVISED CONTRACTS THAT FIRST BEGAN TO BE ISSUED IN SEPTEMBER OF 1986 (THE "1986 CONTRACTS"), EXCEPT WHERE THE DEATH BENEFIT HAS BEEN INCREASED TO THE CONTRACT FUND DIVIDED BY THE NET SINGLE PREMIUM, IN WHICH CASE THE CASH SURRENDER VALUE AND DEATH BENEFIT FIGURES SHOWN ARE APPLICABLE ONLY TO THE 1986 CONTRACTS. THIS FIRST OCCURS AT THE TIME WHEN THE 1984 CONTRACTS WOULD BECOME PAID-UP. FOR A HYPOTHETICAL GROSS INVESTMENT RETURN OF 0%, THE PREMIUM AFTER AGE 65 WILL BE $3,477.40; FOR A GROSS RETURN OF 4% THE PREMIUM AFTER AGE 65 WILL BE $3,477.40; FOR A GROSS RETURN OF 8% THE PREMIUM AFTER AGE 65 WILL BE $2,238.49; FOR A GROSS RETURN OF 12% THE PREMIUM AFTER AGE 65 WILL BE $554.80. THE PREMIUMS ACCUMULATED AT 4% INTEREST IN COLUMN 2 ARE THOSE PAYABLE IF THE GROSS INVESTMENT RETURN IS 4%. FOR AN EXPLANATION OF WHY THE SCHEDULED PREMIUM MAY INCREASE ON THE PREMIUM CHANGE DATE, SEE PREMIUMS. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. T3 VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT FORM B -- VARIABLE DEATH BENEFIT MALE PREFERRED ISSUE AGE 35 $60,000 GUARANTEED DEATH BENEFIT $554.80 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3) USING MAXIMUM CONTRACTUAL CHARGES
DEATH BENEFIT (2) CASH SURRENDER VALUE (2) ---------------------------------------------------- ---------------------------------------------------- ASSUMING HYPOTHETICAL GROSS (AND NET) ASSUMING HYPOTHETICAL GROSS (AND NET) PREMIUMS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF END OF ACCUMULATED ---------------------------------------------------- ---------------------------------------------------- POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS 0% GROSS 4% GROSS 8% GROSS 12% GROSS YEAR PER YEAR (3) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) ------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------ 1 $ 577 $60,000 $60,000 $60,013 $ 60,030 $ 0 $ 0 $ 0 $ 0 2 $ 1,177 $60,000 $60,000 $60,036 $ 60,085 $ 183 $ 230 $ 277 $ 327 3 $ 1,801 $60,000 $60,000 $60,071 $ 60,171 $ 458 $ 548 $ 643 $ 743 4 $ 2,450 $60,000 $60,000 $60,119 $ 60,291 $ 720 $ 866 $ 1,024 $ 1,196 5 $ 3,125 $60,000 $60,000 $60,180 $ 60,448 $ 966 $ 1,181 $ 1,421 $ 1,689 6 $ 3,827 $60,000 $60,000 $60,256 $ 60,647 $1,309 $ 1,605 $ 1,946 $ 2,337 7 $ 4,557 $60,000 $60,000 $60,347 $ 60,892 $1,659 $ 2,051 $ 2,512 $ 3,057 8 $ 5,317 $60,000 $60,000 $60,455 $ 61,188 $1,991 $ 2,489 $ 3,093 $ 3,826 9 $ 6,106 $60,000 $60,000 $60,581 $ 61,541 $2,304 $ 2,921 $ 3,689 $ 4,649 10 $ 6,927 $60,000 $60,000 $60,726 $ 61,956 $2,595 $ 3,344 $ 4,300 $ 5,531 15 $ 11,553 $60,000 $60,000 $61,772 $ 65,219 $3,141 $ 4,709 $ 7,013 $ 10,460 20 $ 17,182 $60,000 $60,000 $63,481 $ 71,327 $2,874 $ 5,486 $ 9,942 $ 17,788 25 $ 24,029 $60,000 $60,000 $66,003 $ 81,907 $1,269 $ 5,025 $12,591 $ 28,496 30 (AGE 65) $ 32,361 $60,000 $60,000 $69,428 $ 99,366 $ 0 $ 2,230 $13,928 $ 43,866 35 $ 58,960 $60,000 $60,000 $72,084 $116,649 $3,936 $11,033 $26,386 $ 70,951 40 $ 91,322 $60,000 $60,000 $77,517 $152,335 $6,070 $18,299 $41,127 $113,368 45 $130,695 $60,000 $60,000 $86,835 $219,961 $ 0 $22,174 $58,574 $176,263
(1) IF PREMIUMS ARE PAID MORE FREQUENTLY THAN ANNUALLY, THE PAYMENTS WOULD BE $284.80 SEMI-ANNUALLY, $145.40 QUARTERLY OR $50 MONTHLY. THE DEATH BENEFITS AND CASH SURRENDER VALUES WOULD BE SLIGHTLY DIFFERENT FOR A CONTRACT WITH MORE FREQUENT PREMIUM PAYMENTS. (2) ASSUMES NO CONTRACT LOAN HAS BEEN MADE. (3) VALUES SHOWN IN THE TABLE ARE APPLICABLE TO BOTH THE ORIGINAL CONTRACTS (THE "1984 CONTRACTS") AND THE REVISED CONTRACTS THAT FIRST BEGAN TO BE ISSUED IN SEPTEMBER OF 1986 (THE "1986 CONTRACTS"), EXCEPT WHERE THE DEATH BENEFIT HAS BEEN INCREASED TO THE CONTRACT FUND DIVIDED BY THE NET SINGLE PREMIUM, IN WHICH CASE THE CASH SURRENDER VALUE AND DEATH BENEFIT FIGURES SHOWN ARE APPLICABLE ONLY TO THE 1986 CONTRACTS. THIS FIRST OCCURS AT THE TIME WHEN THE 1984 CONTRACTS WOULD BECOME PAID-UP. FOR A HYPOTHETICAL GROSS INVESTMENT RETURN OF 0%, THE PREMIUM AFTER AGE 65 WILL BE $3,477.40; FOR A GROSS RETURN OF 4% THE PREMIUM AFTER AGE 65 WILL BE $3,477.40; FOR A GROSS RETURN OF 8% THE PREMIUM AFTER AGE 65 WILL BE $2,952.33; FOR A GROSS RETURN OF 12% THE PREMIUM AFTER AGE 65 WILL BE $1,284.96. THE PREMIUMS ACCUMULATED AT 4% INTEREST IN COLUMN 2 ARE THOSE PAYABLE IF THE GROSS INVESTMENT RETURN IS 4%. FOR AN EXPLANATION OF WHY THE SCHEDULED PREMIUM MAY INCREASE ON THE PREMIUM CHANGE DATE, SEE PREMIUMS. THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. T4 CONTRACT LOANS The Contract owner may borrow from Pruco Life up to the "loan value" of the Contract, using the Contract as the only security for the loan. The loan value of a Contract is 90% of an amount equal to its Contract fund, reduced by any charges due upon surrender. However, Pruco Life will, on a non-contractual basis (contractual in Texas), increase the loan value by permitting a Contract owner to borrow up to 100% of the portion of the Contract fund attributable to the fixed-rate option (or any portion of the Contract fund attributable to a prior loan supported by the fixed-rate option), reduced by any charges due upon surrender. The minimum amount that may be borrowed at any one time is $500 unless the loan is used to pay premiums on the Contract. Under one of the loan provisions available under this Contract, interest charged on a loan accrues daily at a fixed effective annual rate of 5.5%. However, if a Contract owner so desires, and if Pruco Life has received any required approvals from the regulatory officials in the state or other jurisdiction in which the Contract is to be issued, the Contract owner may elect at the time of issuance of the Contract to have a different loan provision in the Contract under which the interest rate will vary from time to time. If an owner elects the variable loan interest rate provision, interest charged on any loan will accrue daily at an annual rate Pruco Life determines at the start of each Contract year (instead of at the fixed 5.5% rate). This interest rate will not exceed the greatest of (1) the "Published Monthly Average" for the calendar month ending two months before the calendar month of the Contract anniversary; (2) 5%; or (3) any rate required by law in the state of issue of the Contract. The "Published Monthly Average" means Moody's Corporate Bond Yield Average-Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor to that service, or if that average is no longer published, a substantially similar average established by the insurance regulator where the Contract is issued. For example, the Published Monthly Average in 1996 ranged from 7.10% to 8.00%. Interest payments on any loan are due at the end of each Contract year. If interest is not paid when due, it is added to the principal amount of the loan. The term "Contract debt" means the amount of all outstanding loans plus any interest accrued but not yet due. If at any time the Contract debt exceeds the cash surrender value, Pruco Life will notify the Contract owner of its intent to terminate the Contract in 61 days, within which time the owner may repay all or enough of the loan to keep the Contract in force for a limited time. If the Contract owner fails to keep the Contract in force, the amount of unpaid Contract debt will be treated as a distribution which may be taxable. See LAPSE AND REINSTATEMENT, page 20 and TAX TREATMENT OF CONTRACT BENEFITS - PRE-DEATH DISTRIBUTIONS, page 26. When a loan is made, an amount equal to the loan proceeds will be transferred out of the applicable investment option[s]. The reduction will generally be made in the same proportions as the value in each investment option bears to the total value of the Contract. While a fixed-rate loan is outstanding, the amount that was so transferred will continue to be treated as part of the Contract fund but it will be credited with the assumed rate of return of 4% rather than with the actual rate of return of the applicable investment option[s]. While a loan made pursuant to the variable loan interest rate provision is outstanding, the amount that was transferred is credited with a rate which is less than the loan interest rate for the Contract year by no more than 1.5%, rather than with the actual rate of return of the subaccount[s], the fixed-rate option or the Real Property Account. Currently, Pruco Life credits such amounts with a rate that is 1% less than the loan interest rate for the Contract year. If a loan remains outstanding at a time when Pruco Life fixes a new rate, the new interest rate will apply. A loan will not affect the amount of the premiums due. Should the death benefit become payable while a loan is outstanding, or should the Contract be surrendered, any Contract debt will be deducted from the death benefit or the cash surrender value otherwise payable. Loans from Modified Endowment Contracts may be treated for tax purposes as distributions of income. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. A loan will have a permanent effect on a Contract's cash surrender value and may have a permanent effect on the death benefit because the investment results of the selected investment options will apply only to the amount remaining in those investment options. The longer the loan is outstanding, the greater the effect is likely to be. The effect could be favorable or unfavorable. If investment results are greater than the rate being credited upon the amount of the loan while the loan is outstanding, Contract values will not increase as rapidly as they would have if no loan had been made. If investment results are below that rate, Contract values will be higher than they would have been had no loan been made. A loan that is repaid will not have any effect upon the guaranteed minimum death benefit. Consider the Form A Contract issued on a 35 year old male insured illustrated in the table on page T1 with an 8% gross investment return. Assume a $2,000 (5.5%) fixed-rate loan was made under this Contract at the end of Contract year 8 and repaid at the end of Contract year 10 and loan interest was paid when due. Upon repayment, the cash surrender value would be $4,581.76. This amount is lower than the cash surrender value shown on that page for the end of Contract year 10 because the loan amount was credited with the 4% assumed rate of return 23 rather than the 6.89% net return for the designated subaccount[s] resulting from the 8% gross return in the underlying Series Fund. REPORTS TO CONTRACT OWNERS Once each Contract year (except where the Contract is in force as fixed extended term insurance), Contract owners will be sent statements that provide certain information pertinent to their own Contract. These statements detail values and transactions made and specific Contract data that apply only to each particular Contract. On request, a Contract owner will be sent a current statement in a form similar to that of the annual statement described above, but Pruco Life may limit the number of such requests or impose a reasonable charge if such requests are made too frequently. Contract owners will also be sent annual and semi-annual reports of the Series Fund showing the financial condition of the portfolios and the investments held in each. OPTIONS ON LAPSE If a Contract lapses because the necessary premium has not been paid before the end of the grace period, some life insurance coverage may continue in effect or the owner may choose to surrender the Contract for its cash surrender value. 1. FIXED EXTENDED TERM INSURANCE. With two exceptions explained below, if the owner does not communicate at all with Pruco Life, life insurance coverage will continue for a length of time that depends on the cash surrender value on the date of default (which reflects the deduction of the deferred sales load, administrative charges, and Contract debt, if any), the amount of insurance, and the age and sex (except where unisex rates apply) of the insured. The insurance amount will be what it would have been on the date of default taking into account any Contract debt on that date. The amount will not change while the insurance stays in force. This benefit is known as extended term insurance. If the owner requests, he or she will be told in writing how long the insurance will be in effect. Extended term insurance has a cash surrender value, but no loan value. Contracts issued on the lives of certain insureds in high risk rating classes and Contracts issued in connection with tax qualified pension plans will include a statement that extended term insurance will not be provided. In those cases, variable reduced paid-up insurance will be the automatic benefit provided on lapse. 2. VARIABLE REDUCED PAID-UP INSURANCE. Variable reduced paid-up insurance provides insurance coverage for the lifetime of the insured. The initial insurance amount will depend upon the cash surrender value on the date of default (which reflects the deduction of the deferred sales load, administrative charges, and Contract debt, if any), and the age and sex of the insured. This will be a new guaranteed minimum death benefit. Aside from this guarantee, the cash surrender value and the amount of insurance will vary with investment performance in the same manner as the paid-up Contract described earlier. See WHEN A CONTRACT BECOMES PAID-UP, page 16. Variable reduced paid-up insurance has a loan privilege identical to that available on premium paying Contracts. See CONTRACT LOANS, page 23. Acquisition of reduced paid-up insurance within the first 7 Contract years may result in the Contract becoming a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. As explained above, variable reduced paid-up insurance is the automatic benefit on lapse for Contracts issued on certain insureds. Owners of other Contracts who want variable reduced paid-up insurance must ask for it in writing, in a form that meets Pruco Life's needs, within three months of the date of default; it will be available to such owners only if the initial amount of variable reduced paid-up insurance would be at least $5,000. This minimum is not applicable to Contracts for which variable reduced paid-up insurance is the automatic benefit upon lapse. 3. PAYMENT OF CASH SURRENDER VALUE. The owner can receive the cash surrender value by surrendering the Contract and making a written request in a form that meets Pruco Life's needs. If Pruco Life receives the request after the 61-day grace period has expired, the cash surrender value will be the net value of any extended term insurance then in force, or the net value of any reduced paid-up insurance then in force, less any Contract debt. Surrender of the Contract may have tax consequences. See TAX TREATMENT OF CONTRACT BENEFITS, page 25. RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY 1. ORIGINAL CONTRACTS. At any time during the first 24 months after a Contract is issued, so long as the Contract is not in default, the owner may exchange it for an APPRECIABLE LIFE insurance policy on the insured's life issued by Pruco Life. This is a general account, universal-life type policy with guaranteed minimum values. No evidence of insurability will be required to make an exchange. The new policy's premium and death benefit will be the same as the original Contract's on the date of exchange. The new policy will also have the same issue date and risk classification for the insured as the original Contract. If the Contract fund value under the original Contract is greater than the tabular Contract fund value under the new policy, the difference will be credited to the Contract 24 owner and carried over to the new policy. If the Contract fund value under the original Contract is less than the tabular Contract fund value under the new policy, a cash payment will be required from the exchanging owner. The exchange will be effective when Pruco Life receives a written request in a form that meets its needs. Any outstanding Contract debt must be repaid on or before the effective date of the exchange. The Contract owner may also exchange the Contract for an APPRECIABLE LIFE policy according to procedures meeting applicable state insurance law requirements if the Series Fund or one of its portfolios has a material change in its investment policy. The Company, in conjunction with the Arizona Director of Insurance, will determine if a change in investment policy is material. The Contract owner will be able to exchange within 60 days of receipt of notice of such a material change or of the effective date of the change, whichever is later. 2. REVISED CONTRACTS. Under the revised Contracts, the only right to exchange the Contract for a fixed-benefit contract is provided by allowing Contract owners to transfer their entire Contract fund to the fixed-rate option at any time within the first 2 years from issue (or within 2 years of any increase in face amount with respect to the amount of the increase) without regard to the otherwise applicable limit of four transfers per year. See TRANSFERS, page 10. This conversion right will also be provided if the Series Fund or one of its portfolios has a material change in its investment policy, as explained above. Generally, there is no right to exchange for an APPRECIABLE LIFE contract. SALE OF THE CONTRACT AND SALES COMMISSIONS Pruco Securities Corporation ("Prusec"), an indirect wholly-owned subsidiary of Prudential, acts as the principal underwriter of the Contract. Prusec, organized in 1971 under New Jersey law, is registered as a broker and dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. Prusec's principal business address is 213 Washington Street, Newark, New Jersey 07102-2992. The Contract is sold by registered representatives of Prusec who are also authorized by state insurance departments to do so. The Contract may also be sold through other broker-dealers authorized by Prusec and applicable law to do so. Registered representatives of such other broker-dealers may be paid on a different basis than described below. Where the insured is less than 60 years of age, the representative will generally receive a commission of no more than 50% of the scheduled premiums for the first year, no more than 12% of the scheduled premiums for the second, third, and fourth years, no more than 3% of the scheduled premiums for the fifth through tenth years, and no more than 2% of the scheduled premiums thereafter. For insureds over 59 years of age, the commission will be lower. The representative may be required to return all or part of the first year commission if the Contract is not continued through the second year. Representatives with less than 3 years of service may be paid on a different basis. Representatives who meet certain productivity, profitability, and persistency standards with regard to the sale of the Contract will be eligible for additional compensation. Sales expenses in any year are not equal to the deduction for sales load in that year. Pruco Life expects to recover its total sales expenses over the periods the Contracts are in effect. To the extent that the sales charges are insufficient to cover total sales expenses, the sales expenses will be recovered from Pruco Life's surplus, which may include amounts derived from the mortality and expense risk charge and the guaranteed minimum death benefit risk charge described in items 5 and 7 under CHARGES AND EXPENSES, page 10. TAX TREATMENT OF CONTRACT BENEFITS Each prospective purchaser is urged to consult a qualified tax advisor. The following discussion is not intended as tax advice, and it is not a complete statement of what the effect of federal income taxes will be under all circumstances. Rather, it provides information about how Pruco Life believes the tax laws apply in the most commonly occurring circumstances. There is no guarantee, however, that the current federal income tax laws and regulations or interpretations will not change. TREATMENT AS LIFE INSURANCE. The Contract will be treated as "life insurance," as long as it satisfies certain definitional tests set forth in sections 7702 of the Internal Revenue Code (the "Code") and as long as the underlying investments for the Contract satisfy diversification requirements under section 817(h) of the Code. (For further detail on diversification requirements, see DIVIDENDS, DISTRIBUTIONS, AND TAXES in the attached prospectus for the Series Fund.) Pruco Life believes that it has taken adequate steps to cause the Contract to be treated as life insurance for tax purposes. This means that: (1) except as noted below, the Contract owner should not be taxed on any part of the Contract fund, including additions attributable to interest, dividends or appreciation until amounts are distributed under the Contract; and (2) the death benefit should be excludible from the gross income of the beneficiary under section 101(a) of the Code. However, section 7702 of the Code which defines life insurance for tax purposes gives the Secretary of the Treasury authority to prescribe regulations to carry out the purposes of the section. In this regard, proposed 25 regulations governing mortality charges were issued in 1991 and proposed regulations relating to the definition of life insurance were issued in 1992. None of these proposed regulations has yet been finalized. Additional regulations under section 7702 may also be promulgated in the future. Moreover, in connection with the issuance of temporary regulations under section 817(h), the Treasury Department announced that such regulations do not provide guidance concerning the extent to which Contract owners may direct their investments to particular divisions of a separate account. Such guidance will be included in regulations or rulings under section 817(d) relating to the definition of a variable contract. Pruco Life intends to comply with final regulations issued under sections 7702 and 817. Therefore, it reserves the right to make such changes as it deems necessary to assure that the Contract continues to qualify as life insurance for tax purposes. Any such changes will apply uniformly to affected Contract owners and will be made only after advance written notice to affected Contract owners. PRE-DEATH DISTRIBUTIONS. The taxation of pre-death distributions depends on whether the Contract is classified as a Modified Endowment Contract. The following discussion first deals with distributions under Contracts not so classified, and then with Modified Endowment Contracts. 1. A surrender or lapse of the Contract may have tax consequences. Upon surrender, the owner will not be taxed on the cash surrender value except for the amount, if any, that exceeds the gross premiums paid less the untaxed portion of any prior withdrawals. The amount of any unpaid Contract debt will, upon surrender or lapse, be added to the cash surrender value and treated, for this purpose, as if it had been received. Any loss incurred upon surrender is generally not deductible. The tax consequences of a surrender may differ if the proceeds are received under any income payment settlement option. A withdrawal (or partial surrender) generally is not taxable unless it exceeds total premiums paid to the date of withdrawal less the untaxed portion of any prior withdrawals. However, under certain limited circumstances, in the first 15 Contract years all or a portion of a withdrawal may be taxable if the Contract fund exceeds the total premiums paid less the untaxed portions of any prior withdrawals, even if total withdrawals do not exceed total premiums paid to date. Extra premiums for optional benefits and riders generally do not count in computing gross premiums paid, which in turn determines the extent to which a withdrawal might be taxed. Loans received under the Contract will ordinarily be treated as indebtedness of the owner and will not be considered to be distributions subject to tax. 2. Some of the above rules are changed if the Contract is classified as a Modified Endowment Contract under section 7702A of the Code. It is possible for this Contract to be classified as a Modified Endowment Contract under at least two circumstances: premiums in excess of scheduled premiums are paid; or a decrease in the face amount of insurance is made (or a rider removed) during the first 7 Contract years. Moreover, the addition of a rider or the increase in the face amount of insurance after the Contract date may have an impact on the Contract's status as a Modified Endowment Contract. Contract owners contemplating any of these steps should first consult a qualified tax advisor and their Pruco Life representative. If the Contract is classified as a Modified Endowment Contract, then pre-death distributions, including loans and withdrawals, are includible in income to the extent that the Contract fund prior to surrender charges exceeds the gross premiums paid for the Contract increased by the amount of any loans previously includible in income and reduced by any untaxed amounts previously received other than the amount of any loans excludible from income. These rules may also apply to pre-death distributions, including loans, made during the 2-year period prior to the Contract becoming a Modified Endowment Contract. In addition, pre-death distributions from such Contracts (including full surrenders) will be subject to a penalty of 10 percent of the amount includible in income unless the amount is distributed on or after age 59 1/2, on account of the taxpayer's disability or as a life annuity. It is presently unclear how the penalty tax provisions apply to Contracts owned by nonnatural persons such as corporations. Under certain circumstances, the Code requires two or more Modified Endowment Contracts issued during a calendar year period to be treated as a single contract for purposes of applying the above rules. WITHHOLDING The taxable portion of any amounts received under the Contract will be subject to withholding to meet federal income tax obligations if the Contract owner fails to elect that no taxes be withheld or in certain other circumstances. Contract owners who do not provide a social security number or other taxpayer identification number will not be permitted to elect out of withholding. All recipients may be subject to penalties under the estimated tax payment rules if withholding and estimated tax payments of such amount are not sufficient. 26 OTHER TAX CONSIDERATIONS. Transfer of the Contract to a new owner or assignment of the Contract may have tax consequences depending on the circumstances. In the case of a transfer of the Contract for a valuable consideration, the death benefit may be subject to federal income taxes under section 101(a)(2) of the Code. In addition, a transfer of the Contract to or the designation of a beneficiary who is either 37 1/2 years younger than the Contract owner or a grandchild of the Contract owner may have Generation Skipping Transfer tax consequences under section 2601 of the Code. In certain circumstances, deductions for interest paid or accrued on Contract debt or on other loans that are incurred or continued to purchase or carry the Contract may be denied under section 163 of the Code as personal interest or under section 264 of the Code. Contract owners should consult his or her own tax advisor regarding the application of these provisions to their circumstances. Business-owned life insurance is subject to additional rules. Section 264(a)(1) of the Code generally precludes business Contract owners from deducting premium payments. The recently enacted Health Insurance Portability and Accountability Act of 1996 generally disallows tax deductions for interest on Contract debt on a business- owned insurance policy effective (with certain transitional rules) for interest paid or accrued after October 13, 1995. An exception permits the deduction of interest on policy loans on Contracts for up to 20 key persons. The interest deduction for Contract debt on such loans is limited to a prescribed interest rate and a maximum aggregate loan amount of $50,000 per key insured person. The Code also imposes an indirect tax upon additions to the Contract fund or the receipt of death benefits under business-owned life insurance policies under certain circumstances by way of the corporate alternative minimum tax. The individual situation of each Contract owner or beneficiary will determine the federal estate taxes and the state and local estate, inheritance and other taxes due if the owner or insured dies. CONTRACTS ISSUED IN CONNECTION WITH TAX-QUALIFIED PENSION PLANS The Contracts may be acquired in connection with the funding of retirement plans satisfying the qualification requirements of section 401 of the Internal Revenue Code. Such Contracts may be issued with a minimum face amount of $25,000, and increases and decreases in face amount may be effected in minimum increments of $10,000. The monthly charge for anticipated mortality costs and the scheduled premiums under such Contracts will be the same for male and female insureds of a particular age and underwriting classification. Illustrations reflecting such premiums and charges will be given to purchasers of Contracts issued in connection with qualified plans. Only certain of the riders normally available with the Contracts are available to Contracts issued in connection with qualified plans. See RIDERS, page 28. Moreover, variable reduced paid-up insurance and payment of cash surrender value are the only options on lapse available to Contracts issued in connection with qualified plans. See OPTIONS ON LAPSE, page 24. Finally, Contracts issued in connection with qualified plans may not invest in the Real Property Account. Prior to purchase of a Contract in connection with a qualified plan, the applicable tax rules relating to such plans and life insurance thereunder should be examined in consultation with a qualified tax advisor. THE FIXED-RATE OPTION BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN THE FIXED-RATE OPTION UNDER THE CONTRACT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND THE GENERAL ACCOUNT HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940. ACCORDINGLY, INTERESTS IN THE FIXED-RATE OPTION ARE NOT SUBJECT TO THE PROVISIONS OF THESE ACTS, AND PRUCO LIFE HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURE IN THIS PROSPECTUS RELATING TO THE FIXED-RATE OPTION. DISCLOSURE REGARDING THE FIXED-RATE OPTION MAY, HOWEVER, BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES. As explained earlier, a Contract owner may elect to allocate, either initially or by transfer, all or part of the amount credited under the Contract to a fixed-rate option, and the amount so allocated or transferred becomes part of Pruco Life's general assets. Sometimes this is referred to as Pruco Life's general account, which consists of all assets owned by Pruco Life other than those in the Account and in other separate accounts that have been or may be established by Pruco Life. Subject to applicable law, Pruco Life has sole discretion over the investment of the assets of the general account, and Contract owners do not share in the investment experience of those assets. Instead, Pruco Life guarantees that the part of the Contract fund allocated to the fixed-rate option will accrue interest daily at an effective annual rate that Pruco Life declares periodically, but not less than an effective annual rate of 4%. Currently, declared interest rates remain in effect from the date money is allocated to the fixed-rate option until the Monthly date in the same month in the following year. Thereafter, a new crediting rate will be declared each year and will remain in effect for the calendar year. Pruco Life reserves the right to change this practice. Pruco Life is not obligated to credit interest at a higher rate than 4%, although in its sole discretion it may do so. Different crediting rates may be declared for different portions of the Contract fund allocated to the 27 fixed-rate option. On request, a Contract owner will be advised of the interest rates that currently apply to his or her Contract. Transfers from the fixed-rate option are subject to strict limits. (See TRANSFERS, page 10). The payment of any cash surrender value attributable to the fixed-rate option may be delayed up to 6 months (see WHEN PROCEEDS ARE PAID, page 20). LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT PREMIUMS AND BENEFITS The Contract generally employs mortality tables that distinguish between males and females. Thus, premiums and benefits under Contracts issued on males and females of the same age will generally differ. However, in those states that have adopted regulations prohibiting sex-distinct insurance rates, premiums and cost of insurance charges will be based on a blended unisex rate whether the insured is male or female. In addition, employers and employee organizations considering purchase of a Contract should consult their legal advisors to determine whether purchase of a Contract based on sex-distinct actuarial tables is consistent with Title VII of the Civil Rights Act of 1964 or other applicable law. Pruco Life may offer the Contract with unisex mortality rates to such prospective purchasers. OTHER GENERAL CONTRACT PROVISIONS BENEFICIARY. The beneficiary is designated and named in the application by the Contract owner. Thereafter, the owner may change the beneficiary, provided it is in accordance with the terms of the Contract. Should the insured die with no surviving beneficiary, the insured's estate will become the beneficiary. INCONTESTABILITY. After the Contract has been in force during the insured's lifetime for 2 years from the Contract date or, with respect to any change in the Contract that requires Pruco Life's approval and could increase its liability, after the change has been in effect during the insured's lifetime for 2 years from the effective date of the change, Pruco Life will not contest its liability under the Contract in accordance with its terms. MISSTATEMENT OF AGE OR SEX. If the insured's stated age or sex (except where unisex rates apply) or both are incorrect in the Contract, Pruco Life will adjust the death benefits payable, as required by law, to reflect the correct age and sex. Any death benefit will be based on what the most recent charge for mortality would have provided at the correct age and sex. SUICIDE EXCLUSION. Generally, if the insured, whether sane or insane, dies by suicide within 2 years from the Contract date, Pruco Life will pay no more under the Contract than the sum of the premiums paid. If the insured, whether sane or insane, dies by suicide within 2 years from the effective date of an increase in the face amount of insurance, Pruco Life will pay, with respect to the amount of the increase, no more than the sum of the scheduled premiums attributable to the increase. ASSIGNMENT. This Contract may not be assigned if such assignment would violate any federal, state or local law or regulation. Pruco Life assumes no responsibility for the validity or sufficiency of any assignment, and it will not be obligated to comply with any assignment unless it has received a copy at one of its Home Offices. SETTLEMENT OPTIONS. The Contract grants to most owners, or to the beneficiary, a variety of optional ways of receiving Contract proceeds, other than in a lump sum. Any Pruco Life representative authorized to sell this Contract can explain these options upon request. RIDERS Contract owners may be able to obtain extra fixed benefits which may require an additional premium. These benefits will be described in what is known as a "rider" to the Contract. Charges for riders will be taken out of the Contract's Contract fund on each Monthly date. One rider pays an additional amount if the insured dies in an accident. Others waive certain premiums if the insured is disabled within the meaning of the provision (or, in the case of a Contract issued on an insured under the age of 15, if the applicant dies or becomes disabled within the meaning of the provision). Others pay an additional amount if the insured dies within a stated number of years after issue; similar term insurance riders may be available for the insured's spouse or child. The amounts of these benefits are fully guaranteed at issue; they do not depend on the performance of the Account. Certain restrictions may apply; they are clearly described in the applicable rider. Any Pruco Life representative authorized to sell the Contract can explain these riders further. Samples of the provisions are available from Pruco Life upon written request. Under one form of rider, which provides monthly renewable term life insurance, the amount payable upon the death of the insured may be substantially increased. If this rider is purchased, even the original Contract will not become paid-up, although, if the Contract fund becomes sufficiently large, a time may come when Pruco Life will have the right to refuse to accept further premiums. See WHEN A CONTRACT BECOMES PAID-UP, page 16. 28 Under another form of rider that is purchased for a single premium, businesses that own a Contract covering certain employees may be able to change the insured person from one key employee to another if certain requirements are met. VOTING RIGHTS As stated above, all of the assets held in the subaccounts of the Account will be invested in shares of the corresponding portfolios of the Series Fund. Pruco Life is the legal owner of those shares and as such has the right to vote on any matter voted on at Series Fund shareholders meetings. However, Pruco Life will, as required by law, vote the shares of the Series Fund at any regular and special shareholders meetings it is required to hold in accordance with voting instructions received from Contract owners. The Series Fund will not hold annual shareholders meetings when not required to do so under Maryland law or the Investment Company Act of 1940. Series Fund shares for which no timely instructions from Contract owners are received, and any shares attributable to general account investments of Pruco Life will be voted in the same proportion as shares in the respective portfolios for which instructions are received. Should the applicable federal securities laws or regulations, or their current interpretation, change so as to permit Pruco Life to vote shares of the Series Fund in its own right, it may elect to do so. Matters on which Contract owners may give voting instructions include the following: (1) election of the Board of Directors of the Series Fund; (2) ratification of the independent accountant of the Series Fund; (3) approval of the investment advisory agreement for a portfolio of the Series Fund corresponding to the Contract owner's selected subaccount[s]; (4) any change in the fundamental investment policy of a portfolio corresponding to the Contract owner's selected subaccount[s]; and (5) any other matter requiring a vote of the shareholders of the Series Fund. With respect to approval of the investment advisory agreement or any change in a portfolio's fundamental investment policy, Contract owners participating in such portfolios will vote separately on the matter, pursuant to the requirements of Rule 18f-2 under the 1940 Act. The number of Series Fund shares for which instructions may be given by a Contract owner is determined by dividing the portion of the value of the Contract derived from participation in a subaccount, by the value of one share in the corresponding portfolio of the Series Fund. The number of votes for which each Contract owner may give Pruco Life instructions will be determined as of the record date chosen by the Board of Directors of the Series Fund. Pruco Life will furnish Contract owners with proper forms and proxies to enable them to give these instructions. Pruco Life reserves the right to modify the manner in which the weight to be given voting instructions is calculated where such a change is necessary to comply with current federal regulations or interpretations of those regulations. Pruco Life may, if required by state insurance regulations, disregard voting instructions if such instructions would require shares to be voted so as to cause a change in the sub-classification or investment objectives of one or more of the Series Fund's portfolios, or to approve or disapprove an investment advisory contract for the Series Fund. In addition, Pruco Life itself may disregard voting instructions that would require changes in the investment policy or investment advisor of one or more of the Series Fund's portfolios, provided that Pruco Life reasonably disapproves such changes in accordance with applicable federal regulations. If Pruco Life does disregard voting instructions, it will advise Contract owners of that action and its reasons for such action in the next annual or semi-annual report to Contract owners. SUBSTITUTION OF SERIES FUND SHARES Although Pruco Life believes it to be unlikely, it is possible that in the judgment of its management, one or more of the portfolios of the Series Fund may become unsuitable for investment by Contract owners because of investment policy changes, tax law changes, or the unavailability of shares for investment. In that event, Pruco Life may seek to substitute the shares of another portfolio or of an entirely different mutual fund. Before this can be done, the approval of the SEC, and possibly one or more state insurance departments, will be required. Contract owners will be notified of such substitution. STATE REGULATION Pruco Life is subject to regulation and supervision by the Department of Insurance of the State of Arizona, which periodically examines its operations and financial condition. It is also subject to the insurance laws and regulations of all jurisdictions in which it is authorized to do business. Pruco Life is required to submit annual statements of its operations, including financial statements, to the insurance departments of the various jurisdictions in which it does business to determine solvency and compliance with local insurance laws and regulations. 29 In addition to the annual statements referred to above, Pruco Life is required to file with Arizona and other jurisdictions a separate statement with respect to the operations of all its variable contract accounts, in a form promulgated by the National Association of Insurance Commissioners. EXPERTS The financial statements included in this prospectus for the year ended December 31, 1996 have been audited by Price Waterhouse LLP, independent accountants, as stated in their reports appearing herein, and are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. Price Waterhouse LLP's principal business address is 1177 Avenue of the Americas, New York, New York 10036. The financial statements included in this prospectus for years ended December 31, 1995 and December 31, 1994, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports appearing herein, and are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. Deloitte & Touche LLP's principal business address is Two Hilton Court, Parsippany, New Jersey 07054- 0319. On March 12, 1996, Deloitte & Touche LLP was dismissed as the independent accountants of Pruco Life. There have been no disagreements with Deloitte & Touche LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of the accountant, would have caused them to make reference to the matter in their reports. Actuarial matters included in this prospectus have been examined by Pam A. Schiz, FSA, MAAA, Actuarial Director of Prudential whose opinion is filed as an exhibit to the registration statement. LITIGATION Several actions have been brought against Pruco Life alleging that Pruco Life and its agents engaged in improper life insurance sales practices. Prudential has agreed to indemnify Pruco Life for losses, if any, resulting from such litigation. No other significant litigation is being brought against Pruco Life that would have a material effect on its financial position. ADDITIONAL INFORMATION A registration statement has been filed with the SEC under the Securities Act of 1933, relating to the offering described in this prospectus. This prospectus does not include all the information set forth in the registration statement. Certain portions have been omitted pursuant to the rules and regulations of the SEC. The omitted information may, however, be obtained from the SEC's principal office in Washington, D.C., upon payment of a prescribed fee. Further information may also be obtained from Pruco Life's office. The address and telephone number are set forth on the cover of this prospectus. FINANCIAL STATEMENTS The consolidated financial statements of Pruco Life and subsidiaries included herein should be distinguished from the financial statements of the Account, and should be considered only as bearing upon the ability of Pruco Life to meet its obligations under the Contracts. 30 DIRECTORS AND OFFICERS The directors and major officers of Pruco Life, listed with their principal occupations during the past 5 years, are shown below. DIRECTORS OF PRUCO LIFE WILLIAM M. BETHKE, Director. -- President, Prudential Capital Markets Group since 1992. IRA J. KLEINMAN, Director. -- Executive Vice President, Prudential International Insurance Group since 1997; 1995 to 1997: Chief Marketing and Product Development Officer, Prudential Individual Insurance Group; 1993 to 1995: President, Prudential Select; Prior to 1993: Senior Vice President of Prudential. MENDEL A. MELZER, Director. -- Chief Investment Officer, Mutual Funds and Annuities, Prudential Investments since 1996; 1995 to 1996: Chief Financial Officer of the Money Management Group of Prudential; 1993 to 1995: Senior Vice President and Chief Financial Officer of Prudential Preferred Financial Services; Prior to 1993: Managing Director, Prudential Investment Corporation. ESTHER H. MILNES, President and Director. -- Vice President and Actuary, Prudential Individual Insurance Group since 1996; 1993 to 1996: Senior Vice President and Chief Actuary, Prudential Insurance and Financial Services; Prior to 1993: Vice President and Associate Actuary of Prudential. I. EDWARD PRICE, Vice Chairman and Director. -- Senior Vice President and Actuary, Prudential Individual Insurance Group since 1995; 1994 to 1995: Chief Executive Officer, Prudential International Insurance; 1993 to 1994: President, Prudential International Insurance; Prior to 1993: Senior Vice President and Company Actuary of Prudential. KIYOFUMI SAKAGUCHI, Director. -- President, Prudential International Insurance Group since 1995; 1994 to 1995: Chairman and Chief Executive Officer, The Prudential Life Insurance Co., Ltd.; Prior to 1994: President and Chief Executive Officer, Asia Pacific Region-Prudential International Insurance, and President, The Prudential Life Insurance Co., Ltd. WILLIAM F. YELVERTON, Chairman and Director. --Chief Executive Officer, Prudential Individual Insurance Group since 1995; Prior to 1995: Chief Executive Officer, New York Life Worldwide. OFFICERS WHO ARE NOT DIRECTORS SUSAN L. BLOUNT, Secretary.--Vice President and Secretary of Prudential since 1995; Prior to 1995: Assistant General Counsel for Prudential Residential Services Company. C. EDWARD CHAPLIN, Treasurer. -- Vice President and Treasurer of Prudential since 1995; 1993 to 1995: Managing Director and Assistant Treasurer of Prudential; 1992 to 1993: Vice President and Assistant Treasurer, Banking and Cash Management for Prudential. LINDA S. DOUGHERTY, Vice President, Comptroller and Chief Accounting Officer. -- Vice President and Comptroller, Prudential Individual Insurance Group since 1997; Prior to 1997: Vice President, Accounting, Prudential. JAMES C. DROZANOWSKI, Senior Vice President. -- Vice President and Operations Executive, Prudential Individual Insurance Group since 1996; 1995 to 1996: President and Chief Executive Officer of Chase Manhattan Bank; 1993 to 1995: Vice President, North America Customer Services, Chase Manhattan Bank; Prior to 1993: Operations Executive, Global Securities Services, Chase Manhattan Bank. CLIFFORD E. KIRSCH, Chief Legal Officer. -- Chief Counsel, Variable Products, Law Department of Prudential since 1995; 1994 to 1995: Associate General Counsel with Paine Webber; Prior to 1994: Assistant Director in the Division of Investment Management with the Securities and Exchange Commission. FRANK P. MARINO, Senior Vice President. -- Vice President, Policyowner Relations Department, Prudential Individual Insurance Group since 1996; Prior to 1996: Senior Vice President, Prudential Mutual Fund Services. MARIO A. MOSSE, Senior Vice President. -- Vice President, Annuity Services, Prudential Investments since 1996; Prior to 1996: Vice President, Chase Manhattan Bank. SHIRLEY H. SHAO, Senior Vice President and Chief Actuary. -- Vice President and Associate Actuary, Prudential. KAREN L. SHAPIRO, Senior Vice President. -- Vice President, Prudential Individual Insurance Group since 1996; Vice President and Associate General Counsel, Prudential Securities Incorporated 1993 to 1996; Prior to 1993: Senior Associate with Shaw, Pittman, Potts and Trowbridge. The business address of all directors and officers of Pruco Life is 213 Washington Street, Newark, New Jersey 07102-2992. - ---------- * SUBSIDIARY OF PRUDENTIAL 31 FINANCIAL STATEMENTS OF PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT STATEMENTS OF NET ASSETS December 31, 1996
SUBACCOUNTS ------------------------------------------------------------------------------ MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED -------------- -------------- -------------- -------------- -------------- ASSETS Investment in shares of The Prudential Series Fund, Inc. Portfolios at net asset value [Note 3]............................................ $ 48,602,527 $ 69,864,663 $ 678,148,975 $1,017,291,397 $ 534,344,865 -------------- -------------- -------------- -------------- -------------- NET ASSETS, representing: Equity of Contract owners....................... $ 48,479,537 $ 69,810,275 $ 677,939,121 $1,016,601,979 $ 534,039,090 Equity of Pruco Life Insurance Company.......... 122,990 54,388 209,854 689,418 305,775 -------------- -------------- -------------- -------------- -------------- $ 48,602,527 $ 69,864,663 $ 678,148,975 $1,017,291,397 $ 534,344,865 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
STATEMENTS OF OPERATIONS For the year ended December 31, 1996
SUBACCOUNTS ------------------------------------------------------------------------------ MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED -------------- -------------- -------------- -------------- -------------- INVESTMENT INCOME Dividend distributions received................. $ 2,545,618 $ 4,422,147 $ 15,452,502 $ 29,870,591 $ 21,071,449 EXPENSES Charges to Contract owners for assuming mortality risk and expense risk [Note 5A]..... 295,628 403,154 3,759,455 5,804,428 3,078,977 Reimbursement for excess expenses [Note 5D]..... (20,990) (33,127) (691,285) (2,442,468) (1,030,139) -------------- -------------- -------------- -------------- -------------- NET EXPENSES...................................... 274,638 370,027 3,068,170 3,361,960 2,048,838 -------------- -------------- -------------- -------------- -------------- NET INVESTMENT INCOME (LOSS)...................... 2,270,980 4,052,120 12,384,332 26,508,631 19,022,611 -------------- -------------- -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received............ 0 0 60,055,192 95,799,304 32,702,701 Realized gain (loss) on shares redeemed [average cost basis].......................... 0 133,542 6,145,351 9,236,814 4,364,767 Net unrealized gain (loss) on investments....... 0 (1,490,302) 25,824,063 (10,204,679) 3,618,761 -------------- -------------- -------------- -------------- -------------- NET GAIN (LOSS) ON INVESTMENTS.................... 0 (1,356,760) 92,024,606 94,831,439 40,686,229 -------------- -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $ 2,270,980 $ 2,695,360 $ 104,408,938 $ 121,340,070 $ 59,708,840 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14. A1
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------ HIGH YIELD STOCK EQUITY NATURAL BOND INDEX INCOME RESOURCES GLOBAL -------------- -------------- -------------- -------------- -------------- ASSETS Investment in shares of The Prudential Series Fund, Inc. Portfolios at net asset value [Note 3] $ 36,136,216 $ 90,276,629 $ 60,001,150 $ 31,382,787 $ 22,767,801 -------------- -------------- -------------- -------------- -------------- NET ASSETS, representing: Equity of Contract owners $ 36,121,047 $ 89,628,480 $ 59,976,124 $ 31,174,010 $ 22,620,834 Equity of Pruco Life Insurance Company 15,169 648,149 25,026 208,777 146,967 -------------- -------------- -------------- -------------- -------------- $ 36,136,216 $ 90,276,629 $ 60,001,150 $ 31,382,787 $ 22,767,801 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- SMALL GOVERNMENT PRUDENTIAL CAPITALIZATION INCOME JENNISON STOCK -------------- -------------- -------------- ASSETS Investment in shares of The Prudential Series Fund, Inc. Portfolios at net asset value [Note 3] $ 9,560,909 $ 11,272,061 $ 8,616,660 -------------- -------------- -------------- NET ASSETS, representing: Equity of Contract owners $ 9,541,272 $ 10,997,199 $ 8,454,992 Equity of Pruco Life Insurance Company 19,637 274,862 161,668 -------------- -------------- -------------- $ 9,560,909 $ 11,272,061 $ 8,616,660 -------------- -------------- -------------- -------------- -------------- --------------
SUBACCOUNTS (CONTINUED) -------------------------------------------------------------- HIGH YIELD STOCK EQUITY NATURAL BOND INDEX INCOME RESOURCES -------------- -------------- -------------- -------------- INVESTMENT INCOME Dividend distributions received $ 3,403,479 $ 1,433,253 $ 1,891,825 $ 185,182 EXPENSES Charges to Contract owners for assuming mortality risk and expense risk [Note 5A] 209,077 450,089 323,322 156,197 Reimbursement for excess expenses [Note 5D] 0 0 0 0 -------------- -------------- -------------- -------------- NET EXPENSES 209,077 450,089 323,322 156,197 -------------- -------------- -------------- -------------- NET INVESTMENT INCOME (LOSS) 3,194,402 983,164 1,568,503 28,985 -------------- -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received 0 1,013,015 1,879,859 3,633,842 Realized gain (loss) on shares redeemed [average cost basis] (26,717) 515,477 417,132 267,338 Net unrealized gain (loss) on investments 386,086 12,527,056 6,642,405 2,559,541 -------------- -------------- -------------- -------------- NET GAIN (LOSS) ON INVESTMENTS 359,369 14,055,548 8,939,396 6,460,721 -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,553,771 $ 15,038,712 $ 10,507,899 $ 6,489,706 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- SMALL GOVERNMENT PRUDENTIAL CAPITALIZATION GLOBAL INCOME JENNISON STOCK -------------- -------------- -------------- -------------- INVESTMENT INCOME Dividend distributions received $ 488,012 $ 622,180 $ 16,655 $ 46,335 EXPENSES Charges to Contract owners for assuming mortality risk and expense risk [Note 5A] 107,629 59,065 35,885 30,485 Reimbursement for excess expenses [Note 5D] 0 0 0 0 -------------- -------------- -------------- -------------- NET EXPENSES 107,629 59,065 35,885 30,485 -------------- -------------- -------------- -------------- NET INVESTMENT INCOME (LOSS) 380,383 563,115 (19,230) 15,850 -------------- -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received 347,618 0 0 147,641 Realized gain (loss) on shares redeemed [average cost basis] 36,315 19,619 32,821 132,894 Net unrealized gain (loss) on investments 2,363,101 (439,977) 870,328 626,371 -------------- -------------- -------------- -------------- NET GAIN (LOSS) ON INVESTMENTS 2,747,034 (420,358) 903,149 906,906 -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,127,417 $ 142,757 $ 883,919 $ 922,756 -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14. A2 FINANCIAL STATEMENTS OF PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT STATEMENTS OF CHANGES IN NET ASSETS For the years ended December 31, 1996, 1995 and 1994
SUBACCOUNTS ---------------------------------------------------------------------------------------------- MONEY DIVERSIFIED MARKET BOND ---------------------------------------------- ---------------------------------------------- 1996 1995 1994 1996 1995 1994 -------------- -------------- -------------- -------------- -------------- -------------- OPERATIONS: Net investment income (loss).... $ 2,270,980 $ 2,620,276 $ 1,649,101 $ 4,052,120 $ 3,860,873 $ 3,400,785 Capital gains distributions received...................... 0 0 0 0 144,746 133,233 Realized gain (loss) on shares redeemed [average cost basis].......... 0 0 0 133,542 75,353 (39,688) Net unrealized gain (loss) on investments................... 0 0 0 (1,490,302) 7,114,539 (5,814,428) -------------- -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 2,270,980 2,620,276 1,649,101 2,695,360 11,195,511 (2,320,098) -------------- -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS [NOTE 7]........................ (4,243,121) (740,753) 174,399 1,116,168 (1,432,720) (3,900,361) -------------- -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS [NOTE 8]........................ 22,759 (89,480) (486,387) 33,769 (94,534) 24,099 -------------- -------------- -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS.......................... (1,949,382) 1,790,043 1,337,113 3,845,297 9,668,257 (6,196,360) NET ASSETS: Beginning of year............... 50,551,909 48,761,866 47,424,753 66,019,366 56,351,109 62,547,469 -------------- -------------- -------------- -------------- -------------- -------------- End of year..................... $ 48,602,527 $ 50,551,909 $ 48,761,866 $ 69,864,663 $ 66,019,366 $ 56,351,109 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14. A3
SUBACCOUNTS (CONTINUED) -------------------------------------------------------------- FLEXIBLE EQUITY MANAGED ---------------------------------------------- -------------- 1996 1995 1994 1996 -------------- -------------- -------------- -------------- OPERATIONS: Net investment income (loss) $ 12,384,332 $ 8,602,440 $ 7,817,827 $ 26,508,631 Capital gains distributions received 60,055,192 20,556,916 18,199,834 95,799,304 Realized gain (loss) on shares redeemed [average cost basis] 6,145,351 1,265,358 1,432,168 9,236,814 Net unrealized gain (loss) on investments 25,824,063 105,422,478 (17,636,131) (10,204,679) -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 104,408,938 135,847,192 9,813,698 121,340,070 -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS [NOTE 7] (13,252,943) 13,327,159 1,930,473 (41,031,839) -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS [NOTE 8] (127,887) 153,934 (486,070) 533,513 -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 91,028,108 149,328,285 11,258,101 80,841,744 NET ASSETS: Beginning of year 587,120,867 437,792,582 426,534,481 936,449,653 -------------- -------------- -------------- -------------- End of year $ 678,148,975 $ 587,120,867 $ 437,792,582 $1,017,291,397 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- CONSERVATIVE BALANCED ---------------------------------------------- 1995 1994 1996 1995 1994 -------------- -------------- -------------- -------------- -------------- OPERATIONS: Net investment income (loss) $ 24,734,903 $ 19,391,523 $ 19,022,611 $ 17,956,379 $ 13,772,420 Capital gains distributions received 39,033,998 22,635,794 32,702,701 17,065,189 4,752,103 Realized gain (loss) on shares redeemed [average cost basis] 5,763,771 2,045,045 4,364,767 2,716,236 925,009 Net unrealized gain (loss) on investments 113,356,027 (73,072,549) 3,618,761 35,828,712 (25,603,121) -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 182,888,699 (29,000,187) 59,708,840 73,566,516 (6,153,589) -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS [NOTE 7] (31,598,849) (15,011,537) (25,728,075) (18,484,820) (3,697,057) -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS [NOTE 8] (1,895,990) 1,559,318 207,529 (806,795) 172,937 -------------- -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 149,393,860 (42,452,406) 34,188,294 54,274,901 (9,677,709) NET ASSETS: Beginning of year 787,055,793 829,508,199 500,156,571 445,881,670 455,559,379 -------------- -------------- -------------- -------------- -------------- End of year $ 936,449,653 $ 787,055,793 $ 534,344,865 $ 500,156,571 $ 445,881,670 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14. A4 FINANCIAL STATEMENTS OF PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT STATEMENTS OF CHANGES IN NET ASSETS For the years ended December 31, 1996, 1995 and 1994
SUBACCOUNTS ---------------------------------------------------------------------------------------------- HIGH YIELD STOCK BOND INDEX ---------------------------------------------- ---------------------------------------------- 1996 1995 1994 1996 1995 1994 -------------- -------------- -------------- -------------- -------------- -------------- OPERATIONS: Net investment income (loss).... $ 3,194,402 $ 3,185,876 $ 2,882,389 $ 983,164 $ 870,823 $ 843,636 Capital gains distributions received...................... 0 0 23 1,013,015 454,847 68,595 Realized gain (loss) on shares redeemed [average cost basis].......... (26,717) (44,447) (41,868) 515,477 1,387,759 574,991 Net unrealized gain (loss) on investments................... 386,086 1,861,218 (3,901,821) 12,527,056 14,103,114 (1,293,204) -------------- -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 3,553,771 5,002,647 (1,061,277) 15,038,712 16,816,543 194,018 -------------- -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS [NOTE 7]........................ (1,115,027) (1,077,084) (1,682,842) 10,720,960 623,288 (263,376) -------------- -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS [NOTE 8]........................ (6,897) 5,385 (94,816) 396,129 132,045 92,281 -------------- -------------- -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS.......................... 2,431,847 3,930,948 (2,838,935) 26,155,801 17,571,876 22,923 NET ASSETS: Beginning of year............... 33,704,369 29,773,421 32,612,356 64,120,828 46,548,952 46,526,029 -------------- -------------- -------------- -------------- -------------- -------------- End of year..................... $ 36,136,216 $ 33,704,369 $ 29,773,421 $ 90,276,629 $ 64,120,828 $ 46,548,952 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14. A5
SUBACCOUNTS (CONTINUED) -------------------------------------------------------------- EQUITY NATURAL INCOME RESOURCES ---------------------------------------------- -------------- 1996 1995 1994 1996 -------------- -------------- -------------- -------------- OPERATIONS: Net investment income (loss) $ 1,568,503 $ 1,499,078 $ 1,108,691 $ 28,985 Capital gains distributions received 1,879,859 2,122,385 1,981,250 3,633,842 Realized gain (loss) on shares redeemed [average cost basis] 417,132 107,006 76,758 267,338 Net unrealized gain (loss) on investments 6,642,405 4,726,822 (3,029,605) 2,559,541 -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 10,507,899 8,455,291 137,094 6,489,706 -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS [NOTE 7] (1,064,633) 3,721,237 8,440,504 3,651,574 -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS [NOTE 8] (61,045) 75,709 (464,805) 40,623 -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 9,382,221 12,252,237 8,112,793 10,181,903 NET ASSETS: Beginning of year 50,618,929 38,366,692 30,253,899 21,200,884 -------------- -------------- -------------- -------------- End of year $ 60,001,150 $ 50,618,929 $ 38,366,692 $ 31,382,787 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- GLOBAL* ---------------------------------------------- 1995 1994 1996 1995 1994 -------------- -------------- -------------- -------------- -------------- OPERATIONS: Net investment income (loss) $ 131,646 $ 65,158 $ 380,383 $ 137,947 $ (5,689) Capital gains distributions received 969,854 323,593 347,618 270,758 3,344 Realized gain (loss) on shares redeemed [average cost basis] 135,295 107,035 36,315 60,621 0 Net unrealized gain (loss) on investments 3,207,434 (1,353,754) 2,363,101 1,314,446 (559,095) -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,444,229 (857,968) 3,127,417 1,783,772 (561,440) -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS [NOTE 7] 464,376 3,393,256 5,614,035 1,377,627 11,335,055 -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS [NOTE 8] 23,471 (74,840) 18,594 (539,673) 612,414 -------------- -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 4,932,076 2,460,448 8,760,046 2,621,726 11,386,029 NET ASSETS: Beginning of year 16,268,808 13,808,360 14,007,755 11,386,029 0 -------------- -------------- -------------- -------------- -------------- End of year $ 21,200,884 $ 16,268,808 $ 22,767,801 $ 14,007,755 $ 11,386,029 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- *Commenced Business on 5/1/94
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14. A6 FINANCIAL STATEMENTS OF PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT STATEMENTS OF CHANGES IN NET ASSETS For the years ended December 31, 1996, 1995 and 1994
SUBACCOUNTS ------------------------------------------------------------------------------ GOVERNMENT PRUDENTIAL INCOME JENNISON** ---------------------------------------------- ------------------------------ 1996 1995 1994 1996 1995 -------------- -------------- -------------- -------------- -------------- OPERATIONS: Net investment income (loss)...... $ 563,115 $ 578,383 $ 579,579 $ (19,230) $ (2,483) Capital gains distributions received........................ 0 0 0 0 0 Realized gain (loss) on shares redeemed [average cost basis]............ 19,619 10,838 (32,581) 32,821 3,407 Net unrealized gain (loss) on investments..................... (439,977) 1,064,134 (1,209,373) 870,328 59,770 -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......... 142,757 1,653,355 (662,375) 883,919 60,694 -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS [NOTE 7].......................... (808,931) (557,802) (1,472,096) 8,604,081 1,554,794 -------------- -------------- -------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS [NOTE 8].......................... (44,003) (180,155) 98,497 71,804 96,769 -------------- -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS............................ (710,177) 915,398 (2,035,974) 9,559,804 1,712,257 NET ASSETS: Beginning of year................. 10,271,086 9,355,688 11,391,662 1,712,257 0 -------------- -------------- -------------- -------------- -------------- End of year....................... $ 9,560,909 $ 10,271,086 $ 9,355,688 $ 11,272,061 $ 1,712,257 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- **Commenced Business on 5/1/95
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14. A7
SUBACCOUNTS (CONTINUED) ------------------------------ SMALL CAPITALIZATION STOCK** ------------------------------ 1996 1995 -------------- -------------- OPERATIONS: Net investment income (loss) $ 15,850 $ 3,088 Capital gains distributions received 147,641 18,365 Realized gain (loss) on shares redeemed [average cost basis] 132,894 3,705 Net unrealized gain (loss) on investments 626,371 50,127 -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 922,756 75,285 -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS [NOTE 7] 5,434,938 2,019,898 -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS [NOTE 8] (105,516) 269,299 -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 6,252,178 2,364,482 NET ASSETS: Beginning of year 2,364,482 0 -------------- -------------- End of year $ 8,616,660 $ 2,364,482 -------------- -------------- -------------- -------------- **Commenced Business on 5/1/95
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14. A8 NOTES TO FINANCIAL STATEMENTS OF PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 1996 NOTE 1: GENERAL Pruco Life Variable Appreciable Account ("the Account") was established on January 13, 1984 under Arizona law as a separate investment account of Pruco Life Insurance Company ("Pruco Life") which is a wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential"). The assets of the Account are segregated from Pruco Life's other assets. Currently only Pruco Life's Variable Appreciable Life ("VAL") Contracts invest in the Account. Pruco Life's Variable Universal Life ("VUL") Contracts will begin investing in the Account on January 24, 1997. The Account is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. There are thirteen subaccounts within the Account, each of which invests only in a corresponding portfolio of The Prudential Series Fund, Inc. (the "Series Fund"). The Series Fund is a diversified open-end management investment company, and is managed by Prudential. New sales of the VAL product which invests in the Account were discontinued as of May 1, 1992. However, premium payments made by current VAL Contract owners will continue to be received by the Account. All premium payments for the VUL product will be received by the Account. NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements are prepared in conformity with generally accepted accounting principles (GAAP). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. Investments--The investments in shares of the Series Fund are stated at the net asset value of the respective portfolio. Security Transactions--Realized gains and losses on security transactions are reported on an average cost basis. Purchase and sale transactions are recorded as of the trade date of the security being purchased or sold. Distributions Received--Dividend and capital gain distributions received are reinvested in additional shares of the Series Fund and are recorded on ex-dividend date. Equity of Pruco Life Insurance Company--Pruco Life maintains a position in the Account for the purpose of administering activity in the Account. The activity includes unit transactions, fund share transactions, and expense processing. Pruco Life monitors the balance daily and transfers funds based upon anticipated activity. At times, Pruco Life may owe an amount to the Account, which is reflected in Pruco Life's equity as a negative balance. The position does not have an effect on the Contract owner's account or the related unit value. A9 NOTE 3: INVESTMENT INFORMATION FOR THE PRUDENTIAL SERIES FUND, INC. PORTFOLIOS The net asset value per share for each portfolio of the Series Fund, the number of shares of each portfolio held by the subaccounts of the Account and the aggregate cost of investments in such shares at December 31, 1996 were as follows:
PORTFOLIOS ---------------------------------------------------------------------------- MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED ------------- ------------- -------------- -------------- -------------- Number of shares: 4,860,253 6,313,778 25,149,332 57,190,947 34,435,961 Net asset value per share: $ 10.00000 $ 11.06543 $ 26.96489 $ 17.78763 $ 15.51706 Cost: $ 48,602,527 $ 67,751,873 $ 470,995,841 $ 859,142,904 $ 468,191,337
PORTFOLIOS (CONTINUED) ------------------------------------------------------------ HIGH YIELD STOCK EQUITY NATURAL BOND INDEX INCOME RESOURCES ------------- ------------- -------------- -------------- Number of shares: 4,593,106 3,801,968 3,241,585 1,587,763 Net asset value per share: $ 7.86749 $ 23.74471 $ 18.50982 $ 19.76541 Cost: $ 37,195,879 $ 56,796,687 $ 48,102,205 $ 24,788,338 PORTFOLIOS (CONTINUED) ------------------------------------------------------------ SMALL GOVERNMENT PRUDENTIAL CAPITALIZATION GLOBAL INCOME JENNISON STOCK ------------- ------------- -------------- -------------- Number of shares: 1,275,168 852,048 786,980 624,764 Net asset value per share: $ 17.85474 $ 11.22109 $ 14.32319 $ 13.79187 Cost: $ 19,649,350 $ 9,562,026 $ 10,341,963 $ 7,940,162
A10 NOTE 4: CONTRACT OWNER UNIT INFORMATION Outstanding Contract owner units, unit values and total Contract owner equity for the year ended December 31, 1996 were as follows:
SUBACCOUNTS --------------------------------------------------------------------------------------------- MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED ----------------- ----------------- ----------------- ----------------- ----------------- Contract Owner Units Outstanding (VAL):........... 27,635,005.343 26,475,879.397 126,934,924.340 276,125,230.858 172,284,568.110 Unit value (VAL):.......... $ 1.75428 $ 2.63675 $ 5.34084 $ 3.68167 $ 3.09975 ----------------- ----------------- ----------------- ----------------- ----------------- Contract Owner Equity (VAL):... $ 48,479,537 $ 69,810,275 $ 677,939,121 $ 1,016,601,979 $ 534,039,090 ----------------- ----------------- ----------------- ----------------- ----------------- Contract Owner Units Outstanding (VUL):.......... -- -- -- -- -- Unit value (VUL):.......... -- -- -- -- -- ----------------- ----------------- ----------------- ----------------- ----------------- Contract Owner Equity (VUL):... -- -- -- -- -- ----------------- ----------------- ----------------- ----------------- ----------------- TOTAL CONTRACT OWNER EQUITY:..... $ 48,479,537 $ 69,810,275 $ 677,939,121 $ 1,016,601,979 $ 534,039,090 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
SUBACCOUNTS (CONTINUED) -------------------------------------------------------------------------- HIGH YIELD STOCK EQUITY NATURAL BOND INDEX INCOME RESOURCES ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- Contract Owner Units Outstanding (VAL):....... 16,605,774.477 29,188,289.443 18,772,398.676 10,427,764.324 Unit value (VAL):......... $ 2.17521 $ 3.07070 $ 3.19491 2.98952 ----------------- ----------------- ----------------- ----------------- Contract Owner Equity (VAL):.................. $ 36,121,047 $ 89,628,480 $ 59,976,124 $ 31,174,010 ----------------- ----------------- ----------------- ----------------- Contract Owner Units Outstanding (VUL):...... -- -- -- N/A Unit value (VUL):......... -- -- -- N/A ----------------- ----------------- ----------------- ----------------- Contract Owner Equity (VUL):.................. -- -- -- N/A ----------------- ----------------- ----------------- ----------------- TOTAL CONTRACT OWNER EQUITY:................... $ 36,121,047 $ 89,628,480 $ 59,976,124 $ 31,174,010 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- SUBACCOUNTS (CONTINUED) -------------------------------------------------------------------------- SMALL GOVERNMENT PRUDENTIAL CAPITALIZATION GLOBAL INCOME JENNISON STOCK ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- Contract Owner Units Outstanding (VAL):....... 17,029,016.012 5,250,679.232 7,721,125.596 5,944,716.585 Unit value (VAL):......... $ 1.32837 $ 1.81715 $ 1.42430 $ 1.42227 ----------------- ----------------- ----------------- ----------------- Contract Owner Equity (VAL):.................. $ 22,620,834 $ 9,541,272 $ 10,997,199 $ 8,454,992 ----------------- ----------------- ----------------- ----------------- Contract Owner Units Outstanding (VUL):...... -- N/A -- N/A Unit value (VUL):......... -- N/A -- N/A ----------------- ----------------- ----------------- ----------------- Contract Owner Equity (VUL):.................. -- N/A -- N/A ----------------- ----------------- ----------------- ----------------- TOTAL CONTRACT OWNER EQUITY:................... $ 22,620,834 $ 9,541,272 $ 10,997,199 $ 8,454,992 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Natural Resources, Government Income and Small Capitalization Stock are not available to VUL Contract owners. A11 NOTE 5: CHARGES AND EXPENSES A. Mortality Risk and Expense Risk Charges The mortality risk and expense risk charges at an effective annual rate of 0.60% are applied against the net assets representing equity of VAL and VUL Contract owners held in each subaccount. Mortality risk is that Contract holders may not live as long as estimated and expense risk is that the cost of issuing and administering the policies may exceed the estimated expenses. For 1996, the amount of these charges paid to Pruco Life for the VAL product was $14,713,391. B. Deferred Sales Charge Subsequent to a Contract owner redemption, a deferred sales charge is imposed upon surrenders of certain variable life insurance contracts to compensate Pruco Life for sales and other marketing expenses. The amount of any sales charge will depend on the number of years that have elapsed since the Contract was issued. No sales charge will be imposed after the tenth year of the Contract. No sales charge will be imposed on death benefits. For 1996, the amount of these charges paid to Pruco Life for VAL was $3,439,306. C. Partial Withdrawal Charge A charge is imposed by Pruco Life on partial withdrawals of the cash surrender value. For 1996, the amount of these charges paid to Pruco Life for VAL was $69,170. D. Expense Reimbursement Pursuant to a prior merger agreement, the Account is reimbursed by Pruco Life for expenses in excess of 0.40% of the VAL product's average daily net assets incurred by the Money Market, Diversified Bond, Equity, Flexible Managed, and the Conservative Balanced Portfolios of the Series Fund. For 1996, the amount of these reimbursements totaled $4,218,009. E. Cost of Insurance Charges Contract holder contributions are applied to the Account net of the following charges: transaction costs, premium taxes, sales loads, monthly administration charges, and death benefit risk charges. During 1996, Pruco Life received from Contract owners $4,272,094, $5,444,940, $393,203, $13,244,265 and $2,484,809, respectively for these charges for VAL. NOTE 6: TAXES Pruco Life is taxed as a "life insurance company" under the Internal Revenue Code and the operations of the Account form a part of and are taxed with those of Pruco Life. Under current federal law, no federal income taxes are payable by the Account. As such, no provision for tax liability has been recorded. A12 NOTE 7: NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS AND OTHER OPERATING TRANSFERS Contract owner activity in the subaccounts of the Account, for the year ended December 31, 1996, was as follows:
SUBACCOUNTS -------------------------------------------------------------------------------- MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED -------------- -------------- --------------- --------------- -------------- Contract Owner Contributions, net: $ 31,416,670 $ 12,684,816 $ 85,325,629 $ 115,822,666 $ 64,449,174 Contract Owner Redemptions: $ (33,618,199) $ (14,081,345) $ (106,876,645) $ (146,140,657) $ (80,582,263) Net Transfers from(to) other subaccounts or fixed rate option: $ (2,041,592) $ 2,512,697 $ 8,298,073 $ (10,713,848) $ (9,594,986)
SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------- HIGH YIELD STOCK EQUITY NATURAL BOND INDEX INCOME RESOURCES -------------- -------------- --------------- --------------- Contract Owner Contributions, net: $ 9,385,513 $ 16,779,382 $ 13,424,627 $ 8,351,168 Contract Owner Redemptions: $ (10,226,859) $ (17,552,325) $ (14,639,865) $ (9,068,616) Net Transfers from(to) other subaccounts or fixed rate option: $ (273,681) $ 11,493,903 $ 150,605 $ 4,369,022 SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------- SMALL GOVERNMENT PRUDENTIAL CAPITALIZATION GLOBAL INCOME JENNISON STOCK -------------- -------------- --------------- --------------- Contract Owner Contributions, net: $ 6,463,503 $ 2,451,426 $ 5,516,854 $ 5,852,286 Contract Owner Redemptions: $ (6,683,555) $ (2,607,449) $ (5,254,510) $ (5,962,162) Net Transfers from(to) other subaccounts or fixed rate option: $ 5,834,087 $ (652,908) $ 8,341,737 $ 5,544,814
NOTE 8: NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS The increase (decrease) in net assets resulting from equity transfers represents the net contributions (withdrawals) of Pruco Life to the Account. A13 NOTE 9: UNIT ACTIVITY Transactions in units (including transfers among subaccounts), for the year ended December 31, 1996 were as follows:
SUBACCOUNTS --------------------------------------------------------------------------------------------- MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED ----------------- ----------------- ----------------- ----------------- ----------------- Contract Owner Contributions: 18,317,198.320 6,032,489.291 19,318,824.308 33,929,159.280 22,253,843.498 Contract Owner Redemptions: (20,797,006.538) (5,568,937.715) (21,974,064.812) (45,839,478.729) (31,093,009.761)
SUBACCOUNTS (CONTINUED) -------------------------------------------------------------------------- HIGH YIELD STOCK EQUITY NATURAL BOND INDEX INCOME RESOURCES ----------------- ----------------- ----------------- ----------------- Contract Owner Contributions: 4,533,364.255 10,183,057.448 4,799,710.141 4,624,377.287 Contract Owner Redemptions: (5,073,116.794) (6,331,551.426) (5,166,776.253) (3,352,624.583) SUBACCOUNTS (CONTINUED) -------------------------------------------------------------------------- SMALL GOVERNMENT PRUDENTIAL CAPITALIZATION GLOBAL INCOME JENNISON STOCK ----------------- ----------------- ----------------- ----------------- Contract Owner Contributions: 10,050,734.228 1,390,565.397 10,385,284.939 8,735,019.776 Contract Owner Redemptions: (5,504,422.378) (1,851,584.892) (3,950,760.606) (4,551,837.745)
NOTE 10: PURCHASES AND SALES OF INVESTMENTS The aggregate costs of purchases and proceeds from sales of investments in the Series Fund, Inc. were as follows:
PORTFOLIOS -------------------------------------------------------------------------------- MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED -------------- -------------- --------------- --------------- -------------- For the year ended December 31, 1996 Purchases......... $ 7,103,000 $ 4,249,000 $ 1,489,000 $ 226,000 $ 180,000 Sales............. $ (11,598,000) $ (3,444,000) $ (17,938,000) $ (43,999,000) $ (27,672,000)
PORTFOLIOS (CONTINUED) ---------------------------------------------------------------- HIGH YIELD STOCK EQUITY NATURAL BOND INDEX INCOME RESOURCES -------------- -------------- --------------- --------------- For the year ended December 31, 1996 Purchases........... $ 1,698,000 $ 12,097,000 $ 1,158,000 $ 4,560,000 Sales............... $ (3,029,000) $ (1,430,000) $ (2,607,000) $ (1,024,000) PORTFOLIOS (CONTINUED) ---------------------------------------------------------------- SMALL GOVERNMENT PRUDENTIAL CAPITALIZATION GLOBAL INCOME JENNISON STOCK -------------- -------------- --------------- --------------- For the year ended December 31, 1996 Purchases........... $ 5,968,000 $ 264,000 $ 9,767,000 $ 7,278,000 Sales............... $ (443,000) $ (1,176,000) $ (1,127,000) $ (2,031,000)
A14 REPORT OF INDEPENDENT ACCOUNTANTS To the Contract Owners of Pruco Life Variable Appreciable Account and the Board of Directors of Pruco Life Insurance Company In our opinion, the accompanying statement of net assets and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of Money Market Subaccount, Diversified Bond Subaccount, Equity Subaccount, Flexible Managed Subaccount, Conservative Balanced Subaccount, High Yield Bond Subaccount, Stock Index Subaccount, Equity Income Subaccount, Natural Resources Subaccount, Global Subaccount, Government Income Subaccount, Prudential Jennison Subaccount and Small Capitalization Stock Subaccount of Pruco Life Variable Appreciable Account at December 31, 1996, and the results of each of their operations and the changes in each of their net assets for the year then ended, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Pruco Life Insurance Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of shares owned in The Prudential Series Fund, Inc. at December 31, 1996, provide a reasonable basis for the opinion expressed above. Price Waterhouse LLP New York, New York March 31, 1997 A15 INDEPENDENT AUDITORS' REPORT To the Contract Owners of Pruco Life Variable Appreciable Account and the Board of Directors of Pruco Life Insurance Company Newark, New Jersey We have audited the accompanying statements of changes in net assets of Pruco Life Variable Appreciable Account of Pruco Life Insurance Company (comprising, respectively, the Money Market, Diversified Bond, Equity, Flexible Managed, Conservative Balanced, High Yield Bond, Stock Index, Equity Income, Natural Resources, Global, Government Income, Prudential Jennison, and Small Capitalization Stock subaccounts) for the periods presented for each of the two years ended December 31, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the changes in net assets of each of the respective subaccounts constituting the Pruco Life Variable Appreciable Account for the respective stated periods in conformity with generally accepted accounting principles. Deloitte & Touche LLP Parsippany, New Jersey February 15, 1996 A16 PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 1996 1995 ----------- ------------ (000'S) ASSETS Fixed maturities Held to maturity $ 405,731 $ 437,727 Available for sale 2,236,817 2,144,854 Equity securities 3,748 4,036 Mortgage loans 46,915 64,464 Investment real estate - 4,059 Policy loans 639,782 569,273 Other long term investments 4,528 4,159 Short term investments 169,830 228,016 ----------- ------------ Total invested assets 3,507,351 3,456,588 ----------- ------------ Cash 73,766 41,435 Deferred policy acquisition costs 633,159 566,976 Premiums due 9,084 6,367 Accrued investment income 62,110 59,862 Receivable from affiliates 1,901 8,275 Federal income tax receivable 7,191 6,375 Reinsurance recoverable on unpaid losses 27,014 27,914 Other assets 20,000 12,578 Separate Account assets 5,336,851 4,285,268 ----------- ------------ TOTAL ASSETS $9,678,427 $8,471,638 =========== ============ LIABILITIES AND STOCKHOLDER'S EQUITY Liabilities Future policy benefits and other policyholders' liabilities $ 557,351 $ 501,200 Policyholders' account balances 2,188,862 2,218,330 Deferred federal income tax payable 148,960 141,048 Payable to affiliate 51,729 41,584 Other liabilities 55,090 37,387 Separate Account liabilities 5,277,454 4,263,896 ----------- ------------ Total Liabilities 8,279,446 7,203,445 ----------- ------------ Contingencies - Note 9 Stockholder's Equity Common Stock, $10 par value; 1,000,000 shares, authorized; 250,000 shares, issued and outstanding at December 31, 1996 and 1995 2,500 2,500 Paid-in-capital 439,582 439,582 Net unrealized investment gains (less deferred income tax) 12,402 30,836 Retained earnings 944,497 795,275 ----------- ------------ Total Stockholder's Equity 1,398,981 1,268,193 ----------- ------------ TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $9,678,427 $8,471,638 =========== ============
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B-1 PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 1995 1994 ----------------------------------- (000'S) REVENUES Premiums $ 51,525 $ 42,089 $ 22,689 Policy charges and fee income 324,976 319,012 308,753 Net investment income 247,328 246,618 241,132 Realized investment gains (losses) 10,835 13,200 (41,074) Other income 20,818 26,986 13,259 ----------------------------------- Total Revenues 655,482 647,905 544,759 ----------------------------------- BENEFITS AND EXPENSES Policyholders' benefits 186,873 153,987 121,949 Interest credited to policyholders' account balances 118,246 126,926 113,711 Other operating costs and expenses 122,006 134,790 179,173 ----------------------------------- Total Benefits and Expenses 427,125 415,703 414,833 ----------------------------------- Income before income tax provision 228,357 232,202 129,926 ----------------------------------- Income tax provision 79,135 79,558 48,031 ----------------------------------- NET INCOME $ 149,222 $ 152,644 $ 81,895 ===================================
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B-2 PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
YEAR ENDED DECEMBER 31, 1996 1995 1994 ----------------------------------- (000'S) Common Stock Balance, beginning of year $ 2,500 $ 2,500 $ 2,500 Issued during year - - - ----------------------------------- Balance, end of year 2,500 2,500 2,500 ----------------------------------- Paid in Capital Balance, beginning of year 439,582 439,582 439,582 Paid in during year - - - ----------------------------------- Balance, end of year 439,582 439,582 439,582 ----------------------------------- Net Unrealized Investment Gains (Losses) (Less Deferred Income Tax) Balance, beginning of year 30,836 (1,349) - Adoption of SFAS 115 - (39,762) - Net change in unrealized investment gains (losses) (18,434) 71,947 (1,349) ----------------------------------- Balance, end of year 12,402 30,836 (1,349) ----------------------------------- RETAINED EARNINGS Balance, beginning of year 795,275 642,631 560,736 Net income 149,222 152,644 81,895 ----------------------------------- Balance, end of year 944,497 795,275 642,631 ----------------------------------- TOTAL STOCKHOLDER'S EQUITY $1,398,981 $1,268,193 $1,083,364 ===================================
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B-3 PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996 1995 1994 ------------------------------------------ (000'S) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 149,222 $ 152,644 $ 81,895 Adjustments to reconcile net income to net cash from operating activities: Increase in future policy benefits and other policyholders' liabilities 56,151 22,877 31,932 General account policy fee income (50,286) (56,637) (48,401) Interest credited to policyholders' account balances 118,246 126,926 113,711 Net decrease (increase) in Separate Accounts (38,025) (3,520) (4,121) Net realized investment (gains) losses (10,835) (13,200) 41,074 Amortization and other non-cash items 26,709 (8,106) 6,228 Change in: Accrued investment income (2,248) (480) (2,597) Premiums due (2,717) (1,957) (1,374) Receivable from affiliates 6,374 (758) (637) Note receivable from affiliate -- -- 50,000 Deferred policy acquisition costs (66,183) 31,318 34,124 Federal income tax receivable (816) 12,031 (28,908) Other assets (6,522) (12,689) (11,121) Payable to affiliate 10,145 11,327 (24,029) Deferred federal income tax payable 7,912 30,779 -- Other liabilities 17,703 (61,306) (5,293) ----------------------------------------- Cash Flows From Operating Activities 214,830 229,249 232,483 ----------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from the sale/maturity of: Fixed maturities: Held to maturity 138,127 144,898 2,710,423 Available for sale 3,886,254 1,886,687 -- Equity securities 7,527 5,557 1,910 Mortgage loans 19,226 7,395 10,821 Other long term investments 288 1,559 607 Investment real estate 4,488 2,926 8,677 Payments for the purchase of: Fixed maturities: Held to maturity (114,494) (135,092) (2,561,082) Available for sale (4,008,810) (1,741,139) -- Equity securities (4,697) (4,279) (2,436) Mortgage loans -- -- (35,276) Other long term investments (657) (1,674) (1,584) Policy loans (70,509) (75,411) (73,591) Net proceeds (payments) of short term investments 58,186 (36,482) 9,845 ----------------------------------------- Cash Flows From Investing Activities (85,071) 54,945 68,314 ----------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Policyholders' account balances: Deposits 536,370 95,039 114,105 Withdrawals (net of transfers to/from separate accounts) (633,798) (365,578) (387,793) ----------------------------------------- Cash Flows From Financing Activities (97,428) (270,539) (273,688) ----------------------------------------- Net increase in Cash 32,331 13,655 27,109 Cash, beginning of year 41,435 27,780 671 ----------------------------------------- CASH, END OF YEAR $ 73,766 $ 41,435 $ 27,780 ========================================= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Income taxes paid $ 61,760 $ 53,107 $ 56,089 =========================================
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS B-4 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRINCIPLES A. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Pruco Life Insurance Company (Pruco Life), a stock life insurance company, and its subsidiaries (collectively, the Company). Pruco Life is a wholly-owned subsidiary of The Prudential Insurance Company of America (Prudential), a mutual life insurance company. The Company markets individual life insurance and deferred annuities primarily through Prudential's sales force in the United States, and in Taiwan. All significant intercompany balances and transactions have been eliminated in consolidation. B. Basis of Presentation The Financial Accounting Standards Board (FASB) issued Interpretation No. 40 "Applicability of Generally Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises", as amended by Statement of Financial Accounting Standards (SFAS) No. 120 "Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration Participating Contracts", effective for fiscal years beginning after December 15, 1995. Financial statements of mutual life insurance companies, and their wholly owned stock life insurance subsidiaries, for periods beginning after December 15, 1995 which are prepared on the basis of statutory accounting practices will no longer be characterized as in conformity with generally accepted accounting principles (GAAP). As a result, the Company has prepared its 1996 consolidated financial statements in accordance with all applicable GAAP pronouncements. The 1995 and 1994 consolidated financial statements, which were previously prepared on the statutory basis of accounting, have been restated in accordance with GAAP. The cumulative effect of adopting GAAP as of January 1, 1994 was an increase in retained earnings of $378.3 million. See Note 7 for a reconciliation of the Company's surplus and net income determined in accordance with statutory accounting practices with equity and net income determined on a GAAP basis. On January 1, 1995, the Company adopted SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities," which expanded the use of fair value accounting for those securities that a company does not have positive intent and ability to hold to maturity. Implementation of this statement decreased stockholder's equity by $39.8 million net of deferred income tax benefit of $21.4 million. In 1994 prior to the adoption of SFAS 115, all fixed maturities were carried at amortized cost. C. Investments Fixed Maturities - Securities held to maturity are those that the Company has the positive intent and ability to hold to maturity and are principally reported at amortized cost. Amortized cost is adjusted to estimated fair value for impairments which are deemed to be other than temporary. Where the Company may not have the positive intent to hold fixed maturities until maturity, the securities are classified as "Available for Sale." These securities are reported at market value based principally on their quoted market prices. The associated unrealized gains and losses, net of income taxes and deferred policy acquisition costs, are included as a component of equity or if deemed to be other than temporary, are included as a realized loss. Equity Securities consist primarily of common and preferred stocks. Marketable equity securities are reported at market value based principally on their quoted market prices. Cost basis of the equity securities is $3.9 million and $5.3 million as of December 31, 1996 and 1995, respectively. The associated unrealized gains and losses are included as a component of equity. Mortgage Loans and Policy Loans are stated primarily at unpaid principal balances, net of unamortized discounts. Interest income is recognized as net investment income earned. B-5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 Investment Real Estate acquired through foreclosure during 1994 was sold in 1996 for $4.5 million. Other Long Term Investments, which consist of limited partnerships, are valued at the aggregate net equity in the partnerships. Certain investments in this category were non-income producing at December 31, 1995. These investments were $.3 million at December 31, 1995. There were no non-income producing investments at December 31, 1996 and 1994. Partnership and joint venture interests in which the Company does not have control and a majority economic interest are reported on the equity basis of accounting. Non real estate related interests of $4.5 million and $4.1 million are included in other long term investments, at December 31, 1996 and 1995, respectively. The Company's share of net income from such entities was $1.4 million, $.3 million, and $1.9 million for the years ended December 31, 1996, 1995, and 1994, respectively, and is reported in net investment income. Realized investment gains and losses are reported based on specific identification of the investments sold. Short-term investments are fixed maturities that mature within one year, and are reported at estimated fair value. D. Revenue Recognition and Related Expenses Universal life contracts are long duration life insurance contracts that involve significant mortality and morbidity risk with both fixed and guaranteed terms. Investment contracts are long duration contracts that do not subject the insurance enterprise to risks arising from policyholder mortality or morbidity. Amounts received as payments for these contracts are reported as deposits to policyholders' account balances. Revenues from these contracts consist primarily of amounts assessed during the period against policyholders' account balances for mortality charges, policy administration fees and surrender charges. Policy benefits and claims that are charged to expenses include benefit claims incurred in the period in excess of related policyholders' account balances. Premiums, policy benefits and claims from traditional life and annuity policies, generally are recognized in operations when due. E. Deferred Policy Acquisition Costs Acquisition costs consist of commissions and other costs which vary with and are primarily related to the production or acquisition of new business. Acquisition costs related to universal life products and investment-type contracts are deferred and amortized in proportion to total estimated gross profits arising principally from investment results, mortality, expense margins and surrender charges based on historical and anticipated future experience. Amortization of deferred policy acquisition costs was $9.3 million, $54.4 million, and $76.0 million for the years ended December 31, 1996, 1995, and 1994, respectively. Deferred policy acquisition costs are analyzed to determine if they are recoverable from future income, including investment income. If such costs are determined to be unrecoverable, they are expensed at the time of determination. The effect on the deferred policy acquisition asset that would result from realization of unrealized investment gains (losses) is recognized with an offset to unrealized investment gains (losses) in consolidated stockholder's equity. B-6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 F. Future Policy Benefits and Policyholders' Account Balances Benefit reserve liabilities for payout annuities such as matured deferred annuities and supplementary contracts represent the present values of estimated future benefits payments and related expenses. Present values for these contracts are computed using interest rates ranging from 6.5% to 11%. The mortality assumption for these contracts is the 83 IAM tables. Reserves for supplementary benefits are stated at interest rates that vary from 4% to 6.5% using mortality and morbidity assumptions either from company experience or various actuarial tables. When liabilities for future policy benefits plus the present value of expected future gross deposits are insufficient to provide expected future policy benefits and expenses, unrecoverable deferred policy acquisition costs are written off and thereafter, if required, a premium deficiency reserve is established as a charge to income. Policyholders' account balances for universal life and investment-type contracts are equal to the policy account values. The policy account values represent an accumulation of gross deposits plus interest credited less expense and mortality charges and withdrawals. Interest crediting rates on life insurance products range from 3.35% to 7%. G. Separate Accounts Separate Accounts represent funds for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the policyholders, with the exception of the Pruco Life Modified Guaranteed Annuity Account. The Pruco Life Modified Guaranteed Annuity Account is a non-unitized separate account, which funds the Modified Guaranteed Annuity Contract and the Market Value Adjustment Annuity Contract. Owners of the Pruco Life Modified Guaranteed Annuity and the Market Value Adjustment Annuity Contracts do not participate in the investment gain or loss from assets relating to such accounts. Such gain or loss is borne, in total, by the Company. All Separate Account assets are carried at market value. Deposits to all Separate Accounts are reported as increases in Separate Account liabilities, which equal the Separate Account policy account fund values. Charges assessed against Policyholders' account balances for mortality, policy administration and surrender charges are included in policy charges and fee income. Mortality and expense risk charges are applied against the Policyholders' account balance. The Separate Account assets are legally segregated and are not subject to claims that arise out of any other business of the Company. H. Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. B-7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 2. FIXED MATURITIES Gross unrealized gains and losses for securities classified as Held to Maturity and Available for Sale, by major security type, are as follows:
DECEMBER 31, 1996 - --------------------------------------------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Fair (000's) Cost Gains Losses Value - --------------------------------------------------------------------------------------------------- Held to Maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies $ - $ - $ - $ - Foreign government bonds - - - - Corporate securities 405,731 10,947 576 416,102 Mortgage-backed securities - - - - Other fixed maturities - - - - - --------------------------------------------------------------------------------------------------- Total $ 405,731 $ 10,947 $ 576 $ 416,102 - --------------------------------------------------------------------------------------------------- DECEMBER 31, 1996 - --------------------------------------------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Fair (000's) Cost Gains Losses Value - --------------------------------------------------------------------------------------------------- Available For Sale U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 32,055 $ 30 $ 174 $ 31,911 Foreign government bonds 90,447 857 205 91,099 Corporate securities 2,087,250 30,365 4,206 2,113,409 Mortgage-backed securities 398 - - 398 Other fixed maturities - - - - - --------------------------------------------------------------------------------------------------- Total $ 2,210,150 $ 31,252 $ 4,585 $ 2,236,817 - ---------------------------------------------------------------------------------------------------
B-8 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994
DECEMBER 31, 1995 - --------------------------------------------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Fair (000's) Cost Gains Losses Value - --------------------------------------------------------------------------------------------------- Held to Maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies $ - $ - $ - $ - Foreign government bonds - - - - Corporate securities 437,727 18,629 1,805 454,551 Mortgage-backed securities - - - - Other fixed maturities - - - - - --------------------------------------------------------------------------------------------------- Total $ 437,727 $ 18,629 $ 1,805 $ 454,551 - --------------------------------------------------------------------------------------------------- DECEMBER 31, 1995 - --------------------------------------------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Fair (000's) Cost Gains Losses Value - --------------------------------------------------------------------------------------------------- Available For Sale U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 324,854 $ 6,830 $ 61 $ 331,623 Foreign government bonds 73,042 3,055 - 76,097 Corporate securities 1,507,248 54,545 2,168 1,559,625 Mortgage-backed securities 169,190 8,717 398 177,509 Other fixed maturities - - - - - --------------------------------------------------------------------------------------------------- Total $ 2,074,334 $ 73,147 $ 2,627 $ 2,144,854 - ---------------------------------------------------------------------------------------------------
B-9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 The amortized cost and estimated fair value of fixed maturities at December 31, 1996, categorized by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because borrowers may prepay obligations with or without call or prepayment penalties. DECEMBER 31, 1996 - ------------------------------------------------------------------------------ Estimated Amortized Fair (000's) Cost Value - ------------------------------------------------------------------------------ Held to Maturity Due in one year or less $ 28,653 $ 28,762 Due after one year through five years 156,013 158,183 Due after five years through ten years 194,765 202,766 Due after ten years 26,300 26,391 Mortgage-backed securities -- -- - ------------------------------------------------------------------------------ Total $ 405,731 $ 416,102 - ------------------------------------------------------------------------------ DECEMBER 31, 1996 - ------------------------------------------------------------------------------ Estimated Amortized Fair (000's) Cost Value - ------------------------------------------------------------------------------ Available For Sale Due in one year or less $ 130,400 $ 131,301 Due after one year through five years 1,561,854 1,578,979 Due after five years through ten years 398,090 404,920 Due after ten years 119,408 121,219 Mortgage-backed securities 398 398 - ------------------------------------------------------------------------------ Total $2,210,150 $2,236,817 - ------------------------------------------------------------------------------ Proceeds from the sale of fixed maturities during 1996, 1995, and 1994 were $3.8 billion, $1.8 billion, and $2.6 billion, respectively. Gross gains of $28.7 million, $28.8 million, and $16.8 million and gross losses of $19.7 million, $17.5 million, and $49.8 million were realized on those sales during 1996, 1995, and 1994, respectively. B-10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994
3. Net Investment Income YEAR ENDED DECEMBER 31, 1996 1995 1994 ------------------------------------------- (000'S) Net investment income consists of: Gross investment income Fixed maturities Held to maturity $ 33,419 $ 33,458 $ 196,909 Available for sale 152,445 160,740 -- Equity securities 44 104 14 Mortgage loans 5,669 7,757 4,041 Investment real estate 613 647 2,146 Policy loans 33,449 29,775 25,692 Short term investments 16,780 15,092 12,676 Other 9,438 3,949 5,075 ------------------------------------------- 251,857 251,522 246,553 Investment expenses (4,529) (4,904) (5,421) =========================================== Net investment income $ 247,328 $ 246,618 $ 241,132 =========================================== 4. Investment Gains (Losses) YEAR ENDED DECEMBER 31, 1996 1995 1994 ------------------------------------------- (000'S) Realized investment gains (losses) Fixed maturities - Available for sale $ 9,036 $ 11,359 $ (38,180) Equity securities 781 2,020 503 Mortgage loans 1,677 (90) (4,581) Investment real estate 487 (99) 1,184 Other (1,146) 10 -- ------------------------------------------- Realized investment gains (losses) $ 10,835 $ 13,200 $ (41,074) =========================================== YEAR ENDED DECEMBER 31, 1996 1995 1994 ------------------------------------------- (000'S) Net unrealized investment gains (losses), beginning of period $ 30,836 $ (1,349) $ -- Net unrealized investment gains (losses) Fixed maturities - Available for sale (43,853) 131,712 -- Equity securities 1,403 827 (2,108) ------------------------------------------- (42,450) 132,539 (2,108) Deferred income tax benefit (provision) 15,398 (47,714) 759 Deferred policy acquisition costs (net of deferred income taxes) 8,618 (12,878) -- ------------------------------------------- Net change in unrealized investment gains (losses) (18,434) 71,947 (1,349) Adoption of SFAS 115 -- (39,762) -- ------------------------------------------- Net unrealized investment gains (losses), end of period $ 12,402 $ 30,836 (1,349) ===========================================
B-11 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 5. Fair Value Information The fair value amounts have been determined by the Company using available information and reasonable valuation methodologies. Considerable judgment is applied, as necessary, in interpreting data to develop the estimates of fair value. Accordingly, the estimates presented may not be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The following methods and assumptions were used in calculating the fair values. Fixed Maturities - Fair values for fixed maturities, other than private placement securities, are based on quoted market prices or estimates from independent pricing services. Fair values for private placement securities are estimated using a discounted cash flow model which considers the current market spreads between the U.S. Treasury yield curve and corporate bond yield curve adjusted for the type of issue, its current quality and its remaining average life. Equity Securities - Fair value is based on quoted market prices. Mortgage Loans - The fair value of the mortgage loan portfolio is primarily based upon the present value of the scheduled cash flows discounted at the appropriate U.S. Treasury rate, adjusted for the current market spread for a similar quality mortgage. Policy Loans - The estimated fair value is calculated using a discounted cash flow model based upon current U.S. Treasury rates and historical loan repayments. Policyholders' Account Balances - Fair values for policyholders' account balances are equal to the policy account values. Short-term Investments - Fair values for short-term investments are based on quoted market prices or estimates from independent pricing services. The following table discloses the carrying amounts and estimated fair values of the Company's financial instruments at December 31, 1996 and 1995:
1996 1995 CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE -------------- ---------- -------------- ---------- (000'S) Financial Assets: Fixed maturities: Held to maturity $ 405,731 $ 416,102 $ 437,727 $ 454,551 Available for sale 2,236,817 2,236,817 2,144,854 2,144,854 Mortgage loans 46,915 46,692 64,464 63,635 Policy loans 639,782 623,218 569,273 577,975 Equity securities 3,748 3,748 4,036 4,036 Short-term investments 169,830 169,830 228,016 228,016 Financial Liabilities: Policyholders' account balances $ 2,188,862 $ 2,188,862 $ 2,218,330 $ 2,218,330
B-12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 6. Income Taxes The Company is a member of a group of affiliated companies which join in filing a consolidated federal income tax return in addition to separate company state and local tax returns. The Internal Revenue Code limits the amount of nonlife insurance losses that may offset life insurance company taxable income. Companies operating outside the United States are taxed under applicable foreign statutes. Pursuant to the tax allocation arrangement, total federal income tax expense is determined on a separate company basis. Members with losses record tax benefits to the extent such losses are recognized in the consolidated federal tax provision. The Company has a net receivable from Prudential of $7.2 million and $6.4 million as of December 31, 1996 and 1995, respectively. Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes. The components of income taxes are as follows: YEAR ENDED DECEMBER 31, 1996 1995 1994 ------------------------------------- (000'S) Current income tax provision: Federal income tax $ 59,489 $ 65,131 $ 59,641 State and local income tax 703 1,876 3,036 Foreign income tax 4 7 7 ------------------------------------- Total current income tax 60,196 67,014 62,684 Deferred income tax provision (benefit): Federal income tax 18,413 12,196 (14,246) State and local income tax 526 348 (407) ------------------------------------- Total deferred income tax 18,939 12,544 (14,653) ------------------------------------- Total income tax provision $ 79,135 $ 79,558 $ 48,031 ===================================== The income tax provision is different from the amount computed using the expected federal income tax rate of 35% for the following reasons: YEAR ENDED DECEMBER 31, 1996 1995 1994 ------------------------------------- (000'S) Expected federal income tax expense $ 79,926 $ 81,271 $ 45,474 State income taxes 1,229 2,224 2,629 Other (2,020) (3,937) (72) ===================================== Total income tax provision $ 79,135 $ 79,558 $ 48,031 ===================================== B-13 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 The components of net deferred income taxes payable are as follows: YEAR ENDED DECEMBER 31, 1996 1995 ------------------------------ (000'S) Deferred Income Tax Assets Insurance liabilities $ 38,532 $ 40,732 Other -- -- ------------------------------ Total deferred income tax assets $ 38,532 $ 40,732 ============================== Deferred Income Tax Liabilities Deferred acquisition costs $ 173,785 $ 153,526 Net investment gains 12,502 28,157 Other 1,205 97 ------------------------------ Total deferred income tax liabilities 187,492 181,780 ------------------------------ Deferred federal income tax payable $ 148,960 $ 141,048 ============================== The Internal Revenue Service (the "Service") has completed examinations of the consolidated federal income tax returns through 1989. The Service is examining the years 1990 through 1992. Discussions are being held with the Service with respect to proposed adjustments. However, management believes there are adequate defenses against, or sufficient reserves to provide for, such adjustments. B-14 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 7. Stockholder's Equity Reconciliation The reconciliation of statutory net income to GAAP net income, and statutory surplus to GAAP equity as of December 31, 1996, 1995, and 1994 are as follows:
1996 1995 1994 --------------------------------------------------------- (000'S) Statutory net income $ 73,847 $ 157,751 $ 52,955 Deferred acquisition costs 48,862 (6,103) (34,124) Deferred premium 1,295 (743) 1,122 Insurance liabilities 10,211 22,890 31,780 Income taxes (7,780) (27,669) 42,755 Interest maintenance reserve 365 5,480 (24,704) Separate accounts and other 22,422 1,038 12,111 --------------------------------------------------------- GAAP net income $ 149,222 $ 152,644 $ 81,895 ========================================================= Statutory surplus $ 901,645 $ 829,022 $ 676,087 Investment valuation 26,678 70,776 - Deferred acquisition costs 633,159 566,976 598,294 Deferred premium (11,859) (13,154) (12,412) Insurance liabilities (124,781) (153,995) (71,076) Income taxes (124,823) (128,070) (82,167) Asset valuation reserve and interest maintenance reserve 68,733 64,551 23,690 Other 30,229 32,087 (49,052) --------------------------------------------------------- GAAP stockholder's equity $ 1,398,981 $ 1,268,193 $ 1,083,364 =========================================================
The New York State Insurance Department ("Department") recognizes only statutory accounting for determining and reporting the financial condition and results of operations of an insurance company, for determining its solvency under the New York Insurance Law, and for determining whether its financial condition warrants the payment of a dividend to its stockholders. No consideration is given by the Department to financial statements prepared in accordance with generally accepted accounting principles in making such determinations. B-15 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES DECEMBER 31, 1996, 1995, AND 1994 8. Related Party Transactions A. Service Agreements The Company, Prudential, and Pruco Securities Corporation, an indirect wholly-owned subsidiary of Prudential, operate under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided. The net cost of these services allocated to the Company were $102 million, $98 million and $78 million for the years ended December 31, 1996, 1995, and 1994, respectively. B. Pension Plans The Company is a wholly-owned subsidiary of Prudential which sponsors several defined benefit pension plans that cover substantially all of its employees. Benefits are generally based on career average earnings and credited length of service. Prudential's funding policy is to contribute annually the amount necessary to satisfy the Internal Revenue Service contribution guidelines. No pension expense for contributions to the plan was allocated to the Company in 1996, 1995, or 1994 because the plan was subject to the full funding limitation under the Internal Revenue Code. C. Postretirement Life and Health Benefits Prudential also sponsors certain life insurance and health care benefits for its retired employees. Substantially all employees may become eligible to receive a benefit if they retire after age 55 with at least 10 years of service. Prudential elected to amortize its obligation over twenty years. A provision for contributions to the postretirement fund is included in the net cost of services allocated to the Company discussed above for the years ended December 31, 1996, 1995, and 1994. D. Reinsurance The Company currently has three reinsurance agreements in place with Prudential (the reinsurer). Specifically: reinsurance Group Annuity Contract, whereby the reinsurer, in consideration for a single premium payment by the Company, provides reinsurance equal to 100% of all payments due under the contract, and two yearly renewable term agreements in which the Company may offer and the reinsurer may accept reinsurance on any life in excess of the Company's maximum limit of retention. The Company is not relieved of its primary obligation to the policyholder as a result of these reinsurance transactions. These agreements had no material effect on net income for the years ended December 31, 1996, 1995, and 1994. 9. Contingencies Several actions have been brought against the Company on behalf of those persons who purchased life insurance policies based on complaints about sales practices engaged in by Prudential, the Company and agents appointed by Prudential and the Company. Prudential has agreed to indemnify the Company for any and all losses resulting from such litigation. 10. Dividends The Company is subject to Arizona law which limits the amount of dividends that insurance companies can pay to stockholders. The maximum dividend which may be paid in any twelve month period without notification or approval is limited to the lesser of 10% of surplus as of December 31 of the preceding year or the net gain from operations of the preceding calendar year. Cash dividends may only be paid out of surplus derived from realized net profits. Based on these limitations and the Company's surplus position at December 31, 1996, the Company would be permitted a maximum of $48 million in dividend distribution in 1997, all of which could be paid in cash, without approval from The State of Arizona Department of Insurance. B-16 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Pruco Life Insurance Company In our opinion, the accompanying consolidated statement of financial position and the related consolidated statements of operations, of stockholder's equity and of cash flows present fairly, in all material respects, the financial position of Pruco Life Insurance Company and its subsidiaries at December 31, 1996, and the results of their operations and their cash flows for the year in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. /s/ PRICE WATERHOUSE LLP - -------------------------- PRICE WATERHOUSE LLP New York, New York March 21, 1997 B-17 INDEPENDENT AUDITORS' REPORT To The Board of Directors of Pruco Life Insurance Company Newark, New Jersey We have audited the accompanying consolidated statement of financial position of Pruco Life Insurance Company and subsidiaries as of December 31, 1995, and the related consolidated statements of operations, stockholder's equity and cash flows for the years ended December 31, 1995 and 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the accompanying financial statements presents fairly, in all material respects, the consolidated financial position of Pruco Life Insurance Company and subsidiaries as of December 31, 1995, and the consolidated results of operations and cash flows for the years ended December 31, 1995 and 1994 in conformity with generally accepted accounting principles. As discussed in Note 1 to the consolidated financial statements, the Company has retroactively adopted all applicable generally accepted accounting principles relating to stock life insurance subsidiaries of mutual life insurance companies and has changed, as of January 1, 1995, the method of accounting for fixed maturity investments. /s/ DELOITTE & TOUCHE LLP Parsippany, N.J. December 19, 1996 B-18 VARIABLE APPRECIABLE LIFE(R)_____________ INSURANCE CONTRACTS [LOGO} PRUDENTIAL PRUCO LIFE INSURANCE COMPANY 213 Washington Street, Newark, NJ 07102-2992 Telephone 800 437-4016, Extension 46 A Subsidiary of The Prudential Insurance Company of America PART II OTHER INFORMATION UNDERTAKING TO FILE REPORTS Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred in that section. REPRESENTATION WITH RESPECT TO CHARGES Pruco Life Insurance Company represents that the fees and charges deducted under the variable Appreciable Life insurance contracts registered by this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Pruco Life Insurance Company. UNDERTAKING WITH RESPECT TO INDEMNIFICATION Prudential Directors' and Officers' Liability and Corporation Reimbursement Insurance program, purchased by Prudential from Aetna Casualty & Surety Company, CNA Insurance Companies, Lloyds of London, Great American Insurance Company, Reliance Insurance Company, Corporate Officers & Directors Assurance Ltd., A.C.E. Insurance Company, Ltd., XL Insurance Company, Ltd., and Zurich-American Insurance Company, provides reimbursement for "Loss" (as defined in the policies) which the Company pays as indemnification to its directors or officers resulting from any claim for any actual or alleged act, error, misstatement, misleading statement, omission, or breach of duty by persons in the discharge of their duties in their capacities as directors or officers of Prudential, any of its subsidiaries, or certain investment companies affiliated with Prudential. Coverage is also provided to the individual directors or officers for such Loss, for which they shall not be indemnified. Loss essentially is the legal liability on claims against a director or officer, including adjudicated damages, settlements and reasonable and necessary legal fees and expenses incurred in defense of adjudicatory proceedings and appeals therefrom. Loss does not include punitive or exemplary damages or the multiplied portion of any multiplied damage award, criminal or civil fines or penalties imposed by law, taxes or wages, or matters which are uninsurable under the law pursuant to which the policies are construed. There are a number of exclusions from coverage. Among the matters excluded are Losses arising as the result of (1) claims brought about or contributed to by the criminal, dishonest or fraudulent acts or omissions or the willful violation of any law by a director or officer, (2) claims based on or attributable to directors or officers gaining personal profit or advantage to which they were not legally entitled, and (3) claims arising from actual or alleged performance of, or failure to perform, services as, or in any capacity similar to, an investment adviser, investment banker, underwriter, broker or dealer, as those terms are defined in the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, any rules or regulations thereunder, or any similar federal, state or local statute, rule or regulation. The limit of coverage under the program for both individual and corporate reimbursement coverage is $150,000,000. The retention for corporate reimbursement coverage is $10,000,000 per loss. The relevant provisions of New Jersey law permitting or requiring indemnification, New Jersey being the state of organization of Prudential, can be found in Section 14A:3-5 of the New Jersey Statutes Annotated. The relevant provisions of Arizona law, Arizona being the state of organization of Pruco Life, can be found in Section 10-005 of the Arizona Statutes Annotated. The text of Prudential's by-law 26, which relates to indemnification of officers and directors, is incorporated by reference to Exhibit 1.A.(6)(b) of Post-Effective Amendment No. 1 to Form S-6, Registration No. 33-61079, filed April 25, 1996, on behalf of The Prudential Variable Appreciable Account. The text of Pruco Life's by-laws, Article VIII, which relates to indemnification of officers and directors, is incorporated by reference to Exhibit 1.A.(6)(b) to this Registration Statement. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-1 CONTENTS OF REGISTRATION STATEMENT This Registration Statement comprises the following papers and documents: The facing sheet. Cross-reference to items required by Form N-8B-2. The prospectus consisting of 74 pages. The undertaking to file reports. The representation with respect to charges. The undertaking with respect to indemnification. The signatures. Written consents of the following persons: 1. Deloitte & Touche LLP, independent auditors. 2. Price Waterhouse LLP, independent accountants. 3. Clifford E. Kirsch, Esq. 4. Pam A. Schiz, FSA, MAAA. The following exhibits: 1. The following exhibits correspond to those required by paragraph A of the instructions as to exhibits in Form N-8B-2: A. (1) Resolution of Board of Directors of Pruco Life Insurance Company establishing the Pruco Life Variable Appreciable Account. (Note 6) (2) Not Applicable. (3) Distributing Contracts: (a) Distribution Agreement between Pruco Securities Corporation and Pruco Life Insurance Company. (Note 1) (b) Proposed form of Agreement between Pruco Securities Corporation and independent brokers with respect to the Sale of the Contracts. (Note 1) (c) Schedules of Sales Commissions. (Note 1) (4) Not Applicable. (5) Variable Appreciable Life Insurance Contracts. (a) With fixed death benefit. (Note 1) (b) With variable death benefit. (Note 1) (c) Complaint Notice for use in Texas with Variable Appreciable Life Insurance Contracts. (Note 1) (d) Notice giving Information for Consumers for use in Illinois with Variable Appreciable Life Insurance Contracts. (Note 1) (e) Endorsement for Misstatement of Age and/or Sex for use in Pennsylvania with Variable Appreciable Life Insurance Contracts. (Note 1) (f) Revised Contract with fixed death benefit. (Note 1) (g) Revised Contract with variable death benefit. (Note 1) (6) (a) Articles of Incorporation of Pruco Life Insurance Company, as amended October 19, 1993. (Note 6) (b) By-laws of Pruco Life Insurance Company, as amended June 18, 1996. (Note 5) (7) Not Applicable. (8) Not Applicable. (9) Not Applicable. (10) (a) Application Form for Variable Appreciable Life Insurance Contract. (Note 1) (b) Supplement to the Application for Variable Appreciable Life Insurance Contract. (Note 1) (11) Form of Notice of Withdrawal Right. (Note 1) (12) Memorandum describing Pruco Life Insurance Company's issuance, transfer, and redemption procedures for the Contracts pursuant to Rule 6e-2(b)(12)(ii) and method of computing cash adjustment upon exercise of right to exchange for fixed-benefit insurance pursuant to Rule II-2 6e-2(b)(13)(v)(B). (Note 8) (13) Available Contract Riders. (a) Rider for Insured's Waiver of Premium Benefit. (Note 1) (b) Rider for Applicant's Waiver of Premium Benefit. (Note 1) (c) Rider for Insured's Accidental Death Benefit. (Note 1) (d) Rider for Level Term Insurance Benefit on Life of Insured. (Note 1) (e) Rider for Decreasing Term Insurance Benefit on Life of Insured. (Note 1) (f) Rider for Interim Term Insurance Benefit. (Note 1) (g) Rider for Option to Purchase Additional Insurance on Life of Insured. (Note 1) (h) Rider for Decreasing Term Insurance Benefit on Life of Insured Spouse. (Note 1) (i) Rider for Level Term Insurance Benefit on Dependent Children. (Note 1) (j) Rider for Level Term Insurance Benefit on Dependent Children-from Term Conversions. (Note 1) (k) Rider for Level Term Insurance Benefit on Dependent Children-from Term Conversions or Attained Age Change. (Note 1) (l) Rider defining Insured Spouse. (Note 3) (m) Rider covering lack of Evidence of Insurability on a Child. (Note 3) (n) Rider modifying Waiver of Premium Benefit. (Note 3) (o) Rider to terminate a Supplementary Benefit. (Note 3) (p) Rider providing for election of Variable Reduced Paid-up Insurance. (Note 1) (q) Rider to provide for exclusion of Aviation Risk. (Note 1) (r) Rider to provide for exclusion of Military Aviation Risk. (Note 1) (s) Rider to provide for exclusion for War Risk. (Note 1) (t) Endorsement for Contractual Conversion of a Term Policy. (Note 3) (u) Endorsement for Conversion of a Dependent Child. (Note 3) (v) Endorsement for Conversion of Level Term Insurance Benefit on a Child. (Note 3) (w) Endorsement providing for Variable Loan Interest Rate. (Note 1) (x) Rider for Automatic Premium Loan for use in Maryland and Rhode Island. (Note 1) (y) Certification guaranteeing Right to Convert for use in Virginia. (Note 3) (z) Endorsement for Increase in Face Amount. (Note 1) (aa) Supplementary Monthly Renewable Non-Convertible One Month Term Insurance (i) for use with fixed death benefit Contract. (Note 1) (ii) for use with variable death benefit Contract. (Note 1) (bb) Rider for Term Insurance Benefit on Life of Insured-Decreasing Amount After Three Years. (Note 1) (cc) Rider for Term Insurance Benefit on Life of Insured Spouse-Decreasing Amount After Three Years. (Note 1) (dd) Endorsement for Contracts issued in connection with tax-qualified pension plans. (Note 1) (ee) Appreciable Plus Rider. (Note 1) (ff) Living Needs Benefit Rider (i) for use in Florida. (Note 4) (ii) for use in all approved jurisdictions except Florida. (Note 4) 2. See Exhibit 1.A.(5). 3. Opinion and Consent of Clifford E. Kirsch, Esq., as to the legality of the securities being registered. (Note 1) 4. None. 5. Not Applicable. 6. Opinion and Consent of Pam A. Schiz, FSA, MAAA, as to actuarial matters pertaining to the securities being registered. (Note 1) 7. Powers of Attorney: (a) William M. Bethke, Ira J. Kleinman, Mendel A. Melzer, Esther H. Milnes, I. Edward Price, William F. Yelverton (Note 2) (b) Linda S. Dougherty (Note 5) (c) Kiyofumi Sakaguchi (Note 7) II-3 27. Financial Data Schedule (Note 1) (Note 1) Filed herewith. (Note 2) Incorporated by reference to Form 10-K, Registration No. 33-08698, filed March 31, 1997 on behalf of the Pruco Life Variable Contract Real Property Account. (Note 3) Incorporated by reference to Post-Effective Amendment No. 1 to this Registration Statement, filed April 30, 1985. (Note 4) Incorporated by reference to Post-Effective Amendment No. 16 to this Registration Statement, filed April 26, 1990. (Note 5) Incorporated by reference to Post-Effective Amendment No. 3 to Form S-1, Registration No. 33- 86780, filed April 9, 1997 on behalf of the Pruco Life Variable Contract Real Property Account. (Note 6) Incorporated by reference to Form S-6, Registration No. 333-07451, filed July 2, 1996, on behalf of the Pruco Life Variable Appreciable Account. (Note 7) Incorporated by reference to Post-Effective Amendment No. 8 to Form S-6, Registration No. 33-49994, filed on or about April 25, 1997 on behalf of the Pruco Life PRUvider Variable Appreciable Account. (Note 8) Incorporated by reference to Post-Effective Amendment No. 25 to this Registration Statement, filed April 25, 1996. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, the Pruco Life Variable Appreciable Account, certifies that this Amendment is filed solely for one or more of the purposes specified in Rule 485(b)(1) under the Securities Act of 1933 and that no material event requiring disclosure in the prospectus, other than one listed in Rule 485(b)(1), has occurred since the effective date of the most recent Post-Effective Amendment to the Registration Statement which included a prospectus and has caused this Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, and its seal hereunto affixed and attested, all in the city of Newark and the State of New Jersey, on this 25th day of April, 1997. (Seal) PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT (Registrant) By: PRUCO LIFE INSURANCE COMPANY (Depositor) Attest: /s/ Thomas C. Castano By: /s/ Esther H. Milnes -------------------------- -------------------------------- Thomas C. Castano Esther H. Milnes Assistant Secretary President Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 26 to the Registration Statement has been signed below by the following persons in the capacities indicated on this 25th day of April, 1997. SIGNATURE AND TITLE ------------------- /s/ * - ----------------------------------------- Esther H. Milnes President and Director /s/ * - ----------------------------------------- Linda S. Dougherty Chief Accounting Officer and Comptroller /s/ * - ----------------------------------------- William M. Bethke Director /s/ * *By: /s/ Thomas C. Castano - ----------------------------------------- ------------------------------- Ira J. Kleinman Thomas C. Castano Director (Attorney-in-Fact) /s/ * - ----------------------------------------- Mendel A. Melzer Director /s/ * - ----------------------------------------- I. Edward Price Director /s/ * - ----------------------------------------- Kiyofumi Sakaguchi Director /s/ * - ----------------------------------------- William F. Yelverton Director II-5 EXHIBIT INDEX
Consent of Deloitte & Touche LLP, independent auditors. Page II-8 Consent of Price Waterhouse LLP, independent accountants. Page II-9 1.A.(3)(a) Distribution Agreement between Pruco Securities Corporation Page II-10 and Pruco Life Insurance Company. (b) Proposed form of Agreement between Pruco Securities Page II-17 Corporation and independent brokers with respect to the Sale of the Contracts. (c) Schedules of Sales Commissions. Page II-27 1.A.(5)(a) With fixed death benefit. Page II-30 (b) With variable death benefit. Page II-58 (c) Complaint Notice for use in Texas with Variable Appreciable Page II-86 Life Insurance Contracts. (d) Notice giving Information for Consumers for use in Illinois with Page II-87 Variable Appreciable Life Insurance Contracts. (e) Endorsement for Misstatement of Age and/or Sex for use in Page II-88 Pennsylvania with Variable Appreciable Life Insurance Contracts. (f) Revised Contract with fixed death benefit. Page II-89 (g) Revised Contract with variable death benefit. Page II-120 1.A.(10)(a) Application Form for Variable Appreciable Life Insurance Page II-152 Contract. (b) Supplement to the Application for Variable Appreciable Life Page II-162 Insurance Contract. 1.A.(11) Form of Notice of Withdrawal Right. Page II-163 1.A.(13)(a) Rider for Insured's Waiver of Premium Benefit. Page II-165 (b) Rider for Applicant's Waiver of Premium Benefit. Page II-167 (c) Rider for Insured's Accidental Death Benefit. Page II-169 (d) Rider for Level Term Insurance Benefit on Life of Insured. Page II-170 (e) Rider for Decreasing Term Insurance Benefit on Life of Insured. Page II-172 (f) Rider for Interim Term Insurance Benefit. Page II-175 (g) Rider for Option to Purchase Additional Insurance on Life of Page II-176 Insured. (h) Rider for Decreasing Term Insurance Benefit on Life of Insured Page II-179 Spouse. (i) Rider for Level Term Insurance Benefit on Dependent Children. Page II-183 (j) Rider for Level Term Insurance Benefit on Dependent Page II-186 Children-from Term Conversions. (k) Rider for Level Term Insurance Benefit on Dependent Page II-189 Children-from Term Conversions or Attained Age Change. (p) Rider providing for election of Variable Reduced Paid-up Page II-192 Insurance. (q) Rider to provide for exclusion of Aviation Risk. Page II-193 (r) Rider to provide for exclusion of Military Aviation Risk. Page II-194 (s) Rider to provide for exclusion for War Risk. Page II-195 (w) Endorsement providing for Variable Loan Interest Rate. Page II-196 (x) Rider for Automatic Premium Loan for use in Maryland and Page II-197 Rhode Island. (z) Endorsement for Increase in Face Amount. Page II-198 (aa) Supplementary Monthly Renewable Non-Convertible One Month Term Insurance: (i) for use with fixed death benefit Contract. Page II-203
II-6
(ii) for use with variable death benefit Contract. Page II-210 (bb) Rider for Term Insurance Benefit on Life of Insured-Decreasing Page II-217 Amount After Three Years. (cc) Rider for Term Insurance Benefit on Life of Insured Page II-222 Spouse-Decreasing Amount After Three Years. (dd) Endorsement for Contracts issued in connection with Page II-227 tax-qualified pension plans. (ee) Appreciable Plus Rider. Page II-228 3. Opinion and Consent of Clifford E. Kirsch, Esq., as to the Page II-231 legality of the securities being registered. 6. Opinion and Consent of Pam A. Schiz, FSA, MAAA, as to Page II-232 actuarial matters pertaining to the securities being registered. 27. Financial Data Schedule. Page II-233
II-7 EX-99.C1A 2 INDEPENDENT AUDITORS' CONSENT INDEPENDENT AUDITORS' CONSENT We consent to the use in this Post-Effective Amendment No. 26 to Registration Statement No. 2-89558 on Form S-6 of Pruco Life Variable Appreciable Account of Pruco Life Insurance Company of our report dated February 15, 1996, relating to the financial statements of Pruco Life Variable Appreciable Account, and of our report dated December 19, 1996 relating to the consolidated financial statements of Pruco Life Insurance Company and subsidiaries appearing in the Prospectus, which is part of such Registration Statement, and to the reference to us under the heading "Experts" in such Prospectus. /s/ Deloitte & Touche LLP Parsippany, New Jersey April 25, 1997 II-8 EX-99.C1B 3 PRICE WATERHOUSE LLP CONSENT CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in the Prospectus constituting part of this Post-Effective Amendment No. 26 to the registration statement on Form S-6 (the "Registration Statement") of our report dated March 31, 1997, relating to the financial statements of Pruco Life Variable Appreciable Account, which appears in such Prospectus. We also consent to the use in the Prospectus constituting part of this Registration Statement of our report dated March 21, 1997, relating to the consolidated financial statements of Pruco Life Insurance Company and subsidiaries, which appears in such Prospectus. We also consent to the reference to us under the heading "Experts" in the Propectus. /s/ PRICE WATERHOUSE LLP 1177 Avenue of the Americas New York, New York 10036 April 24, 1997 II-9 EX-99.1A.(3)(A) 4 DISTRIBUTION AGREEMENT Exhibit 1.A.(3)(a) DISTRIBUTION AGREEMENT AGREEMENT made this 3rd day of February, 1984, by and between Pruco Life Insurance company, an Arizona corporations ("Company"), on its own behalf and on behalf of the Pruco Life Variable Appreciable Account ("Account"), and Pruco Securities Corporations, a New Jersey corporations ("Distributor"). WITNESSETH: WHEREAS, the Company has established and maintains the Account, a separate investment account, pursuant to the laws of Arizona for the purpose of selling variable appreciable life insurance contracts ("Contracts"), to commence after the effectiveness of the Registrations Statement relating thereto filed with the Securities and Exchange Commission on Form S-6 pursuant to the Securities Act of 1933, as amended (the "1933 Act"); and WHEREAS, the Account will be registered as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"); and WHEREAS, Distributor is registered as a broker-dealer under the Securities Exchange Act of 1934 (the "Securities Exchange Act") and is a member of the National Association of Securities Dealers, Inc. ("NASD"); and WHEREAS, the Company and the Distributor wish to enter into an agreement to have the distributor act as the Company's principal underwriter for the sale of the contracts through the Account: NOW, THEREFORE, the parties agree as follows: II-10 -2- 1. Appointment of the Distributor The Company agrees that during the term of this Agreement it will take all action which is required to cause the Contracts to comply as an insurance product and a registered security with all applicable federal and state laws and regulations. The Company appoints the Distributor and the Distributor agrees to act as the principal underwriter for the sale of contracts to the public, during the term of this Agreement, in each state and other jurisdictions in which such Contracts may lawfully be sole. Distributor shall offer the Contracts for sale and distribution at premium rates sec by the Company. Applications for the Contracts shall be solicited only be representatives duly and appropriately licensed or otherwise qualified for the sale of such contracts in each state or other jurisdiction. Company shall undertake to appoint Distributor's qualified representatives as life insurance agents of Company. Completed applications for Contracts shall be transmitted directly to the company for acceptance or rejection in accordance with underwriting rules established by the Company. Initial premium payments under the Contracts shall be made b check payable to the Company and shall be held at all times by Distributor or its representatives in a fiduciary capacity and remitted promptly to the Company. Anything in this agreement to the contrary notwithstanding, the Company retains the ultimate right to control the sale of the Contracts and to appoint and discharge life insurance agents of the Company. The Distributor shall be held to the exercise of reasonable care in carrying out the provisions of this Agreement. 2. Sales Agreements Distributor is hereby authorized to enter into separate II-11 -3- written agreements, on such terms and conditions as Distributor may determine not inconsistent with this Agreement, with one or more organizations which agree to participate in the distribution of Contracts. Such organization (hereafter "Broker") shall be both registered as a broker/dealer under the Securities Exchange Act and a member of NASD. Broker and its agents or representatives soliciting applications for Contracts shall be duly and appropriately licensed, registered or otherwise qualified for the sale of such Contracts (and the riders and other policies offered in connection therewith) under the insurance laws and any applicable blue-sky laws of each state or other jurisdiction in which the Company is licensed to sell the Contracts. Distributor shall have the responsibility for ensuring that Broker supervises its representatives. Broker shall assume any legal responsibilities of company for the acts, commissions or defalcations of such representatives insofar as they relate to the sale of the Contracts. Applications for Contracts solicited by such Broker through its agents or representatives shall be transmitted directly to the Company, and if received by Distributor, shall be forwarded to Company. All premium payments under the Contracts shall be made by check to Company and, if received by Distributor, shall be held at all times in a fiduciary capacity and remitted promptly to Company. 3. Life Insurance Licensing Company shall be responsible for insuring that Brokers are duly qualified, under the insurance laws of the applicable jurisdictions, to sell the contracts. II-12 -4- 4. Suitability Company wishes to ensure that Contracts sold by Distributor will be issued to purchasers for whom the Contract will be suitable. Distributor shall take reasonable steps to ensure that the various representatives appointed by it shall not make recommendations to an applicant to purchase a Contract in the absence of reasonable grounds to believe that the purchase of the Contract is suitable for such applicant. While not limited to the following, a determination of suitability shall be based on information furnished to a representative after reasonable inquiry of such applicant concerning the applicant's insurance and investment objectives, financial situation and needs, and the likelihood that the applicant will continue to make the premium payments contemplated by the Contracts. 5. Promotion Materials Company shall have the responsibility for furnishing to Distributor and its representatives sales promotion materials and individual sales proposals related to the sale of the Contracts. Distributor shall not use any such materials that have not been approved by Company. 6. Compensations Company shall arrange for the payment of commissions directly to those registered representatives of distributor who are entitled thereto in connection with the sale of the contracts on behalf of Distributor, in the amounts and on such terms and conditions as Company and Distributor shall determine; provided that such terms, conditions and commissions shall II-13 -5- be as are set forth in or as are not inconsistent with the Prospectus included as part of the Registration Statement for the contracts and effective under the 1933 Act. Company shall arrange for the payment of commissions directly to those Brokers who sell contracts under agreements entered into pursuant to paragraph 2, hereof, in amounts as may be agreed to by the company and specified in such written agreements. Company shall reimburse Distributor for the costs and expenses incurred by Distributor in furnishing or obtaining the services, materials and supplies required by the terms of this Agreement in the initial sales efforts and the continuing obligations hereunder. 7. Records Distributor shall have the responsibility for maintaining the records of representatives licensed, registered and otherwise qualified to sell the Contracts. Distributor shall maintain such other records as are required of it by applicable laws and regulations. The books, accounts and records of company, the Account and Distributor shall be maintained so as to clearly and accurately disclose the nature and details of the transactions. All records maintained by the Distributor in connections with this Agreement shall be the property of the Company and shall be returned to the Company upon termination of this Agreement, free from any claims or retention of rights by the Distributor. The Distributor shall keep confidential any information obtained pursuant to this Agreement and shall disclose such information, only if the Company has authorized such disclosure, or if such disclosure is expressly required by applicable federal or state regulator authorities. II-14 -6- 8. Investigation and Proceeding (a) Distributor and Company agree to cooperate fully in any insurance regulatory investigation or proceeding or judicial proceeding arising in connection with the Contracts distributed under this Agreement. Distributor and Company further agree to cooperate fully in any securities regulatory investigation or proceeding or judicial proceeding with respect to Company, Distributor, their affiliates and their agents or representatives to the extent that such investigation or proceeding is in connection with Contracts distributed under this Agreement. The Distributor shall furnish applicable federal and state regulatory authorities with any information or reports in connection with its services under this Agreement which such authorities may request in order to ascertain whether the Company's operations are being conducted in a manner consistent with any applicable law or regulations. (b) In the case of a substantive customer complaint, Distributor and Company will cooperate in investigating such complaint and any response to such complaint will be sent to the other party to this Agreement for approval not less than five business days prior to its being sent to the customer or regulatory authority, except that if a more prompt response is required, the proposed response shall be communicated by telephone or telegraph. 9. Termination This Agreement shall terminate automatically upon its assignment without the prior written consent of both parties. This Agreement may be terminated at any time by either party on 60 days' written notice to the other party, whiteout the payment of any penalty. Upon II-15 -7- termination of this Agreement all authorization, rights and obligations shall cease except the obligation to settle accounts hereunder, including commissions on premiums subsequently received for contracts in effect at time of termination, and the agreements contained in paragraph 8. hereof. 10. Regulation This Agreement shall be subject to the provisions of the 1940 Act and the Securities Exchange Act of the rules, regulations, and rulings thereunder and of the applicable rules and regulations of the NASD, from time to time in effect, and the terms hereof shall be interpreted and construed in accordance therewith. 11. Severability If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 12. Applicable Law This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Arizona. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written PRUCO LIFE INSURANCE COMPANY By /s/ RICHARD A. YORKS --------------------------------- PRUCO SECURITIES CORPORATION By /s/ GEORGE E. HARTZ, JR. --------------------------------- II-16 EX-99.1A(3)(B) 5 SELECTED BROKER AGREEMENT Exhibit 1.A.(3)(b) SELECTED BROKER AGREEMENT AGREEMENT dated _________, 1984, by and between Pruco Securities Corporation (Distributor), a New Jersey corporation, and _________ (Broker), a ______ corporation. WITNESSETH: In consideration of the mutual promises contained herein, the parties hereto agree as follows: A. Definitions (1) Contracts - The variable appreciable life insurance contracts which Pruco Life Insurance Company (Company), an Arizona corporation, propose to issue and for which Distributor has been appointed the principal underwriter pursuant to a Distribution Agreement, a copy of which has been furnished to Broker. (2) Pruco Life Variable Appreciable Account, or the Account - The separate account established and maintained by Company pursuant to the laws of Arizona to fund the benefits under the Contracts. (3) Pruco Life Series Fund, Inc., or the Fund - An open-end management investment company registered under the 1940 Act, shares of which are sold to the Account in connection with the sale of the Contracts. (4) Registration Statement - The registration statements and amendments thereto relating to the Contracts, the Account, and the Fund, including financial statements and all exhibits. (5) Prospectus - The prospectuses included within the registration statements referred to herein. II-17 -2- (6) 1933 Act - The Securities Act of 1933, as amended. (7) 1934 Act - The Securities Exchange Act of 1934, as amended. (8) SEC - The Securities and Exchange Commission. B. Agreements of Distributor (1) Pursuant to the authority delegated to it by Company, Distributor hereby authorizes Broker during the term of this Agreement to solicit applications for Contracts from eligible persons provided that there is an effective Registration Statement relating to such Contracts and provided further that Broker has been notified by Distributor that the Contracts are qualified for sale under all applicable securities and insurance laws of the State or jurisdiction in which the application will be solicited. In connection with the solicitation of applications for Contracts. Broker is hereby authorized to offer riders that are available with the Contracts in accordance with instructions furnished by Distributor or Company. (2) Distributor, during the term of this Agreement, will notify Broker of the issuance by the SEC of any stop order with respect to the Registration Statement or any amendments thereto or the initiation of any proceedings for that purpose or for any other purpose relating to the registration and/or offering of the Contracts and of any other action or circumstance that may prevent the lawful sale of the Contracts in any state or jurisdiction. (3) During the term of this Agreement, Distributor shall advise Broker of any amendment to the Registration Statement or any amendment or supplement to any Prospectus. II-18 -3- C. Agreements of Broker (1) It is understood and agreed that Broker is a registered broker/dealer under the 1934 Act and a member of the National Association of Securities Dealers, Inc. and that the agents or representatives of Broker who will be soliciting applications for the Contracts also will be duly registered representatives of Broker. (2) Commencing at such time as Distributor and Broker shall agree upon, Broker agrees to use its best efforts to find purchasers for the contracts acceptable to Company. In meeting its obligation to use its best efforts to solicit applications for Contracts, Broker shall, during the term of this Agreement, engage in the following activities: (a) Continuously utilize training, sales and promotional materials which have been approved by Company; (b) Establish and implement reasonable procedures for periodic inspection and supervision of sales practices of its agents or representatives and submit periodic reports to Distributor as may be requested on the results of such inspections and the compliance with such procedures. (c) Broker shall take reasonable steps to ensure that the various representatives appointed by it shall not make recommendations to an applicant to purchase a Contract in the absence of reasonable grounds to believe that the purchase of the Contract is suitable for such applicant. While not limited to the following, a determination of suitability shall be based on information furnished to a II-19 -4- representative after reasonable inquiry of such applicant concerning the applicant's insurance and investment objectives, financial situation and needs, and the likelihood that the applicant will continue to make the premium payments contemplated by the Contract. (3) All payments for Contracts collected by agents or representatives of Broker shall be held at all times in a fiduciary capacity and shall be remitted promptly in full together with such applications, forms and other required documentation to an office of the Company designated by Distributor. Checks or money orders in payment of initial premiums shall be drawn to the order of "Pruco Life Insurance Company." Broker acknowledges that the Company retains the ultimate right to control the sale of the Contracts and that the Distributor or Company shall have the unconditional right to reject, in whole or in part, any application for the Contract. In the event Company or Distributor rejects an application, Company immediately will return all payments directly to the purchaser and Broker will be notified of such action. In the event that any purchaser of a Contract elects to return such Contract pursuant to Rule 6e-2(b)(13)(viii) of the 1940 Act, the purchaser will receive a refund of any premium payments, plus or minus any change due to investment performance in the value of the invested portion of such premiums; however, if applicable state law so requires, the purchaser who exercises his short-term cancellation right will receive a refund of all payments made, unadjusted for investment experience prior to the cancellation. The Broker will be notified of any such action. II-20 -5- (4) Broker shall act as an independent contractor, and nothing herein contained shall constitute Broker, its agents or representatives, or any employees thereof as employees of Company or Distributor in connection with the solicitation of applications for Contracts. Broker, its agents or representatives, and its employees shall not hold themselves out to be employees of Company or Distributor in this connection or in any dealings with the public. (5) Broker agrees that any material it develops, approves or uses for sales, training, explanatory or other purposes in connection with the solicitation of applications for Contracts hereunder (other than generic advertising materials which do not make specific reference to the Contracts) will not be used without the prior written consent of Distributor and, where appropriate, the endorsement of Company to be obtained by Distributor. (6) Solicitation and other activities by Broker shall be undertaken only in accordance with applicable laws and regulations. No agent or representative of Broker shall solicit applications for the contracts until duly licensed and appointed by Company as a life insurance and variable contract broker or agent of Company in the appropriate states or other jurisdiction. Broker shall ensure that such agents or representatives fulfill any training requirements necessary to be licensed. Broker understands and acknowledges that neither it nor its agents or representatives is authorized by Distributor or Company to give any information or make any representation in connection with this Agreement or the offering of the Contracts other than those contained in the Prospectus or other solicitation material authorized in writing by Distributor or Company. II-21 -6- (7) Broker shall not have authority on behalf of Distributor or Company: make, alter or discharge any Contract or other form; waive any forfeiture, extent the time of paying any premium; receive any monies or premiums due, or to become due, to Company, except as set forth in Section C(3) of this Agreement. Broker shall not expend, nor contract for the expenditure of the funds of Distributor, nor shall Broker possess or exercise any authority on behalf of Broker by this Agreement. (8) Broker shall have the responsibility for maintaining the records of its representatives licensed, registered and otherwise qualified to sell the Contracts. Broker shall maintain such other records as are required of it by applicable laws and regulations. The books, accounts and records of Company, the Account, Distributor and Broker relating to the sale of the Contracts shall be maintained so as to clearly and accurately disclose the nature and details of the transactions. All records maintained by the Broker in connection with this Agreement shall be the property of the Company and shall be returned to the Company upon termination of this Agreement, free from any claims or retention of rights by the Broker. The Broker shall keep confidential any information obtained pursuant to this Agreement and shall disclose such information, only if the Company has authorized such disclosure, or if such disclosure is expressly required by applicable federal or state regulatory authorities. II-22 -7- D. Compensation (1) Pursuant to the Distribution Agreement between Distributor and Company, Distributor shall cause Company to arrange for the payment of commissions to Broker as compensation for the sale of each contract sold by an agent or representative of Broker. The amount of such compensation shall be based on a schedule to be determined by agreement of Company, Distributor and Broker. Company shall identify to Broker with each such payment the name of the agent or representative of Broker who solicited each Contract covered by the payment. (2) Neither Broker nor any of its agents or representatives shall have any right to withhold or deduct any part of any premium it shall receive for purposes of payment of commission or otherwise. Neither Broker nor any of its agents or representatives shall have an interest in any compensation paid by Company to Distributor, now or hereafter, in connection with the sale of any Contracts hereunder. E. Complaints and Investigations (1) Broker and Distributor jointly agree to cooperate fully in any insurance regulatory investigation or proceeding or judicial proceeding arising in connection with the Contracts marketed under this Agreement. Broker and Distributor further agree to cooperate fully in any securities regulatory investigation or proceeding or judicial proceeding with respect to Broker, Distributor, their affiliates and their agents or representatives to the extent that such investigation or proceeding is in connection with Contracts marketed under this Agreement. Broker shall furnish applicable II-23 -8- federal and state regulatory authorities with any information or reports in connection with its services under this Agreement which such authorities may request in order to ascertain whether the Company's operations are being conducted in a manner consistent with any applicable law or regulation. F. Term of Agreement (1) This Agreement shall continue in force for one year from its effective date and thereafter shall automatically be renewed every year for a further one year period; provided that either party may unilaterally terminate this Agreement upon thirty (30) days' written notice to the other party of its intention to do so. (2) Upon termination of this Agreement, all authorizations, rights and obligations shall cease except (a) the agreements contained in Section E hereof; (b) the indemnity set forth in Section G hereof; and (c) the obligations to settle accounts hereunder, including payments on premiums subsequently received for Contracts in effect at the time of termination or issued pursuant to applications received by Broker prior to termination. G. Indemnity (1) Broker shall be held to the exercise of reasonable care in carrying out the provisions of this Agreement. (2) Distributor agrees to indemnify and hold harmless Broker and each officer or director of Broker against any losses, claims, damages or liabilities, joint or several, to which Broker or such officer or director become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions II-24 -9- in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact, required to be stated therein or necessary to make the statements therein not misleading, contained in any Registration Statement or any post-effective amendment thereof or in the Prospectus or any amendment or supplement to the Prospectus. (3) Broker agrees to indemnify and hold harmless Company and Distributor and each of their current and former directors and officers and each person, if any, who controls or has controlled Company or Distributor within the meaning of the 1933 Act or the 1934 Act, against any losses, claims, damages or liabilities to which Company or Distributor and any such director or officer or controlling person may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (a) Any unauthorized use of sales materials or any verbal or written misrepresentations or any unlawful sales practices concerning the Contracts by Brokers; or (b) Claims by agents or representatives or employees of Broker for commissions, service fees, development allowances or other compensation or renumeration of any type; (c) The failure of Broker, its officers, employees, or agents to comply with the provisions of this Agreement; and Broker will reimburse Company and Distributor and any director or officer or controlling person of either for any legal or other expenses reasonably incurred by Company, Distributor, or such director, officer or II-25 -10- controlling person in connection with investigating or defending any such loss, claims, damage, liability or action. This indemnity agreement will be in addition to any liability which Broker may otherwise have. H. Assignability This Agreement shall not be assigned by either party without the written consent of the other. I. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey. In Witness Whereof, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PRUCO LIFE CORPORATION (Distributor) By______________________________ (Broker) By______________________________ II-26 EX-99.1A(3)(C) 6 COMMISSION SCHEDULE Exhibit 1.A.(3)(c) Commission Schedule For Variable Appreciable Life Insurance Contracts I. District Agencies A. First Year Commissions on Contracts Issued on the Following Insureds: Commission as Percentage Insured of Scheduled Premiums ------- ------------------------ Under Age 60 50% Age 60-69 45% Age 70-75 40% B. Commissions on Renewal Scheduled Premiums in Contract Years Two Through Four: Commission as Percentage Insured of Scheduled Premiums ------- --------------------- Age 0-75 10% C. On renewal scheduled premiums in Contract years Five Through Ten, a commission of 3% will be paid until the client has paid premiums equal to ten years of scheduled premiums and 2% thereafter. D. On premiums paid in excess of scheduled premiums, a commission of 3% will be paid until the client has paid premiums equal to ten years of scheduled premiums, and 2% thereafter. II. Ordinary Agencies A. First Year Commissions Are the Same as Those Stated Above for District Agencies. B. Commissions on Renewal Scheduled Premiums on Contracts Sold Through Ordinary Agencies Depend On the Classification of the Selling Agent. II-27 1. For Agents in categories T (Career agent-ICP/TAP), W (Career agent-temporary ACCUM), and Y (Career agent-temporary), the following commission schedule on renewal schedule premiums applies: Commission as Percentage Insured of Scheduled Premiums ------- --------------------- Age 0-75 12% in Contract Years Two Through Four; 3% in Contract Years Five through Ten 2. For Agents in categories A (Asst. Mgr. or Assoc. mgr.), B (Broker), G (Part-Time Special Agent), K (Retired Agent), M (Manager), P (Part-Time Special Agent), S (Surplus Broker), and U (Manager), the commission rate on renewal scheduled premiums is 5% for Contract years Two Through Ten. 3. For Agents in Categories F (Asst. Mgr. or Assoc. Mgr., Special), E (Full-Time Agents, PCAP), V (Full-Time Career Agents), and N (Agent Emeritus), the following commission schedule on renewal scheduled premiums applies: Commission as Percentage Insured of Scheduled Premiums ------- --------------------- Age 0-75 10% in Contract Years Two Through Four; 3% in Contract Years Five Through Ten 4. For Agents in Category X (Retired Part-Time Agent), the commission rate on renewal scheduled premiums is 9% for Contract years Two through Five. 5. Agents with less than three years of service may be paid on a different basis. Agents who meet certain productivity, profitability, and persistency standards with regard to the sale of the Contracts will be eligible for additional compensation. II-28 III. The registered representatives of Prudential-Bache Securities, Inc. will be paid the following commissions on contracts they sell: the same as stated above for DA for first year scheduled premiums, and 5% of the second through tenth year scheduled premiums. They will also be paid 3% of premiums paid in excess of scheduled premiums until the client has paid premiums equal to ten years of scheduled premiums, and 2% thereafter. IV. In the event a Contract lapses or is surrendered within the first two Contract years, a portion or all of the first year commission may be subject to recapture by the Pruco Life Insurance Company. If the Contract lapses at the end of year one, 30% of the commission is subject to recapture. A higher percentage of the first year commission may be recaptured on earlier lapses. A lower and decreasing portion of the first year commission is subject to recapture throughout the second Contract year. V. The Contract may also be sold through other broker-dealers authorized by Prusec and applicable law to do so. Registered representatives of such other broker-dealers may be paid on a different basis than that stated above. II-29 EX-99.1A(5)(A) 7 CONTRACT Exhibit 1.A.(5)(a) Pruco Life Insurance Company Phoenix, Arizona A Stock Company subsidiary of The Prudential Insurance Company of America ================================================================================ Insured JOHN DOE XX XXX XXX Policy Number July 1, 1984 Contract Date Face Amount $50,000-- Contract Premium Period LIFE JUL 1, 2014 Change Date Agency R-NK 1 ================================================================================ We will pay the beneficiary the proceeds of this contract promptly if we receive due proof that the insured died. We make this promise subject to all the provisions of the contract. The Death Benefit will be the face amount we show above plus the amount of any extra benefit unless the contract is in default or there is contract debt. (If and when the contract becomes paid-up, the death benefit after that will be as we describe under Paid-up Contract on page 9.). The cash value may increase or decrease daily depending on the payment of premiums, the investment experience of the separate account and the level of mortality charges made. There is no guaranteed minimum. We specify a schedule of premiums. Additional unscheduled premiums may be paid at your option subject to the limitations in the contract. Please read this contract with care. A guide to its contents is on the last page. A summary is on page 2. If there is ever a question about it, or if there is a claim, just see one of our representatives or get in touch with one of our offices. Right to Cancel Contract. -- You may return this contract to us within (1) 10 days after you get it, or (2) 45 days after Part 1 of the application was signed, or (3) 10 days after we mail or deliver the Notice of Withdrawal Right, whichever is latest. All you have to do is take the contract or mail it to one of our offices or to the representative who sold it to you. It will be canceled fro the start and we will promptly give you the value of our Contract Fund on the date you return the contract to us. We will also give back any charges we made in accord with this contract. Signed for Pruco Life Insurance Company, an Arizona Corporation /S/ ISABELLE KIRCHNER /S/ DONALD G. SOUTHWELL [SPECIMEN] [SPECIMEN] Secretary President Modified Premium Variable Life Insurance Policy. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums. Cash values reflect premium payments, investment results and mortality charges. Guaranteed death benefit if scheduled premiums duly paid and no contract debt. Increase in face amount at attained age 21 if contract issued at age 14 or lower. Non-participating. VALA--84 II-30 CONTRACT SUMMARY We offer this summary to help you understand this contract. We do not intend that it change any of the provisions of the contract. This is a contract of life insurance. Premiums are to be paid throughout the Insured's lifetime. We specify a schedule of premiums that will keep the contract in force. Additional premiums may be paid at your option, subject to limits in the contract. The cash value will vary with the payment of premiums, the investment performance of those subaccounts of the Pruco Life Variable Appreciable Account that you select, and the extent to which mortality charges are less than the guaranteed maximums. But the death benefit is guaranteed and, until the time if any when the contract becomes paid-up, will not vary if the contract is not in default past its days of grace, and there is no contract debt. (We describe on page 8 the way the contract can go into default, and on page 9 how the contract may become paid-up and how the death benefit may vary above the face amount after that.) If the contract remains in default past its days of grace, the contract may end or it may stay in force with reduced benefits. If either occurs, you may be able to reinstate its full benefits. The guaranteed death benefit is the face amount. On the date, if any, when we determine that the contract has become fully paid-up, we will recompute the guaranteed death benefit. It may be higher; it will not be lower. The death benefit may vary after that, but it will not be less than the recomputed guaranteed amount if there is no contract debt. Proceeds is a word we use to mean the amount we would pay if we were to settle the contract in one sum. To compute the proceeds that may arise from the Insured's death, we start with a basic amount. We may adjust that amount if there is a loan or if the contract is in default. The table on page 21 tells what the basic amount is. The amount depends on how the contract is in force. The table will refer you to the parts of the contract that tell you how we adjust the basic amount. If you surrender the contract, the proceeds will be the net cash value. We describe it under Cash Value Option on pages 13 and 14. Proceeds often are not taken in one sum. For instance, on surrender, you may be able to put proceeds under a settlement option to provide retirement income or for some other purpose. Also, for all or part of the proceeds that arise from the Insured's death, you may be able to choose a manner of payment for the beneficiary. If an option has not been chosen, the beneficiary may be able to choose one. We will pay interest under Option 3 from the date of death on any proceeds to which no other manner of payment applies. This will be automatic as we state on page 20. There is no need to ask for it. You and we may agree on a change in the ownership of this contract. Also, unless we endorse it to say otherwise, the contract gives you these rights, among others: o You may change the beneficiary under it. o You may borrow on it up to its loan value. o You may surrender it for its net cash value. o You may change the allocation of future net premiums among the subaccounts. o You may transfer amounts among subaccounts. The contract, as issued, may or may not have extra benefits that we call Supplementary Benefits. If it does, we list them under Supplementary Benefits on the Contract Data page(s) and describe them after page 20. The contract may or may not have other extra benefits. If it does, we add them by rider. Any extra benefit ends as soon as the contract is in default past its days of grace, unless the form that describes it states otherwise. (Contract Summary Continued on Page 21) Page 2 (VALA--84) II-31 CONTRACT DATA INSURED'S SEX AND ISSUE AGE M-35 RATING CLASS NONSMOKER INSURED JOHN DOE XX XXX XXX POLICY NUMBER July 1, 1984 CONTRACT DATE FACE AMOUNT $50,000-- CONTRACT PREMIUM PERIOD LIFE JUL 1, 2014 CHANGE DATE AGENCY R-NK 1 BENEFICIARY CLASS 1 MARY DOE, WIFE CLASS 2 ROBERT DOE, SON LIST OF CONTRACT MINIMUMS THE MINIMUM FACE AMOUNT IS $50,000 THE MINIMUM UNSCHEDULED PREMIUM IS $25. LIST OF SUPPLEMENTARY BENEFITS *****NONE***** SCHEDULE OF PREMIUMS PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE. SCHEDULED PREMIUMS ARE $XXX.XX EACH CHANGING JUL 1, 2014 TO $XXX.XX EACH THEREAFTER *****END OF SCHEDULE***** *****NOTICE***** CONTRACT DATA CONTINUED ON NEXT PAGE Page 3(84) II-32 POLICY NO. XX XXX XX CONTRACT DATA CONTINUED SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00. FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%, WHICH IS USED TO PAY FOR SALES CHARGES AND STATE PREMIUM TAXES. AFTER DEDUCTION OF THIS AMOUNT, THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.) *****END OF SCHEDULE***** SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND THE MONTHLY ADMINISTRATION CHARGE IS $3.50. THE MONTHLY CHARGE TO GUARANTEE THE MINIMUM DEATH BENEFIT IS $0.50 *****END OF SCHEDULE***** SCHEDULE OF MAXIMUM SURRENDER CHARGES FOR FULL SURRENDER AT THE END OF THE CONTRACT YEAR INDICATED, THE MAXIMUM CHARGES WE WILL DEDUCT FROM THE CONTRACT FUND ARE SHOWN BELOW. FOR SURRENDER AT OTHER THAN YEAR-END DURING THE SIXTH THROUGH TENTH YEARS, THE AMOUNT OF THE CHARGE WILL REFLECT THE NUMBER OF COMPLETED CONTRACT MONTHS SINCE THE BEGINNING OF THE CONTRACT YEAR. (SEE PAGE 14.) YEAR OF DEFERRED DEFERRED UNDERWRITING SURRENDER SALES CHARGE AND ISSUE CHARGE TOTAL - --------- ------------ ---------------- ----- 1 $XXX.XX $XXX.XX $XXX.XX 2 XXX.XX XXX.XX XXX.XX 3 XXX.XX XXX.XX XXX.XX 4 XXX.XX XXX.XX XXX.XX 5 XXX.XX XXX.XX XXX.XX 6 XXX.XX XXX.XX XXX.XX 7 XXX.XX XXX.XX XXX.XX 8 XXX.XX XXX.XX XXX.XX 9 XXX.XX XXX.XX XXX.XX 10 ZERO ZERO ZERO 11 AND LATER ZERO ZERO ZERO *****END OF SCHEDULE***** CONTRACT DATA CONTINUED ON NEXT PAGE Page 3A(84) II-33 POLICY NO. XX XXX XX CONTRACT DATA CONTINUED LIST OF SUBACCOUNTS AND PORTFOLIOS EACH SUBACCOUNT OF THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT INVESTS IN A SPECIFIC PORTFOLIO OF THE PRUCO LIFE SERIES FUND. WE SHOW BELOW THE SUBACCOUNTS AND THE FUND PORTFOLIOS THEY INVEST IN. FUND SUBACCOUNT PORTFOLIO - ---------- --------- MONEY MARKET MONEY MARKET BOND BOND COMMON STOCK COMMON STOCK AGGRESSIVELY MANAGED FLEXIBLE AGGRESSIVELY MANAGED FLEXIBLE CONSERVATIVELY MANAGED FLEXIBLE CONSERVATIVELY MANAGED FLEXIBLE INITIAL ALLOCATION OF NET PREMIUMS MONEY MARKET SUBACCOUNT 20% BOND SUBACCOUNT 20% COMMON STOCK SUBACCOUNT 20% AGGRESSIVELY MANAGED FLEXIBLE SUBACCOUNT 20% CONSERVATIVELY MANAGED FLEXIBLE SUBACCOUNT 20% *****END OF LIST***** SERVICE OFFICE -- PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS CONTRACT TO: PRUCO LIFE INSURANCE COMPANY P.O. BOX XXXX CITY, STATE XXXXX Page 3B(84) II-34 POLICY NO. XX XXX XX TABULAR VALUES WE EXPLAIN THIS TABLE UNDER CONTRACT FUND AND TABULAR VALUES. ACTUAL CONTRACT FUND VALUES AND CASH VALUES MAY BE MORE OR LESS THAN AMOUNT SHOWN (SEE CONTRACT FUND AND CASH VALUE OPTION.) END OF TABULAR TABULAR CONTRACT CONTRACT CASH YEAR FUND VALUE - -------- -------- ------- 1 2 3 4 5 6 7 8 9 10 11 12 12 13 14 15 16 17 18 19 20 ATTAINED AGE - -------- 60 62 65 TABULAR CASH VALUES THROUGH THE FIRST 10 CONTRACT YEARS ARE THE TABULAR CONTRACT FUND VALUES MINUS A SURRENDER CHARGE. WE DESCRIBE UNDER CASH VALUE OPTION ON PAGES 13 AND 14 HOW THE SURRENDER CHARGE IS DETERMINED. WE SHOW ON A PRIOR CONTRACT DATA PAGE WHAT THE MAXIMUM SURRENDER CHARGE WILL BE. TABULAR CASH VALUES AFTER THE 10TH CONTRACT YEAR WILL BE THE SAME AS THE TABULAR CONTRACT FUND VALUES SHOWN ABOVE. Page 4 (84) II-35 ENDORSEMENTS (Only we can endorse this contract.) Definitions.--We define here some of the words and phrases used all through this contract. We explain others, not defined here, in other parts of the test. We, Our, Us and Company.--Pruco Life Insurance Company, an Arizona Corporation. You and Your.--The owner of the contract. Insured.--The person named as the Insured on the first page. He or she need not be the owner. Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner. SEC.--The Securities and Exchange Commission. Issue Date.--The contract date. Monthly Date.--The contract date and the same day as the contract date in each later month. Example: If the contract date is March 9, 1986, the Monthly Dates are each March 9, April 9, May 9 and so on. Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year. Example: If the contract date is March 9, 1986, the first anniversary is March 9, 1987. The second is March 9, 1988, and so on. Contract year.--A year that starts on the contract date or on an anniversary. Example: If the contract date is March 9, 1986, the first contract year starts then and ends on March 8, 1987. The second starts on March 9, 1987 and ends on March 8, 1988, and so on. Contract Month.--A month that starts on a Monthly Date. Example: If March 9, 1986 is a Monthly Date, a contract month starts then and ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends on May 8, 1986, and so on. Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3. The Contract.--This policy and the application, a copy of which is attached, form the whole contract. We assume that all statements in the application were made to the best of the knowledge and belief of the person(s) who made them; in the absence of fraud they are deemed to be representations and not warranties. We relied on those statements when we issued the contract. We will not use any statement, unless made in the application, to try to void the contract or to deny a claim. Contract Modifications.--Only a Company officer may agree to modify this contract, and then only in writing. Non-participating.--This contract will not share in our profits or surplus earnings. We will pay no dividends on it. Service Office.--This is the office that will service this contract. Its mailing address is the one we show on the Contract Data pages, unless we notify you of another one. Ownership and Control.--Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. Suicide Exclusion.--If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid. Currency.--Any money we pay, or that is paid to us, must be in United States currency. Any amount we owe will be payable at our Service Office. (Continued on Next Page) page 5 (VALA--84) II-36 GENERAL PROVISIONS (Continued) Misstatement of Age or Sex.--If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex. Where required, we have given the insurance regulator a detailed statement of how we will make these changes. The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the Insured would attain a certain age on that date. If we find that the issue age was wrong, we will correct that date. Incontestability.--Except for default, we will not contest this contract after it has been in force during the Insured's lifetime for two years from the issue date. Assignment.--We will not be deemed to know of an assignment unless we receive it, or a copy of it, at our Service Office. We are not obliged to see that an assignment is valid or sufficient. Annual Report.--Each year we will send you a report. It will show: (1) the current death benefit; (2) the investment amount; (3) the amount of investment amount in each subaccount; (4) the net cash value; (5) premiums paid and monthly charges deducted since the last report; and (6) any contract debt and the interest on the debt for the prior year. The report will also include any other data that may be currently required where this contract is delivered. No report will be sent if this contract is being continued under extended term insurance. You may ask for a similar report at some other time during the year. Or you may request from time to time a report projecting results under your contract on the basis of premium payment assumptions and assumed investment results. We have the right to make a reasonable charge for reports such as these that you ask for, and to limit the scope and frequency of such reports. Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower.--If this contract was issued at age 14 or lower, it shows on page 3 an increase in face amount at attained age 21, which applies if the contract is not then in default beyond its days of grace. If so, any references in the contract to face amount or death benefit which apply at or after attained age 21 will be based upon the increased face amount, unless otherwise stated. Death Proceeds.--The table of Basic Amounts on page 21 describes how the proceeds payable at death will be determined, depending on the status of the contract at the time of death. In addition to what is shown in that table, a special situation will apply in those cases where all of these conditions exist: (a) the contract was issued at an age below 15; (b) death occurs before attained age 21; (c) the contract is on a premium paying basis and not in default past its days of grace; (d) the contract fund is not sufficient to make the contract paid up for the ultimate face amount; (e) the contract fund is greater than the sum of the net single premium for the initial face amount and the present value, discounted at a rate we set from time to time but no less than 4% a year, of all future charges for extra benefits other than those which do not continue after a contract such as this becomes paid up. (See above and Paid-up Contract, page 9.) In this case, the Basic Amount will not be as described on page 21 but will be the total of (1) the initial face amount, plus (2) the amount which results from dividing the contract fund minus the present value of the future charges for extra benefits referred to above, minus the net single premium for the initial face amount, by the net single premium at the then attained age, plus (3) the amount of any extra benefits. Payment of Death Claim.--If we settle this contract in one sum as a death claim, we will usually pay the proceeds within 7 days after we receive at our Service Office proof of death and any other information we need to pay the claim. But in the event of death while the contract is either fully paid-up or is in force as variable reduced paid-up insurance we have the right to defer paying any portion of the proceeds greater than the minimum guaranteed death benefit if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency; or (3) the SEC lets us defer payment to protect our contract owners. Page 6 (VALA--84) II-37 PREMIUM PAYMENT AND REINSTATEMENT Payment of Premiums.--Premiums may be paid at our Service Office or to any of our authorized representatives. If we are asked to do so, we will give a signed receipt. Premium payments will in most cases be credited as of the date of receipt, to both the contract fund and the premium account. (See Contract Fund, page 11, and Premium Account, page 8.) Premium credits to the contract fund are the invested premium amounts, (see page 11). Premium credits to the premium account are the full premiums paid with no deductions. But in the following cases, to the extent stated, premium payments will be credited as of a date other than the date of receipt: 1. The first scheduled premium is due on the Contract Date. But if the first premium payment is received after the Contract Date, the scheduled portion will be credited to the contract fund and the premium account as of the Contract Date. And any portion of that first premium payment in excess of the first scheduled premium will be credited as of the date of receipt. If the first premium is received before the Contract Date, the entire payment will be credited as of the Contract Date. 2. If a premium payment is received during the 61 day period after the day when a scheduled premium was due and had not yet been paid, here is what we will do. We will determine whether the premium account, (see Premium Account below), just before receipt of that payment was a negative amount. If not--that is, if the premium account was zero or higher--the premium payment will be credited as of the date of receipt. But if the premium account was negative, by no more than the scheduled premium on the due date, that portion of the premium payment required to bring the premium account up to zero will be credited to the premium account as of the due date; any remaining portion of the premium payment will be credited to the premium account as of the date of receipt. If the premium account is negative by more than the scheduled premium then due, the premium payment will be credited as of the date of receipt, except in the situation described in 3 below. 3. On each Monthly Date we will determine if the contract fund is in default. (See Default on page 8.) We will notify you on the minimum payment amount needed to bring the contract out of default. If one or more premium payments are made during the days of grace after that monthly date, (see Grace period on page 8,) we will credit to the contract fund and the premium account as of the applicable Monthly Dates, such parts of the payments as are needed to end the default status; any remaining part of these premium payments will be credited to the contract fund and premium account as of the date of receipt. Scheduled Premiums.--We show the amount and frequency of the scheduled premiums in the Schedule of Premiums. The first scheduled premium is due on the contract date. There is no insurance under this contract unless an amount at least equal to the first scheduled premium is paid. The scheduled premium shown is the minimum required, at the frequency chosen, to continue the contract in full force if all scheduled premiums are paid when due, investment returns are at the rate assumed, we deduct mortality charges at no less than the maximum rate, and any contract debt does not exceed the cash value. If you wish to pay, on a regular basis, higher premiums than the amount of the scheduled premium, we will bill you for the higher amount you choose. If scheduled premiums that are due are not paid, or if smaller payments are made, the contract may then or at some future time go into default. The conditions under which default will exist are described below: Unscheduled Premiums.--Except as we state in the next paragraph unscheduled premiums may be paid at any time during the Insured's lifetime as long as the contract is not in default beyond its days of grace. We show on page 3 the minimum premium we will accept. We have the right to limit unscheduled premiums to a total of $10,000 in any contract year. If we determine at any time that investment returns above the rate assumed, or smaller than maximum mortality charges or greater than scheduled premium payments have made the contract paid-up, we have the right to accept no further premium payments, or to limit the amount or frequency of premium payments thereafter. (See Paid-up Contract, page 9.) Premium Change on Contract Change Date.--We show the Contract Change Date in the Contract Data on page 3. We also show in the Schedule of Premiums on page 3 that the amount of each scheduled premium will change on the Contract Change Date and what the new premium will be. However, when the Contract Change Date arrives we will recompute a new premium amount to be used in calculating the premium account. The new premium that we recompute will be no greater than the new premium for that date which we show on page 3. In addition, if the premium account is less than zero, we will set the premium account to zero. (Continued on Next Page) Page 7 (VALA--84) II-38 PREMIUM PAYMENT AND REINSTATEMENT (Continued) The Schedule of Premiums may also show that the premium changes at other times. This may occur, for example, with a contract issued with extra benefits or in an extra rating class if, in either case, this calls for a higher or extra premium for a limited period of time. Default.--Unless the contract is already in the grace period, (see below), on each monthly date, after we deduct any charges from the contract fund (which we describe on page 11) and add any credits to it, we will determine whether the contract is in default. To do so we will compute the amount which will accrue to the tabular contract fund on the next monthly date if, during the current contract month; (1) investment returns are at the assumed rate; and (2) we make the other charges and credit we have set, including interest on contract debt; and (3) we receive no premiums or loan repayments and make no more loans or grant no partial withdrawals. We will subtract this amount from the contract fund. If the result is zero or more, (that is, not a negative amount,) the contract is not in default. But if there is a fund deficit--that is, if the result is less than zero--the contract is in default if the premium account, which we define below, is also less than zero. Grace Period.--We grant 61 days of grace from any monthly date (other than the contract date) on which the contract goes into default. During the days of grace we will continue to accept premiums and make the charges we have set. If the monthly date was a scheduled premium due date, when we receive a premium payment during the days of grace we will first determine whether it satisfies case 2 under Payment of Premiums above. If it does, the default will end. If it does not, or if the monthly date when the contract went into default was not a scheduled premium due date, here is what we will do: If at any time during the days of grace, we have received payments that in total are at least equal to the lesser of (a) the sum of the fund deficit, (that is, the amount by which the contract fund is below the tabular contract fund,) on the date of default and any subsequent Monthly Date, and (b) the sum of the amount by which the premium account is negative on the date of default and any scheduled premiums due since the date of default, the default will end. If the contract is still in default when the days of grace are over, it will end and have no value, except as we state under Contract Value Options, (which we describe on page 13). Premium Account.--On the contract date, the premium account is equal to the premium received on that date minus the scheduled premium then due. On any other day, the premium account is equal to: 1. what it was on the prior day; plus 2. if the premium account was greater than zero on the prior day, interest on the excess at 4% year; minus 3. if the premium account was less than zero on the prior day, interest on the deficit at 4% a year; plus 4. any premium received on that day; minus 5. any scheduled premium due on that day; minus 6. any partial withdrawals on that day. The contract might be in default, as described above. If so, the premium account is a negative amount, less than zero. If a premium payment is received on any day during the days of grace while the contract is in default and the premium account is negative by no more than one scheduled premium, that payment, to the extent that it is required to bring the premium account up to zero, will, as we describe under Payment of Premiums above, be credited to the premium account as of the monthly date when the scheduled premium was due, whether the date of default or a subsequent monthly date. Any remaining portion of the premium payment will be credited as of the actual date of receipt. In this case the premium account for all days from the monthly date to the actual date of receipt will be recalculated. Reinstatement.--If this contract ends as we describe under Grace Period, you may reinstate it, if all these conditions are met: 1. No more than three years must have elapsed since the date of default. 2. You must not have surrendered the contract for its net cash value. 3. You must give us any facts we need to satisfy us that the insured is insurable for the contract. 4. We must be paid a premium at least equal to the amount required to bring the premium account up to zero on the first monthly date on which a scheduled premium is due after the date of reinstatement. From this amount we will deduct $2, plus 7 1/2% of the remaining payment, plus any charges with interest for any extra benefits, plus any other expense charges with interest. The contract fund will be equal to the balance, plus the cash value of the contract immediately before reinstatement, plus a refund of that part of any surrender charge paid at the time of default which would be charges if the contract were surrendered immediately after reinstatement. 5. If before reinstatement the contract is in force as reduced paid-up insurance (see page 13) any contract debt under reduced paid-up insurance must be repaid with interest or carried over to the reinstated contract. If we approve the reinstatement, these statements apply. The date of reinstatement will be the date of your request or the date the required premium is paid, if later. And we will start to make daily and monthly charges and credits again as of the date of reinstatement. Page 8 (VALA--84) II-39 BENEFICIARY You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and so on. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise: 1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured. 2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured. 3. Two or more in the same class who have the right to be paid will be paid in equal shares. 4. If none survives the Insured, we will pay in one sum to the Insured's estate. Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. We owe Jane the proceeds if she is living at the Insured's death. We owe Paul and John the proceeds if they are living then but Jane is not. But if only one of them is living, we owe him the proceeds. If none of them is living we owe the Insured's estate. Beneficiaries who do not have a right to be paid under these terms may still have a right to be paid under the Automatic Mode of Settlement. Before we make a payment, we have the right to decide what proof we need of the identity, age or any other facts about any persons designated as beneficiaries. If beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again. PAID-UP CONTRACT This contract will become fully paid-up if and when whichever of the following situations is applicable occurs: (a) For a contract issued at an age lower than 15, the contract fund has grown to an amount at least equal to the net single premium for the ultimate face amount (see page 3 and 7,) plus the present value, discounted at a rate we set from time to time but no less than 4% a year, of all future charges for any extra benefits which will continue under the paid-up contract. (b) For a contract issued at age 15 or above, the contract fund has grown to an amount at least equal to the net single premium for the face amount, (see page 3 and 7,) plus the present value, discounted at a rate we set from time to time but no less than 4% a year, of all future charges for any extra benefits which will continue under the paid-up contract. We will notify you when we determine that the contract has become fully paid-up. We have the right at that time to return any part of any payment then being made which is in excess of the amount billed or required to make the contract paid-up. And we have the right to accept no further premium payments, or to limit the amount or frequency of premium payments thereafter. The contract will continue as paid-up life insurance on the Insured's life. The death benefit under the paid-up contract may change daily, as we explain below, but if there is no contract debt, it will not be less than the minimum guaranteed death benefit determined on the day the contract becomes paid-up. That amount will be no less than the face amount shown on page 3, (or, if the contract was issued below age 15, the ultimate face amount.) It will be computed by using the contract fund on that day, less the present value of all future charges for any extra benefits, (computed as described above,) at the net single premium rate. The net single premium rate depends on the Insured's issue age and sex and on the length of time since the contract date. The amount payable in event of death thereafter will be the guaranteed death benefit, or if greater, the contract fund, divided by the net single premium at the Insured's attained age on the date of death. In either case the amount will be adjusted for any contract debt and for the amount of any paid-up extra benefits. The monthly charge described on page 12 and shown on page 3A, and any charges for extra benefits will not be made after the contract becomes paid-up. Page 9 (VALA--84) II-40 SEPARATE ACCOUNT The Account.--The word account, where we use it in this contract without qualification, means the Pruco Life Variable Appreciable Account. This is a unit investment trust registered with the SEC under the Investment Company Act of 1940. It is also subject to the laws of Arizona. We own the assets of the account; we keep them separate from the assets of our general investment account. We established the account to support variable life insurance contracts. But we do not use it to support this contract if the contract is being continued under extended term insurance. (See page 13.) Subaccounts.--The account has several subaccounts. We list them on the Contract Data page(s). You determine, using percentages, how invested premium amounts will be allocated among the subaccounts. You may choose to allocate nothing to a particular subaccount. But any allocation you make must be at least 10%; you may not choose a fractional percent. Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or any percent that is not a whole number. The total for all subaccounts must be 100%. The allocation of invested premium amounts (see page 11,) that took effect on the contract date is shown in the Contract Data pages. You may change the allocation for future invested premium amounts at any time if the contract is not in default. To do so, you must notify us in writing in a form that meets our needs. The change will take effect on the date we receive your notice at our Service Office. A premium might be paid when the investment amount is less than zero. In that case, when we receive that premium, we first use as much of the invested premium amount as we need to eliminate the deficit in the investment amount. We will then allocate any remainder of the invested premium amount in accord with your most recent request. (We describe investment amount on page 11.) The Fund.--The word fund, where we use it in this contract without qualification, means the fund we identify in the Contract Data pages. The fund is registered with the SEC under the Investment Company Act of 1940 as an open-end diversified management investment company. The fund has several portfolios; there is a portfolio that corresponds to each of the subaccounts of the account. We list these portfolios in the Contract Data pages. Account Investments.--We use the assets of the account to buy shares in the fund. Each subaccount is invested in a corresponding specific portfolio. Income and realized and unrealized gains and losses from assets in each subaccount are credited to, or charged against, the subaccount. This is without regard to income, gains, or losses in our other investment accounts. We will determine the value of the assets in the account at the end of each business day. When we use the term business day, we mean a day when the New York Stock Exchange is open for trading. We might need to know the value of an asset on a day that is not a business day or on which trading in that asset does not take place. In this case, we will use the value of that asset as of the end of the last prior business day on which trading took place. Example: If we need to know the value of an asset on a Sunday, we will normally use the value of the asset as of the end of business on Friday. We will always keep assets in the account with a total value at least equal to the amount of the investment amounts under contracts like this one. To the extent those assets do not exceed this amount, we use them only to support those contracts; we do not use those assets to support any other business we conduct. We may use any excess over this amount in any way we choose. Change in Investment Policy.--A portfolio of the fund might make a material change in its investment policy. In that case, we will send you a notice of the change. Within 60 days after you receive the notice, or within 60 days after the effective date of the change, if later, you may exchange this contract for a new contract of fixed benefit insurance on the Insured's life. The conditions for exchange, and the specifications for the new contract, are described under Exchange of Contract on page 16. Change of Fund.--A portfolio might, in our judgment, become unsuitable for investment by a subaccount. This might happen because of a change in investment policy, or a change in the laws or regulations, or because the shares are no longer available for investment, or for some other reason. If that occurs, we have the right to substitute another portfolio of the fund, or to invest in a fund other than the one we show on the Contract Data page(s). But we would first seek approval from the SEC and, where required, the insurance regulator where this contract is delivered. Page 10 (VALA-84) II-41 INVESTMENT AMOUNT AND RETURN ON INVESTMENT Investment Amount.--The investment amount for this contract is the amount we use to compute the investment return. The investment amount is allocated among the subaccounts. The amount of the investment amount and its allocation to subaccounts depend on (1) how you choose to allocate net premiums; (2) whether or not you transfer amounts among subaccounts, as we discuss below; (3) the investment performance of the subaccounts to which amounts are allocated or transferred; (4) the amount and timing of premium payments you make; (5) whether or not you take any loan; and (6) whether or not you make any partial withdrawals. The investment amount exists only is the contract is not in default past the days of grace or if it is being continued as variable reduced paid-up insurance. The investment amount at any time is equal to the contract fund, (we explain this under contract fund,) minus the amount of any loan on the contract, minus interest accrued on the loan at 4% a year since the last Monthly Date (we explain this under Loans.) Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a year. This is the same as .01074598% a day compounded daily. Transfers Among Subaccounts.--You may transfer amounts among subaccounts as often as four times in a contract year, if the contract is not in default or if the contract is being continued under the variable reduced paid up option. To do so, you must notify us in writing in a form that meets our needs. The transfer will take effect on the date we receive your notice at our Service Office. CONTRACT FUND Contract Fund Defined.--On the contract date the contract fund is equal to the invested premium amounts received, (see below), minus any of the charges described in terms (d) through (j) below which may have been due on that date. On any day after that the contract fund is equal to what it was on the previous day, plus any invested premium amounts received, plus these items. (a) any increase due to investment results in the value of the subaccounts to which that portion of the contract fund that is in the investment amount is allocated; (we explain investment amount above); and (b) guaranteed interest at 4% a year on that portion of the contract fund that is not in the investment amount; Minus these items: (c) any decrease due to investment results in the value of the subaccounts to which that portion of the contract fund that is in the investment amount is allocated; (d) a charge against the investment amount at a rate of not more than .00163894% a day (.60% a year) for mortality and expense risks that we assume; (e) any amount charged against the investment amount for Federal or State income taxes; (f) a monthly charge to guarantee the minimum death benefit; (g) a charge for the cost of expected mortality; (h) any charges for extra rating class; (i) any charges for extra benefits; (j) a monthly administration charges; (k) any partial withdrawals; and (l) if the contract becomes paid-up on that day, the present value of any future charges for any extra benefits that will continue under the paid-up contract. We describe under Reinstatement on page 8 what the contract fund will be equal to on any reinstatement date. Invested Premium Amount.--This is the portion of each premium paid that we will add to the contract fund. It is equal to the premium paid, minus $2.00, minus 7 1/2% of the rest of the premium. We explain this under Schedule of Expense Charges from Premium Payments. Guaranteed Interest Credits.--We will credit interest to the contract fund each day on any portion of the contract fund on that day which is not in the investment amount. That portion will be any contract loan plus interest accrued on the loan at the rate of 4% a year since the last Monthly Date. (See Loans.) We will credit .01074598% a day, which is an effective rate of 4% a year. Cost of Expected Mortality.--This charge is computed daily and deducted monthly from the contract fund, on each Monthly Date. We apply this charge to the coverage amount. The coverage amount is equal to what the Basic Amount (see page 21) would be if there were no extra benefits, minus the contract fund. Where required, we have given the insurance regulator a detailed description of the method we use. We will not charge more than the maximum guaranteed rates, which are based on the Insured's sex and attained age and the mortality table described under the Basis of Computation. We may charge less. At lease once every five years, but not more often than once a year, we will consider the need to change the charges. We will change them only if we do so for all contracts like this one dated in the same year as this one. Charge for Extra Rating Class.--If there is an extra charge because of the rating class of the Insured or because the Insured is a cigarette smoker, we will deduct (Continued on Next Page) Page 11 (VALA--84) II-42 CONTRACT FUND (Continued) it from the contract fund at the beginning of each contract month. Any charge is included in the amount shown in the Contract Data pages under Schedule of Monthly Deductions from Contract Fund. Charge for Extra Benefits.--If the contract has extra benefits, we will deduct the charges for such benefits from the contract fund at the beginning of each contract month. Charges for any such extra benefits are included in the amount shown in the Contract Data pages under Schedule of Monthly Deductions from Contract Fund. If and when we determine that the contract has become paid-up, we will deduct from the contract fund the present value of any future charges for any extra benefits that will continue under the paid-up contract. We will make no further deductions for these benefits after that. The description of any such benefit (which can be found following page 20) describes how the future cash value, if any, of that benefit will be determined. Monthly Administration Charge and Mortality Risk Charge.--On each monthly date, we will deduct up to $2.50, plus up to 2 cents per $1000 of face amount, from the contract fund, as a monthly administration charge. We will also deduct 1 cent per $1000 of face amount for guaranteeing the death benefit regardless of the investment performance of the separate account. (Both of these references to charges based upon face amount are to initial face amount for contracts issued below age 15. The total charges do not increase when the face amount increases at attained age 21.) These charges will be made only while the contract is on a premium paying basis; they will not be made if the contract becomes paid-up or is continued as variable reduced paid-up or extended term insurance, (see Contract Value Options). We show the amount of these charges in the Contract Date pages under Schedule of Monthly Deductions from Contract Fund. Partial Withdrawals.--You may be able to make partial withdrawals from the contract. All these conditions must be met. 1. The contract must have passed its first contract anniversary. 2. You must ask for the change in writing and in a form that meets our needs. 3. The amount withdrawn, plus the net cash value after withdrawal, may not be more than the net cash value before withdrawal. 4. The cash value after withdrawal must not be less than the tabular cash value for the new face amount. 5. The amount you withdraw must be at least $2,000. 6. The face amount must not decrease below the minimum shown on page 3. 7. You must send the contract to us to be endorsed. We will add a withdrawal fee of $15 to the amount you ask to withdraw. We will decrease the face amount by the amount of the withdrawal. We will compute a new tabular contract fund, a new tabular contract value, and new minimum premiums based on the reduced face amount. These new minimum premiums will be used thereafter for the computation of the premium account. An amount withdrawn may not be repaid, except as an unscheduled premium subject to charges. We will tell you how much you may withdraw if you ask us. Page 12 (VALA--84) II-43 CONTRACT VALUE OPTIONS Benefit After the Grace Period.--If the contract is in default beyond its days of grace, we will use any net cash value (which we describe under Cash Value Option) to keep the contract in force as one of two kinds of insurance. One kind is extended insurance. The second kind is variable reduced paid-up insurance. We describe each below. You will find under Automatic Benefit which kind it will be. Any extra benefit(s) will end as soon as the contract is in default past its days of grace, unless the form that describes the extra benefit states otherwise. Extended Insurance.--This will be term insurance of a fixed amount on the Insured's life. We will pay the amount of term insurance if the Insured dies in the term we describe below. Before the end of the term there will be cash values but no loan value. The amount of term insurance will be the death benefit on the day of default, minus any part of that death benefit which was provided by extra benefits. The term is a period of time that will start on the day the contract went into default. The length of the term will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date. There may be extra days of term insurance. This will occur if, on the day the contract goes into default, the term of extended insurance provided by the net cash value does not exceed 90 days, or the number of days the contract was in force before the default began, if less. The number of extra days will be (1) 90, or the number of days the contract was in force before the default began, if less, minus (2) the number of days of extended insurance that would be provided by the net cash value if there were no contract debt. The extra days, if any, start on the day after the last day of term insurance provided by the net cash value, if any. If there is no such term insurance, the extra days start on the day the contract goes into default. The term insurance for the extra days has no cash value. There will be no extra days if you replace the extended insurance with variable reduced paid-up insurance or you surrender the contract before the extra days start. Variable Reduced Paid-up Insurance.--This will be paid-up variable life insurance on the Insured's life. The death benefit may change from day to day, as we explain below, but if there is no contract debt, it will not be less than a minimum guarantee amount determined as of the day when the contract went into default. There will be cash values and loan values. The minimum guaranteed amount of insurance will be computed by using the net cash value at the net single premium rate. The net single premium rate depends on the Insured's issue age and sex and on the length of time since the contract date. The amount payable in event of death thereafter will be the greater of (a) the minimum guaranteed amount and (b) the contract fund divided by the net single premium at the Insured's attained age. In either case the amount will be adjusted for any contract debt. Except when it is provided as the automatic benefit, (see below), the variable reduced paid-up insurance option will be available only when the guaranteed death benefit under the option will be $5000 or more. Computations.--We will make all computations for either of these benefits as of the date the contract goes into default. But we will consider any loan you take out or pay back or any premium payments or partial withdrawals you make in the days of grace. Automatic Benefit.--When the contract is in default, it will stay in force as extended insurance. But it will stay in force as variable reduced paid-up insurance if either of these statements applies: (1) We issued the contract in a rating class for which we do not provide extended insurance; in this case the phrase No Extended Insurance is in the Rating Class on page 3. (2) The amount of reduced paid-up insurance would be at least as great as the amount of term insurance. Optional Benefit.--You may choose to replace any fixed extended insurance that has a net cash value by variable reduced paid-up insurance. To make this choice, you must do so in writing to us in a form that meets our needs, not more than three months after the date the contract goes into default. You must also send the contract to us to be endorsed. Cash Value Option.--You may surrender this contract for its net cash value. The net cash value at any time is the cash value at that time less any contract debt. To surrender this contract, you must ask us in writing in a form that meets our needs. You must also send the contract to us. Here is how we will compute the cash value for surrender of the contract or for its continuation under extended insurance or variable reduced paid-up insurance: 1. If the contract is not in default: The cash value on surrender at any time in the first ten contract years is the (Continued on Next Page. Page 13 (VALA--84) II-44 CONTRACT VALUE OPTIONS (Continued) contract fund, minus a surrender charge, consisting of a deferred sales charge and a deferred underwriting and issue charge. The cash value on surrender at the end of the 10th contract year or later is the contract fund. A schedule of maximum surrender charges for this contract is on page 3A. In no event will the deferred sales charge upon surrender be greater than 25% of scheduled premiums due in contract year 1, plus 5% of the scheduled premiums due in contract years 2 through 5. For the purpose of computing this limit we use the lesser of premiums due and premiums paid. For a paid-up contract that includes extra benefits, the cash value is the amount described above, plus the cash value, if any, of the extra benefits. (See the description of any such extra benefits following page 20.) 2. If the contract is in default during the days of grace: We will compute the net cash value as of the date the contract went into default. But we will adjust this value for any loan you take out or pay back or any premium payments or partial withdrawals you make in the days of grace. 3. If the contract is in default beyond its days of grace: The net cash value as of any date will be the value on that date of any extended insurance benefit then in force. Or it will be the value on that date of any variable reduced paid-up insurance benefit then in force, less any contract debt. Within 30 days of a contract anniversary, the net cash value of any extended insurance will not be less than the value on that anniversary. If the contract is not in default past the days of grace, or if the contract is in force as variable reduced paid up insurance, we will usually pay any cash value within 7 days after we receive your request and the contract at our Service Office. But we have the right to defer payment if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency; or (3) the SEC lets us defer payments to protect our contract owners. If the contract is in force as extended insurance we have the right to postpone paying a cash value for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. Tabular Values.--In the table on page 4 we show tabular contract fund and tabular cash values at the end of the contract years. The tabular contract fund values are the amount which will then be in the contract fund, (see page 11,) if all scheduled premiums have been paid on their due dates, there have been no unscheduled premiums paid, there is no contract debt, the subaccounts you have chosen earn exactly the assumed rate of return, and we have deducted the maximum mortality charges. The tabular cash values are the amounts which, under the same conditions, will then be used to provide extended insurance or variable reduced paid-up insurance or will be paid in cash, if the maximum surrender charges are applied. The tabular cash value shown is equal to the tabular contract fund value as of the same date after deducting any surrender charges (at the maximum rate) from the tabular contract fund value. (See Cash Value Option above.) Since surrender charges are not deducted after the end of the 10th contract year, the tabular cash values are the same as the tabular contract fund values thereafter. If we need to compute tabular values at some time during a contract year, we will count the time since the start of the year. We will let you know the tabular values for other durations if you ask for them. Page 14 (VALA-84) II-45 LOANS Loan Requirements.--After the first anniversary, you may borrow from us on the contract. All these conditions must be met: 1. The Insured is living. 2. The contract is in force other than as extended insurance. 3. The contract debt will not be more than the loan value. (We explain these terms below.) 4. As sole security for the loan, you assign the contract to us in a form that meets our needs. 5. Except when used to pay premiums on this contract, the amount you borrow at any one time must be at least $500. If there is already contract debt when you borrow from us, we will add the new amount you borrow to that debt. Contract Debt.--Contract debt at any time means the loan on the contract, plus the interest we have charges that is not yet due and that we have not yet added to the loan. Loan Value.--You may borrow any amount up to the difference between the loan value and any existing contract debt. At any time the loan value is 90% of the net cash value. There is one exception. If the contract is in default, the loan value during the days of grace is what it was on the date of default. Example 1: Suppose the contract has a loan value of $6,000. About eight months ago you borrowed $1,500. By now there is interest of $55 charged but not yet due. The contract debt is now $1,555, which is made up of the $1,500 loan and the $55 interest. Example 2: Suppose, in example 1, you want to borrow all that you can. We will lend out $4,445 which is the difference between the $6,000 loan value and the $1,555 contract debt. This will increase the contract debt to $6,000. We will add the new amount borrowed to the existing loan and will charge interest on it, too. Interest Charge.--We will charge interest daily on any loan at the effective rate of 5 1/2% a year. Interest is due on each contract anniversary, or when the loan is paid back if that comes first. If interest is not paid when due, it will become part of the loan. Then we will start to charge interest on it, too. Example 3: Suppose the contract date is 1987. Six months before the anniversary in 1996 you borrow $1,600 out of a $4,000 loan value. We charge 5 1/2% a year. Three months later, but still three months before the anniversary, we will have charges about $22 interest. This amount will be a few cents more or less than $22 since some months have more days than others. The interest will not be due until the anniversary unless the load is paid back sooner. The loan will still be $1,600. The contract debt will be $1,622, since contract debt included interest charged but not yet due. On the anniversary in 1996 we will have charged about $44 interest. The interest will then be due. Example 4: Suppose the $44 interest in example 3 was paid on the anniversary. The loan and contract debt each became $1,600 right after the payment. Example 5: Suppose the $44 interest in example 3 was not paid on the anniversary. The interest became part of the loan, and we began to charge interest on it, too. The loan and contract debt each became $1,644. Repayment.--All or part of any contract debt may be paid back at any time while the Insured is living. When we settle the contract, any contract debt is due us. If there is contract debt at the end of the last day of grace when the contract is in default, it will be deducted from the cash value to determine the net cash value. We will make this adjustment so that the proceeds will not include the amount of that debt. Effect of a Loan.--When you take a loan, the amount of the loan continues to be a part of the contract fund and is credited with interest at the guaranteed rate of 4% a year. However, we will reduce the investment amount by the amount you borrow, and by loan interest that becomes part of the loan because it is not paid when due. On each Monthly Date, if there is a contract loan outstanding, we will increase the investment amount by interest credits accrued on the loan at 4% a year since the last Monthly Date. When you repay part or all of a loan we will increase the investment amount by the amount of loan you repay, plus, if you repay all the loan, interest credits accrued on the loan at 4% a year since the last Monthly Date. We will not increase the investment amount by loan interest that is paid before we make it part of the loan. We will allocate loans and repayments among the subaccounts in proportion to the investment amount in each subaccount as of the date of the loan or repayment. Only the amount of the investment amount will reflect the investment results of the subaccounts. Since the amount you borrow is removed from the investment amount, a loan may have a permanent effect on the net cash value of this contract, and also, for a contract which is paid-up or which is in force under the variable reduced paid-up option, on any death benefit in excess of the guaranteed death benefit. The longer the loan is outstanding, the greater this effect is likely to be. (Continued on Next Page) Page 15 (VALA--84) II-46 LOANS (Continued) Example 6: Suppose the contract's investment amount is $15,000 and that $10,000 is in subaccount A and $5,000 is in subaccount B. If you make a $9,000 loan we will reduce the amount in subaccount A by $6,000 and the amount in subaccount B by $3,000. Suppose that sometime later, when the investment amount in each of the two subaccounts is the same you choose to repay the $9,000 loan. We will add $4,500 to the amount in each subaccount. Excess Contract Debt.--If contract debt ever becomes equal to or more than the cash value, all the contract's benefits will end 61 days after we mail a notice to you and any assignee of whom we know. Also, we may send a notice to the Insured's last known address. In the notice we will state the amount that, if paid to us, will keep the contract's benefits from ending for a limited time. Postponement of Loan.--We will usually make a loan within 7 days after we receive your request at our Service Office. But we have the right to defer making the loan if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency; or (3) the SEC lets us defer payments to protect our contract owners. EXCHANGE OF CONTRACT Right to Exchange.--Before the second anniversary you may exchange this contract for a new contract of fixed benefit insurance on the Insured's life. You will not have to prove to us that the Insured is insurable. Also, you may make such an exchange at any time if there is a material change in the investment policy of a portfolio (see Change in Investment Policy on page 10). When we use the term new contract we mean the contract for which this contract may be exchanged. Conditions.--Your right to make this exchange is subject to all these conditions: (1) You must ask for the exchange in writing in a form that meets our needs. (2) You must surrender the contract to us. (3) We must have your request and the contract at our Service office while the contract is in force and not in default past its days of grace. (4) You must pay back any contract debt under this contract, to the extent it may exceed the loan value of the new contract. (5) You must pay any other charges required for the exchange. Exchange Date.--The exchange date will be the later of: (1) the date we receive the contract and our request at our Service Office; and (2) the date we receive the payment, if any, required for the exchange. The new contract will take effect on the exchange date only if the Insured is then living. If the new contract takes effect, this contract will end just before the exchange date. Contract Specifications.--The new contract will be on the Modified Premium Whole Life plan. It will have a face amount equal to the face amount of this one. It will have the same contract date and issue age as this contract and be in the same rating class. If, for any reason, we are not issuing the Modified Premium Whole Life Contract on the exchange dates, then the new contract will be another life plan that we would regularly issue on that date for the same rating class, amount, issue, age and sex. This contract might include an extra benefit which is still in effect just before the exchange date. And a similar kind of benefit might have been regularly offered in contracts like the new one on the date the extra benefit took effect in this contract. In that case, if you ask for it in your request for the exchange, that similar kind of benefit will be put in the new contract. When we use the phrase contracts like the new one, we mean contracts that were, on the contract date of this contract, regularly issued on the same plan as the new one and for the same rating class, amount, issue age and sex. The amount of any accidental death benefit included in the new contract in accord with this provision will be the same as the amount of any accidental death benefit in this contract. If a benefit for waiving scheduled premiums is included in the new contract in accord with this provision, any scheduled premiums to be waived under the new contract for a disability that began before the exchange date must be at the billing frequency that applied to this contract when the disability started. But premiums will not be waived under the new contract unless it has a benefit for waiving premiums in the event of disability. This will be so even if we have waived premiums under this contract. A charge may be made on exchange in the following situation: If, on the date of exchange, the contract fund of this contract is less than the tabular contract fund, a charge will be made for the difference in the two amounts. If the contract fund of this contract is equal to or greater than the tabular contract fund, no charge will be made. In these cases, the contract fund of the new contract will be equal to that of this contract. Exchange at Other Times.--You may be able to exchange this contract for a fixed benefit Modified Premium Whole Life contract at a time other than those described under right to Exchange above. But any such exchange may be made only if we consent, and will be subject to conditions and charges which we then determine. Page 16 (VALA--84) II-47 SETTLEMENT OPTIONS Payee Defined.--In these provisions and under the Automatic Mode of Settlement, the word Payee means a person who has a right to receive a settlement under the contract. Such a person may be the Insured, the owner, a beneficiary, or a contingent payee. Choosing an Option.--While the Insured is living you may choose, or change the choice of, an option for all or part of the proceeds that may arise from the Insured's death. The requirements are the same as those to designate or change a beneficiary. We describe them under Beneficiary. A payee may choose an option for all or part of any proceeds or residue that becomes payable to him or her in one sum. We describe residue later on this page. In some cases, you or another Payee will need our consent to choose an option. We describe these cases under conditions. Options Described.--Here are the options we offer. We may also consent to other arrangements. Option 1 (Instalments for a Fixed Period).--We will make equal payments for up to 25 years based on the Option 1 Table. The payments will include interest at an effective rate of 3 1/2% a year. We may credit more interest. If and while we do so, the payments will be larger. Option 2 (Life Income).--We will make equal monthly payments for as long as the person on whose life the settlement is based lives, with payments certain for the period chosen. The choices are either ten years (10-Year Certain) or until the sum of the payments equals the amount put under this option (Instalment Refund). The amount of each payment will be based on the Option 2 Table and on the sex and age, on the due date of the first payment, of the person on whose life the settlement is based. But if a choice is made more than two years after the Insured's death, we may use the Option 2 payment rates in individual annuity contracts or life insurance contracts we regularly issue, based on United States currency, on the due date of the first payment. On request, we will quote the payment rates in contracts we then issue. We must have proof of the date of birth of the person on whose life the settlement is based. If on the due date of the first payment under this option, we have declared a higher payment rate under the option, we will base the payments on that higher rate. Option 3 (Interest Payment).--We will hold an amount at interest. We will pay interest at an effective rate of at lease 3% a year ($30.00 annually, $14.89 semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more interest. Option 4 (Instalments of a Fixed Amount).--We will make equal annual, semi-annual, quarterly or monthly payments if they total at least $90 a year for each $1,000 put under this option. We will credit the unpaid balance with interest at an effective rate of at least 3 1/2% a year. We may credit more interest. If we do so, the balance will be larger. The final payment will be any balance equal to or less than one payment. First Payment Due Date.--Unless a different date is stated when the option is chosen: (1) the first payment for Option 3 will be due at the end of the chosen payment interval; and (2) the first payment for any of the other options will be due on the date the option takes effect. Residue Described.--For Options 1 and 2, residue on any date means the then present value of any unpaid payments certain. We will compute it at an effective interest rate of 3 1/2% a year. But we will use the interest rate we used to compute the actual Option 2 payments if they were not based on the table in this contract. For Options 3 and 4, residue on any date means any unpaid balance with interest to that date. For option 2, residue does not include the value of any payment that may become due after the certain period. (Continued on Page 19) Page 17 (VALA--84) II-48 SETTLE OPTIONS (Continued) OPTION 1 TABLE - ------------------------ MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY - ------------------------ Number Monthly of Year Payment - ------------------------ 1 $84.65 2 43.05 3 29.19 4 22.27 5 18.12 6 15.35 7 13.38 8 11.90 9 10.75 10 9.83 11 9.09 12 8.46 13 7.94 14 7.49 15 7.10 16 6.76 17 6.47 18 6.20 19 5.97 20 5.75 21 5.56 22 5.39 23 5.24 24 5.09 25 4.96 - ------------------------ Multiply the monthly amount by 2.989 for quarterly, 5.952 for semi-annual or 11.804 for annual. - ------------------------
OPTION 2 TABLE ---------------------------------------------------------------------------------------- MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000. THE FIRST PAYABLE IMMEDIATELY ---------------------------------------------------------------------------------------- KIND OF LIFE INCOME KIND OF LIFE INCOME ------------------------------- ----------------------------- 10-Year Instalment 10-Year Instalment AGE Certain Refund AGE Certain Refund LAST ------------------------------- LAST ----------------------------- BIRTHDAY Male Female Male Female BIRTHDAY Male Female Male Female ---------------------------------------------------------------------------------------- 10 $ 3.18 $3.11 $3.17 $3.10 45 $4.06 $3.82 $3.99 $3.78 and under 46 4.12 3.86 4.03 3.81 11 3.19 3.12 3.18 3.11 47 4.17 3.90 4.08 3.85 12 3.20 3.13 3.19 3.12 48 4.23 3.94 4.13 3.90 13 3.12 3.14 3.20 3.13 49 4.28 3.99 4.18 3.94 14 3.22 3.15 3.21 3.14 50 4.35 4.04 4.24 3.98 15 3.24 3.16 3.23 3.15 51 4.41 4.09 4.29 4.03 16 3.25 3.17 3.24 3.16 52 4.48 4.15 4.35 4.08 17 3.27 3.19 3.25 3.18 53 4.55 4.21 4.41 4.13 18 3.28 3.20 3.27 3.19 54 4.62 4.27 4.48 4.19 19 3.30 3.21 3.28 3.20 55 4.70 4.33 4.55 4.24 20 3.31 3.22 3.30 3.21 56 4.78 4.40 4.62 4.30 21 3.33 3.24 3.32 3.23 57 4.86 4.47 4.69 4.37 22 3.35 3.25 3.33 3.24 58 4.95 4.54 4.77 4.43 23 3.36 3.26 3.35 3.25 59 5.05 4.62 4.86 4.50 24 3.38 3.28 3.37 3.27 60 5.15 4.71 4.94 4.58 25 3.40 3.30 3.39 3.29 61 5.25 4.79 5.03 4.66 26 3.42 3.31 3.41 3.30 62 5.36 4.89 5.13 4.74 27 3.45 3.33 3.43 3.32 63 5.48 4.98 5.23 4.82 28 3.47 3.35 3.45 3.34 64 5.60 5.09 5.34 4.92 29 3.49 3.37 3.47 3.35 65 5.73 5.20 5.45 5.01 30 3.52 3.29 3.49 3.37 66 5.87 5.31 5.57 5.11 31 3.54 3.41 3.52 3.39 67 6.01 5.43 5.70 5.22 32 3.57 3.43 3.54 3.41 68 6.15 5.56 5.83 5.34 33 3.60 3.45 3.57 3.44 69 6.30 5.70 5.97 5.46 34 3.63 3.47 3.60 3.46 70 6.46 5.84 6.11 5.58 35 3.66 3.50 3.63 3.48 71 6.62 5.99 6.27 5.72 36 3.69 3.52 3.66 3.50 72 6.79 6.15 6.43 5.86 37 3.72 3.55 3.69 3.53 73 6.96 6.31 6.60 6.01 38 3.76 3.58 3.72 3.56 74 7.13 6.49 6.78 6.18 39 3.80 3.61 3.75 3.58 75 7.30 6.67 6.97 6.35 40 3.84 3.64 3.79 3.61 76 7.48 6.85 7.17 6.53 41 3.88 3.67 3.82 3.64 77 7.66 7.04 7.38 6.72 42 3.92 3.70 3.86 3.67 78 7.83 7.24 7.60 6.93 43 3.97 3.74 3.90 3.71 79 8.00 7.44 7.83 7.15 44 4.01 3.78 3.94 3.74 80 8.17 7.64 8.07 7.38 and over
II-49 (Continued on Next Page) Page 18 (VALA-84) II-50 SETTLEMENT OPTIONS (Continued) Withdrawal of Residue.--Unless otherwise stated when the option is chosen: (1) under Options 1 and 2 the residue may be withdrawn; and (2) under Options 3 and 4 all, or any part not less than $100, of the residue may be withdrawn. If an Option 3 residue is reduced to less than $1,000, we have the right to pay it in one sum. Under Option 2, withdrawal of the residue will not affect any payments that may become due after the certain period; the value of those payments cannot be withdrawn. Instead, the payments will start again if they were based on the life of a person who lives past the certain period. Designating Contingent Payee(s).--A Payee under an option has the right, unless otherwise stated, to name or change a contingent payee to receive any residue at that Payee's death. This may be done only if (1) the Payee has the full right to withdraw the residue; or (2) the residue would otherwise have been payable to that Payee's estate at death. A Payee who has this right may choose, or change the choice of, an option for all or part of the residue. In some cases, the Payee will need our consent to choose or change an option. We describe these cases under Conditions. Any request to exercise any of these rights must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office. Then the interest of anyone who is being removed will end as of the date of the request, even if the Payee who made the request is not living when we file it. Changing Options.--A payee under Option 1, 3 or 4 may choose another option for any sum that the Payee could withdraw on the date the chosen option is to start. That date may be before the date the Payee makes the choice only if we consent. In some cases, the Payee will need our consent to choose or change an option. We describe these cases next. Conditions.--Under any of these conditions, our consent is needed for an option to be used for any person: 1. The person is not a natural person who will be paid in his or her own right. 2. The person will be paid as assignee. 3. The amount to be held for the person under Option 3 is less than $1,000. But we will hold any amount for at lease one year in accord with the Automatic Mode of Settlement. 4. Each payment to the person under the option would be less than $20. 5. The option is for residue arising other than at (a) the Insured's death, or (b) the death of the beneficiary who was entitled to be paid as of the date of the Insured's death. 6. The option is for proceeds that arise other than from the Insured's death, and we are settling with an owner or any other person who is not the Insured. Death of Payee.--If a Payee under an option dies and if no other distribution is shown, we will pay any residue under that option in one sum to the Payee's estate. ENDORSEMENTS (Only we can endorse this contract.) Page 19 (VALA--84) II-51 AUTOMATIC MODE OF SETTLEMENT Applicability.--These provisions apply to proceeds arising from the Insured's death and payable in one sum to a Payee who is a beneficiary. They do not apply to any periodic payment. Interest on Proceeds.--We will hold the proceeds at interest under Option 3 of the Settlement Options provision. The Payee may withdraw the residue. We will pay it promptly on request. We will pay interest annually unless we agree to pay it more often. We have the right to pay the residue in one sum after one year if (1) the Payee is not a natural person who will be paid in his or her own right; (2) the Payee will be paid as assignee; or (3) the original amount we hold under Option 3 for the Payee is less than $1,000. Settlement at Payee's Death.--If the Payee dies and leaves an option 3 residue, we will honor any contingent payee provision then in effect. If there is none, here is what we will do. We will look to the beneficiary designation of the contract; we will see what other beneficiary(ies), if any, would have been entitled to the portion of the proceeds that produced the Option 3 residue if the Insured had not died until immediately after the Payee died. Then we will pay the residue in one sum to such other beneficiary(ies), in accord with that designation. But if, as stated in that designation, payment would be due the estate of someone else, we will instead pay the estate of the Payee. Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. Jane was living when the Insured died. Jane later died without having chosen an option or naming someone other than Paul and John as contingent payee. If Paul and John are living at Jane's death we own them the residue. If only one of them is living then, and if the contract called for payment to the survivor of them, we owe him the residue. If neither of them is living then, we owe Jane's estate. Spendthrift and Creditor.--A beneficiary or contingent payee may not, at or after the Insured's death, assign, transfer, or encumber any benefit payable. To the extent allowed by law, the benefits will not be subject to the claims of any creditor of any beneficiary or contingent payee. ENDORSEMENTS (Only we can endorse this contract.) Page 20 (VALA--84) II-52
Part 1 Application to No. [ ] The Prudential Insurance Company of America XX XXX XXX [X] Pruco Life Insurance Company--A Subsidiary of The Prudential Insurance Company of America - ----------------------------------------------------------------------------------------------------------------------------------- 1a. Proposed Insured's name--first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth M F Mo. Day Yr. JOHN DOE [X] [ ] 6 10 48 35 (NAME OF STATE) - ----------------------------------------------------------------------------------------------------------------------------------- 3. [ ] Single [X] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Occupation(s) MANAGER - ----------------------------------------------------------------------------------------------------------------------------------- 5. Address for mail No. Street City State Zip 15 BLANK STREET (NAME OF CITY) (NAME OF STATE) XXXXX - ----------------------------------------------------------------------------------------------------------------------------------- 6a. Kind of policy VARIABLE APPRECIABLE 6b. Initial amount 7. Accidental death coverage VARIABLE DEATH BENEFIT $50,000 initial amount $ - ----------------------------------------------------------------------------------------------------------------------------------- 8. Beneficiary: (Include name, age and relationship.) 9. List all life insurance on proposed Insured. If NONE, so state.) a. Primary (Class 1): b. Contingent (Class 2) if any: Company Initial Yr. Kind Medical MARY DOE, 35 ROBERT DOE, 10 amt. issued (Indiv., Group) Yes No SPOUSE SON NONE [ ] [ ] ____________________________________________________ _______________________________________________________________________ [ ] [ ] (For insurance payable upon death of (1) the Insured, _______________________________________________________________________ and (2) an insured child after the death of the [ ] [ ] Insured if there is no insured spouse.) _______________________________________________________________________ [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 10. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP) Relationship to Date of birth Total life insurance Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies a. Spouse $ ___________________________________________________________________________________________________________________________________ b. $ ___________________________________________________________________________________________________________________________________ c. $ ___________________________________________________________________________________________________________________________________ d. $ ___________________________________________________________________________________________________________________________________ e. $ ___________________________________________________________________________________________________________________________________ f. $ - ----------------------------------------------------------------------------------------------------------------------------------- 11. Supplementary benefits: a. For proposed Insured b. For spouse, children, Applicant for AWP Type and duration of benefit Amount Type and duration of benefit Amount $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ [ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit - ----------------------------------------------------------------------------------------------------------------------------------- 12. State any special request. - ----------------------------------------------------------------------------------------------------------------------------------- 13. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No in 1a or 10? If "Yes", give their names, name of company, plan, amount and policy numbers. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 14. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 10 in Yes No this or any company? If "Yes", give amount, details and company. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 15. Does any person named in 1a or 10 plan to live or travel outside the United States and Canada within the next Yes No 12 months? If "Yes", give details. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 16. Has any person named in 1a or 10 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [X] complete Aviation Questionnaire. - ----------------------------------------------------------------------------------------------------------------------------------- 17. Has any person named in 1a or 10, within the last 12 months: Yes No a. been treated by a doctor for or had a known heart attack, stroke or cancer other than of the skin? ............ [ ] [X] b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 18. Premiums payable [X] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot. - ----------------------------------------------------------------------------------------------------------------------------------- 19. Amount paid $468.00 [ ] None (Must be "None" if either 17a or 17b is answered "Yes".) - ----------------------------------------------------------------------------------------------------------------------------------- 20. Is a medical examination to be made on a. the proposed Insured?............................................... Yes [ ] No [X] b. spouse (if proposed for coverage)? ................................. Yes [ ] No [X] - ----------------------------------------------------------------------------------------------------------------------------------- 21. If 20a or 20b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No the person(s) indicated in 20 have been examined, even if 19 shows that an amount has been paid? ................. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 22. Changes made by the Company. - ----------------------------------------------------------------------------------------------------------------------------------- ORD 84376-82 Page 1 (Continued on page 2)
II-53
Continuation of Part 1 of Application Complete on all persons named in 1a and 10 if any one of them can have insurance on a non-medical basis. - ----------------------------------------------------------------------------------------------------------------------------------- 23. Height and weight of: a. Proposed Insured Ht. 5'9" Wt. 158 lbs b. Spouse Ht.________ Wt.________ c. Applicant for AWP Ht.________ Wt.________ Has the weight changed more than 10 pounds in the past year? Yes [ ] No [X] If "Yes", give details in 30. - ----------------------------------------------------------------------------------------------------------------------------------- 24. Has the proposed Insured or spouse ever smoked? a. Proposed Insured Yes [ ] No [X] b. Spouse Yes [ ] No [X] If "Yes", give date(s) last smoked: Cigarettes Cigars Pipe Proposed Insured Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ Spouse Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ - ----------------------------------------------------------------------------------------------------------------------------------- 25. When was a doctor last consulted by: a. Proposed Insured? b. Spouse? c. Applicant for AWP? Mo. 6 Yr. 83 Mo.______ Yr. ______ Mo.______ Yr. ______ - ----------------------------------------------------------------------------------------------------------------------------------- 26. Is any person to be covered now being treated or taking medicine for any condition or disease ................. Yes [ ] No [X] - ----------------------------------------------------------------------------------------------------------------------------------- 27. Has any person to be covered ever: Yes No a. had any surgery or been advised to have surgery and has not done so?............................................... [ ] [X] b. been in a hospital, sanitarium or other institution for observation, rest, diagnosis or treatment ................. [ ] [X] c. regularly used or is any such person now using, barbiturates or amphetamines, marijuana or other hallucinatory drugs, or heroin, opiates or other narcotics, except as prescribed by a doctor? ................................... [ ] [X] d. been treated or counseled for alcoholism? ......................................................................... [ ] [X] e. had life or health insurance declined, postponed, changed, rated-up or withdrawn? ................................. [ ] [X] f. had life or health insurance canceled, or its renewal or reinstatement refused? ................................... [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 28. Other than as shown above, in the past 5 years has any person to be covered: Yes No a. consulted or been attended or examined by any doctor or other practitioner? ...................................... [ ] [X] b. had electrocardiograms, X-rays for diagnosis or treatment, or blood, urine, or other medical tests? .............. [ ] [X] c. made claim for or received benefits, compensation, or a pension because of sickness or injury? ................... [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 29. Does any person to be covered now have a known sign of any physical disorder, disease or defect not shown above? Yes [ ] No [X] - ----------------------------------------------------------------------------------------------------------------------------------- 30. What are the full details of the answer to 25 and to each part of 23 and 26 thru 29 which is answered "Yes"? Name & Full names and addresses of Question No. Illness or other resason Dates and duration of illness doctors and hospitals - ----------------------------------------------------------------------------------------------------------------------------------- #25--JOHN Sore Throat 6-83, 1 week Dr. R. L. Jones, Newark, N.J. ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ - ----------------------------------------------------------------------------------------------------------------------------------- Those who sign below declare, to the best of their knowledge and belief, that the statements in this application are complete and true. When the Company gives a Temporary Insurance Agreement form, ORD 84376A-82, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first premium is paid while all persons to be covered are living and their health remains as stated in Part 1. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 22 it will be approved by acceptance of the contract. But where the law requires written consent for any change in the application, such a change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs. OWNERSHIP: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of owership stated in the contract. Signature of Proposed Insured (If Age 8 or over) /s/ JOHN DOE ---------------------------------------------------------------------- Dated at (Name of City & State) on June 1, 1984 Signature of Applicant (If other than proposed Insured) - --------------------------------------------------- City/State ---------------------------------------------------------------------- Witness (If applicant is a firm or corporation, show that company's name) /s/ JOHN ROE - --------------------------------------------------- By (Licensed agent must witness where required by law) ---------------------------------------------------------------------- (Signature and title of officer signing for that company) ORD 84376-82 Page 2
II-54 Pruco Life Insurance Company No. A Subsidiary of The Prudential Insurance Company of America XX XXX XXX A Supplement to The Application for Life Insurance in which John Doe is named as the proposed Insured. The contract applied for is: |_| Variable Life Insurance |_| Variable Appreciable Life Insurance |_| with Variable Insurance Amount |_| with Fixed Insurance Amount The person who signs below: 1. UNDERSTANDS THAT UNLESS THE CONTRACT APPLIED FOR IS VARIABLE APPRECIABLE LIFE INSURANCE WITH FIXED INSURANCE AMOUNT AND IS NOT FULLY PAID UP, THE DEATH BENEFIT (EXCEPT ANY SUPPLEMENTARY BENEFITS) MAY GO UP OR GO DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE BUT WILL NEVER BE LESS THAN THE GUARANTEED MINIMUM, IF PREMIUMS ARE DULY PAID AND THERE IS NO CONTRACT DEBT; 2. UNDERSTANDS THAT THE CASH VALUES MAY GO UP OR GO DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE AND THAT THERE IS NO GUARANTEED MINIMUM CASH VALUE; Yes No Did the applicant receive the current prospectus for the contract checked above?................................................... |X| |_| Does the applicant believe that this contract will meet insurance needs and financial objectives?.................................. |X| |_| The net premium payments (as described in the prospectus) are to be allocated to the appropriate Pruco Life variable contract account for the contract checked above as follows: Subaccount Allocation* ---------- ----------- Bond 20% (BOND) Money Market 20% (MMKT) Common Stock 20% (CSTK) Aggressively Managed Flexible 20% (AFLX) Conservatively Managed Flexible 20% (CFLX) --------------------------- ---- % (_________) --------------------------- ---- % (_________) 100 % * If any portion of a net premium is allocated to a particular subaccount, that portion must be at least 10% on the date the allocation takes effect. All percentage allocations must be in whole numbers (e.g. 33% can be selected, but 33 1/3% cannot). Date Signature of Applicant June 1, 1984 John Doe - --------- PLI 49-84 Printed in U.S.A. by PROF - --------- II-55 BASIS OF COMPUTATION Mortality Tables Described.--Except as we state in the next paragraph, (1) we base all net premium and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Mortality Table; and (3) we use continuous functions based on age last birthday. For extended insurance, we base net premiums and net values on the Commissioners 1980 Extended Term Insurance Table. Interest Rate.--For all net premium and net values to which we refer in this contract we use an effective rate of 4% a year. Exclusions.--When we compute net values we exclude the value of any Supplementary Benefits and any other extra benefits added by rider to this contract. Values After 20 Contract Years.--Tabular values after the 20th contract year will be the net level premium reserves, taking into account the increase in scheduled premium amount on the Contract Change Date. To compute them, we will use the mortality tables and interest rate we describe above. There will be the same exclusions. Minimum Legal Values.--The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits. Pruco Life Insurance Company, By Isabelle L. Kirchner Secretary - ----------- PLIY 42--84 - -----------
CONTRACT SUMMARY (Continued from Page 2) - ------------------------------------------------------------------------------------------------------------- TABLE OF BASIC AMOUNTS - ------------------------------------------------------------------------------------------------------------- When the proceeds arise from the Insured's death: - ------------------------------------------------------------------------------------------------------------- And The Contract Is In Force: Then the Basic Amount is: And we Adjust The Basic Amount For: - ------------------------------------------------------------------------------------------------------------- on a premium paying basis and not the face amount (see page 3), or Contract debt (see page 15), in default past its days of grace the paid-up value if greater, plus the plus any charges due in the amount of any extra benefits* days of grace (see page 8). - ------------------------------------------------------------------------------------------------------------- as a fully paid-up contract the amount of paid-up insurance contract debt. (see page 9), plus the amount of any paid-up extra benefits - ------------------------------------------------------------------------------------------------------------- as variable reduced paid-up the amount of variable reduced contract debt. insurance (see page 13) paid-up insurance (see page 13) - ------------------------------------------------------------------------------------------------------------- as extended insurance (see the amount of term insurance, if the Nothing. page 13) Insured dies in the term (see page 13); otherwise zero - -------------------------------------------------------------------------------------------------------------
* But see Death Proceeds on page 6 for the determination of Basic Amount under certain conditions which may arise when death occurs before attained age 21, under a contract issued below age 15. This Table is a part of the Contract Summary and of the Contract. Page 21 (VALA--84) II-56 GUIDE TO CONTENTS Page Contract Summary ....................................................... 2 Table of Basic Amounts ............................................... 21 Contract Data .......................................................... 3 Rating Class: List of Contract Minimums; List of Supplementary Benefits, if any; Schedule of Premiums; Schedule of Expense Charges from Premium Payments; Schedule of Monthly Deductions from Contract Fund; Schedule of Maximum Surrender Charges; List of Subaccounts and Portfolios; Service Office Tabular Contract Fund and Tabular Cash Values ......................................................... 4 General Provisions ..................................................... 5 Definitions; The Contract; Contract Modifications; Non-participating; Service Office; Ownership and Control; Suicide Exclusion; Currency; Misstatement of Age or Sex; Incontestability; Assignment; Annual Report; Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower; Death Proceeds; Payment of Death Claim Premium Payment and Reinstatement ...................................... 7 Payment of Premiums; Scheduled Premiums; Unscheduled Premiums; Premium Change on Contract Change Date; Default; Grace Period; Premium Account; Reinstatement Beneficiary ............................................................ 9 Paid-Up Contract ....................................................... 9 Separate Account ....................................................... 10 The Account; Subaccounts; The Fund; Account Investments; Change in Investment Policy; Change of Fund Investment Amount and Return on Investment ............................. 11 Investment Amount; Assumed Rate of Return; Transfers Among Subaccounts Contract Fund .......................................................... 11 Contract Fund Defined; Invested Premium Amount; Guaranteed Interest Credits, Cost of Expected Mortality; Charge for Extra Rating Class; Charge for Extra Benefits; Monthly Administration Charge and Mortality Risk Charge; Partial Withdrawals Contract Value Options ................................................. 13 Benefit After tne Grace Period; Extended Insurance; Variable Reduced Paid-up Insurance; Computations; Automatic Benefit: Optional Benefit; Cash Value Option; Tabular Values Loans .................................................................. 15 Loan Requirements; Contract Debt; Loan Value; Interest Charge; Repayment; Effect of a Loan; Excess Contract Debt; Postponement of Loan Exchange of Contract ................................................... 16 Right to Exchange; Conditions; Exchange Date; Contract Specifications; Exchange at Other Times Settlement Options ..................................................... 17 Payee Defined; Choosing an Option; Options Described; First Payment Due Date; Residue Described; Income Tables; Withdrawal of Residue; Designating Contingent Payee(s); Changing Options; Conditions; Death of Payee Automatic Mode of Settlement ........................................... 20 Applicability; Interest on Proceeds; Settlement at Payee's Death; Spendthrift and Creditor Basis of Computation ................................................... 21 Mortality Tables Described; Interest Rate; Exclusions; Values after 20 Contract Years; Minimum Legal Values Any Supplementary Benefits and a copy of the application follow page 20. Page 22 Modified Premium Variable Life Insurance Policy. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums. Cash values reflect premium payments, investment results and mortality charges. Guaranteed death benefit if scheduled premiums duly paid and no contract debt. increase in face amount at attained age 21 if contract issued at age 14 or lower. Non-participating. VALA--84 II-57 EX-99.1A(5)(B) 8 CONTRACT Exhibit 1.A.(5)(b) Pruco Life Insurance Company Phoenix, Arizona A Stock Company subsidiary of The Prudential Insurance Company of America ================================================================================ Insured JOHN DOE XX XXX XXX Policy Number July 1, 1984 Contract Date Face Amount $50,000-- Contract Premium Period LIFE JUL 1, 2014 Change Date Agency R-NK 1 ================================================================================ We will pay the beneficiary the proceeds of this contract promptly if we receive due proof that the insured died. We make this promise subject to all the provisions of the contract. The Death Benefit may increase or decrease daily, depending on the payment of premiums, the investment experience of the separate account and the level of mortality changes made. But it will not be less than the face amount we show above, plus the amount of any extra benefit, if the contract is not in default and if there is no contract debt. The cash value may increase or decrease daily depending on the payment of premiums, the investment experience of the separate account and the level of mortality charges made. There is no guaranteed minimum. We specify a schedule of premiums. Additional unscheduled premiums may be paid at your option subject to the limitations in the contract. Please read this contract with care. A guide to its contents is on the last page. A summary is on page 2. If there is ever a question about it, or if there is a claim, just see one of our representatives or get in touch with one of our offices. Right to Cancel Contract. -- You may return this contract to us within (1) 10 days after you get it, or (2) 45 days after Part 1 of the application was signed, or (3) 10 days after we mail or deliver the Notice of Withdrawal Right, whichever is latest. All you have to do is take the contract or mail it to one of our offices or to the representative who sold it to you. It will be canceled fro the start and we will promptly give you the value of our Contract Fund o the date you return the contract to us. We will also give back any charges we made in accord with this contract. Signed for Pruco Life Insurance Company, an Arizona Corporation /s/ ISABELLE L. KIRCHNER /s/ DONALD G. SOUTHWELL Secretary President [SPECIMEN] [SPECIMEN] Modified Premium Variable Life Insurance Policy with variable insurance amount. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums. Benefits reflect premium payments, investment results and mortality charges. Guaranteed minimum death benefit if scheduled premiums duly paid and no contract debt. Increase in face amount at attained age 21 if contract issued at age 14 or lower. Non-participating. VALB--84 II-58 CONTRACT SUMMARY We offer this summary to help you understand this contract. We do not intend that it change any of the provisions of the contract. This is a contract of life insurance. Premiums are to be paid throughout the Insured's lifetime. We specify a schedule of premiums that will keep the contract in force. Additional premiums may be paid at your option, subject to limits in the contract. The death benefit and the cash value will vary with the payment of premiums, the investment performance of those subaccounts of the Pruco Life Variable Appreciable Account that you select, and the extent to which mortality charges are less than the guaranteed maximums. But the death benefit is guaranteed never to be less than the face amount if the contract is not in default past its days of grace, and there is no contract debt. (We describe on page 8 the way the contract can go into default.) If the contract remains in default past its days of grace, the contract may end or it may stay in force with reduced benefits. If either occurs, you may be able to reinstate its full benefits. On the date, if any, when we determine that the contract has become fully paid-up, we will recompute the guaranteed death benefit. It may be higher, it will not be lower. We describe on page 9 how the contract may become paid-up. Proceeds is a word we use to mean the amount we would pay if we were to settle the contract in one sum. to compute the proceeds that may arise from the Insured's death, we start with a basic amount. We may adjust that amount if there is a loan or if the contract is in default. The table on page 21 tells what the basic amount is. The amount depends on how the contract is in force. The table will refer you to the parts of the contract that tell you how we adjust the basic amount. If you surrender the contract, the proceeds will be the net cash value. We describe it under Cash Value Option on pages 13 and 14. Proceeds often are not taken in one sum. For instance, on surrender, you may be able to put proceeds under a settlement option to provide retirement income or for some other purpose. Also, for all or part of the proceeds that arise from the Insured's death, you may be able to choose a manner of payment for the beneficiary. If an option has not been chosen, the beneficiary may be ale to choose one. We will pay interest under Option 3 from the date of death on any proceeds to which no other manner of payment applies. This will be automatic as we state on page 20. There is no need to ask for it. You and we may agree on a change in the ownership of this contract. Also, unless we endorse it to say otherwise, the contract gives you these rights, among others: o You may change the beneficiary under it. o You may borrow on it up to its loan value. o You may surrender it for its net cash value. o You may change the allocation of future net premiums among the subaccounts. o You may transfer amounts among subaccounts. The contract, as issued, may or may not have extra benefits that we call Supplementary Benefits. If it does, we list them under Supplementary Benefits on the Contract Data page(s) and describe them after page 21. The contract may or may not have other extra benefits. If it does, we add them by rider. Any extra benefit ends as soon as the contract is in default past its days of grace, unless the form that describes it states otherwise. (Contract Summary Continued on Page 21) Page 2 (VALB--84) II-59 CONTRACT DATA INSURED'S SEX AND ISSUE AGE M-35 RATING CLASS NONSMOKER INSURED JOHN DOE XX XXX XXX POLICY NUMBER July 1, 1984 CONTRACT DATE FACE AMOUNT $50,000-- CONTRACT PREMIUM PERIOD LIFE JUL 1, 2014 CHANGE DATE AGENCY R-NK 1 BENEFICIARY CLASS 1 MARY DOE, WIFE CLASS 2 ROBERT DOE, SON LIST OF CONTRACT MINIMUMS THE MINIMUM FACE AMOUNT IS $50,000 THE MINIMUM UNSCHEDULED PREMIUM IS $25. LIST OF SUPPLEMENTARY BENEFITS *****NONE***** SCHEDULE OF PREMIUMS PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE. SCHEDULED PREMIUMS ARE $XXX.XX EACH CHANGING JUL 1, 2014 TO $XXX.XX EACH THEREAFTER *****END OF SCHEDULE***** *****NOTICE***** CONTRACT DATA CONTINUED ON NEXT PAGE Page 3(84) II-60 POLICY NO. XX XXX XX CONTRACT DATA CONTINUED SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00. FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%, WHICH IS USED TO PAY FOR SALES CHARGES AND STATE PREMIUM TAXES. AFTER DEDUCTION OF THIS AMOUNT, THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.) *****END OF SCHEDULE***** SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND THE MONTHLY ADMINISTRATION CHARGE IS $3.50. THE MONTHLY CHARGE TO GUARANTEE THE MINIMUM DEATH BENEFIT IS $0.50 *****END OF SCHEDULE***** SCHEDULE OF MAXIMUM SURRENDER CHARGES FOR FULL SURRENDER AT THE END OF THE CONTRACT YEAR INDICATED, THE MAXIMUM CHARGES WE WILL DEDUCT FROM THE CONTRACT FUND ARE SHOWN BELOW. FOR SURRENDER AT OTHER THAN YEAR-END DURING THE SIXTH THROUGH TENTH YEARS, THE AMOUNT OF THE CHARGE WILL REFLECT THE NUMBER OF COMPLETED CONTRACT MONTHS SINCE THE BEGINNING OF THE CONTRACT YEAR. (SEE PAGE 14.) YEAR OF DEFERRED DEFERRED UNDERWRITING SURRENDER SALES CHARGE AND ISSUE CHARGE TOTAL - --------- ------------ ---------------- ----- 1 $XXX.XX $XXX.XX $XXX.XX 2 XXX.XX XXX.XX XXX.XX 3 XXX.XX XXX.XX XXX.XX 4 XXX.XX XXX.XX XXX.XX 5 XXX.XX XXX.XX XXX.XX 6 XXX.XX XXX.XX XXX.XX 7 XXX.XX XXX.XX XXX.XX 8 XXX.XX XXX.XX XXX.XX 9 XXX.XX XXX.XX XXX.XX 10 ZERO ZERO ZERO 11 AND LATER ZERO ZERO ZERO *****END OF SCHEDULE***** CONTRACT DATA CONTINUED ON NEXT PAGE Page 3A(84) II-61 POLICY NO. XX XXX XX CONTRACT DATA CONTINUED LIST OF SUBACCOUNTS AND PORTFOLIOS EACH SUBACCOUNT OF THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT INVESTS IN A SPECIFIC PORTFOLIO OF THE PRUCO LIFE SERIES FUND. WE SHOW BELOW THE SUBACCOUNTS AND THE FUND PORTFOLIOS THEY INVEST IN. FUND SUBACCOUNT PORTFOLIO - ---------- --------- MONEY MARKET MONEY MARKET BOND BOND COMMON STOCK COMMON STOCK AGGRESSIVELY MANAGED FLEXIBLE AGGRESSIVELY MANAGED FLEXIBLE CONSERVATIVELY MANAGED FLEXIBLE CONSERVATIVELY MANAGED FLEXIBLE INITIAL ALLOCATION OF NET PREMIUMS MONEY MARKET SUBACCOUNT 20% BOND SUBACCOUNT 20% COMMON STOCK SUBACCOUNT 20% AGGRESSIVELY MANAGED FLEXIBLE SUBACCOUNT 20% CONSERVATIVELY MANAGED FLEXIBLE SUBACCOUNT 20% *****END OF LIST***** SERVICE OFFICE -- PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS CONTRACT TO: PRUCO LIFE INSURANCE COMPANY P.O. BOX XXXX CITY, STATE XXXXX Page 3B(84) II-62 POLICY NO. XX XXX XX TABULAR VALUES WE EXPLAIN THIS TABLE UNDER CONTRACT FUND AND TABULAR VALUES. ACTUAL CONTRACT FUND VALUES AND CASH VALUES MAY BE MORE OR LESS THAN AMOUNT SHOWN (SEE CONTRACT FUND AND CASH VALUE OPTION.) END OF TABULAR TABULAR CONTRACT CONTRACT CASH YEAR FUND VALUE - -------- -------- ------- 1 2 3 4 5 6 7 8 9 10 11 12 12 13 14 15 16 17 18 19 20 ATTAINED AGE 60 62 65 TABULAR CASH VALUES THROUGH THE FIRST 10 CONTRACT YEARS ARE THE TABULAR CONTRACT FUND VALUES MINUS A SURRENDER CHARGE. WE DESCRIBE UNDER CASH VALUE OPTION ON PAGES 13 AND 14 HOW THE SURRENDER CHARGE IS DETERMINED. WE SHOW ON A PRIOR CONTRACT DATA PAGE WHAT THE MAXIMUM SURRENDER CHARGE WILL BE. TABULAR CASH VALUES AFTER THE 10TH CONTRACT YEAR WILL BE THE SAME AS THE TABULAR CONTRACT FUND VALUES SHOWN ABOVE. Page 4 (84) II-63 ENDORSEMENTS (Only we can endorse this contract.) Definitions.--We define here some of the words and phrases used all through this contract. We explain others, not defined here, in other parts of the test. We, Our, Us and Company.--Pruco Life Insurance Company, an Arizona corporation. You and Your.--The owner of the Contract. Insured.--The person named as the Insured on the first page. He or she need not be the owner. Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner. SEC.--The Securities and Exchange Commission. Issue Date.--The contract date. Monthly Date.--The contract date and the same day as the contract date in each later month. Example: If the contract date is March 9, 1986, the Monthly Dates are each March 9, April 9, May 9 and so on. Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year. Example: If the contract date is March 9, 1986, the first anniversary is March 9, 1987. The second is March 9, 1988, and so on. Contract year.--A year that starts on the contract date or on an anniversary. Example: If the contract date is March 9, 1986, the first contract year starts then and ends on March 9, 1987. The second starts on march 9, 1987 and ends on March 8, 1988, and so on. Contract Month.--A month that starts on a Monthly Date. Example: If March 9, 1986 is a Monthly Date, a contract month starts then and ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends on May 8, 1986, and so on. Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3. The Contract.--This policy and the application, a copy of which is attached, form the whole contract. We assume that all statements in the application ere made to the best of the knowledge and belief of the person(s) who made them; in the absence of fraud they are deemed to be representations and not warranties. We will not use any statement, unless made I the application, to try to void the contract or to deny a claim. Contract Modifications.--Only a Company office may agree to modify this contract, and then only in writing. Non-participating.--This contract will not share in our profits or surplus earnings. We will pay no dividends on it. Service Office.--This is the office that will service this contract. Its mailing address is the one we show on the Contract Data pages, unless we notify you of another one. Ownership and Control.--Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. Suicide Exclusion. --If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid. Currency.--Any money we pay, or that is paid to us, must be in United States currency. Any amount we owe will be payable at our Service Office. (Continued on Next Page) page 5 (VALB--84) II-64 GENERAL PROVISIONS (Continued) Misstatement of Age or Sex.--If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex. Where required, we have given the insurance regulator a detailed statement of how we will make these changes. The Schedule of Premiums may show that scheduled premiums change or stop on a certain date. We may have used that date because the Insured would attain a certain age on that date. If we find that the issue age was wrongs, we will correct that date. Incontestability.--Except for default, we will not contest this contract after it has been in force during the Insured's lifetime for two years from the issue date. Assignment.--We will not be deemed to know of an assignment unless we receive it, or a copy of it, at our Service Office. We are not obliged to see that an assignment is valid or sufficient. Annual Report.--Each year we will send you a report. It will show: (1) the current death benefit; (2) the investment amount; (3) the amount of investment amount in each subaccount; (4) the net cash value; (5) premiums paid and monthly charges deducted since the last report; (6) any partial withdrawals since the last report; and (7) any contract debt and the interest on the debt for the prior year. The report will also include any other data that may be currently required where this contract is delivered. No report will be sent if this contract is being continued under extended term insurance. You may ask for a similar report at some other time during the year. Or you may request from time to time a report projecting results under your contract on the basis of premium payment assumptions and assumed investment results. We have the right to make a reasonable charge for reports such as these that you ask for, and to limit the scope and frequency of such reports. Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower.--If this contract was issued at age 14 or lower, it shows on page 3 an increase in face amount at attained age 21, which applies if the contract is not then in default beyond its days of grace. If so, any references in the contract to face amount or death benefit which apply at or after attained age 21 will be based upon the increased face amount, unless otherwise stated. Death Proceeds.--The Table of Basic Amounts on page 21 describes how the proceeds payable at death will be determined, depending on the status of the contract at the time of death. In addition to what is shown in that table, a special situation will apply in those cases where all of these conditions exist: (a) the contract was issued at an age below 15; (b) death occurs before attained age 21; (c) the contract is on a premium paying basis and not in default past its days of grace; (d) the contract fund is not sufficient to make the contract paid up for the ultimate face amount plus the excess of the contract fund over the tabular contract fund; (e) the contract fund is greater than the sum of (I) the net single premium for the initial face amount, (ii) the net single premium for the excess of the contract fund over the tabular contract fund, and (iii) the present value, discounted at a rate we set from time to time but no less than 4% a year, of all future charges for extra benefits other than those which do not continue after a contract such as this becomes paid up. (See above and paid-up Contract, page 9.) In these cases, the Basic mount will not be as described on page 21 but will be the total of (1) the initial face amount, plus (2) the excess of the contract fund over the tabular contract fund, plus (3) the amount which results from dividing the contract fund, minus the present value of the future charges for extra benefits referred to above, minus the net single premium for the sum of the initial face amount and the excess of the contract fund over the tabular contract fund, by the net single premium at the then attained age, plus (4) the amount of any extra benefits. Payment of Death Claim.--If we settle this contract in one sum as a death claim, we will usually pay the proceeds within 7 days after we receive at our Service Office proof of death and any other information we need to pay the claim. But we have the right to defer paying any portion of the proceeds greater than the minimum guaranteed death benefit if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency; or (3) the SEC lets us defer payment to protect our contract owners. Page 6 (VALB-84) II-65 PREMIUM PAYMENT AND REINSTATEMENT Payment of Premiums.--Premiums may be paid at our Service Office or to any of our authorized representatives. If we are asked to do so, we will give a signed receipt. Premium payments will in most cases be credited as of the date of receipt, to both the contract fund and the premium account. (See Contract Fund, page 11 and Premium Account, page 8.) Premium credits to the contract fund are the invested premium amounts, (see page 11). Premium credits to the premium account are the full premium paid with n deductions. But in the following cases, to the extent states premium payments will be credited as of a date other than the date of receipt: 1. The first scheduled premium is due on the Contract Date. But if the first premium payment is received after the Contract Date, the scheduled portion will be credited to the contract fund and the premium account as of the Contract Date. And any portion of that first premium payment in excess of the first scheduled premium will be credited as of the date of receipt. If the first premium is received before the Contract Date, the entire payment will be credited as of the Contract Date. 2. If a premium payment is received during the 61 day period after the day when a scheduled premium was due and had not yet been paid, here is what we will do. We will determine whether the premium account, (see Premium Account below), just before receipt of that payment was a negative amount. If not--that is, if the premium account was zero or higher--the premium payment will be credited as of the date of receipt. But if the premium account was negative by no more than the scheduled premium on the due date, that portion of the premium payment required to bring the premium account up to zero will be credited to the premium account as of the due date; any remaining portion of the premium payment will be credited to the premium account as of the date of receipt. If the premium account is negative by more than the scheduled premium than due, the premium payment will be credited as of the date of receipt, except in the situation described in 3 below. 3. On each Monthly Date we will determine if the contract fund is in default. (See Default on page 8.) We will notify you on the minimum payment amount needed to bring the contract out of default. If one or more premium payments are made during the days of grace after that monthly date, (see Grace period on page 8,) we will credit to the contract fund and the premium account, as of the applicable Monthly Dates, such parts of the payments as are needed to end the default status; any remaining part of those premium payments will be credited to the contract fund and premium account as of the date of receipt. Scheduled Premiums.--We show the amount and frequency of the scheduled premiums in the Schedule of Premiums. The first scheduled premium is due on the contract date. There is no insurance under this contract unless an amount at least equal to the first scheduled premium is paid. The scheduled premium shown is the minimum required, at the frequency chosen, to continue the contract in full force if all scheduled premiums are paid when due, investment returns are at the rate assumed, we deduct mortality charges at no less than the maximum rate, and any contract debt does not exceed the cash value. If you wish to pay, on a regular basis, higher premiums than the amount of the scheduled premium, we will bill you for the higher amount you choose. If scheduled premiums that are due are not paid, or if smaller payments are made, the contract may then or at some future time go into default. The conditions under which default will exist are described below: Unscheduled Premiums.--Except as we state in the next paragraph, unscheduled premiums may be paid at any time during the Insured's lifetime, as long as the contract is not in default beyond its days of grace. We show on page 3 the minimum premium we will accept. We have the right to limit unscheduled premiums to a total of $10,000 in any contract year. If we determine at any time that investment returns above the rate assumed, or smaller than maximum mortality charges or greater than scheduled premium payments have made the contract paid-up, we have the right not to accept any further premium payments, or to limit the amount or frequency of premium payments thereafter. (See Paid-up Contract, page 9.) Premium Change on Contract Change Date.--We show the Contract Change Date, in the Contract Data on page 3. We also show in the Schedule of Premiums on page 3 that the amount of each scheduled premium will change on the Contract Change Date and what the new premium will be. However, when the Contract Change Date arrives we will recompute a new premium amount to be used in calculating the premium account. The new premium that we recompute will be no greater than the new premium for that date which we show on page 3. In addition, if the premium account is less than zero, we will set the premium account to zero. The Schedule of Premiums may also show that the premium changes at other times. This may occur, for example, with a contract issued with extra benefits or in an extra rating class if, I either case, this calls for a higher or extra premium for a limited period of time. (Continued on Next Page) Page 7 (VALB-84) II-66 PREMIUM PAYMENT AND REINSTATEMENT (Continued) Default.--Unless the contract is already in the grace period, (see below), on each monthly date, after we deduct any charges from the contract fund (which we describe on page 11) and add any credits to it, we will determine whether the contract is in default. To do so we will compute the amount which will accrue to the tabular contract fund on the next monthly date if, during the current contract month; (1) investment returns are at the assumed rate; and (2) we make the other charges and credit we have set, including interest on contract debt; and (3) we receive no premiums or loan repayments and make no more loans or grant no partial withdrawals. We will subtract this amount from the contract fund. If the result is zero or more, (that is, not a negative amount,) the contract is not in default. But if there is a fund deficit -that is, if the result is less than zero--the contract is in default if the premium account, which we define below, is also less than zero. Grace Period.--We grant 61 days of grace from any monthly date (other than the contract date) on which the contract goes into default. During the days of grace we will continue to accept premiums and make the charges we have set. If the monthly date was a scheduled premium due date, when we receive a premium payment during the days of grace we will first determine whether it satisfies case 2 under Payment of Premiums above. If it does, the default will end. If it does not, or if the monthly date when the contract went into default was not a scheduled premium due date, here is what we will do: If at any time during the days of grace, we have received payments that in total are at least equal to the lesser of (a) the sum of the fund deficit, (that is, the amount by which the contract fund is below the tabular contract fund,) on the date of default and any subsequent Monthly Date, and (b) the sum of the amount by which the premium account is negative on the date of default and any scheduled premiums due since the date of default, the default will end. If the contract is still in default when the days of grace are over, it will end and have no value, except as we state under contract Value Options, (which we describe on page 13). Premium Account.--On the contract date, the premium account is equal to the premium received on that date minus the scheduled premium then due. On any other day, the premium account is equal to: 1. what it was on the prior day; plus 2. if the premium account was greater than zero on the prior day, interest on the excess at 4% year, minus 3. if the premium account was less than zero on the prior day, interest o the deficit at 4% a year; plus 4. any premium received on that day; minus 5. any scheduled premium due on that day; minus 6. any partial withdrawals on that day. The contract might be in default, as described above. If so, the premium account is a negative amount, less than zero. If a premium payment is received on any day during the days of grace while the contract is in default and the premium account is negative by no more than one scheduled premium, that payment, to the extent that it is required to bring the premium account up to zero, will, as we describe under Payment of Premiums above, be credited to the premium account as of the monthly date when the scheduled premium, was due, whether the date of default or a subsequent monthly date. Any remaining portion of the premium payment will be credited s of the actual date of receipt. In this case the premium account for all days from the monthly date to the actual date of receipt will be recalculated. Reinstatement.--If this contract ends as we describe under Grace Period, you may reinstate it, if all these conditions are met: 1. No more than three years must have elapsed since the date of default. 2. You must mot have surrendered the contract for its net cash value. 3. You must give us any facts we need to satisfy us that the insured is insurable for the contract. 4. We must be paid a premium at least equal to the amount required to bring the premium account up to zero on the first monthly date on which a scheduled premium is de after the date of reinstatement. From this amount we will deduct $2, plus 7 1/2% of the remaining payment, plus any charges with interest for any extra benefits, plus any other expense charges with interest. The contract fund will be equal to the balance, plus the cash value of the contract immediately before reinstatement, plus a refund of that part of any surrender charge paid at the time of default which would be charges if the contract were surrendered immediately after reinstatement. 5. If before reinstatement the contract is in force as reduced paid-up insurance (see page 13) any contract debt under reduced paid-up insurance must be repaid with interest or carried over to the reinstated contract. If we approve the reinstatement, these statements apply. The date of reinstatement will be the date of your request or the date the required premium is paid, if later. And we will start to make daily and monthly charges and credits again as of the date of reinstatement. Page 8 (VALB-84) II-67 BENEFICIARY You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and so on. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise: 1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured. 2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured. 3. Two or more in the same class who have the right to be paid will be paid in equal shares. 4. If none survives the Insured, we will pay in one sum to the Insured's estate. Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. We owe Jane the proceeds if she is living at the Insured's death. We owe Paul and John the proceeds if they are living then but Jane is not. But if only one of them is living, we owe him the proceeds. If none of them is living we owe the Insured's estate. Beneficiaries who do not have a right to be paid under these terms may still have a right to be paid under the Automatic Mode of Settlement. Before we make a payment, we have the right to decide what proof we need of the identity, age or any other facts about any persons designated as beneficiaries. If beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again. PAID-UP CONTRACT This contract will become fully paid-up if and when whichever of the following situations is applicable occurs: (a) For a contract issued at an age lower than 15, the contract fund has grown to an amount at least equal to the net single premium for the sum of the ultimate face amount and any excess of the contract fund over the tabular contract fund, (see pages 3 and 4) plus the present value, discounted at a rate we set from time to time but no less than 4% a year, of all future charges for any extra benefits which will continue under the paid-up contract. (b) For a contract issued at age 15 or above, the contract fund has grown to an amount at least equal to the net single premium for the sum of the face amount and any excess of the contract fund over the tabular contract fund, (see pages 3 and 4) plus the present value, discounted at a rate we set from time to time but no less than 4% a year, of all future charges for any extra benefits which will continue under the paid-up contract. We will notify you when we determine that the contract has become fully paid-up. We have the right at that time to return any part of any payment then being made which is I excess of the amount billed or required to make the contract paid-up. And we have the right to accept no further premium payments, or to limit the amount or frequency of premium payments thereafter. The contract will continue as paid-up life insurance on the Insured's life. The death benefit under the paid-up contract may change daily, as we explain below, but if there is no contract debt, it will never be less than the minimum guaranteed death benefit determined on the day the contract becomes paid-up. That amount will be no less than the sum of the face amount shown on page 3, (or, if the contract was issued below age 15, the ultimate face amount,) and the excess of the contract fund over the tabular contract fund on that day. It will be computed by using the contract fund on that day, less the present value of all future charges for any extra benefits, (computed as described above,) at the net single premium rate. The net single premium rate depends on the Insured's issue age and sex and on the length of time since the contract date. The amount payable in event of death thereafter will be the guaranteed death benefit, or if greater, the contract fund divided by the net single premium at the Insured's attained age on the date of death. In either case the amount will be adjusted for any contract debt and for the amount of any paid-up extra benefits. The monthly charge described on page 12 and shown on page 3A, and any charges for extra benefits will not be made after the contract becomes paid-up. Page 9 (VALB-84) II-68 SEPARATE ACCOUNT The Account.--The word account, where we use it in this contract without qualification, means the Pruco Life Variable appreciable Account. This is a unit investment trust registered with the SEC under the Investment Company Act of 1940. It is also subject to the laws of Arizona. We own the assets of the account; we keep them separate from the assets of our general investment account. We established the account to support variable life insurance contracts. But we do not use it to support this contract if the contract is being continued under extended term insurance. (See page 13.) Subaccounts.--The account has several subaccounts. We list them on the Contract Data page(s). You determine, using percentages, how invested premium amounts will be allocated among the subaccounts. You may choose to allocate nothing to a particular subaccount. But any allocation you make must be at least 10%; you may not choose a fractional percent. Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or any percent that is not a whole number. The total for all subaccounts must be 100%. The allocation of invested premium amounts (see page 11,) that took effect on the contract date is shown in the Contract Data pages. You may change the allocation for future invested premium amounts at any time if the contract is not in default. To do so, you must notify us in writing in a form that meets our needs. The change will take effect on the date we receive your notice at our Service Office. A premium might be paid when the investment amount is less than zero. In that case, when we receive that premium, we first use as much of the invested premium amount as we need to eliminate the deficit in the investment amount. We will then allocate any remainder of the invested premium amount in accord with your most recent request. (We describe investment amount on page 11.) The Fund.--The word fund, where we use it in this contract without qualification, means the fund we identify in the Contract Data pages. The fund is registered with the SEC under the Investment company Act of 1940 as an open-end diversified management investment company. The fund has several portfolios; there is a portfolio that corresponds to each of the subaccounts of the account. We list these portfolios in the Contract Data pages. Account Investments.--We use the assets of the account to buy shares in the fund. Each subaccount is invested in a corresponding specific portfolio. Income and realized and unrealized gains and losses from assets in each subaccount are credited to, or charged against, the subaccount. This is without regard to income, gains, or losses in our other investment accounts. We will determine the value of the assets in the account at the end of each business day. When we use the term business day, we mean a day when the New York Stock Exchange is open for trading. We might need to know the value of an asset on a day that is not a business day or on which trading in that asset does not take place. In this case, we will use the value of that asset as of the end of the last prior business day on which trading took place. Example: If we need to know the value of an asset on a Sunday, we will normally use the value of the asset as of the end of business on Friday. We will always keep assets in the account with a total value at least equal to the amount of the investment amounts under contracts like this one. To the extent those assets do not exceed this amount, we use them only to support those contracts; we do not use those assets to support any other business we conduct. We may use any excess over this amount in any way we choose. Change in Investment Policy.--A portfolio of the fund might make a material change in its investment policy. In that case, we will send you a notice of the change. Within 60 days after you receive the notice, or within 60 days after the effective date of the change, if later, you may exchange this contract for a new contract of fixed benefit insurance on the Insured's life. The conditions for exchange, and the specifications for the new contract, are described under Exchange of contract on page 16. Change of Fund.--A portfolio might, in our judgment, become unsuitable for investment by a subacount. This might happen because of a change in investment policy, or a change in the laws or regulations, or because the shares are no longer available for investment, or for some other reason. If that occurs, we have the right to substitute another portfolio of the fund, or to invest in a fund other than the one we show on the Contract Data page(s). But we would first seek approval from the SEC and, where required, the insurance regulator where this contract is delivered. Page 10 (VALB-84) II-69 INVESTMENT AMOUNT AND RETURN ON INVESTMENT Investment Amount.--The investment amount for this contract is the amount we use to compute the investment return. The investment amount is allocated among the subaccounts. The amount of the investment amount and its allocation to subaccounts depend on (1) how you choose to allocate net premiums; (2) whether or not to transfer amounts among subaccounts, as we discuss below; (3) the investment performance of the subaccounts to which amounts are allocated or transferred; (4) the amount and timing of premium payments you make; (5) whether or not you take any loan; and (6) whether or not you make any partial withdrawals. The investment amount exists only is the contract is not in default past the days of grace or if it is being continued as variable reduced paid-up insurance. The investment amount at any time is equal to the contract fund, (we explain this under contract Fund,) minimum the amount of any loan on the contract, minus interest accrued on the loan at 4% a year since the last Monthly Date (we explain this under Loans.) Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a year. This is the same as .01074598% a day compounded daily. Transfers Among Subaccounts.--You may transfer amounts among subaccounts as often as four times in a contract year, if the contract is not in default or if the contract is being continued under the variable reduced paid up option. To do so, you must notify us in writing in a form that meets our needs. The transfer will take effect on the date we receive your notice at our Service Office. CONTRACT FUND Contract Fund Defined.--On the contract date the contract fund is equal to the invested premium amounts received, (see below), minus any of the charges described in terms (d) through (j) below which may have been due on that date. On any day after that the contract fund is equal to what it was on the previous day, plus any invested premium amount received that day, plus these items. (a) any increase due to investment results in the value of the subaccounts to which that portion of the contract fund that is in the investment amount is allocated; (we explain investment amount above); and (b) guaranteed interest at 4% a year on that portion of the contract fund that is not in the investment amount; and minus these items: (c) any decrease due to investment results in the value of the subaccounts to which that portion of the contract fund that is in the investment amount is allocated; (d) a charge against the investment amount at a rate of not more than .00163894% a day (.60% a year) for mortality and expense risks that we assume; (e) any amount charged against the investment amount for Federal or State income taxes; (f) a monthly charge to guarantee the minimum death benefit; (g) a charge for the cost of expected mortality; (h) any charges for extra rating class; (i) any charges for extra benefits; (j) a monthly administration charges; (k) any partial withdrawals; and (l) if the contract becomes paid-up on that day, the present value of any future charges for any extra benefits that will continue under the paid-up contract. We describe under Reinstatement on page 8 what the contract fund will be equal to on any reinstatement date. Invested Premium Amount.--This is the portion of each premium paid that we will add to the contract fund. It is equal to the premium paid, minus $2, minus 7 1/2% of the rest of the premium. We explain this under Schedule of Expense Charges from Premium Payments. Guaranteed Interest Credits.--We will credit interest to the contract fund each day on any portion of the contract fund on that day which is not in the investment amount. That portion will be any contract loan plus interest accrued on the loan at the rate of 4% a year since the last Monthly Date. (See Loans.) We will credit .01074598% a day, which is an effective rate of 4% a year. Cost of Expected Mortality.--This charge is computed daily and deducted monthly from the contract fund, on each Monthly Date. We apply this charge to the coverage amount. The coverage amount is equal to what the Basic Amount (see page 21) would be if there were no extra benefits, minus the contract fund. Where required, we have given the insurance regulator a detailed description of the method we use. We will not charge more than the maximum guaranteed rates, which are based on the Insured's sex and attained age and the mortality table described under the Basis of Computation. We may charge less. At lease once every five years, but not more often than once a year, we will consider the need to change the charges. We will change them only if we do so for all contracts like this one dated in the same year as this one. (Continued on Next Page) Page 11 (VALB-84) II-70 CONTRACT FUND (Continued) Charge for Extra Rating Class.--If there is an extra charge because of the rating class of the Insured or because the Insured is a cigarette smoker, we will deduct it from the contract fund at the beginning of each contract month. Any charge is included in the amount shown in the Contract Data pages under Schedule of Monthly Deductions from Contract Fund. Charge for Extra Benefits.--If the contract has extra benefits, we will deduct the charges for such benefits from the contract fund at the beginning of each contract month. Charges for any such extra benefits are included in the amount shown in the Contract Data pages under Schedule of Monthly Deductions from Contract Fund. If and when we determine that the contract has become paid-up, we will deduct from the contract fund the present value of any future charges for any extra benefits that will continue under the paid-up contract. We will make no further deductions for these benefits after that. The description of any such benefit (which can be found following page 20) describes how the future cash value, if any, of that benefit will be determined. Monthly Administration Charge and Mortality Risk Charge.--On each monthly date, we will deduct up to $2.50 plus up to 2c per $1,000 of face amount, from the contract fund, as a monthly administration charge. We will also deduct 1c per $1,000 of face amount for guaranteeing the minimum death benefit regardless of the investment performance of the separate account. (Both of these references to charges based upon face amount are to initial face amount for contracts issued below age 15. The total charges do not increase when the face amount increases at attained age 21.) These charges will be made only while the contract is on a premium paying basis; they will not be made if the contract becomes paid-up or is continued as variable reduced paid-up or extended term insurance, (see Contract Value Options). We show the amount of these charges in the Contract Date pages under Schedule of Monthly Deductions from Contract Fund. Partial Withdrawals.--If the cash value of this contract is more than the tabular cash value, you may be able to make partial withdrawals from the contract. All these conditions must be met. (1) The amount withdrawn, plus the net cash value after withdrawal, may not be more than the net cash value before withdrawal. (2) The cash value after withdrawal must not be less than the tabular cash value. (3) The amount you withdraw must be at least $500. (4) You may make no more than four withdrawals in a contract year. We will add a withdrawal fee of $15 to the amount you ask to withdraw; (5) An amount withdrawn may not be repaid, except as an unscheduled premium subject to charges. We will tell you how much you may withdraw if you ask us. Page 12 (VALB-84) II-71 CONTRACT VALUE OPTIONS Benefit After the Grace Period.--If the contract is in default beyond its days of grace, we will use any net cash value (which we describe under Cash Value Option) to keep the contract in force as one of two kinds of insurance. One kind is extended insurance. The second kind is variable reduced paid-up insurance. We describe each below. You will find under Automatic Benefit which kind it will be. Any extra benefit(s) will end as soon as the contract is in default past its days of race, unless the form that describes the extra benefit states otherwise. Extended Insurance.--This will be term insurance of a fixed amount on the Insured's life. We will pay the amount of term insurance if the Insured dies in the term we describe below. Before the end of the term there will be cash values but no loan value. The amount of term insurance will be the death benefit on the date of default, minus any part of that death benefit which was provided by extra benefits. The term is a period of time that will start on the day the contract went into default. The length of the term will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date. There may be extra days of term insurance. This will occur if, on the day the contract goes into default, the term of extended insurance provided by the net cash value does not exceed 90 days, or the number of days the contract was in force before the default began, if less. The number of extra days will be (1) 90, or the number of days the contract was in force before the default began, if less, minus (2) the number of days of extended insurance that would be provided by the net cash value if there were no contract debt. The extra days, if any, start on the day after the last day of term insurance provided by the net cash value, if any. If there is no such term insurance, the extra days start on the day the contract goes into default. The term insurance for the extra days has no cash value. There will be no extra days if you replace the extended insurance with variable reduced paid-up insurance or you surrender the contract before the extra days start. Variable Reduced Paid-up Insurance.--This will be paid-up variable life insurance on the Insured's life. The death benefit may change from day to day, as we explain below, but if there is no contract debt, it will not be less than a minimum guarantee amount determined as of the day when the contract went into default. There will be cash values and loan values. The minimum guaranteed amount of insurance will be computed by using the net cash value at the net single premium rate. The net single premium rate depends on the Insured's issue age and sex and on the length of time since the contract date. The amount payable in event of death thereafter will be the greater of (a) the minimum guaranteed amount and (b) the contract fund divided by the net single premium at the Insured's attained age. In either case the amount will be adjusted for any contract debt. Except when it is provided as the automatic benefit, (see below), the variable reduced paid-up insurance option will be available only when the guaranteed death benefit under the option will be $5000 or more. Computations.--We will make all computations for either of these benefits as of the date the contract goes into default. But we will consider any loan you take out or pay back or any premium payments or partial withdrawals you make in the days of grace. Automatic Benefit.--When the contract is in default, it will stay in force as extended insurance. But it will stay in force as variable reduced paid-up insurance if either of these statements applies: (1) We issue the contract in a rating class for which we do not provide extended insurance; in this case the phrase No Extended Insurance is in the Rating Class on page 3. (2) The amount of reduced paid-up insurance would be at lease as great as the amount of term insurance. Optional Benefit.--You may choose to replace any fixed extended insurance that has a net cash value by variable reduced paid-up insurance. To make this choice, you must do so in writing to us in a form that meets our needs, not more than three months after the date the contract goes into default. You must also send the contract to us to be endorsed. Cash Value Option.--You may surrender this contract for its net cash value. The net cash value at any time is the cash value at that time less any contract debt. To surrender this contract, you must ask us in writing in a form that meets our needs. You must also send the contract to us. here is how we will compute the case value for surrender of the contract or for its continuation under extended insurance or variable reduced paid-up insurance: 1. If the contract is not in default: The cash value on surrender at any time in the first ten contract years is the contract fund, minus a surrender charge, consisting of a deferred sales charge and a deferred underwriting and issue charge. The cash value on surrender at the end of the tenth contract year or later is the contract fund. A schedule of maximum surrender charges for this contract is on page 3A. (Continued on Next Page. Page 13 (VALB-84) II-72 CONTRACT VALUE OPTIONS (Continued) In no event will the deferred sales charge upon surrender be greater than 25% of scheduled premiums due I contract year 1, plus 5% of the scheduled premiums due in contract years 2 through 5. For the purpose of computing this limit we use the lesser of premiums due and premiums paid. For a paid-up contract that includes extra benefits, the cash value is the amount described above, plus the cash value, if any, of the extra benefits. (See the description of any such extra benefits following page 20.( 2. If the contract is in default during the days of grace: We will compute the net cash value as of the day the contract went into default. But we will adjust this value for any loan you take out or pay back or any premium payments or partial withdrawals you make in the days of grace. 3. If the contract is in default beyond its days of grace: The net cash value as of any date will be the value on that date of any extended insurance benefit then in force. Or it will be the value on that date of any variable reduced paid-up insurance benefit then in force, less any contract debt. Within 30 days of a contract anniversary, the net cash value of any extended insurance will not be less than the value on that anniversary. If the contract is not in default past the days of grace, or if the contract is in force as variable reduced paid up insurance, we will usually pay any cash value within 7 days after we receive your request and the contract at our Service Office. But we have the right to defer payment if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares and emergency; or (3) the SEC lets us defer payments of protect our contract owners. If the contract is in force as extended insurance we have the right to postpone paying a cash value for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. Tabular Values.--In the table on page 4 we show tabular contract fund and tabular cash values at the end of the contract years. The tabular contract fund values are the amount which will then be in the contract fund, (see page 11,) if all scheduled premiums have been paid on their due dates, there have been no unscheduled premiums paid, there is no contract debt, the subaccounts you have chosen earn exactly the assumed rate of return, and we have deducted the maximum mortality charges. The tabular cash values are the amounts which, under the same conditions, will then be used to provide extended insurance or variable reduced paid-up insurance or will be paid in cash if the maxim surrender charges are applied. The tabular cash value shown is equal to the tabular contract fund value as of the same date, after deducting any surrender charges (at the maximum rate) from the tabular contract fund value. (See Cash Value Option above.) Since surrender charges are not deducted after the end of the 10th contract year, the tabular cash values are the same as the tabular contract fund values thereafter. If we need to compute tabular values at some time during a contract year, we will count the time since the start of the year. We will let you know the tabular values for other durations if you ask for them. Page 14 (VALB-84) II-73 LOANS Loan Requirements.--After the first anniversary, you may borrow from us on the contract. All these conditions must be met: 1. The Insured is living. 2. The contract is in force other than as extended insurance. 3. The contract debt will not be more than the loan value. (We explain these terms below.) 4. As sole security for the loan, you assign the contract to us in a form that meets our needs. 5. Except when used to pay premiums on this contract, the amount you borrow at any one time must be at lease $500. If there is already contract debt when you borrow from us, we will add the new amount you borrow to that debt. Contract Debt.--Contract debt at any time means the loan on the contract, plus the interest we have charges that is not yet due and that we have not yet added to the loan. Loan Value.--You may borrow any amount up to the difference between the loan value and any existing contract debt. At any time the loan value is 90% of the net cash value. There is one exception. If the contract is I default, the loan value during the days of grace is what it was on the date of default. Example 1: Suppose the contract has a loan value of $6,000. About eight months ago you borrowed $1,500. By now there is interest of $55 charges but not yet due. The contract debt is now $1,555, which is made up of the $1,500 loan and the $55 interest. Example 2: Suppose, in example 1, you want to borrow all that you can. We will lend out $4,445 which is the difference between the $6,000 loan value and the $1,555 contract debt. This will increase the contract debt to $6,000. We will add the new amount borrowed to the existing loan and will charge interest on it, too. Interest Charge.--We will charge interest daily on any loan at the effective rate of 5 1/2% a year. Interest is due on each contract anniversary, or when the loan is paid back if that comes first. If interest is not paid when due, it will become part of the loan. Then we will start to charge interest on it, too. Example 3: Suppose the contract date is 1987. Six months before the anniversary in 1996 you borrow $1,600 out of a $4,000 loan value. We charge 5 1/2% a year. Three months later, but still three months before the anniversary, we will have charges about $22 interest. This amount will be a few cents more or less than $22 since some months have more days than others. The interest will not be due until the anniversary unless the load is paid back sooner. The loan will still be $1,600. The contract debt will be $1,622, since contract debt included interest charged but not yet due. On the anniversary in 1996 we will have charged about $44 interest. The interest will then be due. Example 4: Suppose the $44 interest in example 3 was paid on the anniversary. The loan and contract debt each became $1,600 right after the payment. Example %: Suppose the $44 interest in example 3 was not paid on the anniversary. The interest became part of the loan, and we began to charge interest on it, too. The loan and contract debt each became $1,644. Repayment.--All or part of any contract debt may be paid back at any time while the Insured is living. When we settle the contract, any contract debt is due us. If there is contract debt at the end of the last day of grace when the contract is in default, it will be deducted from the cash value to determine the net cash value. We will make this adjustment so that the proceeds will not include the amount of that debt. Effect of a Loan.--When you take a loan, the amount of the loan continues to be a part of the contract fund and is credited with interest at the guaranteed rate of $% a year. However, we will reduce the investment amount by the amount you borrow, and by loan interest that becomes part of the loan because it is not paid when due. On each Monthly Date, if there is a contract loan outstanding, we will increase the investment amount by interest credits accrued on the loan at 4% a year since the last Monthly Date. When you repay part or all of a loan will increase the investment amount by the amount of loan you repay, plus, if you repay all the loan, interest credits accrued on the loan at 4% a year since the last Monthly Date. We will not increase the investment amount by loan interest that is paid before we make it part of the loan. We will allocate loans and repayments among the subaccounts I proportion to the investment amount in each subaccount as of the date of the loan or repayment. Only the amount of the investment amount will reflect the investment results of the subaccounts. Since the amount you borrow is removed from the investment amount, a loan may be a permanent effect on the net cash value of this contract, and also for a contract which is paid-up or which is in force under the variable reduced paid-up option, on any death benefit in excess of the guaranteed death benefit. The longer the loan is outstanding, the greater this effect is likely to be. (Continued on Next Page) Page 15 (VALA-84) II-74 LOANS (Continued) Example 6: Suppose the contract's investment amount is $15,000 and that $10,000 is in subaccount A and $5,000 is in subaccount B. If you make a $9,000 loan we will reduce the amount in subaccount A by $6,000 and the amount in subaccount B by $3,000. Suppose that sometime later, when the investment amount in each of the two subaccounts is the same you choose to repay the $9,000 loan. We will add $4,500 to the amount in each subaccount. Excess Contract Debt.--If contract debt ever becomes equal to or more than the cash value, all the contract's benefits will end 61 days after we mail a notice to you and any assignee of whom we know. Also, we may send a notice to the Insured's last known address. In the notice we will state the amount that, if paid to us, will keep the contract's benefits from ending for a limited time. Postponement of Loan.--We will usually make a loan within 7 days after we receive your request at our Service Office. But we have the right to defer making the loan if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency; or (3) the SEC lets us defer payments to protect our contract owners. EXCHANGE OF CONTRACT Right to Exchange.--Before the second anniversary you may exchange this contract for a new contract of fixed benefit insurance on the Insured's life. You will not have to prove to us that the Insured is insurable. Also, you may make such an exchange at any time if there is a material change in the investment policy of a portfolio (see Change in Investment Policy on page 10). When we use the term new contract we mean the contract for which this contract may be exchanged. Conditions.--Your right to make this exchange is subject to all these conditions: (1) You must ask for the exchange in writing in a form that meets our needs. (2) You must surrender the contract to us. (3) We must have your request and the contract at our Service office while the contract is in force and not in default past its days of grace. (4) You must pay back any contract debt under this contract, to the extent it may exceed the loan value of the new contract. (5) You must pay any other charges required for the exchange. Exchange Date.--The exchange date will be the later of: (1) the date we receive the contract and our request at our Service Office; and (2) the date we receive the payment, if any, required for the exchange. The new contract will take effect on the exchange date only if the Insured is then living. If the new contract takes effect, this contract will end just before the exchange date. Contract Specifications.--The new contract will be on the Modified Premium Whole Life plan. It will have a face amount equal to the face amount of this one. It will have the same contract date and issue age as this contract and be in the same rating class. If, for any reason, we are not issuing the Modified Premium Whole Life Contract on the exchange dates, then the new contract will be another life plan that we would regularly issue on that date for the same rating class, amount, issue, age and sex. This contract might include an extra benefit which is still in effect just before the exchange date. And a similar kind of benefit might have been regularly offered in contracts like the new one on the date the extra benefit took effect in this contract. In that case, if you ask for it in your request for the exchange, that similar kind of benefit will be put in the new contract. When we use the phrase contracts like the new one, we mean contracts that were, on the contract date of this contract, regularly issued on the same plan as the new one and for the same rating class, amount, issue age and sex. The amount of any accidental death benefit included in the new contract in accord with this provision will be the same as the amount of any accidental death benefit in this contract. If a benefit for waiving scheduled premiums is included in the new contract in accord with this provision, any scheduled premiums to be waived under the new contract for a disability that began before the exchange date must be at the billing frequency that applied to this contract when the disability started. But premiums will not be waived under the new contract unless it has a benefit for waiving premiums in the event of disability. This will be so even if we have waived premiums under this contract. A charge may be made on exchange in the following situation: If, on the date of exchange, the contract fund of this contract is less than the tabular contract fund, a charge will be made for the difference in the two amounts. If the contract fund of this contract is equal to or greater than the tabular contract fund, no charge will be made. In these cases, the contract fund of the new contract will be equal to that of this contract. Exchange at Other Times.--You may be able to exchange this contract for a fixed benefit Modified Premium Whole Life contract at a time other than those described under right to Exchange above. But any such exchange may be made only if we consent, and will be subject to conditions and charges which we then determine. Page 16 (VALA-84) II-75 SETTLEMENT OPTIONS Payee Defined.--In these provisions and under the Automatic Mode of Settlement, the word Payee means a person who has a right to receive a settlement under the contract. Such a person may be the Insured, the owner, a beneficiary, or a contingent payee. Choosing an Option.--While the Insured is living you may choose, or change the choice of, an option for all or part of the proceeds that may arise from the Insured's death. The requirements are the same as those to designate or change a beneficiary. We describe them under Beneficiary. A payee may choose an option for all or part of any proceeds or residue that becomes payable to him or her in one sum. We describe residue later on this page. In some cases, you or another Payee will need our consent to choose an option. We describe these cases under conditions. Options Described.--Here are the options we offer. We may also consent to other arrangements. Option 1 (Instalments for a Fixed Period).--We will make equal payments for up to 25 years based on the Option 1 Table. The payments will include interest at an effective rate of 3 1/2% a year. We may credit more interest. If and while we do so, the payments will be larger. Option 2 (Life Income).--We will make equal monthly payments for as long as the person on whose life the settlement is based lives, with payments certain for the period chosen. The choices are either ten years (10-Year Certain) or until the sum of the payments equals the amount put under this option (Instalment Refund). The amount of each payment will be based on the Option 2 Table and on the sex and age, on the due date of the first payment, of the person on whose life the settlement is based. But if a choice is made more than two years after the Insured's death, we may use the Option 2 payment rates in individual annuity contracts or life insurance contracts we regularly issue, based on United States currency, on the due date of the first payment. On request, we will quote the payment rates in contracts we then issue. We must have proof of the date of birth of the person on whose life the settlement is based. If on the due date of the first payment under this option, we have declared a higher payment rate under the option, we will base the payments on that higher rate. Option 3 (Interest Payment).--We will hold an amount at interest. We will pay interest at an effective rate of at lease 3% a year ($3.000 annually, $14.89 semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more interest. Option 4 (Instalments of a Fixed Amount).--We will make equal annual, semi-annual, quarterly or monthly payments if they total at least $90 a year for each $1,000 put under this option. We will credit the unpaid balance with interest at an effective rate of at least 3 1/2% a year. We may credit more interest. If we do so, the balance will be larger. The final payment will be any balance equal to or less than one payment. First Payment Due Date.--Unless a different date is stated when the option is chosen: (1) the first payment for Option 3 will be due at the end of the chosen payment interval; and (2) the first payment for any of the other options will be due on the date the option takes effect. Residue Described.--For Options 1 and 2, residue on any date means the then present value of any unpaid payments certain. We will compute it at an effective interest rate of 3 1/2% a year. But we will use the interest rate we used to compute the actual Option 2 payments if they were not based on the table in this contract. For Options 3 and 4, residue on any date means any unpaid balance with interest to that date. For option 2, residue does not include the value of any payment that may become due after the certain period. (Continued on Page 19) Page 17 (VALA-84) II-76 SETTLE OPTIONS (Continued) OPTION 1 TABLE - ------------------------ MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY - ------------------------ Number Monthly of Year Payment - ------------------------ 1 $84.65 2 43.05 3 29.19 4 22.27 5 18.12 6 15.35 7 13.38 8 11.90 9 10.75 10 9.83 11 9.09 12 8.46 13 7.94 14 7.49 15 7.10 16 6.76 17 6.47 18 6.20 19 5.97 20 5.75 21 5.56 22 5.39 23 5.24 24 5.09 25 4.96 - ------------------------ Multiply the monthly amount by 2.989 for quarterly, 5.952 for semi-annual or 11.804 for annual. - ------------------------
OPTION 2 TABLE ---------------------------------------------------------------------------------------- MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000. THE FIRST PAYABLE IMMEDIATELY ---------------------------------------------------------------------------------------- KIND OF LIFE INCOME KIND OF LIFE INCOME ------------------------------- ----------------------------- 10-Year Instalment 10-Year Instalment AGE Certain Refund AGE Certain Refund LAST ------------------------------- LAST ----------------------------- BIRTHDAY Male Female Male Female BIRTHDAY Male Female Male Female ---------------------------------------------------------------------------------------- 10 $ 3.18 $3.11 $3.17 $3.10 45 $4.06 $3.82 $3.99 $3.78 and under 46 4.12 3.86 4.03 3.81 11 3.19 3.12 3.18 3.11 47 4.17 3.90 4.08 3.85 12 3.20 3.13 3.19 3.12 48 4.23 3.94 4.13 3.90 13 3.12 3.14 3.20 3.13 49 4.28 3.99 4.18 3.94 14 3.22 3.15 3.21 3.14 50 4.35 4.04 4.24 3.98 15 3.24 3.16 3.23 3.15 51 4.41 4.09 4.29 4.03 16 3.25 3.17 3.24 3.16 52 4.48 4.15 4.35 4.08 17 3.27 3.19 3.25 3.18 53 4.55 4.21 4.41 4.13 18 3.28 3.20 3.27 3.19 54 4.62 4.27 4.48 4.19 19 3.30 3.21 3.28 3.20 55 4.70 4.33 4.55 4.24 20 3.31 3.22 3.30 3.21 56 4.78 4.40 4.62 4.30 21 3.33 3.24 3.32 3.23 57 4.86 4.47 4.69 4.37 22 3.35 3.25 3.33 3.24 58 4.95 4.54 4.77 4.43 23 3.36 3.26 3.35 3.25 59 5.05 4.62 4.86 4.50 24 3.38 3.28 3.37 3.27 60 5.15 4.71 4.94 4.58 25 3.40 3.30 3.39 3.29 61 5.25 4.79 5.03 4.66 26 3.42 3.31 3.41 3.30 62 5.36 4.89 5.13 4.74 27 3.45 3.33 3.43 3.32 63 5.48 4.98 5.23 4.82 28 3.47 3.35 3.45 3.34 64 5.60 5.09 5.34 4.92 29 3.49 3.37 3.47 3.35 65 5.73 5.20 5.45 5.01 30 3.52 3.29 3.49 3.37 66 5.87 5.31 5.57 5.11 31 3.54 3.41 3.52 3.39 67 6.01 5.43 5.70 5.22 32 3.57 3.43 3.54 3.41 68 6.15 5.56 5.83 5.34 33 3.60 3.45 3.57 3.44 69 6.30 5.70 5.97 5.46 34 3.63 3.47 3.60 3.46 70 6.46 5.84 6.11 5.58 35 3.66 3.50 3.63 3.48 71 6.62 5.99 6.27 5.72 36 3.69 3.52 3.66 3.50 72 6.79 6.15 6.43 5.86 37 3.72 3.55 3.69 3.53 73 6.96 6.31 6.60 6.01 38 3.76 3.58 3.72 3.56 74 7.13 6.49 6.78 6.18 39 3.80 3.61 3.75 3.58 75 7.30 6.67 6.97 6.35 40 3.84 3.64 3.79 3.61 76 7.48 6.85 7.17 6.53 41 3.88 3.67 3.82 3.64 77 7.66 7.04 7.38 6.72 42 3.92 3.70 3.86 3.67 78 7.83 7.24 7.60 6.93 43 3.97 3.74 3.90 3.71 79 8.00 7.44 7.83 7.15 44 4.01 3.78 3.94 3.74 80 8.17 7.64 8.07 7.38 and over
II-77 (Continued on Next Page) Page 18 (VALA-84) II-78 SETTLEMENT OPTIONS (Continued) Withdrawal of Residue.--Unless otherwise stated when the option is chosen: (1) under Options 1 and 2 the residue may be withdrawn; and (2) under Options 3 and 4 all, or any part not less than $100, of the residue may be withdrawn. If an Option 3 residue is reduced to less than $1,000, we have the right to pay it in one sum. Under Option 2, withdrawal of the residue will not affect any payments that may become due after the certain period; the value of those payments cannot be withdrawn. Instead, the payments will start again if they were based on the life of a person who lives past the certain period. Designating Contingent Payee(s).--A Payee under an option has the right, unless otherwise stated, to name or change a contingent payee to receive any residue at that Payee's death. This may be done only if (1) the Payee has the full right to withdraw the residue; or (2) the residue would otherwise have been payable to that Payee's estate at death. A Payee who has this right may choose, or change the choice of, an option for all or part of the residue. In some cases, the Payee will need our consent to choose or change an option. We describe these cases under Conditions. Any request to exercise any of these rights must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office. Then the interest of anyone who is being removed will end as of the date of the request, even if the Payee who made the request is not living when we file it. Changing Options.--A payee under Option 1, 3 or 4 may choose another option for any sum that the Payee could withdraw on the date the chosen option is to start. That date may be before the date the Payee makes the choice only if we consent. In some cases, the Payee will need our consent to choose or change an option. We describe these cases next. Conditions.--Under any of these conditions, our consent is needed for an option to be used for any person: 1. The person is not a natural person who will be paid in his or her own right. 2. The person will be paid as assignee. 3. The amount to be held for the person under Option 3 is less than $1,000. But we will hold any amount for at lease one year in accord with the Automatic Mode of Settlement. 4. Each payment to the person under the option would be less than $20. 5. The option is for residue arising other than at (a) the Insured's death, or (b) the death of the beneficiary who was entitled to be paid as of the date of the Insured's death. 6. The option is for proceeds that arise other than from the Insured's death, and we are settling with an owner or any other person who is not the Insured. Death of Payee.--If a Payee under an option dies and if no other distribution is shown, we will pay any residue under that option in one sum to the Payee's estate. ENDORSEMENTS (Only we can endorse this contract.) Page 19 (VALA-84) II-79 AUTOMATIC MODE OF SETTLEMENT Applicability.--These provisions apply to proceeds arising from the Insured's death and payable in one sum to a Payee who is a beneficiary. They do not apply to any periodic payment. Interest on Proceeds.--We will hold the proceeds at interest under Option 3 of the Settlement Options provision. The Payee may withdraw the residue. We will pay it promptly on request. We will pay interest annually unless we agree to pay it more often. We have the right to pay the residue in one sum after one year if (a) the Payee is not a natural person who will be paid in his or her own right; (2) the Payee will be paid as assignee; or (3) the original amount we hold under Option 3 for the Payee is less than $1,000. Settlement at Payee's Death.--If the Payee dies and leaves an option 3 residue, we will honor any contingent payee provision then in effect. If there is none, here is what we will do. We will look to the beneficiary designation of the contract; we will see what other beneficiary(ies), if any, would have been entitled to the portion of the proceeds that produced the Option 3 residue if the Insured had not died until immediately after the Payee died. Then we will pay the residue in one sum to such other beneficiary(ies), in accord with that designation. But if, as stated in that designation, payment would be due the estate of someone else, we will instead pay the estate of the Payee. Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. Jane was living when the Insured died. Jane later died without having chosen an option or naming someone other than Paul and John as contingent payee. If Paul and John are living at Jane's death we own them the residue. If only one of them is living then, and if the contract called for payment to the survivor of them, we own him the residue. If neither of them is living then, we owe Jane's estate. Spendthrift and Creditor.--A beneficiary or contingent payee may not, at or after the Insured's death, assign, transfer, or encumber any benefit payable. To the extent allowed by law, the benefits will not be subject to the claims of any creditor of any beneficiary or contingent payee. ENDORSEMENTS (Only we can endorse this contract.) Page 20 (VALA-84) II-80
Part 1 Application to No. [ ] The Prudential Insurance Company of America XX XXX XXX [X] Pruco Life Insurance Company--A Subsidiary of The Prudential Insurance Company of America - ----------------------------------------------------------------------------------------------------------------------------------- 1a. Proposed Insured's name--first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth M F Mo. Day Yr. JOHN DOE [X] [ ] 6 10 48 35 (NAME OF STATE) - ----------------------------------------------------------------------------------------------------------------------------------- 3. [ ] Single [X] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Occupation(s) MANAGER - ----------------------------------------------------------------------------------------------------------------------------------- 5. Address for mail No. Street City State Zip 15 BLANK STREET (NAME OF CITY) (NAME OF STATE) XXXXX - ----------------------------------------------------------------------------------------------------------------------------------- 6a. Kind of policy VARIABLE APPRECIABLE 6b. Initial amount 7. Accidental death coverage VARIABLE DEATH BENEFIT $50,000 initial amount $ - ----------------------------------------------------------------------------------------------------------------------------------- 8. Beneficiary: (Include name, age and relationship.) 9. List all life insurance on proposed Insured. If NONE, so state.) a. Primary (Class 1): b. Contingent (Class 2) if any: Company Initial Yr. Kind Medical MARY DOE, 35 ROBERT DOE, 10 amt. issued (Indiv., Group) Yes No SPOUSE SON NONE [ ] [ ] ____________________________________________________ _______________________________________________________________________ [ ] [ ] (For insurance payable upon death of (1) the Insured, _______________________________________________________________________ and (2) an insured child after the death of the [ ] [ ] Insured if there is no insured spouse.) _______________________________________________________________________ [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 10. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP) Relationship to Date of birth Total life insurance Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies a. Spouse $ ___________________________________________________________________________________________________________________________________ b. $ ___________________________________________________________________________________________________________________________________ c. $ ___________________________________________________________________________________________________________________________________ d. $ ___________________________________________________________________________________________________________________________________ e. $ ___________________________________________________________________________________________________________________________________ f. $ - ----------------------------------------------------------------------------------------------------------------------------------- 11. Supplementary benefits: a. For proposed Insured b. For spouse, children, Applicant for AWP Type and duration of benefit Amount Type and duration of benefit Amount $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ [ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit - ----------------------------------------------------------------------------------------------------------------------------------- 12. State any special request. - ----------------------------------------------------------------------------------------------------------------------------------- 13. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No in 1a or 10? If "Yes", give their names, name of company, plan, amount and policy numbers. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 14. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 10 in Yes No this or any company? If "Yes", give amount, details and company. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 15. Does any person named in 1a or 10 plan to live or travel outside the United States and Canada within the next Yes No 12 months? If "Yes", give details. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 16. Has any person named in 1a or 10 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [X] complete Aviation Questionnaire. - ----------------------------------------------------------------------------------------------------------------------------------- 17. Has any person named in 1a or 10, within the last 12 months: Yes No a. been treated by a doctor for or had a known heart attack, stroke or cancer other than of the skin? ............ [ ] [X] b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 18. Premiums payable [X] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot. - ----------------------------------------------------------------------------------------------------------------------------------- 19. Amount paid $468.00 [ ] None (Must be "None" if either 17a or 17b is answered "Yes".) - ----------------------------------------------------------------------------------------------------------------------------------- 20. Is a medical examination to be made on a. the proposed Insured?............................................... Yes [ ] No [X] b. spouse (if proposed for coverage)? ................................. Yes [ ] No [X] - ----------------------------------------------------------------------------------------------------------------------------------- 21. If 20a or 20b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No the person(s) indicated in 20 have been examined, even if 19 shows that an amount has been paid? ................. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 22. Changes made by the Company. - ----------------------------------------------------------------------------------------------------------------------------------- ORD 84376-82 Page 1 (Continued on page 2)
II-81
Continuation of Part 1 of Application Complete on all persons named in 1a and 10 if any one of them can have insurance on a non-medical basis. - ----------------------------------------------------------------------------------------------------------------------------------- 23. Height and weight of: a. Proposed Insured Ht. 5'9" Wt. 158 lbs b. Spouse Ht.________ Wt.________ c. Applicant for AWP Ht.________ Wt.________ Has the weight changed more than 10 pounds in the past year? Yes [ ] No [X] If "Yes", give details in 30. - ----------------------------------------------------------------------------------------------------------------------------------- 24. Has the proposed Insured or spouse ever smoked? a. Proposed Insured Yes [ ] No [X] b. Spouse Yes [ ] No [X] If "Yes", give date(s) last smoked: Cigarettes Cigars Pipe Proposed Insured Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ Spouse Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ - ----------------------------------------------------------------------------------------------------------------------------------- 25. When was a doctor last consulted by: a. Proposed Insured? b. Spouse? c. Applicant for AWP? Mo. 6 Yr. 83 Mo.______ Yr. ______ Mo.______ Yr. ______ - ----------------------------------------------------------------------------------------------------------------------------------- 26. Is any person to be covered now being treated or taking medicine for any condition or disease ................. Yes [ ] No [X] - ----------------------------------------------------------------------------------------------------------------------------------- 27. Has any person to be covered ever: Yes No a. had any surgery or been advised to have surgery and has not done so?............................................... [ ] [X] b. been in a hospital, sanitarium or other institution for observation, rest, diagnosis or treatment ................. [ ] [X] c. regularly used or is any such person now using, barbiturates or amphetamines, marijuana or other hallucinatory drugs, or heroin, opiates or other narcotics, except as prescribed by a doctor? ................................... [ ] [X] d. been treated or counseled for alcoholism? ......................................................................... [ ] [X] e. had life or health insurance declined, postponed, changed, rated-up or withdrawn? ................................. [ ] [X] f. had life or health insurance canceled, or its renewal or reinstatement refused? ................................... [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 28. Other than as shown above, in the past 5 years has any person to be covered: Yes No a. consulted or been attended or examined by any doctor or other practitioner? ...................................... [ ] [X] b. had electrocardiograms, X-rays for diagnosis or treatment, or blood, urine, or other medical tests? .............. [ ] [X] c. made claim for or received benefits, compensation, or a pension because of sickness or injury? ................... [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 29. Does any person to be covered now have a known sign of any physical disorder, disease or defect not shown above? Yes [ ] No [X] - ----------------------------------------------------------------------------------------------------------------------------------- 30. What are the full details of the answer to 25 and to each part of 23 and 26 thru 29 which is answered "Yes"? Name & Full names and addresses of Question No. Illness or other resason Dates and duration of illness doctors and hospitals - ----------------------------------------------------------------------------------------------------------------------------------- #25--JOHN Sore Throat 6-83, 1 week Dr. R. L. Jones, Newark, N.J. ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ - ----------------------------------------------------------------------------------------------------------------------------------- Those who sign below declare, to the best of their knowledge and belief, that the statements in this application are complete and true. When the Company gives a Temporary Insurance Agreement form, ORD 84376A-82, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first premium is paid while all persons to be covered are living and their health remains as stated in Part 1. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 22 it will be approved by acceptance of the contract. But where the law requires written consent for any change in the application, such a change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs. OWNERSHIP: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of owership stated in the contract. Signature of Proposed Insured (If Age 8 or over) /s/ JOHN DOE ---------------------------------------------------------------------- Dated at (Name of City & State) on June 1, 1984 Signature of Applicant (If other than proposed Insured) - --------------------------------------------------- City/State ---------------------------------------------------------------------- Witness (If applicant is a firm or corporation, show that company's name) /s/ JOHN ROE - --------------------------------------------------- By (Licensed agent must witness where required by law) ---------------------------------------------------------------------- (Signature and title of officer signing for that company) ORD 84376-82 Page 2
II-82 No. PRUCO LIFE INSURANCE COMPANY XX XXX XXX A Subsidiary of The Prudential Insurance Company of America A Supplement to the Application for Life Insurance in which JOHN DOE is named as the proposed Insured. The contract applied for is: [X] Variable Life Insurance [ ] Variable Appreciable Life Insurance [ ] with Variable Insurance Amount [ ] with Fixed Insurance Amount The person who signs below: 1. UNDERSTANDS THAT UNLESS THE CONTRACT APPLIED FOR IS VARIABLE APPRECIABLE LIFE INSURANCE WITH FIXED INSURANCE AMOUNT AND IS NOT FULLY PAID UP, THE DEATH BENEFIT (EXCEPT ANY SUPPLEMENTARY BENEFITS) MAY GO UP OR DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE BUT WILL NEVER BE LESS THAN THE GUARANTEED MINIMUM, IF PREMIUMS ARE DULY PAID AND THERE IS NO CONTRACT DEBT; 2. UNDERSTANDS THAT THE CASH VALUES MAY GO UP OR DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE AND THAT THERE IS NO GUARANTEED MINIMUM CASH VALUE; Yes No Did the applicant receive the current prospectus for the contract checked above? ....................................... [X] [ ] Does the applicant believe that this contract will meet insurance needs and financial objectives? ......................... [X] [ ] The net premium payments (as described in the prospectus) are to be allocated to the appropriate Pruco Life variable contract account for the contract checked above as follows: Subaccount Allocation+ ---------- ---------- Bond 20% (BOND) Money Market 20% (MMKT) Common Stock 20% (CSTK) Aggressively Managed Flexible 20% (AFLX) Conservatively Managed Flexible 20% (CFLX) _______________________________ __% ( ) _______________________________ __% ( ) 100% + If any portion of a net premium is allocated to a particular subaccount, that portion must be at least 10% on the date the allocation takes effect. All percentage allocations must be in whole numbers (e.g. 33% can be selected, but 33 1/3% cannot). Date Signature of Applicant June 1, 1984 /s/ JOHN DOE --------------------------------------------- - --------- PLI 49-84 Printed In U.S.A. By PROF - --------- II-83 BASIS OF COMPUTATION Mortality Tables Described.--Except as we state in the next paragraph, (1) we base all net premium and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Mortality Table; and (3) we use continuous functions based on age last birthday. For extended insurance, we base net premiums and net values on the Commissioners 1980 Extended Term Insurance Table. Interest Rate.--For all net premium and net values to which we refer in this contract we use an effective rate of 4% a year. Exclusions.--When we compute net values we exclude the value of any Supplementary Benefits and any other extra benefits added by rider to this contract. Values After 20 Contract Years.--Tabular values after the 20th contract year will be the net level premium reserves, taking into account the increase in scheduled premium amount on the Contract Change Date. To compute them, we will use the mortality tables and interest rate we describe above. There will be the same exclusions. Minimum Legal Values.--The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits. Pruco Life Insurance Company, By /S/ Isabelle L. Kirchner Secretary [SPECIMEN] - ----------- PLIY 42--84 - -----------
CONTRACT SUMMARY (continued from Page 2) - ---------------------------------------------------------------------------------------------------------------- TABLE OF BASIC AMOUNTS - ---------------------------------------------------------------------------------------------------------------- When the proceeds arise from the Insured's death: - ---------------------------------------------------------------------------------------------------------------- And The Contract Is In Force: Then the Basic Amount is: And we Adjust The Basic Amount For: - ---------------------------------------------------------------------------------------------------------------- on a premium paying basis and not the face amount (see page 3) plus contract debt (see page 15), plus in default past its days of grace any excess of the contract fund (see any charges due in the days of page 11) over the tabular contract grace (see page 8). fund (see page 4); plus the amount of any extra benefits* - ---------------------------------------------------------------------------------------------------------------- as a fully paid-up contract the amount of paid-up insurance contract debt. (see page 9); plus the amount of any paid-up extra benefits - ---------------------------------------------------------------------------------------------------------------- as variable reduced paid-up the amount of variable reduced contract debt. insurance (see page 13) paid-up insurance (see page 13) - ---------------------------------------------------------------------------------------------------------------- as extended insurance (see the amount of term insurance, if nothing. page 13) the Insured dies in the term (see page 13); otherwise zero - ----------------------------------------------------------------------------------------------------------------
* But see Death Proceeds on page 6 for the determination of Basic Amount under certain conditions which may arise when death occurs before attained age 21, under a contract issued below age 15. This Table is a part of the Contract Summary and of the Contract. Page 21 (VALB-84) II-84 GUIDE TO CONTENTS Page Contract of Summary ....................................................... 2 Table of Basic Amounts .................................................. 21 Contract Date ............................................................. 3 Rating Class; List of Contract Minimums; List of Supplementary Benefits, if any; Schedule of Premiums; Schedule of Expense Charges from Premium Payments; Schedule of Monthly Deductions from Contract Fund; Schedule of Minimum Surrender Charges; List of Subaccounts and Portfolios; Service Office Tabular Values ............................................................ 4 Tabular Contract Fund; Tabular Cash Values General Provisions ........................................................ 5 Definitions; The Contract; Contract Modifications; Non-participating Service Office; Ownership and Control; Suicide Exclusion; Currency; Misstatement of Age or Sex; Incontestability; Assignment; Annual Report; Increase in Face Amount at Age 21 for contracts Issued at Age 14 and Lower; Death Proceeds; Payment of Death Claim Premium Payment and Reinstatement ......................................... 7 Payment of Premiums; Scheduled Premiums; Unscheduled Premiums; Premium Change on Contract Change Date; Default; Grace Period; Premium Account; Reinstatement Beneficiary ............................................................... 9 Paid-Up Contract .......................................................... 9 Separate Account .......................................................... 10 The Account; Subaccounts; The Fund; Account Investments; Change in Investment Policy; Change of Fund Investment Amount and Return on Investment ................................ 11 Investment Amount; Assumed Rate of Return; Transfers Among Subaccounts Contract Fund ............................................................. 11 Contract Fund Defined; Invested Premium Account; Guaranteed Interest Credits, Cost of Expected Mortality; Charge for Extra Rating Class; Charges for Extra Benefits; Monthly Administration Charge and Mortality Risk Charge; Partial Withdrawals Contract Value Options .................................................... 13 Benefit After the Grace Period; Extended Insurance; Variable Reduced Pair-up Insurance; Computations; Automatic Benefit; Optional Benefit; Cash Value Option; Tabular Values Loans ..................................................................... 15 Loan Requirements; Contract Debt; Loan Value; Interest Charge; Repayment; Effect of a Loan; Excess Contract Debt; Postponement of Loan Exchange of Contract ...................................................... 16 Right to Exchange; Conditions; Exchange Date; Contract Specifications Exchange at Other Times Settlement Options ........................................................ 17 Payee Defined; Choosing an Option; Options Described; First Payment Due Date; Residue Described; Income Tables; Withdrawal of Residue; Designating Contingent Payee(s); Changing Options; Conditions; Death of Payee Automatic Mode of Settlement .............................................. 20 Applicability; Interest on Proceeds; Settlement at Payee's Death; Spendthrift and Creditor Basis of Computation ...................................................... 21 Mortality Tables Described, Interest Rate; Exclusions; Values after 20 Contract Years; Minimum Legal Values Any Supplementary Benefits and a copy of the application follow page 20. Page 22 Modified Premium Variable Life Insurance Policy with variable insurance amount. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums. Benefits reflect premium payments, investment results and mortality charges. Guaranteed minimum death benefit if scheduled premiums duly paid and no contract debt. Increase in face amount at attained age 21 if contract issued at age 14 or lower. Non-participating. VALB--84 II-85 EX-99.1A(5)(C) 9 ENDORSEMENTS Exhibit 1.A.(5)(c) ENDORSEMENTS (Only we can endorse this contract.) Definitions.--We define here some of the words and phrases used all through this contract. We explain others, not defined here, in other parts of the test. We, Our, Us and Company.--Pruco Life Insurance Company, an Arizona corporation. You and Your.--The owner of the Contract. Insured.--The person named as the Insured on the first page. He or she need not be the owner. Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner. SEC.--The Securities and Exchange Commission. Issue Date.--The contract date. Monthly Date.--The contract date and the same day as the contract date in each later month. Example: If the contract date is March 9, 1986, the Monthly Dates are each March 9, April 9, May 9 and so on. Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year. Example: If the contract date is March 9, 1986, the first anniversary is March 9, 1987. The second is March 9, 1988, and so on. Contract year.--A year that starts on the contract date or on an anniversary. Example: If the contract date is March 9, 1986, the first contract year starts then and ends on March 9, 1987. The second starts on march 9, 1987 and ends on March 8, 1988, and so on. Contract Month.--A month that starts on a Monthly Date. Example: If March 9, 1986 is a Monthly Date, a contract month starts then and ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends on May 8, 1986, and so on. Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3. The Contract.--This policy and the application, a copy of which is attached, form the whole contract. We assume that all statements in the application ere made to the best of the knowledge and belief of the person(s) who made them; in the absence of fraud they are deemed to be representations and not warranties. We will not use any statement, unless made I the application, to try to void the contract or to deny a claim. Contract Modifications.--Only a Company office may agree to modify this contract, and then only in writing. Non-participating.--This contract will not share in our profits or surplus earnings. We will pay no dividends on it. Service Office.--This is the office that will service this contract. Its mailing address is the one we show on the Contract Data pages, unless we notify you of another one. Ownership and Control.--Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. Suicide Exclusion. --If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid. Currency.--Any money we pay, or that is paid to us, must be in United States currency. Any amount we owe will be payable at our Service Office. (Continued on Next Page) page 5 (VALA--84) (COL. & N.D.) II-86 EX-99.1A(5)(D) 10 NOTICE EXHIBIT 1.A.(5)(d) NOTICE Pruco Life Insurance Company A Subsidiary of The Prudential Insurance Company of America Pruco Life's goal is to provide our planholders with fast and personal service. If you have any need for service with or a question about your Pruco Life insurance, please contact your Pruco Life representative. You may also call the staff of the Pruco Life office in your locale for assistance or the Pruco Life office named below. Should you desire any more help with a problem, assistance may be requested of the Illinois State Department identified below. Pruco Life State Consumer Affairs Unit Illinois Department of Insurance Pruco Life Insurance Company Consumer Service North Central Service Office Springfield, Illinois 62767 P.O. Box 1505 Minneapolis, MN 55440 - ------- PLI 109 EDC-84 Printed in U.S.A. - ------- II-87 EX-99.1A(5)(E) 11 ENDORSEMENTS EXHIBIT 1.A.(5)(e) ENDORSEMENTS (Only we can endorse this contract.) ALTERATION OF TEXT The first paragraph of the misstatement of Age or Sex Provision on page 6 is amended to read as follows. If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex. How we will do so depends on the status of the contract when we learn of the error, and on whether the Insured is then living. If the Insured dies while the contract is in force as extended term insurance, here is what we will do. We will compute what the net cash value of the incorrect contract was on the date of default. We will compute the amount of extended term insurance this value would have provided at the Insured's correct age, on the date of default, and sex for the length of time, beginning on the date of default, that we computed for the incorrect contract. We will pay this amount. If the contract is in force other than as extended term insurance and the Insured is not living when we learn of the error, here is what we will do. We will compute the charge we made on the last Monthly Date before the Insured's death for the cost of expected mortality (see page 11, Cost of Expected Mortality). We will compute the coverage amount which this charge would have provided at the Insured's Correct sex and age on that Monthly Date. The new Basic Amount will be the correct coverage amount plus the contract fund. If the contract is in force other than as extended term insurance and the Insured is living when we learn of the error, here is what we will do. We will accumulate, at 4% interest, the scheduled premiums per $1000 of face amount of the incorrect contract, multiplied by its face amount. We will accumulate, at 4% interest, the scheduled premiums per $1000 of face amount of a similar contract issued at the Insured's correct age and sex. We will divide the first accumulation by the second. The result will be the face amount of a new contract with which we will replace the incorrect contract. The new contract will be similar in form to the incorrect contract but will contain scheduled premiums, tabular contract funds, tabular cash values and surrender charges as if it had been issued at the correct age and sex. If the contract fund of the incorrect contract is at least equal to the tabular contract fund of the correct contract, then we will set the contract fund of the correct contract equal to that of the incorrect contract. If not, we will set the contract fund of the correct contract equal to its tabular contract fund, and grant a loan against the correct contract equal to the excess of its tabular contract fund over the contract fund of the incorrect contract. This loan will be added to any existing loan. If we need to adjust any benefit under conditions we have not fully described in this provision, we will do so in a consistent way. - ----------- PLI 191--85 - ----------- Rider attached to and made a part of this contract on the Contract Date Pruco Life Insurance Company, By /s/ Isabella L. Kirchner ------------------------- Secretary [SPECIMEN] II-88 EX-99.1A(5)(F) 12 VALA--86 Exhibit 1.A.(5)(f) Prudential Pruco Life Insurance Company Phoenix, Arizona A Stock Company subsidiary of The Prudential Insurance Company of America ================================================================================ Insured JOHN DOE xxxxx xxx Policy Number JUN 4, l986 Contract Date Face Amount $50,000-- Premium Period LIFE Agency R-NK ================================================================================ We will pay the beneficiary the proceeds of this contract promptly if we receive due proof that the Insured died. We make this promise subject to all the provisions of the contract. The Death Benefit will be the Insurance Amount, plus the amount of any extra benefit (unless the contract is in default or there is contract debt). The Death Benefit may be fixed or variable depending on the payment of premiums, the investment experience of the separate account and the level of charges made. But the Insurance Amount will not be less than the face amount. (We describe the Insurance Amount on page 14.) The cash value may increase or decrease daily depending on the payment of premiums, the separate account investment experience and the charges made. There is no guaranteed minimum. We specify a schedule of premiums. Additional unscheduled premiums may be paid at your option subject to the limitations in the contract. Please read this contract with care. A guide to its contents is on the last page. A summary is on page 5. If there is ever a question about it, or if there is a claim, just see one of our representatives or get in touch with one of our offices. Right to Cancel Contract.--You may return this contract to us within (1) 10 days after you get it, or (2) 45 days after Part 1 of the application was signed, or (3) 10 days after we mail or deliver the Notice of Withdrawal Right, whichever is latest. All you have to do is take the contract or mail it to one of our offices or to the representative who sold it to you. It will be canceled from the start and we will promptly give you the value of your Contract Fund on the date you return the contract to us. We will also give back any charges we made in accord with this contract. Signed for Pruco Life Insurance Company an Arizona Corporation /s/ ISABELLE L. KIRCHNER /s/ DONALD G. SOUTHWELL Secretary President [SPECIMEN] [SPECIMEN] Modified Premium Variable Life Insurance Policy. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums. Cash values reflect premium payments, investment results and charges. Guaranteed death benefit if scheduled premiums duly paid and no contract debtor withdrawals. Increase in face amount at attained age 21 If contract issued at age l4 or lower. Non-participating. VALA--86 II-89 CONTRACT DATA INSURED'S SEX AND ISSUE AGE M-35 INSURED JOHN DOE XX XXX XXX POLICY NUMBER FACE AMOUNT $50,000-- SEP 10, 1996 CONTRACT DATE PREMIUM PERIOD LIFE AGENCY R-NK 1 BENEFICIARY CLASS 1 MARY DOE, WIFE CLASS 2 ROBERT DOE, SON FIXED LOAN INTEREST RATE LIST OF CONTRACT MINIMUMS THE MINIMUM UNSCHEDULED PREMIUM IS $25. THE MINIMUM INCREASE IN FACE AMOUNT IS $25,000. THE MINIMUM DECREASE IN FACE AMOUNT IS $10,000. THE MINIMUM FACE AMOUNT IS $50,000. ***** END OF LIST ***** LIST OF SUPPLEMENTARY BENEFITS ***** NONE ***** SUMMARY OF FACE AMOUNT EFFECTIVE RATING CONTRACT CHANGE AMOUNT DATE CLASS DATE INITIAL $50,000-- SEP 10, 1986 NONSMOKER SEP 10, 2016 *****END OF SUMMARY ***** SCHEDULE OF PREMIUMS PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE. SCHEDULED PREMIUMS ARE $ 468.00 EACH CHANGING ON SEP 10, 2016 TO $2903.50 EACH ***** END OF SCHEDULE ***** CONTRACT DATA CONTINUED ON NEXT PAGE PAGE 3 (86) II-90 CONTRACT DATA CONTINUED POLICY NO. XX XXX XXX SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF UP TO $2.00. FROM THE REMAINDER WE DEDUCT A CHARGE OF UP TO 7.5% WHICH IS USED TO PAY FOR SALES CHARGES AND STATE PREMIUM TAXES. AFTER DEDUCTION OF THIS AMOUNT, THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 14). ***** END OF SCHEDULE ***** SCHEDULE OF MONTHLY DEDUCTIONS FROM THE CONTRACT FUND THE MONTHLY ADMINISTRATION CHARGE IS NO MORE THAN $3.50. THE MONTHLY CHARGE TO GUARANTEE THE MINIMUM DEATH BENEFIT IS NO MORE THAN $.50. ***** END OF SCHEDULE ***** ***** SCHEDULE ON OTHER CHARGES ***** THERE IS A FEE OF UP TO $15 FOR ANY PARTIAL WITHDRAWAL OR DECREASE IN FACE AMOUNT. ***** END OF SCHEDULE ***** SCHEDULE OF MAXIMUM SURRENDER CHARGES FOR FULL SURRENDER AT THE END OF THE CONTRACT YEAR INDICATED, THE MAXIMUM CHARGE WE WILL DEDUCT FROM THE CONTRACT FUND IS SHOWN BELOW. FOR SURRENDER OTHER THAN YEAR-END THE AMOUNT OF THE CHARGE WILL REFLECT THE NUMBER OF COMPLETED CONTRACT MONTHS SINCE THE BEGINNING OF THE CONTRACT YEAR (SEE PAGE 17). YEAR OF DEFERRED DEFERRED UNDERWRITING SURRENDER SALES CHARGES AND ISSUE CHARGE TOTAL --------- ------------- ---------------- ----- 1 $217.00 $250.00 $467.00 2 $217.00 $250.00 $467.00 3 $217.00 $250.00 $467.00 4 $217.00 $250.00 $467.00 5 $217.00 $250.00 $467.00 6 $173.50 $200.00 $373.50 7 $130.00 $150.00 $280.00 8 $87.00 $100.00 $187.00 9 $43.50 $50.00 $93.50 10 $0.00 $0.00 $0.00 11 AND LATER ZERO ZERO ZERO ***** END OF SCHEDULE ***** CONTRACT DATA CONTINUED ON NEXT PAGE PAGE 3A (86) II-91 CONTRACT DATA CONTINUED POLICY NO. XX XXX XXX LIST OF SUBACCOUNTS AND PORTFOLIOS EACH SUBACCOUNT OF THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT INVESTS IN A SPECIFIC PORTFOLIO OF THE PRUCO LIFE SERIES FUND. WE SHOW BELOW THE SUBACCOUNTS AND THE FUND PORTFOLIOS THEY INVEST IN. FUND SUBACCOUNT PORTFOLIO - ---------- --------- MONEY MARKET MONEY MARKET BOND BOND COMMON STOCK COMMON STOCK AGGRESSIVELY MANAGED FLX AGGRESSIVELY MANAGED FLX CONSERVATIVELY MANAGED FLX CONSERVATIVELY MANAGED FLX ***** END OF LIST ***** LIST OF FIXED ACCOUNT OPTIONS FIXED RATE OPTION ***** END OF LIST ***** SCHEDULE OF INITIAL ALLOCATION OF NET PREMIUMS MONEY MARKET SUBACCOUNT 25% CONSERVATIVELY MANAGED FLX SUBACCOUNT 50% FIXED RATE OPTION 25% ***** END OF LIST ***** SERVICE OFFICE - PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS CONTRACT TO: PRUCO LIFE INSURANCE COMPANY P.O. BOX XXXX, MINNEAPOLIS, MN XXXXX PAGE 3B (86) II-92 POLICY. NO. XX XXX XXX TABULAR VALUES WE EXPLAIN THIS TABLE UNDER CONTRACT FUND AND TABULAR VALUES. ACTUAL CONTRACT FUND VALUES AND CASH VALUES MAY BE MORE OR LESS THAN AMOUNT SHOWN (SEE CONTRACT FUND AND CASH VALUE OPTION.) END OF TABULAR TABULAR CONTRACT CONTRACT CASH YEAR FUND VALUE ---- ---- ----- 1 288.00 0.00 2 581.50 114.50 3 878.00 411.00 4 1178.00 711.00 5 1479.60 1012.50 6 1782.00 1408.50 7 2084.00 1804.00 8 2385.00 2198.20 9 2683.00 2590.10 10 2979.00 2979.00 11 3270.50 3270.50 12 3556.50 3556.50 13 3835.50 3835.50 14 4106.50 4106.50 15 4367.50 4367.50 16 4615.00 4615.00 17 4845.00 4845.00 18 5053.00 5053.00 19 5234.50 5234.50 20 5384.00 5384.00 ATTAINED AGE --- 60 5490.50 5490.50 62 5105.00 5105.00 85 3750.00 3750.00 TABULAR CASH VALUES ARE THE TABULAR CONTRACT FUND VALUES MINUS A SURRENDER CHARGE. WE SHOW ON A PRIOR CONTRACT PAGE WHAT THE MAXIMUM SURRENDER CHARGE WILL BE. THE TABULAR CONTRACT FUND VALUES AND TABULAR CASH VALUES SHOWN ARE THE AMOUNTS WHICH WILL APPLY IF ALL SCHEDULED PREMIUMS HAVE BEEN PAID ON THEIR DUE DATES, THERE HAVE BEEN NO UNSCHEDULED PREMIUMS PAID, THERE IS NOT CONTRACT DEBT, THE SUBACCOUNTS AND THE FIXED ACCOUNT OPTIONS YOU HAVE CHOSEN EARN EXACTLY THE ASSUMED RATE OF RETURN AND WE HAVE DEDUCTED THE MAXIMUM MORTALITY CHARGES. Page 4(86) II-93 CONTRACT SUMMARY We offer this summary to help you understand this contract. We do not intend that it change any of the provisions of the contract. This is a contract of life insurance. Premiums are to be paid throughout the Insured's lifetime. We specify a schedule of premiums that will keep the contract in force. Additional premiums may be paid at your option, subject to limits in the contract. The cash value will vary with the payment of premiums, the investment performance of the Separate Account subaccounts that you select, the interest credited to any portion of the contract fund not allocated to the subaccounts, and the mortality and expense charges deducted. The face amount shown on page 3 is the guaranteed death benefit. The death benefit will not decrease below the guaranteed death benefit if the contract is not in default past its days of grace and there is no contract debt. (We describe on page 9 the way the contract can go into default.) Subject to certain requirements, you may increase or decrease the face amount. If the contract remains in default past its days of grace, the contract may end or it may stay in force with reduced benefits. If either occurs, you may be able to reinstate its full benefits. Proceeds is a word we use to mean the amount we would pay if we were to settle the contract in one sum. To compute the proceeds that may arise from the Insured's death, we start with a basic amount. We may adjust that amount if there is a loan or if the contract is in default. The table on page 23 tells what the basic amount is. The amount depends on how the contract is in force. The table will refer you to the parts of the contract that tell you how we adjust the basic amount. If you surrender the contract, the proceeds will be the net cash value. We describe it under Cash Value Option on page 17. Proceeds often are not taken in one sum. For instance, on surrender, you may be able to put proceeds under a settlement option to provide retirement income or for some other purpose. Also, for all or part of the proceeds that arise from the Insured's death, you may be able to choose a manner of payment for the beneficiary. If an option has not been chosen, the beneficiary may be able to choose one. We will pay interest under the Interest Payment Option from the date of death on any proceeds to which no other manner of payment applies. This will be automatic as we state on page 21. There is no need to ask for it You and we may agree on a change in the ownership of this contract. Also, unless we endorse it to say otherwise, the contract gives you these rights, subject to certain limitations and requirements: o You may change the beneficiary under it; o You may borrow on it up to its loan value; o You may surrender it for its net cash value; o You may change the allocation of future net premiums among the subaccounts and the fixed account; o You may transfer amounts among subaccounts and the fixed account; o You may change the face amount; o You may withdraw a portion of the contract's value. The contract, as issued, may or may not have extra benefits that we call Supplementary Benefits. If it does, we list them under Supplementary Benefits on the Contract Data pages and describe them after page 24. The contract may or may not have other extra benefits. If it does, we add them by rider. Any extra benefit ends as soon as the contract is in default past its days of grace, unless the form that describes it states otherwise. (Contract Summary Continued on Page 23) Page 5 (VALA--86) II-94 GENERAL PROVISIONS Definitions.--We define here some of the words and phrases used all through this contract. We explain others, not defined here, in other parts of the text. We, Our, Us and Company -- Pruco Life Insurance Company, an Arizona Corporation. You and Your.--The owner of the contract. Insured.--The person named as the Insured on the first page. He or she need not be the owner. Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner. SEC.--The Securities and Exchange Commission. PLVAA.-- The Pruco Life Variable Appreciable Account. Issue Date.--The contract date. Monthly Date.--The contract date and the same day as the contract date in each later month. Example: If the contract date is March 9, 1986, the Monthly Dates are each March 9, April 9, May 9 and so on. Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year. Example: If the contract date is March 9, 1986, the first anniversary is March 9, 1987. The second is March 9, 1988, and so on. Contract Year.--A year that starts on the contract date or on an anniversary. Example: If the contract date is March 9, 1986, the first contract year starts then and ends on March 8, 1987. The second starts on March 9, 1987 and ends on March 8, 1988, and so on. Contract Month.--A month that starts on a Monthly Date. Example: If March 9, 1986 is a Monthly Date, a contract month starts then and ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends on May 8, 1986, and so on. Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3. The Contract.--This policy, and the attached copy of the initial application together with copies of any subsequent applications to change the policy, and any additional Contract Data pages added to this policy form the whole contract. We assume that all statements in the application were made to the best of the knowledge and belief of the person(s) who made them; in the absence of fraud they are deemed to be representations and not warranties. We relied on those statements when we issued the contract. We will not use any statement, unless made in the application, to try to void the contract or to deny a claim. Contract Modifications.--Only a Company officer with the rank or title of Vice President or above may agree to modify this contract, and then only in writing. Non-participating.--This contract will not share in our profits or surplus earnings. We will pay no dividends on it. Service Office.--This is the office that will service this contract. Its mailing address is the one we show on the Contract Data pages, unless we notify you of another one. Ownership and Control.--Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. Suicide Exclusion.--If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid, minus any contract debt and minus any partial withdrawals. Also, for any increase in the face amount, if the Insured, whether sane or insane, dies by suicide within two years from the effective date of the increase, we will pay, as to the increase in amount, no more than the sum of the scheduled premiums that were due for the increase. Currency.--Any money we pay, or that is paid to us, must be in United States currency. Any amount we owe will be payable at our Service Office. Misstatement of Age or Sex.--If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex. Any death benefit will be based on what the most recent charge for mortality would have provided at the correct age and sex. Where required, we have given the insurance regulator a detailed statement of how we will make these changes. The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the Insured would attain a certain age on that date. If we find that the issue age was wrong, we will correct that date. (Continued on Next Page) Page 6 (VALA--86) II-95 GENERAL PROVISIONS (Continued) Incontestability.--Except as we state in the next sentence, we will not contest this contract after it has been in force during the Insured's lifetime for two years from the issue date. There are two exceptions: (1) non-payment of enough premium to provide the required charges; and (2) any change in the contract that requires our approval and that would increase our liability. For any such change, we will not contest the change after it has been in effect during the Insured's lifetime for two years from the date it takes effect. Assignment.--We will not be deemed to know of an assignment unless we receive it, or a copy of it, at our Service Office. We are not obliged to see that an assignment is valid or sufficient. Annual Report.--Each year we will send you a report. It will show: (1) the current death benefit; (2) the investment amount; (3) the amount of the investment amount in each subaccount; (4) the amount in the fixed account; (5) the net cash value; (6) premiums paid, interest credited and monthly charges deducted since the last report; (7) any partial withdrawals since the last report; and (8) any contract debt and the interest on the debt for the prior year. The report will also include any other data that may be currently required where this contract is delivered. No report will be sent if this contract is being continued under extended term insurance. You may ask for a similar report at some other time during the year. Or you may request from time to time a report projecting results under your contract on the basis of premium payment assumptions and assumed investment results. We have the right to make a reasonable charge for reports such as these that you ask for, and to limit the scope and frequency of such reports. Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower.--If this contract was issued at age 14 or lower, it shows on page 3 an increase in face amount at attained age 21 which applies if the contract is not then in default beyond its days of grace. Any references in the contract to face amount or death benefit which apply at or after attained age 21 will be based upon the increased face amount, unless otherwise stated. Payment of Death Claim.--If we settle this contract in one sum as a death claim, we will usually pay the proceeds within 7 days after we receive at our Service Office proof of death and any other information we need to pay the claim. But we have the right to defer paying the excess of the Insurance Amount over the face amount if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. BASIS OF COMPUTATION Mortality Tables Described.--Except as we state in the next paragraph, (1) we base all net premiums and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Mortality Table; and (3) we use continuous functions based on age last birthday. For extended insurance, we base net premiums and net values on the Commissioners 1980 Extended Term Insurance Table. Interest Rate.--For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year. Exclusions.--When we compute net values we exclude the value of any Supplementary Benefits and any other extra benefits added by rider to this contract. Values After 20 Contract Years.--Tabular values not shown on page 4 will be the net level premium reserves, taking into account modified premiums. To compute them, we will use the mortality tables and interest rate we describe above. There will be the same exclusions. Minimum Legal Values.--The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits. Pruco Life Insurance Company, By /s/ Isabella L. Kirchner Secretary [SPECIMEN] - ---------- PLI 207-86 - ---------- Page 7 (VALA--86) II-96 PREMIUM PAYMENT AND REINSTATEMENT Payment of Premiums.--Premiums may be paid at our Service Office or to any of our authorized representatives. If we are asked to do so, we will give a signed receipt. Premium payments will in most cases be credited as of the date of receipt, to both the premium account and the contract fund. (See Premium Account, page 9 and Contract Fund, page 14.) Premium credits to the premium account are the full premiums paid with no deductions. Premium credits to the contract fund are the invested premium amounts (see page 14). But in the following cases, to the extent stated, premium payments will be credited as of a date other than the date of receipt: 1. The first scheduled premium is due on the Contract Date. But if the first premium payment is received after the Contract Date, the scheduled portion will be credited to the contract fund and the premium account as of the Contract Date. And any portion of that first premium payment in excess of the first scheduled premium will be credited as of the date of receipt. If the first premium is received before the Contract Date, the entire payment will be credited as of the Contract Date. 2. If a premium payment is received during the 61 day period after the day when a scheduled premium was due and had not yet been paid, here is what we will do. We will determine whether the premium account (see page 9) just before receipt of that payment was a negative amount. If not--that is, if the premium account was zero or higher--the premium payment will be credited as of the date of receipt. But if the premium account was negative, by no more than the scheduled premium on the due date, that portion of the premium payment required to bring the premium account up to zero will be credited to the premium account as of the due date; any remaining portion of the premium payment will be credited to the premium account as of the date of receipt. If the premium account is negative by more than the scheduled premium then due, the premium payment will be credited as of the date of receipt, except in the situation described in 3 below. 3. On each Monthly Date we will determine if the contract is in default. (See Default on page 9.) We will notify you of the minimum payment amount needed to bring the contract out of default. If one or more premium payments are made during the days of grace after that Monthly Date (see Grace Period on page 9), we will credit to the contract fund and the premium account as of the applicable Monthly Dates, such parts of the payments as are needed to end the default status; any remaining part of these premium payments will be credited to the contract fund and premium account as of the date of receipt. Scheduled Premiums.--We show the amount and frequency of the scheduled premiums in the Schedule of Premiums. The first scheduled premium is due on the contract date. There is no insurance under this contract unless an amount at least equal to the first scheduled premium is paid. The scheduled premium shown is the minimum required, at the frequency chosen, to continue the contract in full force if all scheduled premiums are paid when due, you make no withdrawals, any interest credited and investment returns are at the assumed rate, mortality and expense charges are at the maximum rate, and any contract debt does not exceed the cash value. An increase in the face amount increases the scheduled premium. If you wish to pay, on a regular basis, higher premiums than the amount of the scheduled premiums, we will bill you for the higher amount you choose. Or if you wish, you may from time to time make a smaller premium payment than the amount of the scheduled premium, subject to the minimum premium amount shown on page 3. If scheduled premiums that are due are not paid, or if smaller payments are made, the contract may then or at some future time go into default. Payment of less than the scheduled premium increases the risk that the contract will end if investment results are not favorable. The conditions under which default will exist are described below. Unscheduled Premiums.--Except as we state in the next paragraph, unscheduled premiums may be paid at any time during the Insured's lifetime as long as the contract is not in default beyond its days of grace. We show on page 3 the minimum premium we will accept. We have the right to limit unscheduled premiums to a total of $10,000 in any contract year. We have the right to refuse any payment that increases the basic amount by more than it increases the contract fund. Premium Change on Contract Change Date(s).--We show the Contract Change Date(s) in the Contract Data pages. We also show in the Schedule of Premiums on these pages that the amount of each scheduled premium will change on each Contract Change Date and what the new premium will be. However, when a Contract Change Date arrives we will recompute a new premium amount to be used in calculating the premium account. The new premium that we recompute will be no greater than the new premium for that date which we show in the Contract Data pages. In addition, if the premium account is less than zero, we will set the premium account to zero. (Continued on Next Page) Page 8 (VALA--86) II-97 PREMIUM PAYMENT AND REINSTATEMENT (Continued) The Schedule of Premiums may also show that the premium changes at other times. This may occur, for example, with a contract issued with extra benefits or in an extra rating class if, in either case, this calls for a higher or extra premium for a limited period of time. Allocations.--You may allocate all or a part of your invested premium amount to one or more of the subaccounts and fixed account option(s) listed in the Contract Data pages. You may choose to allocate nothing to a particular subaccount or fixed account option. But any allocation you make must be at least 10%; you may not choose a fractional percent. Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or any percentage that is not a whole number. The total for all subaccounts must be 100%. The initial allocation of invested premium amounts (see page 14) is shown in the Contract Data pages. You may change the allocation for future invested premium amounts at any time if the contract is not in default. To do so, you must notify us in writing in a form that meets our needs. The change will take effect on the date we receive your notice at our Service Office. A premium might be paid when the contract fund is less than zero. In that case, when we receive that premium, we first use as much of the invested premium amount as we need to eliminate the deficit in the contract fund. We will then allocate any remainder of the invested premium amount in accord with your most recent request. (We describe contract fund on page 14). Default.--Unless the contract is already in the grace period, on each Monthly Date, after we deduct any charges from the contract fund (which we describe on page 14) and add any credits to it, we will determine whether the contract is in default. To do so, we will compute the amount which will accrue to the tabular contract fund on the next Monthly Date if, during the current contract month: (1) any interest credited and investment returns are at the assumed rate (see Assumed Rate of Return on page 13); (2) we make the other charges and credits we have set, including interest on contract debt; and (3) we receive no premiums or loan repayments, make no loans nor grant any partial withdrawals. We will compare this amount to the contract fund. If this amount is not more than the contract fund, the contract is not in default. If this amount is more than the contract fund, the difference is the fund deficit. In this case the contract is in default if the premium account, which we define below, is also less than zero. See Excess Contract Debt on page 19 for another way the contract may end. Grace Period.--The days of grace begin on any monthly date (other than the contract date) on which the contract goes into default. We grant 61 days from the date we mail you a notice of default to make the required payment which we define below. During the days of grace we will continue to accept premiums and make the charges we have set. If the monthly date was a scheduled premium due date, when we receive a premium payment during the days of grace we will first determine whether it satisfies case 2 under Payment of Premiums above. If it does, the default will end. If it does not, or if the monthly date when the contract went into default was not a scheduled premium due date, here is what we will do: Within 30 days after any default we will send you a notice that your contract is in default. We will indicate the minimum payment required to keep your contract in force and the length of the grace period for payment of such amount. If at any time during the days of grace, we have received payments that in total are at least equal to the lesser of (a) the sum of the fund deficit on the date of default and any additional fund deficits on any subsequent Monthly Dates since the date of default, and (b) the sum of the amount by which the premium account is negative on the date of default and any scheduled premiums due since the date of default, the default will end. If the contract is still in default when the days of grace are over, it will end and have no value, except as we state under Contract Value Options (which we describe on page 16). If death occurs when the contract is in default during its days of grace, the death benefit proceeds will be reduced by the amount needed to bring the contract out of default. This contract might have an extra benefit that insures someone other than the Insured. And there might be a claim under that benefit while the Insured is living and in the days of grace while the contract is in default. In this case, we will subtract the amount needed to bring the contract out of default when we settle the claim. Premium Account.--On the contract date, the premium account is equal to the premium credited on that date minus the scheduled premium then due. On any other day, the premium account is equal to: 1. what it was on the prior day; plus 2. if the premium account was greater than zero on the prior day, interest on the excess at 4% a year; minus 3. if the premium account was less than zero on the prior day, interest on the amount of the deficit at 4% a year; plus 4. any premium credited on that day; minus 5. any scheduled premium due on that day; minus 6. any partial withdrawals on that day. (Continued on Next Page) Page 9 (VALA--86) II-98 PREMIUM PAYMENT AND REINSTATEMENT (Continued) The contract might be in default, as described above. If so, the premium account is less than zero. If a premium payment is received on any day during the days of grace while the contract is in default and the premium account is negative by no more than one scheduled premium, that payment, to the extent that it is required to bring the premium account up to zero, will, as we describe under Payment of Premiums above, be credited to the premium account as of the Monthly Date when the scheduled premium was due, whether that date is the date of default or a subsequent Monthly Date. Any remaining portion of the premium payment will be credited as of the actual date of receipt. In this case the premium account for all days from the monthly date to the actual date of receipt will be recalculated. Reinstatement.--If this contract is still in default after the last day of grace, you may reinstate it, if all these conditions are met: 1. No more than three years must have elapsed since the date of default. 2. You must not have surrendered the contract for its net cash value. 3. You must give us any facts we need to satisfy us that the insured is insurable for the contract. 4. We must be paid a premium at least equal to the amount required to bring the premium account up to zero on the first Monthly Date on which a scheduled premium is due after the date of reinstatement. From this amount we will deduct the expense charges from premium payments described in the Contract Data pages, plus any charges with 4% interest for any extra benefits, plus any other charges with 4% interest. The contract fund will be equal to the remainder, plus the cash value of the contract immediately before reinstatement, plus a refund of that part of any surrender charge deducted at the time of default which would be charged if the contract were surrendered immediately after reinstatement. If we approve, you may be able to reinstate the contract for a premium less than that described above. We will deduct the same charges and adjust the contract fund in the same manner. If you do so, the premium account will be less than zero. You may need to pay more than the scheduled premiums to guarantee that the contract will not go into default at some future time. 5. If before reinstatement the contract is in force as reduced paid-up insurance (see page 16), any contract debt under reduced paid-up insurance must be repaid with interest or carried over to the reinstated contract. If we approve the reinstatement, these statements apply. The date of reinstatement will be the date of your request or the date the required premium is paid, if later. And we will start to make daily and monthly charges and credits again as of the date of reinstatement. CHANGING THE FACE AMOUNT AND PARTIAL WITHDRAWALS Face Amount.--The face amount is shown on page 3. It will change if (1) you increase or decrease it, or (2) you make a partial withdrawal. Increase in Face Amount.--After the first contract year, you may be able to increase the face amount once each contract year. Your right to do so is subject to all these conditions and the paragraph that follows: 1. You must ask for the increase in writing and in a form that meets our needs; if you are not the Insured and the Insured is age 8 or over, he or she must sign the form too. 2. The amount of the increase must be at least equal to the minimum increase in face amount, which we show on page 3. (Continued on Next Page) Page 10 (VALA--86) II-99 CHANGING THE FACE AMOUNT AND PARTIAL WITHDRAWALS (Continued) 3. You must give us any facts we need to satisfy us that the Insured is insurable for the amount of the increase. 4. If we ask you to do so, you must send us the contract to be endorsed. 5. The contract must not be in default. 6. We must not have changed the basis on which benefits and charges are calculated under newly issued contracts since the Issue Date. 7. You must make any required payment. 8. The insured must be eligible for the same rating class and benefits as shown on page 3. 9. We must not be waiving premiums in accord with any Waiver of Premium benefit that may be included in the contract. An increase will take effect only if we approve your request for it at our Service Office. If the increase is approved, we will recompute the contract's scheduled premiums, maximum surrender charges, tabular values, monthly deductions and expense charges. We will send you new Contract Data pages showing the amount and effective date of the increase and the recomputed values. If the insured is not living on the effective date, the increase will not take effect. Decrease in Face Amount.--After the first contract year, you may be able to decrease the face amount. Your right to do so is subject to all these conditions and the paragraphs that follow: 1. You must ask for the decrease in writing and in a form that meets our needs. 2. The amount of the decrease must be at least equal to the minimum decrease in face amount, which we show on page 3. 3. The face amount after the decrease must be at least equal to the minimum face amount, which we show on page 3. 4. It we ask you to do so, you must send us the contract to be endorsed. A decrease will take effect only if we approve your request for it at our Service Office. If the decrease is approved, we will recompute the contract's scheduled premiums, maximum surrender charges, tabular values, monthly deductions and expense charges. A decrease in face amount may also effect the amount of any extra benefits this contract might have. We will send you new Contract Data pages showing the amount and effective date of the decrease and the recomputed values. If the Insured is not living on the effective date, the decrease will not take effect. We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender charge from the contract fund. Partial Withdrawals.--After the first contract year, you may be able to make partial withdrawals from the contract. Your right to do so is subject to all these conditions and the paragraphs that follow: 1. You must ask for the partial withdrawal in writing and in a form that meets our needs. 2. The amount withdrawn, plus the net cash value after withdrawal, may not be more than the net cash value before withdrawal. 3. The cash value after withdrawal must not be less than the tabular cash value for the new face amount. 4. The amount you withdraw must be at least $2,000. 5. You may make up to four partial withdrawals in any contract year. 6. The face amount after the partial withdrawal must be at least equal to the minimum face amount, which we show on page 3. 7. If we ask you to do so, you must send us the contract to be endorsed. We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender charge, based on the reduction in the face amount described below, from the contract fund. We will decrease the face amount by the amount of the withdrawal. We will recompute the contract's scheduled premiums, maximum surrender charges, tabular values, monthly deductions and expense charges. The decrease in face amount may also affect the amount of any extra benefit this contract might have. We will send you new Contract Data pages showing the recomputed values. We will usually pay any partial withdrawal within seven days after we receive your request and, if we request it, the contract at our Service Office. But we have the right to deter paying the portion of the proceeds that is to come from the portion of the contract fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year. An amount withdrawn may not be repaid, except as an unscheduled premium subject to charges. We will tell you how much you may withdraw if you ask us. Page 11 (VALA--86) II-100 SEPARATE ACCOUNT The Separate Account.--The words separate account, where we use them in this contract without qualification, mean the Pruco Life Variable Appreciable Account (PLVAA) and any other separate account that we establish. PLVAA is a unit investment trust registered with the SEC under the Investment Company Act of 1940. We established PLVAA to support variable life insurance contracts. We own the assets of this separate account: we keep them separate from the assets of our general account. Subaccounts.--A separate account may have several subaccounts. We list the subaccounts in the Contract Data pages. You determine, using percentages, how invested premium amounts will be allocated among the subaccounts. We may establish additional subaccounts. The Fund.--The word fund, where we use it in this contract without qualification, means the fund we identify in the Contract Data pages. The fund is registered with the SEC under the Investment Company Act of 1940 as an open-end diversified management investment company. The fund has several portfolios; there is a portfolio that corresponds to each of the subaccounts of PLVAA. We list these portfolios in the Contract Data pages. Separate Account Investments.--We use the assets of PLVAA to buy shares in the fund. Each subaccount of PLVAA is invested in a specific portfolio. Income and realized and unrealized gains and losses from assets in each of these subaccounts are credited to, or charged against, that subaccount. This is without regard to income, gains, or losses in our other investment accounts. We will determine the value of the assets in PLVAA at the end of each business day. When we use the term business day, we mean a day when the New York Stock Exchange is open for trading. We might need to know the value of an asset on a day that is not a business day or on which trading in that asset does not take place. In this case, we will use the value of that asset as of the end of the last prior business day on which trading took place. Example: It we need to know the value of an asset on a Sunday, we will normally use the value of the asset as of the end of business on Friday. We will always keep assets in the separate account with a total value at least equal to the amount of the investment amounts under contracts like this one. To the extent those assets do not exceed this amount, we use them only to support those contracts; we do not use those assets to support any other business we conduct. We may use any excess over this amount in any way we choose. If we create additional separate accounts, we may invest the assets in them in a different way. But we will do so only with the consent of the SEC and, where required, of the insurance regulator where this contract is delivered. Change in Investment Policy.--A portfolio of the fund might make a material change in its investment policy. In that case, we will send you a notice of the change. Within 60 days after you receive the notice, or within 60 days after the effective date of the change, if later, you may transfer to the Fixed Account any amounts in the subaccount investing in that portfolio. Change of Fund.--A portfolio of the fund might, in our judgment, become unsuitable for investment by a subaccount. This might happen because of a change in investment policy, or a change in the laws or regulations, or because the shares are no longer available for investment, or for some other reason. If that occurs, we have the right to substitute another portfolio of the fund, or to invest in a fund other than the one we show in the Contract Data pages. But we would first seek the consent of the SEC and, where required, the insurance regulator where this contract is delivered. FIXED ACCOUNT The Fixed Account.--If you choose, you may allocate all or part of your invested premium amount to the fixed account. The fixed account is funded by the general account of Pruco Life. The fixed account is credited with interest as described under Guaranteed Interest and Excess Interest on page 14. Fixed Account Options.--We may have more than one fixed account option. We list the fixed account option(s) in the Contract Data pages. Page 12 (VALA--86) II-101 TRANSFERS Transfers Among Subaccounts and into the Fixed Account.--You may transfer amounts among subaccounts of PLVAA and into the Fixed Account as often as four times in a contract year if the contract is not in default or if the contract is being continued under the reduced paid up option. In addition, at any time within the first two contract years, or within two years of the effective date of any increase, the entire amount in all subaccounts may be transferred to the fixed account. If we establish new separate accounts, transfers into or out of these separate accounts will be allowed only with our consent. To make a transfer, you must notify us in writing in a form that meets our needs. The transfer will take effect on the date we receive your notice at our Service Office. Transfers Among Fixed Account Options and into the Subaccounts.--You may transfer amounts among the available Fixed Account Options and into the subaccounts only with our consent. INVESTMENT AMOUNT AND ASSUMED RATE OF RETURN Investment Amount.--The investment amount for this contract is an amount we use to compute the investment return. The investment amount is allocated among the subaccounts. The amount of the investment amount and its allocation to subaccounts depend on (1) how you choose to allocate net premiums; (2) whether or not you transfer amounts among subaccounts and the fixed account; (3) the investment performance of the subaccounts to which amounts are allocated or transferred; (4) the deductions we make from the contract fund; (5) the amount and timing of premium payments you make; (6) whether or not you take any loan; and (7) whether or not you make any partial withdrawals or change the face amount. The investment amount exists only if the contract is not in default past the days of grace or if it is being continued as reduced paid-up insurance. The investment amount at any time is equal to the contract fund, minus the amount of any contract loan and interest accrued on the loan since the last transaction date, minus the amount in the Fixed Account. Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a year. This is the same as .01074598% a day compounded daily. Page 13 (VALA--86) II-102 INSURANCE AMOUNT The insurance amount on any date is equal to the greater of (1) the face amount, which we show on the page 3, plus any excess of the contract fund over the tabular contract fund, and (2) the contract fund divided by the net single premium per $1 at the insured's attained age on that date. CONTRACT FUND Contract Fund Defined.--On the contract date the contract fund is equal to the invested premium amounts credited (see below), minus any of the charges described in items (g) through (m) below which may have been due on that date. On any day after that the contract fund is equal to what it was on the previous day, plus any invested premium amounts credited, plus these items: (a) any increase due to investment results in the value of the subaccounts to which that portion of the contract fund that is in the investment amount is allocated; (b) guaranteed interest at an effective rate of 4% a year on that portion of the contract fund that is not in the investment amount; and (c) any excess interest on that portion of the contract fund that is not in the investment amount; and minus these items: (d) any decrease due to investment results in the value of the subaccounts to which that portion of the contract fund that is in the investment amount is allocated; (e) a charge against the investment amount at a rate of not more than .00163894% a day (.60% a year) for mortality and expense risks that we assume; (f) any amount charged against the investment amount for Federal or State income taxes; (g) a charge to guarantee the minimum death benefit; (h) a charge for the cost of expected mortality; (i) any charges for extra rating class; (j) any charges for extra benefits; (k) any charge for administration; (l) any partial withdrawals; and (m) any surrender charges and administrative charges that may result from a partial withdrawal or a decrease in face amount. We describe under Reinstatement on page 10 what the contract fund will be equal to on any reinstatement date. There is no contract fund for a contract in force under extended insurance. Invested Premium Amount.--This is the portion of each premium paid that we will add to the contract fund. It is equal to the premium paid minus the expense charges described in the Contract Data pages under Schedule of Expense Charges from Premium Payments. Guaranteed Interest.--We will credit interest each day on that portion of the contract fund not in the investment amount. We will credit .01074598% a day, which is equivalent to an effective rate of 4% a year. Excess Interest.--We may credit interest in addition to the guaranteed interest on that portion of the contract fund not in the investment amount. The rate of any excess interest will be determined from time to time and will continue thereafter until a new rate is determined. We may use different rates of excess interest for different portions of the contract fund not in the investment amount. We may from time to time guarantee rates of excess interest on some portions of the contract fund. Cost of Expected Mortality.--On each Monthly Date, we will deduct a charge for the cost of expected mortality. The amount deducted is computed as the annual mortality rate multiplied by the coverage amount. The coverage amount is the difference between the adjusted death benefit and the adjusted contract fund. The adjusted death benefit is equal to the Insurance Amount multiplied by the Factor for Adjusting the Insurance Amount (see Table of Adjustment Factors). If the insurance amount equals the face amount, the adjusted contract fund is equal to the tabular contract fund at the end of the month plus the excess, positive or negative, of the actual contract fund, after deduction of any charges due on the Monthly Date, over the tabular contract fund at the beginning of the month, all multiplied by the Factor for Adjusting the Contract Fund. If the insurance amount exceeds the face amount, the adjusted contract fund is equal to the net single premium at the end of the month for the insurance amount on the Monthly Date, all multiplied by the Factor for Adjusting the Contract Fund. The adjustment factors depend on the month as shown in the table that follows. (Continued on Next Page) Page 14 (VALA--86) II-103 CONTRACT FUND (Continued) We will not charge more than the maximum guaranteed rates, which are based on the Insured's sex and attained age and the mortality table described in the Basis of Computation. We may charge less. At least once every five years, but not more often than once a year, we will consider the need to change the rates. We will change them only if we do so for all contracts like this one dated in the same year as this one. Charge for Extra Rating Class.--If there is an extra charge because of the rating class of the Insured, we will deduct it from the contract fund at the beginning of each contract month. Any charge is included in the amount shown in the Contract Data pages under Schedule of Monthly Deductions from the Contract Fund. Charge for Extra Benefits.--If the contract has extra benefits, we will deduct the charges for such benefits from the contract fund at the beginning of each contract month. Charges for any such extra benefits are included in the amount shown in the Contract Data pages under Schedule of Monthly Deductions from Contract Fund. Charges for Administration and Minimum Death Benefit Guarantee.--On each monthly date, we will deduct a charge for administration. We will also deduct a charge for guaranteeing the minimum death benefit regardless of the investment performance of the separate account. We show the amount of these charges in the Contract Data pages under Schedule of Monthly Deductions from the Contract Fund. - -------------------------------------------------------------------------------- TABLE OF ADJUSTMENT FACTORS - -------------------------------------------------------------------------------- Factor for Adjusting Factor for Adjusting Month the Insurance Amount the Contract Fund February .076597042 .076481870 A month with 30 days .082059446 .081927252 A month with 31 days .084790207 .084649064 - -------------------------------------------------------------------------------- Page 15 (VALA-86) II-104 CONTRACT VALUE OPTIONS Benefit After the Grace Period.--If the contract is in default beyond its days of grace, we will use any net cash value (which we describe under Cash Value Option) to keep the contract in force as one of two kinds of insurance. One kind is extended insurance. The second kind is reduced paid-up insurance. We describe each below. You will find under Automatic Benefit which kind it will be. Any extra benefit(s) will end as soon as the contract is in default past its days of grace, unless the form that describes the extra benefit states otherwise. Extended Insurance.--This will be term insurance of a fixed amount on the Insured's life. We will pay the amount of term insurance if the Insured dies in the term we describe below. Before the end of the term there will be cash values but no loan value. The amount of term insurance will be the death benefit on the day of default, minus any part of that death benefit which was provided by extra benefits. The term is a period of time that will start on the day the contract went into default. The length of the term will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date. There may be extra days of term insurance. This will occur if, on the day the contract goes into default, the term of extended insurance provided by the net cash value does not exceed 90 days, or the number of days the contract was in force before the default began, if less. The number of extra days will be (1) 90, or the number of days the contract was in force before the default began, if less, minus (2) the number of days of extended insurance that would be provided by the net cash value if there were no contract debt. The extra days, if any. start on the day after the last day of term insurance provided by the net cash value, if any. If there is no such term insurance, the extra days start on the day the contract goes into default. The term insurance for the extra days has no cash value. There will be no extra days if you replace the extended insurance with reduced paid-up insurance or you surrender the contract before the extra days start. Reduced Paid-up Insurance.--This will be paid-up variable life insurance on the Insured's life. The death benefit may change from day to day, as we explain below, but if there is no contract debt, it will not be less than a minimum guaranteed amount. There will be cash values and loan values. The minimum guaranteed amount of insurance will be computed by using the net cash value at the net single premium rate determined as of the day the contract went into default. The net single premium rate depends on the Insured's issue age and sex and on the length of time since the contract date. The amount payable in the event of death thereafter will be the greater of (a) the minimum guaranteed amount and (b) the contract fund divided by the net single premium per $1 at the Insured's attained age. In either case the amount will be adjusted for any contract debt. Except when it is provided as the automatic benefit, (see below), the reduced paid-up insurance option will be available only when the guaranteed death benefit under the option will be $5000 or more. If we issued the contract in a rating class for which we do not provide extended insurance, you may not allocate the contract fund of the reduced paid-up insurance to any subaccount without our consent. Computations.--We will make all computations for either of these benefits as of the date the contract goes into default. But we will consider any loan you take out or pay back or any premium payments or partial withdrawals you make in the days of grace. Automatic Benefit.--When the contract is in default, it will stay in force as extended insurance. But it will stay in force as reduced paid-up insurance if either of these statements applies: (1) We issued the contract in a rating class for which we do not provide extended insurance; in this case the phrase No Extended Insurance is in the Rating Class in the Contract Data pages. (2) The amount of reduced paid-up insurance would be at least as great as the amount of extended term insurance. Optional Benefit.--You may choose to replace any extended insurance that has a net cash value by reduced paid-up insurance. To make this choice, you must do so in writing to us in a form that meets our needs, not more than three months after the date the contract goes into default. You must also send the contract to us to be endorsed. (Continued on Next Page) Page 16 (VALA--86) II-105 CONTRACT VALUE OPTIONS (Continued) Cash Value Option.--You may surrender this contract for its net cash value. The net cash value at any time is the cash value at that time, less any contract debt. To surrender this contract, you must ask us in writing in a form that meets our needs. You must also send the contract to us. Here is how we will compute the cash value for surrender of the contract or for its continuation under extended insurance or reduced paid-up insurance. 1. If the contract is not in default: The cash value on surrender is the contract fund, minus any surrender charge, consisting of a deferred sales charge and a deferred underwriting and issue charge. The schedule of Maximum Surrender Charges for this contract is in the Contract Data pages. 2. If the contract is in default during its days of grace: We will compute the net cash value as of the date the contract went into default. But we will adjust this value for any loan you take out or pay back, and any premium payments, partial withdrawals or decreases in face amount you make in the days of grace. 3. If the contract is in default beyond its days of grace: The net cash value as of any date will be the net value on that date of any extended insurance benefit then in force. Or it will be the net value on that date of any reduced paid-up insurance benefit then in force, less any contract debt. Within 30 days after a contract anniversary, the net cash value of any extended insurance will not be less than the value on that anniversary. We will usually pay any cash value within seven days after we receive your request and the contract at our Service Office. But we have the right to defer paying the portion of the proceeds that is to come from the portion of the contract fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year. Tabular Values.--We show tabular contract fund values and tabular cash values at the end of contract years in the Contract Data pages. The tabular contract fund at the end of any contract year is the amount which will then be in the contract fund if all scheduled premiums have been paid on their due dates, there have been no unscheduled premiums paid, there is no contract debt, the subaccounts you have chosen earn exactly the assumed rate of return, we have credited no excess interest, and we have deducted the maximum mortality and expense charges. The tabular cash values are the amounts which, under the same conditions, will then be used to provide extended insurance or reduced paid-up insurance or will be paid in cash, if the maximum surrender charges are applied. The tabular cash value shown is equal to the tabular contract fund value as of the same date after deducting any surrender charges (at the maximum rate) from the tabular contract fund value. (See Cash Value Option above.) If we need to compute tabular values at some time during a contract year, we will count the time since the start of the year. We will let you know the tabular values for other durations if you ask for them. Page 17 (VALA--86) II-106 LOANS Loan Requirements.--After the first anniversary, you may borrow from us on the contract. All these conditions must be met: 1. The Insured is living. 2. The contract is in force other than as extended insurance. 3. The contract debt will not be more than the loan value. (We explain these terms below.) 4. As sole security for the loan, you assign the contract to us in a form that meets our needs. 5. Except when used to pay premiums on this contract, the amount you borrow at anyone time must be at least $500. If there is already contract debt when you borrow from us, we will add the new amount you borrow to that debt. Contract Debt.--Contract debt at any time means the loan on the contract, plus the interest we have charged that is not yet due and that we have not yet added to the loan. Loan Value.--You may borrow any amount up to the difference between the loan value and any existing contract debt. At any time the loan value is 90% of the cash value. There is one exception. If the contract is in default, the loan value during the days of grace is what it was on the date of default. Example 1: Suppose the contract has a loan value of $6,000. About eight months ago you borrowed $1,500. By now there is interest of $55 charged but not yet due. The contract debt is now $1,555, which is made up of the $1,500 loan and the $55 interest. Example 2: Suppose, in example 1, you want to borrow all that you can. We will lend you $4,445 which is the difference between the $6,000 loan value and the $1,555 contract debt. This will increase the contract debt to $6,000. We will add the new amount borrowed to the existing loan and will charge interest on it, too. Interest Charge.--You may select either the Fixed Loan Rate Option or the Variable Loan Rate Option. Both are described below. We show on page 3 the option you have selected. You may request a change to the loan rate option at anytime. If we agree, we will tell you the effective date of the change. Fixed Loan Rate Option.--We charge interest daily on any loan at the effective rate of 5 1/2% a year. Interest is due on each contract anniversary, or when the loan is paid back if that comes first. If interest is not paid when due. it becomes part of the loan. Then we start to charge interest on it, too. Example 3: Suppose the contract date is in 1987. Six months before the anniversary in 1996 you borrow $1,600 out of a $4,000 loan value. We charge 5 1/2% a year. Three months later, but still three months before the anniversary, we will have charged about $22 interest. This amount will be a few cents more or less than $22 since some months have more days than others. The interest will not be due until the anniversary unless the loan is paid back sooner. The loan will still be $1,600. The contract debt will be $1,622, since contract debt includes interest charged but not yet due. On the anniversary in 1996 we will have charged about $44 interest. The interest will then be due. Example 4: Suppose the $44 interest in example 3 was paid on the anniversary. The loan and contract debt each became $1,600 right after the payment. Example 5: Suppose the $44 interest in example 3 was not paid on the anniversary. The interest became part of the loan, and we began to charge interest on it, too. The loan and contract debt each became $1,644. Variable Loan Rate Option.--We charge interest daily on any loan. Interest is due on each contract anniversary, or when the loan is paid back it that comes first. If interest is not paid when due, it becomes part of the loan. Then we start to charge interest on it, too. The loan interest rate is the annual rate we set from time to time. The rate will never be greater than is permitted by law. It will change only on a contract anniversary. Before the start of each contract year, we will determine the loan interest rate we can charge for that contract year. To do this, we will first find the rate that is the greater of (1) The Published Monthly Average (which we describe below) for the calendar month ending two months before the calendar month of the contract anniversary; and (2) 5%. If that greater rate is at least 1/2% more than the loan interest rate we had set for the current contract year, we have the right to increase the loan interest rate by at least 1/2%, up to that greater rate. If it is at least 4% less, we will decrease the loan interest rate to be no more than the greater rate. We will not change the loan interest rate by less than 1/2%. (Continued on Next Page) Page 18 (VALA--86) II-107 LOANS (Continued) When you make a loan we will tell you the initial interest rate for the loan. We will send you a notice it there is to be an increase in the rate. The Published Monthly Average means: 1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor to that service; or 2. If that average is no longer published, a substantially similar average, established by the insurance regulator where this contract is delivered. Repayment.--All or part of any contract debt may be paid back at any time while the Insured is living. When we settle the contract, any contract debt is due us. If there is contract debt at the end of the last day of grace when the contract is in default, it will be deducted from the cash value to determine the net cash value. We will make this adjustment so that the proceeds will not include the amount of that debt. Effect of a Loan.--When you take a loan, the amount of the loan continues to be a part of the contract fund and continues to be credited with interest at the guaranteed rate of 4% a year. If you have selected the Variable Loan Rate Option, we will credit excess interest at an effective rate of not less than the loan interest rate for the contract year less 5 1/2%. However, we will reduce the portion of the contract fund allocated to the separate account and the fixed account by the amount you borrow, and by loan interest that becomes part of the loan because it is not paid when due. On each transaction date, if there is a contract loan outstanding, we will increase the portion of the contract fund in the fixed account and the separate account by interest credits accrued on the loan since the last transaction date. When you repay part or all of a loan we will increase the portion of the contract fund in the separate account and the fixed account by the amount of loan you repay, plus interest credits accrued on the loan since the last transaction date. We will not increase the portion of the contract fund allocated to the separate account and the fixed account by loan interest that is paid before we make it part of the loan. Only the amount of the investment amount will reject the investment results of the subaccounts. Since the amount you borrow is removed from the portion of the contract fund allocated to the separate account and the fixed account, a loan may have a permanent effect on the net cash value of this contract and also on any death benefit in excess of the guaranteed death benefit. The longer the loan is outstanding, the greater this effect is likely to be. Excess Contract Debt.--If contract debt ever becomes equal to or more than the cash value, all the contract's benefits will end 61 days after we mail a notice to you and any assignee of whom we know. Also. we may send a notice to the Insured's last known address. In the notice we will state the amount that, if paid to us, will keep the contract's benefits from ending for a limited time. Postponement of Loan.--We will usually make a loan within seven days after we receive your request at our Service Office. But we have the right to defer making the portion of the loan that is to come from the portion of the contract fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds of a loan for up to six months, unless it will be used to pay premiums on this or other contracts with us. Page 19 (VALA--86) II-108 SETTLEMENT OPTIONS Payee Defined.--In these provisions and under the Automatic Mode of Settlement, the word Payee means a person who has a right to receive a settlement under the contract. Such a person may be the Insured, the owner, a beneficiary, or a contingent payee. Choosing an Option.--A Payee may choose an option for all or part of any proceeds or residue that becomes payable to him or her in one sum. We describe residue later on this page. In some cases, a Payee will need our consent to choose an option. We describe these cases under Conditions. Options Described.--Here are the options we offer. We may also consent to other arrangements. Life Income Option.--We will make equal monthly payments for as long as the person on whose life the settlement is based lives, with payments certain for a 10-year period (10-Year Certain). The amount of each payment will be based on the Life Income Option Table and on the sex and age, on the due date of the first payment, of the person on whose life the settlement is based. That person must be a Payee. But if a choice is made more than two years after the Insured's death, we may use the Life Income Option payment rates in individual annuity contracts or life insurance contracts we regularly issue, based on United States currency, on the due date of the first payment. On request, we will quote the payment rates in contracts we then issue. We must have proof of the date of birth of the person on whose life the settlement is based. If on the due date of the first payment under this option, we have declared a higher payment rate under the option, we will base the payments on that higher rate. Interest Payment Option.--We will hold an amount at interest. We will pay interest at an effective rate of at least 3% a year ($30.00 annually, $14.89 semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more interest. Supplemental Life Annuity Option.--Any Payee may choose to receive all or part of the proceeds of this contract in the form of payments like those of any annuity or life annuity we then regularly issue. But that annuity must (1) be based on United States currency; (2) be bought by a single sum; (3) not provide for dividends; and (4) not normally provide for deferral of the first payment. For purposes of this option only, the words we, our and us include our parent company, The Prudential Insurance Company of America, which has agreed to make settlements under this option. The payment will be at least what we would pay under the chosen kind of annuity with its first payment due on its contract date. The phrase regularly issue does not include contracts that are used to qualify for special federal income tax treatment as a retirement plan unless this contract has been issued as part of such a plan. At least one of the persons on whose life this Option is based must be a Payee. We must have proof of the date of birth of any person on whose life the option is based. This Option cannot be chosen more than 30 days before the due date of the first payment. On request, we will quote the payment that would apply for any amount placed under the option at that time. First Payment Due Date.--Unless a different date is stated when the option is chosen: (1) the first payment for the Interest Payment Option will be due at the end of the chosen payment interval; and (2) the first payment for any of the other options will be due on the date the option takes effect. Residue Described. For the Life Income Option and the Supplemental Life Annuity Option, residue on any date means the then present value of any unpaid payments certain. For the Life Income Option, we will compute it at an effective interest rate of 3 1/2% a year. But we will use the interest rate we used to compute the actual Life Income Option payments if they were not based on the table in this contract. For the Supplemental Life Annuity Option, we will use the interest rate we would use for the chosen kind of annuity with the same provisions as to withdrawal. For the Interest Payment Option, residue on any date means any unpaid balance with interest to that date. For the Life Income Option and the Supplemental Life Annuity Option, residue does not include the value of any payment that may become due after the certain period. Withdrawal of Residue.--Unless otherwise stated when the option is chosen: (1) under the Life Income Option and the Supplemental Life Annuity Option the residue may be withdrawn; and (2) under the Interest Payment Option all, or any part not less than $100, of the residue may be withdrawn. If the Interest Payment Option residue is reduced to less than $1,000, we have the right to pay it in one sum. Under the Life Income Option and the Supplemental Life Annuity Option, withdrawal of the residue will not affect any payments that may become doe after the certain period; the value of those payments cannot be withdrawn. Instead, the payments will start again if they were based on the life of a person who lives past the certain period. (Continued on Next Page) Page 20 (VALA--86) II-109 SETTLEMENT OPTIONS (Continued) Designating Contingent Payee(s)--A Payee under an option has the right, unless otherwise stated, to name or change a contingent payee to receive any residue at the Payee's death. This may be done only if (1) the Payee has the full right to withdraw the residue; or (2) the residue would otherwise have been payable to that Payee's estate at death. A payee who has the right may choose, or change the choice of, an option for all or part of the residue. In some cases, the Payee will need our consent to choose or change an option. We describe these cases under Conditions. Any request to exercise any of these rights must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office. Then the interest of anyone who is being removed will end as of the date of the request, even if the Payee who made the request is not living when we file it. Changing Options.--A Payee under the Interest Payment Option may choose another option for any sum that the Payee could withdraw on the date the chosen option is to start. That date may be before the date the Payee makes the choice only if we consent. In some cases, the Payee will need our consent to choose or change an option. We describe these cases next. Conditions.--Under any of these conditions, our consent is needed for an option to be used for any person: 1. The person is not a natural person who will be paid in his or her own right. 2. The person will be paid as assignee. 3. The amount to be held for the person under the Interest Payment Option is less than $1,000. But we will hold any amount for at least one year in accord with the Automatic Mode of Settlement. 4. Each payment to the person under the option would be less than $20. 5. The option is for residue arising other than at (a) the Insured's death, or (b) the death of the beneficiary who was entitled to be paid as of the date of the Insured's death. 6. The option is for proceeds that arise other than from the Insured's death, and we are settling with an owner or any other person who is not the Insured. Death of Payee.--If a Payee under an option dies and if no other distribution is shown, we will pay any residue under that option in one sum to the Payee's estate. AUTOMATIC MODE OF SETTLEMENT Applicability.--These provisions apply to proceeds arising from the Insured's death and payable in one sum to a Payee who is a beneficiary. They do not apply to any periodic payment. Interest on Proceeds.--We will hold the proceeds at interest under Interest Payment Option of the Settlement Options provision. The Payee may withdraw the residue. We will pay it promptly on request. We will pay interest annually unless we agree to pay it more often. We have the right to pay the residue in one sum after one year if (1) the Payee is not a natural person who will be paid in his or her own right; (2) the Payee will be paid as assignee; or (3) the original amount we hold under Interest Payment Option for the Payee is less than $1,000. Settlement at Payee's Death.--If the Payee dies and leaves an Interest Payment Option residue, we will honor any contingent payee provision then in effect. If there is none, here is what we will do. We will look to the beneficiary designation of the contract; we will see what other beneficiary(ies), if any, would have been entitled to the portion of the proceeds that produced the Interest Payment Option residue if the Insured had not died until immediately after the Payee died. Then we will pay the residue in one sum to such other beneficiary(ies}, in accord with that designation. But if, as stated in that designation, payment would be due the estate of someone else, we will instead pay the estate of the Payee. Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. Jane was living when the Insured died. Jane later died without having chosen an option or naming someone other than Paul and John as contingent payee. If Paul and John are living at Jane's death we owe them the residue. If only one of them is living then, and if the contract called for payment to the survivor of them, we owe him the residue. It neither of them is living then, we owe Jane's estate. Spendthrift and Creditor.--A beneficiary or contingent payee may not, at or after the Insured's death, assign, transfer, or encumber any benefit payable. To the extent allowed by law, the benefits will not be subject to the claims of any creditor of any beneficiary or contingent payee. Page 21 (VALA-86) II-110 SETTLEMENT OPTIONS (Continued) LIFE INCOME OPTION TABLE 10-YEAR CERTAIN - -------------------------------------------------------------------------------- MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY - -------------------------------- AGE LAST BIRTHDAY Male Female - -------------------------------- 10 $3.18 $3.11 and under 11 3.19 3.12 12 3.20 3.13 13 3.21 3.14 14 3.22 3.15 15 3.24 3.16 16 3.25 3.17 17 3.27 3.19 18 3.28 3.20 19 3.30 3.21 20 3.31 3.22 21 3.33 3.24 22 3.35 3.25 23 3.36 3.26 24 3.38 3.28 25 3.40 3.30 26 3.42 3.31 27 3.45 3.33 28 3.47 3.35 29 3.49 3.37 30 3.52 3.39 31 3.54 3.41 32 3.57 3.43 33 3.60 3.45 34 3.63 3.47 35 3.66 3.50 36 3.69 3.52 37 3.72 3.55 38 3.76 3.58 39 3.80 3.61 40 3.84 3.64 41 3.88 3.67 42 3.92 3.70 43 3.97 3.74 44 4.01 3.78 - --------------------------------- - --------------------------------- AGE LAST BIRTHDAY Male Female - --------------------------------- 45 $4.06 $3.82 46 4.12 3.86 47 4.17 3.90 48 4.23 3.94 49 4.28 3.99 50 4.35 4.04 51 4.41 4.09 52 4.48 4.15 53 4.55 4.21 54 4.82 4.27 55 4.70 4.33 56 4.78 4.40 57 4.86 4.47 58 4.95 4.54 59 5.05 4.62 60 5.15 4.71 61 5.25 4.79 62 5.36 4.89 63 5.48 4.98 64 5.60 5.09 65 5.73 5.20 66 5.87 5.31 67 6.01 5.43 68 6.15 5.56 69 6.30 5.70 70 6.46 5.84 71 6.62 5.99 72 6.79 6.15 73 6.96 6.31 74 7.13 6.49 75 7.30 6.67 76 7.48 6.85 77 7.66 7.04 78 7.83 7.24 79 8.00 7.44 80 8.17 7.64 and over - --------------------------------- Page 22 (VALA-86) II-111 BENEFICIARY You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and soon. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise; 1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured. 2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured. 3. Two or more in the same class who have the right to be paid will be paid in equal shares. 4. If none survives the Insured, we will pay in one sum to the Insured's estate. Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. We owe Jane the proceeds if she is living at the Insured's death. We owe Paul and John the proceeds if they are living then but Jane is not. But if only one of them is living, we owe him the proceeds. If none of them is living we owe the Insured's estate. Beneficiaries who do not have a right to be paid under these terms may still have a right to be paid under the Automatic Mode of Settlement. Before we make a payment, we have the right to decide what proof we need of the identity, age or any other facts about any persons designated as beneficiaries. It beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again.
CONTRACT SUMMARY (Continued from Page 5) - --------------------------------------------------------------------------------------------------------- TABLE OF BASIC AMOUNTS - --------------------------------------------------------------------------------------------------------- When the proceeds arise from the Insured's death: - --------------------------------------------------------------------------------------------------------- And The Contract Is In Force: Then The Basic Amount Is: And We Adjust The Basic Amount For: - --------------------------------------------------------------------------------------------------------- and not in default past its days of the insurance amount (see page 14) contract debt (see page 18), grace plus the amount of any extra benefits plus any charges due in the arising from the insured's death days of grace (see page 9). - --------------------------------------------------------------------------------------------------------- as reduced paid-up insurance (see the amount of reduced contract debt. page 16) paid-up insurance (see page 16) - --------------------------------------------------------------------------------------------------------- as extended insurance (see the amount of term insurance. if the nothing. page 16) Insured dies in the term (see page 16); otherwise zero - --------------------------------------------------------------------------------------------------------- This Table is a part of the Contract Summary and of the Contract. - ---------------------------------------------------------------------------------------------------------
Page 23 (VALA-86) II-112 GUIDE TO CONTENTS Page Contract Summary .......................................................... 5 Table of Basic Amounts ................................................. 23 Contract Data ............................................................. 3 List of Contract Minimums; List of Supplementary Benefits, if any; Summary of Face Amount; Schedule of Premiums; Schedule of Expense Charges from Premium Payments; Schedule of Monthly Deductions from Contract Fund; Schedule of Maximum Surrender Charges; List of Subaccounts and Portfolios; List of Fixed Account Options; Schedule of Initial Allocation of Net Premiums; Service Office Tabular Contract Fund and Tabular Cash Values ............................................................. 4 General Provisions ........................................................ 6 Definitions; The Contract; Contract Modifications; Non-participating; Service Office; Ownership and Control; Suicide Exclusion; Currency; Misstatement of Age or Sex; Incontestability; Assignment; Annual Report; Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower; Payment of Death Claim Basis of Computation ...................................................... 7 Mortality Tables Described; Interest Rate; Exclusions; Values after 20 Contract Years; Minimum Legal Values Premium Payment and Reinstatement ......................................... 8 Payment of Premiums; Scheduled Premiums; Unscheduled Premiums; Premium Change on Contract Change Date(s); Allocations; Default; Grace Period; Premium Account; Reinstatement Changing The Face Amount and Partial Withdrawals .................................................... 10 Face Amount; Increase in Face Amount; Decrease in Face Amount; Partial Withdrawals Separate Account .......................................................... 12 The Separate Account; Subaccounts; The Fund; Separate Account Investments; Change in Investment Policy; Change of Fund Fixed Account ............................................................. 12 The Fixed Account; Fixed Account Options Transfers ................................................................. 13 Transfers Among Subaccounts and into the Fixed Account; Transfers Among Fixed Account Options and into the Subaccounts Investment Amount and Assumed Rate of Return .............................. 13 Investment Amount; Assumed Rate of Return; Insurance Amount .......................................................... 14 Contract Fund ............................................................. 14 Contract Fund Defined; Invested Premium Amount; Guaranteed Interest; Excess Interest, Cost of Expected Mortality; Charge for Extra Rating Class; Charge for Extra Benefits; Charges for Administration and Minimum Death Benefit Guarantee; Schedule of Other Charges Table of Adjustment Factors ............................................... 15 Contract Value Options .................................................... 16 Benefit After the Grace Period; Extended Insurance; Reduced Paid-up Insurance; Computations; Automatic Benefit; Optional Benefit; Cash Value Option; Tabular Values Loans ..................................................................... 18 Loan Requirements; Contract Debt; Loan Value; Interest Charge; Fixed Loan Rate Option; Variable Loan Rate Option; Repayment; Effect of a Loan; Excess Contract Debt; Postponement of Loan Settlement Options ........................................................ 20 Payee Defined; Choosing an Option; Options Described; Life Income Option; Interest Payment Option; Supplemental Life Annuity Option; First Payment Due Date; Residue Described; Withdrawal of Residue; Designating Contingent Payee(s); Changing Options; Conditions; Death of Payee Automatic Mode of Settlement .............................................. 21 Applicability; Interest on Proceeds; Settlement at Payee's Death; Spendthrift and Creditor Life Income Option Table .................................................. 22 Beneficiary ............................................................... 23 Any Supplementary Benefits and a copy of the application follow page 24. II-113 Page 24 (VALA-86) II-114 ENDORSEMENT (Only we can endorse this contract) Page 25 (VALA--86) II-115 Page 26 Modified Premium Variable Life Insurance Policy. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provisions for optional additional premiums. Cash values reflect premium payments, investment results and charges. Guaranteed death benefit if scheduled premiums duly paid and no contract debt or withdrawals. Increase in face amount at attained age 21 if contract issued at age 14 or lower. Non-participating. VALA--86 II-116 Pruco Life Insurance Company No. XX XXX XXX A Supplement to the Life Insurance Application for a variable contract in which JOHN DOE is named as the proposed insured. - ------------------------------------------------------------------------------- I BELIEVE THIS CONTRACT MEETS MY INSURANCE NEEDS AND FINANCIAL OBJECTIVES. I ACKNOWLEDGE RECEIPT OF A CURRENT PROSPECTUS FOR THE CONTRACT. I UNDERSTAND THAT THE CONTRACT'S VALUE AND DEATH BENEFIT MAY VARY DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE ....................................... YES [X] NO [ ] Date Signature of Applicant Aug. 3, 1987 JOHN DOE PLI 252-88 Ed. 5 II-117
- ----------------------------------------------------=============================================================================== Part 1 Application for Life Insurance [ ] The Prudential Insurance Company of America [X] Pruco Life Insurance Company A Subsidiary of The Prudential Insurance Company of America No. - ----------------------------------------------------------------------------------------------------------------------------------- 1a. Proposed Insured's name--first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth M F Mo. Day Yr. JOHN DOE: [X] [ ] 6 15 50 35 (NAME OF STATE) - ----------------------------------------------------------------------------------------------------------------------------------- 3. [ ] Single [X] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Social Security No. xxx / xx / xxxx - ----------------------------------------------------------------------------------------------------------------------------------- 5a. Occupation(s) Clerk 5b. Duties Clerical - ----------------------------------------------------------------------------------------------------------------------------------- 6. Address for mail No. Street City State Zip 15 BLANK STREET (NAME OF CITY) (NAME OF STATE) XXXXX - ----------------------------------------------------------------------------------------------------------------------------------- 7a. Kind of policy VARIABLE APPRECIABLE LIFE 7b. Initial amount 8. Accidental death coverage LEVEL DEATH BENEFIT $50,000 initial amount $ - ----------------------------------------------------------------------------------------------------------------------------------- 9. Beneficiary: (Include name, age and relationship.) 10. List all life insurance on proposed Insured. Check here if None [ ] a. Primary (Class 1): Company Initial Yr. Kind Medical MARY DOE, 35, SPOUSE amt. issued (Indiv., Group) Yes No ____________________________________________________ [ ] [ ] b. Contingent (Class 2) if any: _______________________________________________________________________ Robert, 10, Son [ ] [ ] _______________________________________________________________________ [ ] [ ] _______________________________________________________________________ [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 11. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP) Relationship to Date of birth Total life insurance Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies a. Spouse $ ___________________________________________________________________________________________________________________________________ b. $ ___________________________________________________________________________________________________________________________________ c. $ ___________________________________________________________________________________________________________________________________ d. $ ___________________________________________________________________________________________________________________________________ e. $ ___________________________________________________________________________________________________________________________________ f. $ - ----------------------------------------------------------------------------------------------------------------------------------- 12. Supplementary benefits and riders: a. For proposed Insured b. For spouse, children, Applicant for AWP Type and duration of benefit Amount Type and duration of benefit Amount $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ [ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit - ----------------------------------------------------------------------------------------------------------------------------------- 13. State any special request. - ----------------------------------------------------------------------------------------------------------------------------------- 14. Has any person named in 1a or 11, within the last 12 months: Yes No a. been treated by a doctor for or had a known heart attack, stroke or cancer (including melanoma) other than of the skin? ....................................................................................... [ ] [X] b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 15. Premiums payable [X] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot. - ----------------------------------------------------------------------------------------------------------------------------------- 16. Amount paid $468.00 [ ] None (Must be "None" if either 14a or b is answered "Yes".) - ----------------------------------------------------------------------------------------------------------------------------------- 17. Is a medical examination to be made on: Yes No a. the proposed Insured?.......................................................................................... [ ] [X] b. spouse (if proposed for coverage)? ............................................................................ [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 18. If 17a or b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No the person(s) indicated in 17 have been examined, even if 16 shows that an amount has been paid? ................. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- ORD 84376-86 Page 1 (Continued on page 2)
II-118
- ----------------------------------------------------------------------------------------------------------------------------------- Continuation of Part 1 of Application - ----------------------------------------------------------------------------------------------------------------------------------- 19. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No in 1a or 11? If "Yes", give their names, name of company, plan, amount, policy numbers and enclose any [ ] [X] required state replacement form(s). - ----------------------------------------------------------------------------------------------------------------------------------- 20. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 11 Yes No in this or any company? If "Yes", give amount, details and company. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 21. Does any person named in 1a or 11 plan to live or travel outside the United States and Canada within the Yes No next 12 months? If "Yes", give country(ies), purpose and duration of trip. [ ] [X] - ----------------------------------------------------------------------------------------------------------------------------------- 22. Has any person named in 1a or 11 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [X] complete Aviation Questionnaire. - ----------------------------------------------------------------------------------------------------------------------------------- 23. Has any person named in 1a or 11 engaged in hazardous sports such as: auto, motorcycle or power boat Yes No sports; bobsledding; scuba or skin diving; mountain climbing; parachuting or sky diving; snowmobile [ ] [X] racing or any other hazardous sport or hobby within the last 2 years or does any such person plan to do so in the future? If "Yes", complete Avocation Questionnaire. - ----------------------------------------------------------------------------------------------------------------------------------- 24. Has any person (age 15 or over) named in 1a or 11 in the last 3 years: Yes No a. had a driver's license denied, suspended or revoked? .............................................................. [ ] [X] b. been convicted of three or more moving violations of any motor vehicle law or of driving while under the influence of alcohol or drugs? .......................................................................... [ ] [X] c. been involved as a driver in 2 or more auto accidents? ............................................................ [ ] [X] If "Yes", give name, diver's license number and state of issue, type of violation and reason for license denial, suspension or revocation. - ----------------------------------------------------------------------------------------------------------------------------------- 25. a. Has the proposed insured smoked cigarettes within the past twelve months? ................................ Yes [ ] No [ ] b. Has the spouse (if proposed for coverage) smoked cigarettes within the past twelve months? ............... Yes [ ] No [ ] c. If the proposed insured or spouse has ever smoked cigarettes, cigars or a pipe, show date(s) last smoked: Cigarettes Cigars Pipe Proposed Insured Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ Spouse Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ - ----------------------------------------------------------------------------------------------------------------------------------- 26. CHANGES MADE BY THE COMPANY. (Not applicable in West Virginia) - ----------------------------------------------------------------------------------------------------------------------------------- To the best of the knowledge and belief of those who sign below, the statements in this application are complete and true. It is understood that, if any of the above statements (for example, the smoking data) is a material misrepresentation, coverage could be invalidated as a result. The beneficiary named in the appliacation is for insurance payable upon death of (1) the Insured, and (2) an insured child after the death of the Insured if there is no insured spouse. When the Company gives a Limited Insurance Agreement form, ORD 84376A-86, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first premium is paid while all persons to be covered are living and their health remains as stated in Parts 1 and 2. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 26 it will be approved by acceptance of the contract. But where the law requires written consent for any change in the application, such change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs. OWNERSHIP: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract. JOHN DOE ----------------------------------------------------------------------- Signature of Proposed Insured (If age 8 or over) ----------------------------------------------------------------------- Dated at (Name of City & State) on Aug. 25, 1986 Signature of Applicant (If other than proposed Insured-- - --------------------------------------------------- If applicant is a firm or corporation, show that company's name) City/State Witness JOHN ROE By - --------------------------------------------------- ---------------------------------------------------------------------- (Licensed agent must witness where required by law) (Signature and title of officer signing for that company) ORD 84376-86 Page 2
II-119 EX-99.1A5(G) 13 CONTRACT Exhibit 1.A.(5)(g) Prudential Pruco Life Insurance Company Phoenix, Arizona A Stock Company subsidiary of The Prudential Insurance Company of America ================================================================================ Insured JOHN DOE xxxxx xxx Policy Number JUN 4, l986 Contract Date Face Amount $50,000-- Premium Period LIFE Agency R-NK 1 ================================================================================ We will pay the beneficiary the proceeds of this contract promptly if we receive due proof that the Insured died. We make this promise subject to all the provisions of the contract. The Death Benefit will be the insurance amount, plus the amount of any extra benefit (unless the contract is in default or there is contract debt). The Death Benefit may be fixed or variable depending on the payment of premiums, the investment experience of the separate account and the level of charges made. But the Insurance Amount will not be less than the face amount. (We describe the insurance amount on page 14.) The cash value may increase or decrease daily depending on the payment of premiums, the separate account investment experience and the charges made. There is no guaranteed minimum. We specify a schedule of premiums. Additional unscheduled premiums may be paid at your option subject to the limitations in the contract. Please read this contract with care. A guide to its contents is on the last page. A summary is on page 5. If there is ever a question about it, or if there is a claim, just see one of our representatives or get in touch with one of our offices. Right to Cancel Contract.--You may return this contract to us within (1) 10 days after you get it, or (2) 45 days after Part 1 of the application was signed, or (3) 10 days after we mail or deliver the Notice of Withdrawal Right, whichever is latest. All you have to do is take the contract or mail it to one of our offices or to the representative who sold it to you. It will be canceled from the start and we will promptly give you the value of your Contract Fund on the date you return the contract to us. We will also give back any charges we made in accord with this contract. Signed for Pruco Life Insurance Company an Arizona Corporation /s/ ISABELLA L. KIRCHNER /s/ DONALD G. SOUTHWELL Secretary President Modified Premium Variable Life Insurance Policy with variable insurance amount. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums. Benefit reflect premium payments, investment results and charges. Guaranteed minimum death benefit if scheduled premiums duly paid and no contract debtor or withdrawals. Increase in face amount at attained age 21 If contract issued at age l4 or lower. Non-participating. VALB--86 II-120 ENDORSEMENTS (Only we can endorse this contract.) Page 2 (VALB--86) II-121 CONTRACT DATA INSURED'S SEX AND ISSUE AGE M-35 INSURED JOHN DOE XX XXX XXX POLICY NUMBER FACE AMOUNT $50,000-- SEP 10, 1996 CONTRACT DATE PREMIUM PERIOD LIFE AGENCY R-NK 1 BENEFICIARY CLASS 1 MARY DOE, WIFE CLASS 2 ROBERT DOE, SON FIXED LOAN INTEREST RATE LIST OF CONTRACT MINIMUMS THE MINIMUM UNSCHEDULED PREMIUM IS $25. THE MINIMUM INCREASE IN FACE AMOUNT IS $25,000. THE MINIMUM DECREASE IN FACE AMOUNT IS $10,000. THE MINIMUM FACE AMOUNT IS $50,000. ***** END OF LIST ***** LIST OF SUPPLEMENTARY BENEFITS ***** NONE ***** SUMMARY OF FACE AMOUNT EFFECTIVE RATING CONTRACT CHANGE AMOUNT DATE CLASS DATE INITIAL $50,000-- SEP 10, 1986 NONSMOKER SEP 10, 2016 *****END OF SUMMARY ***** SCHEDULE OF PREMIUMS PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE. SCHEDULED PREMIUMS ARE $ 468.00 EACH CHANGING ON SEP 10, 2016 TO $2903.50 EACH ***** END OF SCHEDULE ***** CONTRACT DATA CONTINUED ON NEXT PAGE PAGE 3 (86) II-122 CONTRACT DATA CONTINUED POLICY NO. XX XXX XXX SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF UP TO $2.00. FROM THE REMAINDER WE DEDUCT A CHARGE OF UP TO 7.5% WHICH IS USED TO PAY FOR SALES CHARGES AND STATE PREMIUM TAXES. AFTER DEDUCTION OF THIS AMOUNT, THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 14). ***** END OF SCHEDULE ***** SCHEDULE OF MONTHLY DEDUCTIONS FROM THE CONTRACT FUND THE MONTHLY ADMINISTRATION CHARGE IS NO MORE THAN $3.50. THE MONTHLY CHARGE TO GUARANTEE THE MINIMUM DEATH BENEFIT IS NO MORE THAN $.50. ***** END OF SCHEDULE ***** ***** SCHEDULE ON OTHER CHARGES ***** THERE IS A FEE OF UP TO $15 FOR ANY PARTIAL WITHDRAWAL OR DECREASE IN FACE AMOUNT. ***** END OF SCHEDULE ***** SCHEDULE OF MAXIMUM SURRENDER CHARGES FOR FULL SURRENDER AT THE END OF THE CONTRACT YEAR INDICATED, THE MAXIMUM CHARGE WE WILL DEDUCT FROM THE CONTRACT FUND IS SHOWN BELOW. FOR SURRENDER OTHER THAN YEAR-END THE AMOUNT OF THE CHARGE WILL REFLECT THE NUMBER OF COMPLETED CONTRACT MONTHS SINCE THE BEGINNING OF THE CONTRACT YEAR (SEE PAGE 17). YEAR OF DEFERRED DEFERRED UNDERWRITING SURRENDER SALES CHARGES AND ISSUE CHARGE TOTAL --------- ------------- ---------------- ----- 1 $217.00 $250.00 $467.00 2 $217.00 $250.00 $467.00 3 $217.00 $250.00 $467.00 4 $217.00 $250.00 $467.00 5 $217.00 $250.00 $467.00 6 $173.50 $200.00 $373.50 7 $130.00 $150.00 $280.00 8 $87.00 $100.00 $187.00 9 $43.50 $50.00 $93.50 10 $0.00 $0.00 $0.00 11 AND LATER ZERO ZERO ZERO ***** END OF SCHEDULE ***** CONTRACT DATA CONTINUED ON NEXT PAGE PAGE 3A (86) II-123 CONTRACT DATA CONTINUED POLICY NO. XX XXX XXX LIST OF SUBACCOUNTS AND PORTFOLIOS EACH SUBACCOUNT OF THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT INVESTS IN A SPECIFIC PORTFOLIO OF THE PRUCO LIFE SERIES FUND. WE SHOW BELOW THE SUBACCOUNTS AND THE FUND PORTFOLIOS THEY INVEST IN. FUND SUBACCOUNT PORTFOLIO - ---------- --------- MONEY MARKET MONEY MARKET BOND BOND COMMON STOCK COMMON STOCK AGGRESSIVELY MANAGED FLX AGGRESSIVELY MANAGED FLX CONSERVATIVELY MANAGED FLX CONSERVATIVELY MANAGED FLX HIGH YIELD BOND HIGH YIELD BOND STOCK INDEX STOCK INDEX HIGH DIVIDEND STOCK HIGH DIVIDEND STOCK ***** END OF LIST ***** LIST OF FIXED ACCOUNT OPTIONS FIXED RATE OPTION ***** END OF LIST ***** SCHEDULE OF INITIAL ALLOCATION OF NET PREMIUMS MONEY MARKET SUBACCOUNT 25% CONSERVATIVELY MANAGED FLX SUBACCOUNT 50% FIXED RATE OPTION 25% ***** END OF LIST ***** SERVICE OFFICE - PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS CONTRACT TO: PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY P.O. BOX XXXX, MINNEAPOLIS, MN XXXXX PAGE 3B (86) II-124 POLICY. NO. XX XXX XXX TABULAR VALUES WE EXPLAIN THIS TABLE UNDER CONTRACT FUND AND TABULAR VALUES. ACTUAL CONTRACT FUND VALUES AND CASH VALUES MAY BE MORE OR LESS THAN AMOUNT SHOWN (SEE CONTRACT FUND AND CASH VALUE OPTION.) END OF TABULAR TABULAR CONTRACT CONTRACT CASH YEAR FUND VALUE ---- ---- ----- 1 288.00 0.00 2 581.50 114.50 3 878.00 411.00 4 1178.00 711.00 5 1479.60 1012.50 6 1782.00 1408.50 7 2084.00 1804.00 8 2385.00 2198.20 9 2683.00 2590.10 10 2979.00 2979.00 11 3270.50 3270.50 12 3556.50 3556.50 13 3835.50 3835.50 14 4106.50 4106.50 15 4367.50 4367.50 16 4615.00 4615.00 17 4845.00 4845.00 18 5053.00 5053.00 19 5234.50 5234.50 20 5384.00 5384.00 ATTAINED AGE --- 60 5490.50 5490.50 62 5105.00 5105.00 85 3750.00 3750.00 TABULAR CASH VALUES ARE THE TABULAR CONTRACT FUND VALUES MINUS A SURRENDER CHARGE. WE SHOW ON A PRIOR CONTRACT PAGE WHAT THE MAXIMUM SURRENDER CHARGE WILL BE. THE TABULAR CONTRACT FUND VALUES AND TABULAR CASH VALUES SHOWN ARE THE AMOUNTS WHICH WILL APPLY IF ALL SCHEDULED PREMIUMS HAVE BEEN PAID ON THEIR DUE DATES, THERE HAVE BEEN NO UNSCHEDULED PREMIUMS PAID, THERE IS NOT CONTRACT DEBT, THE SUBACCOUNTS AND THE FIXED ACCOUNT OPTIONS YOU HAVE CHOSEN EARN EXACTLY THE ASSUMED RATE OF RETURN AND WE HAVE DEDUCTED THE MAXIMUM MORTALITY CHARGES. Page 4(86) II-125 CONTRACT SUMMARY We offer this summary to help you understand this contract. We do not intend that it change any of the provisions of the contract. This is a contract of life insurance. Premiums are to be paid throughout the Insured's lifetime. We specify a schedule of premiums that will keep the contract in force. Additional premiums may be paid at your option, subject to limits in the contract. The death benefit and the cash value will vary with the payment of premiums, the investment performance of the Separate Account subaccounts that you select, the interest credited to any portion of the contract fund not allocated to the subaccounts, and the mortality and expense charges deducted. The face amount shown on page 3 is the guaranteed death benefit. The death benefit will not decrease below the guaranteed death benefit if the contract is not in default past its days of grace and there is no contract debt. (We describe on page 9 the way the contract can go into default.) Subject to certain requirements, you may increase or decrease the face amount. If the contract remains in default past its days of grace the contract may end or it may stay in force with reduced benefits. If either occurs, you may be able to reinstate its full benefits. Proceeds is a word we use to mean the amount we would pay if we were to settle the contract in one sum. To compute the proceeds that may arise from the Insured's death, we start with a basic amount. We may adjust that amount if there is a loan or if the contract is in default. The table on page 23 tells what the basic amount is. The amount depends on how the contract is in force. The table will refer you to the parts of the contract that tell you how we adjust the basic amount. If you surrender the contract, the proceeds will be the net cash value. We describe it under Cash Value Option on page 17. Proceeds often are not taken in one sum. For instance, on surrender, you may be able to put proceeds under a settlement option to provide retirement income or for some other purpose. Also, for all or part of the proceeds that arise from the Insured's death, you may be able to choose a manner of payment for the beneficiary. If an option has not been chosen, the beneficiary may be able to choose one. We will pay interest under the Interest Payment Option from the date of death on any proceeds to which no other manner of payment applies. This will be automatic as we state on page 21. There is no need to ask for it You and we may agree on a change in the ownership of this contract. Also, unless we endorse it to say otherwise, the contract gives you these rights, subject to certain limitations and requirements: o You may change the beneficiary under it. o You may borrow on it up to its loan value. o You may surrender it for its net cash value. o You may change the allocation of future net premiums among the subaccounts and the fixed account. o You may transfer amounts among subaccounts and the fixed account. o You may change the face amount. o You may withdraw a portion of the contract's value. The contract, as issued, may or may not have extra benefits that we call Supplementary Benefits. If it does, we list them under Supplementary Benefits on the Contract Data pages and describe them after page 24. The contract may or may not have other extra benefits. If it does, we add them by rider. Any extra benefit ends as soon as the contract is in default past its days of grace, unless the form that describes it states otherwise. (Contract Summary Continued on Page 23) Page 5 (VALB--86) II-126 GENERAL PROVISIONS Definitions.--We define here some of the words and phrases used all through this contract. We explain others, not defined here, in other parts of the text. We, Our, Us and Company -- Pruco Life Insurance Company, an Arizona Corporation. You and Your.--The owner of the Contract. Insured.--The person named as the Insured on the first page. He or she need not be the owner. Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner. SEC.--The Securities and Exchange Commission. PLVAA.-- The Pruco Life Variable Appreciable Account. Issue Date.--The contract date. Monthly Date.--The contract date and the same day as the contract date in each later month. Example: If the contract date is March 9, 1986, the Monthly Dates are each March 9, April 9, May 9 and so on. Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year. Example: If the contract date is March 9, 1986, the first anniversary is March 9, 1987. The second is March 9, 1988, and so on. Contract Year.--A year that starts on the contract date or on an anniversary. Example: If the contract date is March 9, 1986, the first contract year starts then and ends on March 8, 1987. The second starts on March 9, 1987 and ends on March 8, 1988, and so on. Contract Month.--A month that starts on a Monthly Date. Example: If March 9, 1986 is a Monthly Date, a contract month starts then and ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends on May 8, 1986, and so on. Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3. The Contract.--This policy, and the attached copy of the initial application together with copies of any subsequent applications to change the policy, and any additional Contract Data pages added to this policy, form the whole contract. We assume that all statements in the application were made to the best of the knowledge and belief of the person(s) who made them; in the absence of fraud they are deemed to be representations and not warranties. We relied on those statements when we issued the contract. We will not use any statement, unless made in the application, to try to void the contract or to deny a claim. Contract Modifications.--Only a Company officer with the rank or title of Vice President or above may agree to modify this contract, and then only in writing. Non-participating.--This contract will not share in our profits or surplus earnings. We will pay no dividends on it. Service Office.--This is the office that will service this contract. Its mailing address is the one we show on the Contract Data pages, unless we notify you of another one. Ownership and Control.--Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. Suicide Exclusion.--If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid, minus any contract debt and minus any partial withdrawals. Also, for any increase in the face amount, if the Insured, whether sane or insane, dies by suicide within two years from the effective date of the increase, we will pay, as to the increase in amount, no more than the sum of the scheduled premiums that were due for the increase. Currency.--Any money we pay, or that is paid to us, must be in United States currency. Any amount we owe will be payable at our Service Office. Misstatement of Age or Sex.--If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex. Any death benefit will be based on what the most recent charge for mortality would have provided at the correct age and sex. Where required, we have given the insurance regulator a detailed statement of how we will make these changes. The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the Insured would attain a certain age on that date. If we find that the issue age was wrong, we will correct that date. (Continued on Next Page) Page 6 (VALB--86) II-127 GENERAL PROVISIONS (Continued) Incontestability.--Except as we state in the next sentence, we will not contest this contract after it has been in force during the Insured's lifetime for two years from the issue date. There are two exceptions: (1) non-payment of enough premium to provide the required charges; and (2) any change in the contract that requires our approval and that would increase our liability. For any such change, we will not contest the change after it has been in effect during the Insured's lifetime for two years from the date it takes effect. Assignment.--We will not be deemed to know of an assignment unless we receive it, or a copy of it, at our Service Office. We are not obliged to see that an assignment is valid or sufficient. Annual Report.--Each year we will send you a report. It will show: (1) the current death benefit; (2) the investment amount; (3) the amount of the investment amount in each subaccount; (4) the amount in the fixed account; (5) the net cash value; (6) premiums paid, interest credited and monthly charges deducted since the last report; (7) any partial withdrawals since the last report; and (8) any contract debt and the interest on the debt for the prior year. The report will also include any other data that may be currently required where this contract is delivered. No report will be sent if this contract is being continued under extended term insurance. You may ask for a similar report at some other time during the year. Or you may request from time to time a report projecting results under your contract on the basis of premium payment assumptions and assumed investment results. We have the right to make a reasonable charge for reports such as these that you ask for, and to limit the scope and frequency of such reports. Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower.--If this contract was issued at age 14 or lower, it shows on page 3 an increase in face amount at attained age 21 which applies if the contract is not then in default beyond its days of grace. Any references in the contract to face amount or death benefit which apply at or after attained age 21 will be based upon the increased face amount, unless otherwise stated. Payment of Death Claim.--If we settle this contract in one sum as a death claim, we will usually pay the proceeds within 7 days after we receive at our Service Office proof of death and any other information we need to pay the claim. But we have the right to defer paying portion of the proceeds greater than the minimum guaranteed death benefit that is to come from the subaccounts if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. BASIS OF COMPUTATION Mortality Tables Described.--Except as we state in the next paragraph, (1) we base all net premiums and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Mortality Table; and (3) we use continuous functions based on age last birthday. For extended insurance, we base net premiums and net values on the Commissioners 1980 Extended Term Insurance Table. Interest Rate.--For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year. Exclusions.--When we compute net values we exclude the value of any Supplementary Benefits and any other extra benefits added by rider to this contract. Values After 20 Contract Years.--Tabular values not shown on page 4 will be the net level premium reserves, taking into account modified premiums. To compute them, we will use the mortality tables and interest rate we describe above. There will be the same exclusions. Minimum Legal Values.--The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits. Pruco Life Insurance Company, By /s/ Isabella L. Kirchner Secretary - ---------- PLI 207-86 - ---------- Page 7 (VALB--86) II-128 PREMIUM PAYMENT AND REINSTATEMENT Payment of Premiums.--Premiums may be paid at our Service Office or to any of our authorized representatives. If we are asked to do so, we will give a signed receipt. Premium payments will in most cases be credited as of the date of receipt, to both the premium account and the contract fund. (See Contract Fund, page 14 and Premium Account, page 9.) Premium credits to the premium account are the full premium paid with no deductions. Premium credits to the contract fund are the invested premium amounts (see page 14). But in the following cases, to the extent stated, premium payments will be credited as of a date other than the date of receipt: 1. The first scheduled premium is due on the Contract Date. But if the first premium payment is received after the Contract Date, the scheduled portion will be credited to the contract fund and the premium account as of the Contract Date. And any portion of that first premium payment in excess of the first scheduled premium will be credited as of the date of receipt. If the first premium is received before the Contract Date, the entire payment will be credited as of the Contract Date. 2. If a premium payment is received during the 61 day period after the day when a scheduled premium was due and had not yet been paid, here is what we will do. We will determine whether the premium account, (see page 9), just before receipt of that payment was a negative amount. If not--that is, if the premium account was zero or higher--the premium payment will be credited as of the date of receipt. But if the premium account was negative by no more than the scheduled premium on the due date, that portion of the premium payment required to bring the premium account up to zero will be credited to the premium account as of the due date; any remaining portion of the premium payment will be credited to the premium account as of the date of receipt. If the premium account is negative by more than the scheduled premium then due, the premium payment will be credited as of the date of receipt, except in the situation described in 3 below. 3. On each Monthly Date we will determine if the contract is in default. (See Default on page 9.) We will notify you of the minimum payment amount needed to bring the contract out of default. If one or more premium payments are made during the days of grace after that Monthly Date (see Grace Period on page 9), we will credit to the contract fund and the premium account, as of the applicable Monthly Dates, such parts of the payments as are needed to end the default status; any remaining part of these premium payments will be credited to the contract fund and premium account as of the date of receipt. Scheduled Premiums.--We show the amount and frequency of the scheduled premiums in the Schedule of Premiums. The first scheduled premium is due on the contract date. There is no insurance under this contract unless an amount at least equal to the first scheduled premium is paid. The scheduled premium shown is the minimum required, at the frequency chosen, to continue the contract in full force if you pay all scheduled premiums when due, you make no withdrawals, any interest credited and investment returns are at the assumed rate, mortality and expense charges are at the maximum rate and any contract debt does not exceed the cash value. An increase in the face amount increases the scheduled premium. If you wish to pay, on a regular basis, higher premiums than the amount of the scheduled premiums, we will bill you for the higher amount you choose. Or if you wish, you may from time to time make a smaller premium payment than the amount of the scheduled premium, subject to the minimum premium amount shown on page 3. If scheduled premiums that are due are not paid, or if smaller payments are made, the contract may then or at some future time go into default. Payment of less than the scheduled premium increases the risk that the contract will end if investment results are not favorable. The conditions under which default will exist are described below. Unscheduled Premiums.--Except as we state in the next paragraph, unscheduled premiums may be paid at any time during the Insured's lifetime, as long as the contract is not in default beyond its days of grace. We show on page 3 the minimum premium we will accept. We have the right to limit unscheduled premiums to a total of $10,000 in any contract year. We have the right to refuse any payment that increases the insurance amount by more than it increases the contract fund. Premium Change on Contract Change Date(s).--We show the Contract Change Date(s) in the Contract Data pages. We also show in the Schedule of Premiums on page 3 that the amount of each scheduled premium will change on each Contract Change Date and what the new premium will be. However, when a Contract Change Date arrives we will recompute a new premium amount to be used in calculating the premium account. The new premium that we recompute will be no greater than the new premium for that date which we show on page 3. In addition, if the premium account is less than zero, we will set the premium account to zero. (Continued on Next Page) Page 8 (VALB--86) II-129 PREMIUM PAYMENT AND REINSTATEMENT (Continued) The Schedule of Premiums may also show that the premium changes at other times. This may occur, for example, with a contract issued with extra benefits or in an extra rating class if, in either case, this calls for a higher or extra premium for a limited period of time. Allocations.--You may allocate all or a part of your invested premium amount to one or more of the subaccounts and fixed account option(s) listed in the Contract Data pages. You may choose to allocate nothing to a particular subaccount or fixed account option. But any allocation you make must be at least 10%; you may not choose a fractional percent. Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or any percentage that is not a whole number. The total for all subaccounts must be 100%. The initial allocation of invested premium amounts (see page 14) is shown in the Contract Data pages. You may change the allocation for future invested premium amounts at any time if the contract is not in default. To do so, you must notify us in writing in a form that meets our needs. The change will take effect on the date we receive your notice at our Service Office. A premium might be paid when the contract fund is less than zero. In that case, when we receive that premium, we first use as much of the invested premium amount as we need to eliminate the deficit in the contract fund. We will then allocate any remainder of the invested premium amount in accord with your most recent request. (We describe contract fund on page 14.) Default.--Unless the contract is already in the grace period, on each Monthly Date, after we deduct any charges from the contract fund (which we describe on page 14) and add any credits to it, we will determine whether the contract is in default. To do so, we will compute the amount which will accrue to the tabular contract fund on the next Monthly Date if, during the current contract month: (1) any interest credited and investment returns are at the assumed rate (see Assumed Rate of Return on page 13); (2) we make the other charges and credits we have set, including interest on contract debt; and (3) we receive no premiums or loan repayments make no loans nor grant any partial withdrawals. We will compare this amount to the contract fund. If this amount is not more than the contract fund the contract is not in default. If this amount is more than the Contract Fund the difference is the fund deficit. In this case the contract is in default if the premium account, which we define below, is also less than zero. See Excess Contract Debt on page 19 for another way the contract may end. Grace Period.--The days of grace begin on any monthly date (other than the contract date) on which the contract goes into default. We grant 61 days from the date we mail you a notice of default to make the required payments which we define below. During the days of grace we will continue to accept premiums and make the charges we have set. If the monthly date was a scheduled premium due date, when we receive a premium payment during the days of grace we will first determine whether it satisfies case 2 under Payment of Premiums above. If it does, the default will end. If it does not, or if the monthly date when the contract went into default was not a scheduled premium due date, here is what we will do: Within 30 days after any default we will send you a notice that your contract is in default. We will indicate the minimum payment required to keep your contract in force and the length of the grace period for payment of such amount. If at any time during the days of grace, we have received payments that in total are at least equal to the lesser of (a) the sum of the fund deficit on the date of default and any additional fund deficits on any subsequent Monthly Dates since the date of default, and (b) the sum of the amount by which the premium account is negative on the date of default and any scheduled premiums due since the date of default, the default will end. If the contract is still in default when the days of grace are over, it will end and have no value, except as we state under Contract Value Options (which we describe on page 16). Premium Account.--On the contract date, the premium account is equal to the premium credited on that date minus the scheduled premium then due. On any other day, the premium account is equal to: 1. what it was on the prior day; plus 2. if the premium account was greater than zero on the prior day, interest on the excess at 4% a year; minus 3. if the premium account was less than zero on the prior day, interest on the amount of the deficit at 4% a year; plus 4. any premium credited on that day; minus 5. any scheduled premium due on that day; minus 6. any partial withdrawals on that day. (Continued on Next Page) Page 9 (VALB--86) II-130 PREMIUM PAYMENT AND REINSTATEMENT (Continued) The contract might be in default, as described above. If so, the premium account is less than zero. If a premium payment is received on any day during the days of grace while the contract is in default and the premium account is negative by no more than one scheduled premium, that payment, to the extent that it is required to bring the premium account up to zero, will, as we describe under Payment of Premiums above, be credited to the premium account as of the Monthly Date when the scheduled premium was due, whether that date is the date of default or a subsequent Monthly Date. Any remaining portion of the premium payment will be credited as of the actual date of receipt. In this case the premium account for all days from the monthly date to the actual date of receipt will be recalculated. Reinstatement.--If this contract is still in default after the last day of grace, you may reinstate it, if all these conditions are met: 1. No more than three years must have elapsed since the date of default. 2. You must not have surrendered the contract for its net cash value. 3. You must give us any facts we need to satisfy us that the insured is insurable for the contract. 4. We must be paid a premium at least equal to the amount required to bring the premium account up to zero on the first Monthly Date on which a scheduled premium is due after the date of reinstatement. From this amount we will deduct the expense charges from premium payments described in the Contract Data pages, plus any charges with 4% interest for any extra benefits, plus any other charges with 4% interest. The contract fund will be equal to the remainder, plus the cash value of the contract immediately before reinstatement, plus a refund of that part of any surrender charge deducted at the time of default which would be charged if the contract were surrendered immediately after reinstatement. If we approve, you may be able to reinstate the contract for a premium less than that described above. We will deduct the same charges and adjust the contract fund in the same manner. If you do so, the premium account will be less than zero. You may need to pay more than the scheduled premiums to guarantee that the contract will not go into default at some future time. 5. If before reinstatement the contract is in force as reduced paid-up insurance (see page 16), any contract debt under reduced paid-up insurance must be repaid with interest or carried over to the reinstated contract. If we approve the reinstatement, these statements apply. The date of reinstatement will be the date of your request or the date the required premium is paid, if later. And we will start to make daily and monthly charges and credits again as of the date of reinstatement. CHANGING THE FACE AMOUNT AND PARTIAL WITHDRAWALS Face Amount.--The face amount is shown on page 3. It will change if you increase or decrease it. Increase in Face Amount.--After the first contract year, you may be able to increase the face amount once each contract year. Your right to do so is subject to all these conditions and the paragraph that follows: 1. You must ask for the increase in writing and in a form that meets our needs; if you are not the Insured and the Insured is age 8 or over, he or she must sign the form too. 2. The amount of the increase must be at least equal to the minimum increase in face amount, which we show on page 3. 3. You must give us any facts we need to satisfy us that the Insured is insurable for the amount of the increase. 4. If we ask you to do so, you must send us the contract to be endorsed. 5. The contract must not be in default. 6. We must not have changed the basis on which benefits and charges are calculated under newly issued contracts since the Issue Date. 7. You must make any required payment. 8. The insured must be eligible for the same rating class and benefits as shown on page 3. 9. We must not be waiving premiums in accord with any Waiver of Premium benefit that may be included in the contract. An increase will take effect only if we approve your request for it at our Service Office. If the increase is approved we will recompute the contract's scheduled premiums, maximum surrender charges, tabular values, monthly deductions and expense charges. We will send you new Contract Data pages showing the amount and effective date of the increase and the recomputed values. If the insured is not living on the effective date, the increase will not take effect. (Continued on Next Page) Page 10 (VALB--86) II-131 CHANGING THE FACE AMOUNT AND PARTIAL WITHDRAWALS (Continued) Decrease in Face Amount.--After the first contract year, you may be able to decrease the face amount. Your right to do so is subject to all these conditions and the paragraphs that follow: 1. You must ask for the decrease in writing and in a form that meets our needs. 2. The amount of the decrease must be at least equal to the minimum decrease in face amount, which we show on page 3. 3. The face amount after the decrease must be at least equal to the minimum face amount, which we show on page 3. 4. It we ask you to do so, you must send us the contract to be endorsed. A decrease will take effect only if we approve your request for it at our Service Office. If the decrease is approved, we will recompute the contract's scheduled premiums, maximum surrender charges, tabular values, monthly deductions and expense charges. A decrease in face amount may also effect the amount of any extra benefits this contract might have. We will send you new Contract Data pages showing the amount and effective date of the decrease and the recomputed values. If the Insured is not living on the effective date, the decrease will not take effect. We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender. Partial Withdrawals.--After the first contract year, you may be able to make partial withdrawals from the contract. Your right to do so is subject to all these conditions and the paragraphs that follow: 1. You must ask for the partial withdrawal in writing and in a form that meets our needs. 2. The amount withdrawn, plus the net cash value after withdrawal, may not be more than the net cash value before withdrawal. 3. The cash value after withdrawal must not be less than the tabular cash value. 4. The amount you withdraw must be at least $500. 5. You may make up to four partial withdrawals in any contract year. 6. If we ask you to do so, you must send us the contract to be endorsed. We may deduct an administrative fee of up to $15.00. We will usually pay any partial withdrawal within seven days after we receive your request and, if we request it, the contract at our Service Office. But we have the right to deter paying the portion of the proceeds that is to come from the portion of the contract fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year. An amount withdrawn may not be repaid, except as an unscheduled premium subject to charges. We will tell you how much you may withdraw if you ask us. Page 11 (VALB--86) II-132 SEPARATE ACCOUNT The Separate Account.--The words separate account, where we use them in this contract without qualification, mean the Pruco Life Variable Appreciable Account (PLVAA) and any other separate account that we establish. PLVAA is a unit investment trust registered with the SEC under the Investment Company Act of 1940. We established PLVAA to support variable life insurance contracts. We own the assets of this separate account; we keep them separate from the assets of our general account. Subaccounts.--A separate account may have several subaccounts. We list the subaccounts in the Contract Data pages. You determine, using percentages, how invested premium amounts will be allocated among the subaccounts. We may establish additional subaccounts. The Fund.--The word fund, where we use it in this contract without qualification, means the fund we identify in the Contract Data pages. The fund is registered with the SEC under the Investment Company Act of 1940 as an open-end diversified management investment company. The fund has several portfolios; there is a portfolio that corresponds to each of the subaccounts of PLVAA. We list these portfolios in the Contract Data pages. Separate Account Investments.--We use the assets of PLVAA to buy shares in the fund. Each subaccount of PLVAA is invested in a specific portfolio. Income and realized and unrealized gains and losses from assets in each of these subaccounts are credited to, or charged against, that subaccount. This is without regard to income, gains, or losses in our other investment accounts. We will determine the value of the assets in PLVAA at the end of each business day. When we use the term business day, we mean a day when the New York Stock Exchange is open for trading. We might need to know the value of an asset on a day that is not a business day or on which trading in that asset does not take place. In this case, we will use the value of that asset as of the end of the last prior business day on which trading took place. Example: It we need to know the value of an asset on a Sunday, we will normally use the value of the asset as of the end of business on Friday. We will always keep assets in the separate account with a total value at least equal to the amount of the investment amounts under contracts like this one. To the extent those assets do not exceed this amount, we use them only to support those contracts; we do not use those assets to support any other business we conduct. We may use any excess over this amount in any way we choose. If we create additional separate accounts, we may invest the assets in them in a different way. But we will do so only with the consent of the SEC and, where required, of the insurance regulator where this contract is delivered. Change in Investment Policy.--A portfolio of the fund might make a material change in its investment policy. In that case, we will send you a notice of the change. Within 60 days after you receive the notice, or within 60 days after the effective date of the change, if later, you may transfer to the Fixed Account any amounts in the subaccount investing in that portfolio. Change of Fund.--A portfolio might, in our judgment, become unsuitable for investment by a subaccount. This might happen because of a change in investment policy, or a change in the laws or regulations, or because the shares are no longer available for investment, or for some other reason. If that occurs, we have the right to substitute another portfolio of the fund, or to invest in a fund other than the one we show in the Contract Data pages. But we would first seek the consent of the SEC and, where required, the insurance regulator where this contract is delivered. FIXED ACCOUNT The Fixed Account.--If you choose, you may allocate all or part of your invested premium amount to the fixed account. The fixed account is funded by the general account of Pruco Life. The fixed account is credited with interest as described under Guaranteed Interest and Excess Interest on page 14. Fixed Account Options.--We may have more than one fixed account option. We list the fixed account option(s) in the Contract Data pages. Page 12 (VALB--86) II-133 TRANSFERS Transfers Among Subaccounts and into the Fixed Account.--You may transfer amounts among subaccounts of PLVAA and into the Fixed Account as often as four times in a contract year it the contract is not in default or if the contract is being continued under the reduced paid up option. In addition, at any time within the first two contract years or within two years of the effective date of any increase, the entire amount in all subaccounts may be transferred to the fixed account. If we establish new separate accounts, transfers into or out of these separate accounts will be allowed only with our consent. To make a transfer, you must notify us in writing in a form that meets our needs. The transfer will take effect on the date we receive your notice at our Service Office. Transfers Among Fixed Account Options and into the Subaccounts.--You may transfer amounts among the available Fixed Account Options and into the subaccounts only with our consent. INVESTMENT AMOUNT AND ASSUMED RATE OF RETURN Investment Amount.--The investment amount for this contract is an amount we use to compute the investment return. The investment amount is allocated among the subaccounts. The amount of the investment amount and its allocation to subaccounts depend on (1) how you choose to allocate net premiums; (2) whether or not you transfer amounts among subaccounts and the fixed account; (3) the investment performance of the subaccounts to which amounts are allocated or transferred; (4) the deductions we make from the contract fund; (5) the amount and timing of premium payments you make; (6) whether or not you take any loan; and (7) whether or not you make any partial withdrawals or change the face amount. The investment amount exists only if the contract is not in default past the days of grace or if it is being continued as reduced paid-up insurance. The investment amount at any time is equal to the contract fund, minus the amount of any contract loan and interest accrued on the loan since the last transaction date, minus the amount in the Fixed Account. Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a year. This is the same as .01074598% a day compounded daily. Page 13 (VALB--86) II-134 INSURANCE AMOUNT The insurance amount on any date is equal to the greater of (1) the face amount, which we show on the page 3, plus any excess of the contract fund over the tabular contract fund, and (2) the contract fund divided by the net single premium per $1 at the insured's attained age on that date. CONTRACT FUND Contract Fund Defined.--On the contract date the contract fund is equal to the invested premium amounts credited (see below), minus any of the charges described in items (g) through (m) below which may have been due on that date. On any day after that the contract fund is equal to what it was on the previous day, plus any invested premium amounts credited, plus these items: (a) any increase due to investment results in the value of the subaccounts to which that portion of the contract fund that is in the investment amount is allocated; (b) guaranteed interest at an effective rate of 4% a year on that portion of the contract fund that is not in the investment amount; and (c) any excess interest on that portion of the contract fund that is not in the investment amount; and minus these items: (d) any decrease due to investment results in the value of the subaccounts to which that portion of the contract fund that is in the investment amount is allocated; (e) a charge against the investment amount at a rate of not more than .00163894% a day (.60% a year) for mortality and expense risks that we assume; (f) any amount charged against the investment amount for Federal or State income taxes; (g) a charge to guarantee the minimum death benefit; (h) a charge for the cost of expected mortality; (i) any charges for extra rating class; (j) any charges for extra benefits; (k) any charge for administration; (l) any partial withdrawals; and (m) any surrender charges and administrative charges that may result from a partial withdrawal or a decrease in face amount. We describe under Reinstatement on page 10 what the contract fund will be equal to on any reinstatement date. There is no contract fund for a contract in force under extended insurance. Invested Premium Amount.--This is the portion of each premium paid that we will add to the contract fund. It is equal to the premium paid minus the expense charges described in the Contract Data pages under Schedule of Expense Charges from Premium Payments. Guaranteed Interest.--We will credit interest to the contract fund each day on any portion of the contract fund not in the investment amount. We will credit .01074598% a day, which is equivalent to an effective rate of 4% a year. Excess Interest.--We may credit interest in addition to the guaranteed interest on that portion of the contract fund not in the investment amount. The rate of any excess interest will be determined from time to time and will continue thereafter until a new rate is determined. We may use different rates of excess interest for different portions of the contract fund not in the investment amount. We may from time to time guarantee rates of excess interest on some portions of the contract fund. Cost of Expected Mortality.--On each Monthly Date, we will deduct a charge for the cost of expected mortality. The amount deducted is computed as the annual mortality rate multiplied by the coverage amount. The coverage amount is the difference between the adjusted death benefit and the adjusted contract fund. If the insurance amount equals the face amount plus any excess of the contract fund over the tabular contract fund, the adjusted death benefit is equal to the face amount multiplied by the Factor for Adjusting the Insurance Amount (See Table of Adjustment Factors), and the adjusted contract fund is equal to the tabular contract fund at the end of the month less any excess of the tabular contract fund at the beginning of the month over the actual contract fund after deduction of any charges due on the Monthly Date, all multiplied by the Factor for Adjusting the Contract Fund. If the insurance amount exceeds the face amount plus any excess of the contract fund over the tabular contract fund, the adjusted death benefit is equal to the insurance amount multiplied by the Factor for Adjusting the Insurance Amount, and the adjusted contract fund is equal to the net single premium at the end of the month for the insurance amount on the Monthly Date, all multiplied by the Factor for Adjusting the Contract Fund. The adjustment factors depend on the month as shown in the table that follows. (Continued on Next Page) Page 14 (VALB--86) II-135 CONTRACT FUND (Continued) We will not charge more than the maximum guaranteed rates, which are based on the Insured's sex and attained age and the mortality table described in the Basis of Computation. We may charge less. At least once every five years, but not more often than once a year, we will consider the need to change the rates. We will change them only if we do so for all contracts like this one dated in the same year as this one. Charge for Extra Rating Class.--If there is an extra charge because of the rating class of the Insured, we will deduct it from the contract fund at the beginning of each contract month. Any charge is included in the amount shown in the Contract Data pages under Schedule of Monthly Deductions from the Contract Fund. Charge for Extra Benefits.--If the contract has extra benefits, we will deduct the charges for such benefits from the contract fund at the beginning of each contract month. Charges for any such extra benefits are included in the amount shown in the Contract Data pages under Schedule of Monthly Deductions from Contract Fund. Charges For Administration and Minimum Death Benefit Guarantees.--On each monthly date, we will deduct a charge for administration. We will also deduct a charge for guaranteeing the minimum death benefit regardless of the investment performance of the separate account. We show the amount of these charges in the Contract Data pages under Schedule of Monthly Deductions from the Contract Fund. - -------------------------------------------------------------------------------- TABLE OF ADJUSTMENT FACTORS - -------------------------------------------------------------------------------- Factor for Adjusting Factor for Adjusting Month the Insurance Amount the Contract Fund February .076597042 .076481870 A month with 30 days .082059446 .081927252 A month with 31 days .084790207 .084649064 - -------------------------------------------------------------------------------- Page 15 (VALB-86) II-136 CONTRACT VALUE OPTIONS Benefit After the Grace Period.--If the contract is in default beyond its days of grace, we will use any net cash value (which we describe under Cash Value Option) to keep the contract in force as one of two kinds of insurance. One kind is extended insurance. The second kind is reduced paid-up insurance. We describe each below. You will find under Automatic Benefit which kind it will be. Any extra benefit(s) will end as soon as the contract is in default past its days of grace, unless the form that describes the extra benefit states otherwise. Extended Insurance.--This will be term insurance of a fixed amount on the Insured's life. We will pay the amount of term insurance if the Insured dies in the term we describe below. Before the end of the term there will be cash values but no loan value. The amount of term insurance will be the death benefit on the day of default, minus any part of that death benefit which was provided by extra benefits. The term is a period of time that will start on the day the contract went into default. The length of the term will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date. There may be extra days of term insurance. This will occur if, on the day the contract goes into default, the term of extended insurance provided by the net cash value does not exceed 90 days, or the number of days the contract was in force before the default began, if less. The number of extra days will be (1) 90, or the number of days the contract was in force before the default began, if less, minus (2) the number of days of extended insurance that would be provided by the net cash value if there were no contract debt. The extra days, if any. start on the day after the last day of term insurance provided by the net cash value, if any. If there is no such term insurance, the extra days start on the day the contract goes into default. The term insurance for the extra days has no cash value. There will be no extra days if you replace the extended insurance with reduced paid-up insurance or you surrender the contract before the extra days start. Reduced Paid-up Insurance.--This will be paid-up variable life insurance on the Insured's life. The death benefit may change from day to day, as we explain below, but if there is no contract debt, it will not be less than a minimum guaranteed amount. There will be cash values and loan values. The minimum guaranteed amount of insurance will be computed by using the net cash value at the net single premium rate determined as of the day the contract went into default. The net single premium rate depends on the Insured's issue age and sex and on the length of time since the contract date. The amount payable in the event of death thereafter will be the greater of (a) the minimum guaranteed amount and (b) the contract fund divided by the net single premium per $1 at the Insured's attained age. In either case the amount will be adjusted for any contract debt. Except when it is provided as the automatic benefit, (see below), the reduced paid-up insurance option will be available only when the guaranteed death benefit under the option will be $5000 or more. If we issued the contract in a rating class for which we do not provide extended insurance, you may not allocate the contract fund of the reduced paid-up insurance to any subaccount without our consent. Computations.--We will make all computations for either of these benefits as of the date the contract goes into default. But we will consider any loan you take out or pay back or any premium payments or partial withdrawals you make in the days of grace. Automatic Benefit.--When the contract is in default, it will stay in force as extended insurance. But it will stay in force as reduced paid-up insurance if either of these statements applies: (1) We issued the contract in a rating class for which we do not provide extended insurance; in this case the phrase No Extended Insurance is in the Rating Class in the Contract Data pages. (2) The amount of reduced paid-up insurance would be at least as great as the amount of extended term insurance. Optional Benefit.--You may choose to replace any extended insurance that has a net cash value by reduced paid-up insurance. To make this choice, you must do so in writing to us in a form that meets our needs, not more than three months after the date the contract goes into default. You must also send the contract to us to be endorsed. (Continued on Next Page) Page 16 (VALB--86) II-137 CONTRACT VALUE OPTIONS (Continued) Cash Value Option.--You may surrender this contract for its net cash value. The net cash value at any time is the cash value at that time, less any contract debt. To surrender this contract, you must ask us in writing in a form that meets our needs. You must also send the contract to us. Here is how we will compute the cash value for surrender of the contract or for its continuation under extended insurance or reduced paid-up insurance. 1. If the contract is not in default: The cash value on surrender is the contract fund, minus any surrender charge, consisting of a deferred sales charge and a deferred underwriting and issue charge. The schedule of Maximum Surrender Charges for this contract is in the Contract Data pages. 2. If the contract is in default during its days of grace: We will compute the net cash value as of the date the contract went into default. But we will adjust this value for any loan you take out or pay back, and any premium payments, partial withdrawals or decreases in face amount you make in the days of grace. 3. If the contract is in default beyond its days of grace: The net cash value as of any date will be the net value on that date of any extended insurance benefit then in force. Or it will be the net value on that date of any reduced paid-up insurance benefit then in force, less any contract debt. Within 30 days after a contract anniversary, the net cash value of any extended insurance will not be less than the value on that anniversary. We will usually pay any cash value within seven days after we receive your request and the contract at our Service Office. But we have the right to defer paying the portion of the proceeds that is to come from the portion of the contract fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year. Tabular Values.--We show tabular contract fund values and tabular cash values at the end of contract years in the Contract Data pages. The tabular contract fund at the end of any contract year is the amount which will then be in the contract fund if all scheduled premiums have been paid on their due dates, there have been no unscheduled premiums paid, there is no contract debt, the subaccounts you have chosen earn exactly the assumed rate of return, we have credited no excess interest, and we have deducted the maximum mortality and expense charges. The tabular cash values are the amounts which, under the same conditions, will then be used to provide extended insurance or reduced paid-up insurance or will be paid in cash, if the maximum surrender charges are applied. The tabular cash value shown is equal to the tabular contract fund value as of the same date after deducting any surrender charges (at the maximum rate) from the tabular contract fund value. (See Cash Value Option above.) If we need to compute tabular values at some time during a contract year, we will count the time since the start of the year. We will let you know the tabular values for other durations if you ask for them. Page 17 (VALB--86) II-138 LOANS Loan Requirements.--After the first anniversary, you may borrow from us on the contract. All these conditions must be met: 1. The Insured is living. 2. The contract is in force other than as extended insurance. 3. The contract debt will not be more than the loan value. (We explain these terms below.) 4. As sole security for the loan, you assign the contract to us in a form that meets our needs. 5. Except when used to pay premiums on this contract, the amount you borrow at anyone time must be at least $500. If there is already contract debt when you borrow from us, we will add the new amount you borrow to that debt. Contract Debt.--Contract debt at any time means the loan on the contract, plus the interest we have charged that is not yet due and that we have not yet added to the loan. Loan Value.--You may borrow any amount up to the difference between the loan value and any existing contract debt. At any time the loan value is 90% of the cash value. There is one exception. If the contract is in default, the loan value during the days of grace is what it was on the date of default. Example 1: Suppose the contract has a loan value of $6,000. About eight months ago you borrowed $1,500. By now there is interest of $55 charged but not yet due. The contract debt is now $1,555, which is made up of the $1,500 loan and the $55 interest. Example 2: Suppose, in example 1, you want to borrow all that you can. We will lend you $4,445 which is the difference between the $6,000 loan value and the $1,555 contract debt. This will increase the contract debt to $6,000. We will add the new amount borrowed to the existing loan and will charge interest on it, too. Interest Charge.--You may select either the Fixed Loan Rate Option or the Variable Loan Rate Option. Both are described below. We show on page 3 the option you have selected. You may request a change to the loan rate option at any time. If we agree, we will tell you the effective date of the change. Fixed Loan Rate Option.--We charge interest daily on any loan at the effective rate of 5 1/2% a year. Interest is due on each contract anniversary, or when the loan is paid back if that comes first. If interest is not paid when due. it becomes part of the loan. Then we start to charge interest on it, too. Example 3: Suppose the contract date is in 1987. Six months before the anniversary in 1996 you borrow $1,600 out of a $4,000 loan value. We charge 5 1/2% a year. Three months later, but still three months before the anniversary, we will have charged about $22 interest. This amount will be a few cents more or less than $22 since some months have more days than others. The interest will not be due until the anniversary unless the loan is paid back sooner. The loan will still be $1,600. The contract debt will be $1,622, since contract debt includes interest charged but not yet due. On the anniversary in 1996 we will have charged about $44 interest. The interest will then be due. Example 4: Suppose the $44 interest in example 3 was paid on the anniversary. The loan and contract debt each became $1,600 right after the payment. Example 5: Suppose the $44 interest in example 3 was not paid on the anniversary. The interest became part of the loan, and we began to charge interest on it, too. The loan and contract debt each became $1,644. Variable Loan Rate Option.--We charge interest daily on any loan. Interest is due on each contract anniversary, or when the loan is paid back it that comes first. If interest is not paid when due, it becomes part of the loan. Then we start to charge interest on it, too. The loan interest rate is the annual rate we set from time to time. The rate will never be greater than is permitted by law. It will change only on a contract anniversary. Before the start of each contract year, we will determine the loan interest rate we can charge for that contract year. To do this, we will first find the rate that is the greater of (1) The Published Monthly Average (which we describe below) for the calendar month ending two months before the calendar month of the contract anniversary; and (2) 5%. If that greater rate is at least 1/2% more than the loan interest rate we had set for the current contract year, we have the right to increase the loan interest rate by at least 1/2%, up to that greater rate. If it is at least 4% less, we will decrease the loan interest rate to be no more than the greater rate. We will not change the loan interest rate by less than 1/2%. (Continued on Next Page) Page 18 (VALB--86) II-139 LOANS (Continued) When you make a loan we will tell you the initial interest rate for the loan. We will send you a notice it there is to be an increase in the rate. The Published Monthly Average means: 1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor to that service; or 2. If that average is no longer published, a substantially similar average, established by the insurance regulator where this contract is delivered. Repayment.--All or part of any contract debt may be paid back at any time while the Insured is living. When we settle the contract, any contract debt is due us. If there is contract debt at the end of the last day of grace when the contract is in default, it will be deducted from the cash value to determine the net cash value. We will make this adjustment so that the proceeds will not include the amount of that debt. Effect of a Loan.--When you take a loan, the amount of the loan continues to be a part of the contract fund and continues to be credited with interest at the guaranteed rate of 4% a year. If you have selected the Variable Loan Rate Option, we will credit excess interest at an effective rate of not less than the loan interest rate for the contract year less 5 1/2%. However, we will reduce the portion of the contract fund allocated to the separate account and the fixed account by the amount you borrow, and by loan interest that becomes part of the loan because it is not paid when due. On each transaction date, if there is a contract loan outstanding, we will increase the portion of the contract fund in the fixed account and the separate account by interest credits accrued on the loan since the last transaction date. When you repay part or all of a loan we will increase the portion of the contract fund in the separate account and the fixed account by the amount of loan you repay, plus interest credits accrued on the loan since the last transaction date. We will not increase the portion of the contract fund allocated to the separate account and the fixed account by loan interest that is paid before we make it part of the loan. Only the amount of the investment amount will reject the investment results of the subaccounts. Since the amount you borrow is removed from the portion of the contract fund allocated to the separate account and the fixed account, a loan may have a permanent effect on the net cash value of this contract and also on any death benefit in excess of the guaranteed death benefit. The longer the loan is outstanding, the greater this effect is likely to be. Excess Contract Debt.--If contract debt ever becomes equal to or more than the cash value, all the contract's benefits will end 61 days after we mail a notice to you and any assignee of whom we know. Also. we may send a notice to the Insured's last known address. In the notice we will state the amount that, if paid to us, will keep the contract's benefits from ending for a limited time. Postponement of Loan.--We will usually make a loan within seven days after we receive your request at our Service Office. But we have the right to defer making the portion of the loan that is to come from the portion of the contract fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds of a loan for up to six months, unless it will be used to pay premiums on this or other contracts with us. Page 19 (VALA--86) II-140 SETTLEMENT OPTIONS Payee Defined.--In these provisions and under the Automatic Mode of Settlement, the word Payee means a person who has a right to receive a settlement under the contract. Such a person may be the Insured, the owner, a beneficiary, or a contingent payee. Choosing an Option.--A Payee may choose an option for all or part of any proceeds or residue that becomes payable to him or her in one sum. We describe residue later on this page. In some cases, a Payee will need our consent to choose an option. We describe these cases under Conditions. Options Described.--Here are the options we offer. We may also consent to other arrangements. Life Income Option.--We will make equal monthly payments for as long as the person on whose life the settlement is based lives, with payments certain for a 10-year period (10-Year Certain). The amount of each payment will be based on the Life Income Option Table and on the sex and age, on the due date of the first payment, of the person on whose life the settlement is based. That person must be a Payee. But if a choice is made more than two years after the Insured's death, we may use the Life Income Option payment rates in individual annuity contracts or life insurance contracts we regularly issue, based on United States currency, on the due date of the first payment. On request, we will quote the payment rates in contracts we then issue. We must have proof of the date of birth of the person on whose life the settlement is based. If on the due date of the first payment under this option, we have declared a higher payment rate under the option, we will base the payments on that higher rate. Interest Payment Option.--We will hold an amount at interest. We will pay interest at an effective rate of at least 3% a year ($30.00 annually, $14.89 semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more interest. Supplemental Life Annuity Option.--Any Payee may choose to receive all or part of the proceeds of this contract in the form of payments like those of any annuity or life annuity we then regularly issue. But that annuity must (1) be based on United States currency; (2) be bought by a single sum; (3) not provide for dividends; and (4) not normally provide for deferral of the first payment. For purposes of this option only, the words we, our and us include our parent company, The Prudential Insurance Company of America, which has agreed to make settlements under this option. The payment will be at least what we would pay under the chosen kind of annuity with its first payment due on its contract date. The phrase regularly issue does not include contracts that are used to qualify for special federal income tax treatment as a retirement plan unless this contract has been issued as part of such a plan. At least one of the persons on whose life this Option is based must be a Payee. We must have proof of the date of birth of any person on whose life the option is based. This Option cannot be chosen more than 30 days before the due date of the first payment. On request, we will quote the payment that would apply for any amount placed under the option at that time. First Payment Due Date.--Unless a different date is stated when the option is chosen: (1) the first payment for the Interest Payment Option will be due at the end of the chosen payment interval; and (2) the first payment for any of the other options will be due on the date the option takes effect. Residue Described. For the Life Income Option and the Supplemental Life Annuity Option, residue on any date means the then present value of any unpaid payments certain. For the Life Income Option, we will compute it at an effective interest rate of 3 1/2% a year. But we will use the interest rate we used to compute the actual Life Income Option payments if they were not based on the table in this contract. For the Supplemental Life Annuity Option, we will use the interest rate we would use for the chosen kind of annuity with the same provisions as to withdrawal. For the Interest Payment Option, residue on any date means any unpaid balance with interest to that date. For the Life Income Option and the Supplemental Life Annuity Option, residue does not include the value of any payment that may become due after the certain period. Withdrawal of Residue.--Unless otherwise stated when the option is chosen: (1) under the Life Income Option and the Supplemental Life Annuity Option the residue may be withdrawn; and (2) under the Interest Payment Option all, or any part not less than $100, of the residue may be withdrawn. If the Interest Payment Option residue is reduced to less than $1,000, we have the right to pay it in one sum. Under the Life Income Option and the Supplemental Life Annuity Option, withdrawal of the residue will not affect any payments that may become doe after the certain period; the value of those payments cannot be withdrawn. Instead, the payments will start again if they were based on the life of a person who lives past the certain period. (Continued on Next Page) Page 20 (VALA--86) II-141 SETTLEMENT OPTIONS (Continued) Designating Contingent Payee(s).--A Payee under an option has the right, unless otherwise stated, to name or change a contingent payee to receive any residue at the Payee's death. This may be done only if (1) the Payee has the full right to withdraw the residue; or (2) the residue would otherwise have been payable to that Payee's estate at death. A payee who has the right may choose, or change the choice of, an option for all or part of the residue. In some cases, the Payee will need our consent to choose or change an option. We describe these cases under Conditions. Any request to exercise any of these rights must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office. Then the interest of anyone who is being removed will end as of the date of the request, even if the Payee who made the request is not living when we file it. Changing Options.--A Payee under the Interest Payment Option may choose another option for any sum that the Payee could withdraw on the date the chosen option is to start. That date may be before the date the Payee makes the choice only if we consent. In some cases, the Payee will need our consent to choose or change an option. We describe these cases next. Conditions.--Under any of these conditions, our consent is needed for an option to be used for any person: 1. The person is not a natural person who will be paid in his or her own right. 2. The person will be paid as assignee. 3. The amount to be held for the person under the Interest Payment Option is less than $1,000. But we will hold any amount for at least one year in accord with the Automatic Mode of Settlement. 4. Each payment to the person under the option would be less than $20. 5. The option is for residue arising other than at (a) the Insured's death, or (b) the death of the beneficiary who was entitled to be paid as of the date of the Insured's death. 6. The option is for proceeds that arise other than from the Insured's death, and we are settling with an owner or any other person who is not the Insured. Death of Payee.--If a Payee under an option dies and if no other distribution is shown, we will pay any residue under that option in one sum to the Payee's estate. AUTOMATIC MODE OF SETTLEMENT Applicability.--These provisions apply to proceeds arising from the Insured's death and payable in one sum to a Payee who is a beneficiary. They do not apply to any periodic payment. Interest on Proceeds.--We will hold the proceeds at interest under Interest Payment Option of the Settlement Options provision. The Payee may withdraw the residue. We will pay it promptly on request. We will pay interest annually unless we agree to pay it more often. We have the right to pay the residue in one sum after one year if (1) the Payee is not a natural person who will be paid in his or her own right; (2) the Payee will be paid as assignee; or (3) the original amount we hold under Interest Payment Option for the Payee is less than $1,000. Settlement at Payee's Death.--If the Payee dies and leaves an Interest Payment Option residue, we will honor any contingent payee provision then in effect. If there is none, here is what we will do. We will look to the beneficiary designation of the contract; we will see what other beneficiary(ies), if any, would have been entitled to the portion of the proceeds that produced the Interest Payment Option residue if the Insured had not died until immediately after the Payee died. Then we will pay the residue in one sum to such other beneficiary(ies}, in accord with that designation. But if, as stated in that designation, payment would be due the estate of someone else, we will instead pay the estate of the Payee. Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. Jane was living when the Insured died. Jane later died without having chosen an option or naming someone other than Paul and John as contingent payee. If Paul and John are living at Jane's death we owe them the residue. If only one of them is living then, and if the contract called for payment to the survivor of them, we owe him the residue. It neither of them is living then, we owe Jane's estate. Spendthrift and Creditor.--A beneficiary or contingent payee may not, at or after the Insured's death, assign, transfer, or encumber any benefit payable. To the extent allowed by law, the benefits will not be subject to the claims of any creditor of any beneficiary or contingent payee. Page 21 (VALA-86) II-142 SETTLEMENT OPTIONS (Continued) LIFE INCOME OPTION TABLE 10-YEAR CERTAIN - -------------------------------------------------------------------------------- MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY - -------------------------------- AGE LAST BIRTHDAY Male Female - -------------------------------- 10 $3.18 $3.11 and under 11 3.19 3.12 12 3.20 3.13 13 3.21 3.14 14 3.22 3.15 15 3.24 3.16 16 3.25 3.17 17 3.27 3.19 18 3.28 3.20 19 3.30 3.21 20 3.31 3.22 21 3.33 3.24 22 3.35 3.25 23 3.36 3.26 24 3.38 3.28 25 3.40 3.30 26 3.42 3.31 27 3.45 3.33 28 3.47 3.35 29 3.49 3.37 30 3.52 3.39 31 3.54 3.41 32 3.57 3.43 33 3.60 3.45 34 3.63 3.47 35 3.66 3.50 36 3.69 3.52 37 3.72 3.55 38 3.76 3.58 39 3.80 3.61 40 3.84 3.64 41 3.88 3.67 42 3.92 3.70 43 3.97 3.74 44 4.01 3.78 - --------------------------------- - --------------------------------- AGE LAST BIRTHDAY Male Female - --------------------------------- 45 $4.06 $3.82 46 4.12 3.86 47 4.17 3.90 48 4.23 3.94 49 4.28 3.99 50 4.35 4.04 51 4.41 4.09 52 4.48 4.15 53 4.55 4.21 54 4.82 4.27 55 4.70 4.33 56 4.78 4.40 57 4.86 4.47 58 4.95 4.54 59 5.05 4.62 60 5.15 4.71 61 5.25 4.79 62 5.36 4.89 63 5.48 4.98 64 5.60 5.09 65 5.73 5.20 66 5.87 5.31 67 6.01 5.43 68 6.15 5.56 69 6.30 5.70 70 6.46 5.84 71 6.62 5.99 72 6.79 6.15 73 6.96 6.31 74 7.13 6.49 75 7.30 6.67 76 7.48 6.85 77 7.66 7.04 78 7.83 7.24 79 8.00 7.44 80 8.17 7.64 and over - --------------------------------- Page 22 (VALA-86) II-143 BENEFICIARY You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and soon. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise; 1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured. 2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured. 3. Two or more in the same class who have the right to be paid will be paid in equal shares. 4. If none survives the Insured, we will pay in one sum to the Insured's estate. Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. We owe Jane the proceeds if she is living at the Insured's death. We owe Paul and John the proceeds if they are living then but Jane is not. But if only one of them is living, we owe him the proceeds. If none of them is living we owe the Insured's estate. Beneficiaries who do not have a right to be paid under these terms may still have a right to be paid under the Automatic Mode of Settlement. Before we make a payment, we have the right to decide what proof we need of the identity, age or any other facts about any persons designated as beneficiaries. It beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again.
CONTRACT SUMMARY (Continued from Page 5) - --------------------------------------------------------------------------------------------------------- TABLE OF BASIC AMOUNTS - --------------------------------------------------------------------------------------------------------- When the proceeds arise from the Insured's death: - --------------------------------------------------------------------------------------------------------- And The Contract Is In Force: Then The Basic Amount Is: And We Adjust The Basic Amount For: - --------------------------------------------------------------------------------------------------------- and not in default past its days of the insurance amount (see page 14) contract debt (see page 18), grace plus the amount of any extra benefits plus any charges due in the arising from the insured's death days of grace (see page 9). - --------------------------------------------------------------------------------------------------------- as reduced paid-up insurance (see the amount of reduced contract debt. page 16) paid-up insurance (see page 16) - --------------------------------------------------------------------------------------------------------- as extended insurance (see the amount of term insurance. if the nothing. page 16) Insured dies in the term (see page 16); otherwise zero - --------------------------------------------------------------------------------------------------------- This Table is a part of the Contract Summary and of the Contract. - ---------------------------------------------------------------------------------------------------------
Page 23 (VALA-86) II-144 GUIDE TO CONTENTS Page Contract Summary .......................................................... 5 Table of Basic Amounts ................................................. 23 Contract Data ............................................................. 3 List of Contract Minimums; List of Supplementary Benefits, if any; Summary of Face Amount; Schedule of Premiums; Schedule of Expense Charges from Premium Payments; Schedule of Monthly Deductions from Contract Fund; Schedule of Maximum Surrender Charges; List of Subaccounts and Portfolios; List of Fixed Account Options; Schedule of Initial Allocation of Net Premiums; Service Office Tabular Contract Fund and Tabular Cash Values ............................................................. 4 General Provisions ........................................................ 6 Definitions; The Contract; Contract Modifications; Non-participating; Service Office; Ownership and Control; Suicide Exclusion; Currency; Misstatement of Age or Sex; Incontestability; Assignment; Annual Report; Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower; Payment of Death Claim Basis of Computation ...................................................... 7 Mortality Tables Described; Interest Rate; Exclusions; Values after 20 Contract Years; Minimum Legal Values Premium Payment and Reinstatement ......................................... 8 Payment of Premiums; Scheduled Premiums; Unscheduled Premiums; Premium Change on Contract Change Date(s); Allocations; Default; Grace Period; Premium Account; Reinstatement Changing The Face Amount and Partial Withdrawals .................................................... 10 Face Amount; Increase in Face Amount; Decrease in Face Amount; Partial Withdrawals Separate Account .......................................................... 12 The Separate Account; Subaccounts; The Fund; Separate Account Investments; Change in Investment Policy; Change of Fund Fixed Account ............................................................. 12 The Fixed Account; Fixed Account Options Transfers ................................................................. 13 Transfers Among Subaccounts and into the Fixed Account; Transfers Among Fixed Account Options and into the Subaccounts Investment Amount and Assumed Rate of Return .............................. 13 Investment Amount; Assumed Rate of Return; Insurance Amount .......................................................... 14 Contract Fund ............................................................. 14 Contract Fund Defined; Invested Premium Amount; Guaranteed Interest; Excess Interest, Cost of Expected Mortality; Charge for Extra Rating Class; Charge for Extra Benefits; Charges for Administration and Minimum Death Benefit Guarantee; Schedule of Other Charges Table of Adjustment Factors ............................................... 15 Contract Value Options .................................................... 16 Benefit After the Grace Period; Extended Insurance; Reduced Paid-up Insurance; Computations; Automatic Benefit; Optional Benefit; Cash Value Option; Tabular Values Loans ..................................................................... 18 Loan Requirements; Contract Debt; Loan Value; Interest Charge; Fixed Loan Rate Option; Variable Loan Rate Option; Repayment; Effect of a Loan; Excess Contract Debt; Postponement of Loan Settlement Options ........................................................ 20 Payee Defined; Choosing an Option; Options Described; Life Income Option; Interest Payment Option; Supplemental Life Annuity Option; First Payment Due Date; Residue Described; Withdrawal of Residue; Designating Contingent Payee(s); Changing Options; Conditions; Death of Payee Automatic Mode of Settlement .............................................. 21 Applicability; Interest on Proceeds; Settlement at Payee's Death; Spendthrift and Creditor Life Income Option Table .................................................. 22 Beneficiary ............................................................... 23 Any Supplementary Benefits and a copy of the application follow page 24. II-145 Page 24 (VALA-86) II-146 Part 1 Application for Life Insurance to [Prudential LOGO] [ ] The Prudential Insurance Company of America [X] Pruco Life Insurance Company A Subsidiary of The Prudential Insurance Company of America No. XX XXX XXX - ----------------------------------------------------------------------------------------------------------------------------------- 1a. Proposed Insured's name--first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth M F Mo. Day Yr. John Doe [x] [ ] 6 15 50 35 (NAME OF STATE) - ----------------------------------------------------------------------------------------------------------------------------------- 3. [ ] Single [x] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Social Security No. xxx /xx /xxxx - ----------------------------------------------------------------------------------------------------------------------------------- 5a. Occupation(s) Clerk 5b. Duties Clerical Duties - ----------------------------------------------------------------------------------------------------------------------------------- 6. Address for mail No. Street City State Zip 15 Blank Street (Name of City) (Name of State) xxxxx - ----------------------------------------------------------------------------------------------------------------------------------- 7a. Kind of policy Variable Appreciable Life 7b. Initial amount 8. Accidental death coverage (Variable Death Benefit) $25,000 initial amount If a Variable contract is applied for complete appropriate suitability form. $ - ----------------------------------------------------------------------------------------------------------------------------------- 9. Beneficiary: (Include name, age and relationship.) 10. List all life insurance on proposed Insured. Check here if None [ ] a. Primary (Class 1): Company Initial Yr. Kind Medical Mary Doe, 35, Spouse amt. issued (Indiv., Group) Yes No ___________________________________________________ [ ] [ ] ________________________________________________________________________ ___________________________________________________ [ ] [ ] ________________________________________________________________________ b. Contingent (Class 2) if any: [ ] [ ] Robert, 10, Son ________________________________________________________________________ __________________________________________________ [ ] [ ] ________________________________________________________________________ [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 11. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP) Relationship to Date of birth Total life insurance Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies a. Spouse $ ___________________________________________________________________________________________________________________________________ b. $ ___________________________________________________________________________________________________________________________________ c. $ ___________________________________________________________________________________________________________________________________ d. $ ___________________________________________________________________________________________________________________________________ e. $ ___________________________________________________________________________________________________________________________________ f. $ - ----------------------------------------------------------------------------------------------------------------------------------- 12. Supplementary benefits and riders: a. For proposed Insured b. For spouse, children, Applicant for AWP Type and duration of benefit Amount Type and duration of benefit Amount $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ [ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit - ----------------------------------------------------------------------------------------------------------------------------------- 13. State any special request. - ----------------------------------------------------------------------------------------------------------------------------------- 14. Has any person named in 1a or 11, within the last 12 months: a. been treated by a doctor for or had a known heart attack, stroke or cancer (including melanoma) other Yes No than of the skin? ............................................................................................. [ ] [x] b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [x] - ----------------------------------------------------------------------------------------------------------------------------------- 15. Premium payable [x] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot. - ----------------------------------------------------------------------------------------------------------------------------------- 16. Amount paid $ [ ] None (Must be "None" if either 14a or b is answered "Yes".) - ----------------------------------------------------------------------------------------------------------------------------------- 17. Is a medical examination to be made on: Yes No a. the proposed Insured? ......................................................................................... [ ] [x] b. spouse (if proposed for coverage)? ............................................................................ [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 18. If 17a or b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No the person(s) indicated in 17 have been examined, even if 16 shows that an amount has been paid? ................. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- - ------------ ORD 84376-86 Page 1 (Continued on page 2) - ------------
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- ----------------------------------------------------------------------------------------------------------------------------------- Continuation of Part 1 of Application - ----------------------------------------------------------------------------------------------------------------------------------- 19. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No in 1a or 11? If "Yes", give their names, name of company, plan, amount, policy numbers and enclose any [ ] [x] required state replacement form(s). - ----------------------------------------------------------------------------------------------------------------------------------- 20. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 11 in Yes No this or any company? If "Yes", give amount, details and company. [ ] [x] - ----------------------------------------------------------------------------------------------------------------------------------- 21. Does any person named in 1a or 11 plan to live or travel outside the United States and Canada within the Yes No next 12 months? If "Yes", give country(ies), purpose and duration of trip. [ ] [x] - ----------------------------------------------------------------------------------------------------------------------------------- 22. Has any person named in 1a or 11 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [x] complete Aviation Questionnaire. - ----------------------------------------------------------------------------------------------------------------------------------- 23. Has any person named in 1a or 11 engaged in hazardous sports such as: auto, motorcycle or power boat Yes No sports; bobsledding, scuba or skin diving; mountain climbing; parachuting or sky diving; snowmobile [ ] [x] racing or any other hazardous sport or hobby within the last 2 years or does any such person plan to do so in the future? If "Yes", complete Avocation Questionnaire. - ----------------------------------------------------------------------------------------------------------------------------------- 24. Has any person (age 15 or over) named in 1a or 11 in the last 3 years: Yes No a. had a driver's license denied, suspended or revoked? ......................................................... [ ] [x] b. been convicted of three or more moving violations of any motor vehicle law or of driving while under the influence of alcohol or drugs? ........................................................................... [ ] [x] c. been involved as a driver in 2 or more auto accidents? ....................................................... [ ] [x] If "Yes", give name, driver's license number and state of issue, type of violation and reason for license denial, suspension or revocation. - ----------------------------------------------------------------------------------------------------------------------------------- 25. a. Has the proposed Insured smoked cigarettes within the past twelve months? .............................. Yes [ ] No [x] b. Has the spouse (if proposed for coverage) smoked cigarettes within the past twelve months? ............. Yes [ ] No [ ] c. If the proposed Insured or spouse has ever smoked cigarettes, cigars or a pipe, show date(s) last smoked: Cigarettes Cigars Pipe Proposed Insured Mo. _______ Yr. _______ Mo. _______ Yr. _______ Mo._______ Yr. _______ Spouse Mo. _______ Yr. _______ Mo. _______ Yr. _______ Mo._______ Yr. _______ - ----------------------------------------------------------------------------------------------------------------------------------- 26. Changes made by the Company. (Not applicable in West Virginia) - ----------------------------------------------------------------------------------------------------------------------------------- To the best of the knowledge and belief of those who sign below, the statements in this application are complete and true. It is understood that, if any of the above statements (for example, the smoking data) is a material misrepresentation, coverage could be invalidated as a result. The beneficiary named in the application is for insurance payable upon death of (1) the Insured, and (2) an insured child after the death of the Insured if there is no insured spouse. When the Company gives a Limited Insurance Agreement form, ORD 84376A-86, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first premium is paid while all persons to be covered are living and their health remains as stated in Parts 1 and 2. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 26 it will be approved by acceptance of the contract. But where the law requires written consent for any change in the application, such change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs. Ownership: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract. John Doe -------------------------------------------------------------------- Signature of Proposed Insured (If age 8 or over) (Name of Dated at City/State) on Aug. 25 , 1986 - ----------------------------------------------------------- -------------------------------------------------------------------- (City/State) Signature of Applicant (If other than proposed Insured -- If applicant is a firm or corporation, show that company's name Witness John Roe By - ----------------------------------------------------------- -------------------------------------------------------------------- (Licensed agent must witness where required by law) (Signature and title of officer signing for that company) - ----------------------------------------------------------------------------------------------------------------------------------- ------------ ORD 84376-86 Page 2 ------------
II-148 | Pruco Life Insurance Company | No. xx xxx xxx |__________________________ A Supplement to the Life Insurance Application for a variable contract in which John Doe is named as the proposed Insured. - ------------------------------------------------------------------------------- I BELIEVE THIS CONTRACT MEETS MY INSURANCE NEEDS AND FINANCIAL OBJECTIVES. I ACKNOWLEDGE RECEIPT OF A CURRENT PROSPECTUS FOR THE CONTRACT. I UNDERSTAND THAT THE CONTRACT'S VALUE AND DEATH BENEFIT MAY VARY DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE............................................ YES [X] NO [ ] | Date | Signature of Applicant | | | Aug 3, 1987 | John Doe |____________________________________ |______________________________________ - ----------- PLI 252--88 ED. 5 - ----------- II-149 ENDORSEMENTS (Only we can endorse this contract.) Page 25 (VALB--86) II-150 Page 26 Modified Premium Variable Life Insurance Policy with variable insurance amount. Insurance payable only upon death Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums. Benefits reflect premium payments, investment results and mortality charges. Guaranteed minimum death if scheduled premiums duly paid and no contract debt or withdrawals. Increase in face amount at attained age 21 if contract issued at age 14 or lower. Non-participating. VALB--86 II-151 EX-99.1A(10)(A) 14 APPLICATION FOR LIFE INSURANCE EXHIBIT 1.A.(10)(a) Prudential [LOGO] - -------------------------------------------------------------------------------- APPLICATION FOR LIFE INSURANCE ------------------------------------------------- _________________________________________________ Proposed Insured ------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Submitted By - ----------------------------------------------------------------------------------------------------------------------------------- _______________________ ____________________ ______________________________ ______________________ ___________________ Name & Title Contract No. Agcy. No./Rep. Init. Office Code Detached Office _____% Credit _______________________ ____________________ ______________________________ ______________________ ___________________ - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- [ ] Debit Ord. [ ] New Acct. [ ] Existing Acct. No. of Apps.__________ Fam. Acct. No. ------------------------------------------------------------------------------------------------------------- [ ] Reg. Ord. Premium Quoted/Scheduled Premium Payment $______________________________________ (According to mode selected) ------------------------------------------------------------------------------------------------------------- [ ] Pruco FOR FIELD OFFICE STAFF TO COMPLETE: Control No. _________ County Code __________ - ----------------------------------------------------------------------------------------------------------------------------------- - --------- ORD 84376 82 - ---------
II-152
[ ] Pruco Life Insurance Company -- A Subsidiary of The Prudential Insurance Company of America - ----------------------------------------------------------------------------------------------------------------------------------- 1a. Proposed Insured's name -- first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth Mo. Day Yr. [ ]M [ ]F - ----------------------------------------------------------------------------------------------------------------------------------- 3. [ ] Single [ ] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Occupation(s) - ----------------------------------------------------------------------------------------------------------------------------------- 5. Address for mail No. Street City State Zip - ----------------------------------------------------------------------------------------------------------------------------------- 6a. Kind of policy 6b. Initial amount 7. Accidental death coverage $ initial amount $ - ----------------------------------------------------------------------------------------------------------------------------------- 8. Beneficiary: (Include name, age and relationship.) 9. List all life insurance on proposed Insured. (If NONE, so state.) a. Primary (Class 1): b. Contingent (Class 2) if any: Initial Yr. Kind Medical Company amt. issued (Indiv., Group) Yes No [ ] [ ] _________________________________________________________ ___________________________________________________________________ (For insurance payable upon death of (1) the Insured, and [ ] [ ] (2) an insured child after the death of the Insured if ___________________________________________________________________ there is no insured spouse.) [ ] [ ] ___________________________________________________________________ [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 10. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP) Relationship to Date of birth Total life insurance Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies a. Spouse $ ___________________________________________________________________________________________________________________________________ b. $ ___________________________________________________________________________________________________________________________________ c. $ ___________________________________________________________________________________________________________________________________ d. $ ___________________________________________________________________________________________________________________________________ e. $ ___________________________________________________________________________________________________________________________________ f. $ - ----------------------------------------------------------------------------------------------------------------------------------- 11. Supplementary benefits: a. For proposed Insured b. For spouse, children, Applicant for AWP Type and duration of benefit Amount Type and duration of benefit Amount $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ $ $ ___________________________________________________________________________________________________________________________________ [ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit - ----------------------------------------------------------------------------------------------------------------------------------- 12. State any special request. - ----------------------------------------------------------------------------------------------------------------------------------- 13. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No in 1a or 10? If "Yes", give their names, name of company, plan, amount and policy numbers. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 14. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 10 in Yes No this or any company? If "Yes", give amount, details and company. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 15. Does any person named in 1a or 10 plan to live or travel outside the United States and Canada within the next Yes No 12 months? If "Yes", give details. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 16. Has any person named in 1a or 10 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [ ] complete Aviation Questionnaire. - ----------------------------------------------------------------------------------------------------------------------------------- 17. Has any person named in 1a or 10, within the last 12 months: Yes No a. been treated by a doctor for or had a known heart attack, stroke or cancer other than of the skin? ............ [ ] [ ] b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 18. Premiums payable [ ] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot. - ----------------------------------------------------------------------------------------------------------------------------------- 19. Amount paid $ [ ] None (Must be "None" if either 17a or 17b is answered "Yes".) - ----------------------------------------------------------------------------------------------------------------------------------- 20. Is a medical examination to be made on a. the proposed Insured?.................................................. Yes [ ] No [ ] b. spouse (if proposed for coverage)? .................................... Yes [ ] No [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 21. If 20a or 20b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No the person(s) indicated in 20 have been examined, even if 19 shows that an amount has been paid? ................. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 22. Changes made by the Company - ----------------------------------------------------------------------------------------------------------------------------------- ------------ ORD 84376-82 Page 1 (Continued on page 2) ------------
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- ----------------------------------------------------------------------------------------------------------------------------------- Continuation of Part 1 of Application Complete on all persons named in 1a and 10 if any one of them can have insurance on a non-medical basis. - ----------------------------------------------------------------------------------------------------------------------------------- 23. Height and weight of: a. Proposed Insured Ht._______ Wt._______ b. Spouse Ht.________ Wt.________ c. Applicant for AWP Ht.________ Wt.________ Has the weight changed more than 10 pounds in the past year? Yes [ ] No [ ] If "Yes", give details in 30. - ----------------------------------------------------------------------------------------------------------------------------------- 24. Has the proposed Insured or spouse ever smoked? a. Proposed Insured Yes [ ] No [ ] b. Spouse Yes [ ] No [ ] If "Yes", give date(s) last smoked: Cigarettes Cigars Pipe Proposed Insured Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ Spouse Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ - ----------------------------------------------------------------------------------------------------------------------------------- 25. When was a doctor last consulted by: a. Proposed Insured? b. Spouse? c. Applicant for AWP? Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______ - ----------------------------------------------------------------------------------------------------------------------------------- 26. Is any person to be covered now being treated or taking medicine for any condition or disease? ................. Yes [ ] No [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 27. Has any person to be covered ever: Yes No a. had any surgery or been advised to have surgery and has not done so? .............................................. [ ] [ ] b. been in a hospital, sanitarium or other institution for observaation, rest, diagnosis or treatment? ............... [ ] [ ] c. regularly used or is any such person now using, barbiturates or amphetamines, marijuana or other hallucinatory drugs, or heroin, opiates or other narcotics, except as prescribed by a doctor? ................................... [ ] [ ] d. been treated or counseled for alcoholism? ......................................................................... [ ] [ ] e. had life or health insurance declined, postponed, changed, rated-up or withdrawn? ................................. [ ] [ ] f. had life or health insurance canceled, or its renewal or reinstatement refused? ................................... [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 28. Other than as shown above, in the past 5 years has any person to be covered: Yes No a. consulted or been attended or examined by any doctor or other practitioner? ...................................... [ ] [ ] b. had electrocardiograms, X-rays for diagnosis or treatment, or blood, urine, or other medical tests? .............. [ ] [ ] c. made claim for or received benefits, compensation, or a pension because of sickness or injury? ................... [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 29. Does any person to be covered now have a known sign of any physical disorder, disease or defect not shown above? Yes [ ] No [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 30. What are the full details of the answer to 25 and to each part of 23 and 26 thru 29 which is answered "Yes"? Full names and addresses of Name & Question No. Illness or other resason Dates and duration of illness doctors and hospitals ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ - ----------------------------------------------------------------------------------------------------------------------------------- Those who sign below declare, to the best of their knowledge and belief, that the statements in this application are complete and true. When the Company gives a Temporary Indurance Agreement form, ORD 84376A-82, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first premium is paid while all persons to be covered are living and their health remains as stated in Part 1. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 22 it will be approved by acceptance of the contract. But where the law requires written consent for any change in the application, such as change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs. OWNERSHIP: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of owership stated in the contract. Signature of Proposed Insured (If Age 8 or over) ---------------------------------------------------------------------- Dated at on , 19 Signature of Applicant (If other than proposed Insured) - --------------------------------------------------- City/State ---------------------------------------------------------------------- Witness (If applicant is a firm or corporation, show that company's name) - --------------------------------------------------- By (Licensed agent must witness where required by law) ---------------------------------------------------------------------- (Signature and title of officer signing for that company) ------------ ORD 84376-82 Page 2 ------------
II-154 ACKNOWLEDGEMENT I have received and read a copy of the IMPORTANT NOTICE ABOUT YOUR APPLICATION FOR INSURANCE. -------------------------------- Date , 19 ---------------------------------------- AUTHORIZATION For the Release of Information to: [ ] The Prudential Insurance Company of America [ ] Pruco Life Insurance Company To: Any licensed physician, medical practitioner, hospital, clinic or like facility, insurance company or the Medical Information Bureau, Inc. or other organization, institution or person. To determine eligibility for life insurance coverage, I authorize you to give the Company checked above and, through it, to its reinsurers and the Medical Information Bureau, any data or records you may have about me or my mental or physical health. This also applies to any child proposed for insurance in the application. This authorization is valid until two years after the effective date of any contract issued in connection with this authorization. A photo of this form will be as valid as the original. (The person who signs this form may have a copy of it upon request.) Signature of Proposed Insured (if age 15 or over) otherwise Applicant - ------------------------------------------------------------------------------- Signature of Spouse (if proposed for coverage) - ------------------------------------------------------------------------------- - --------- ORD 84377 82 - --------- - ------------------------------------------------------------------------------- [ ] The Prudential Insurance Company of America [ ] Pruco Life Insurance Company IMPORTANT NOTICE ABOUT YOUR APPLICATION FOR INSURANCE ----------------------------------------------------- Before we can issue a policy we must first underwrite your application. This means that we evaluate all the information necessary to determine if you qualify for the insurance. In addition to the information on the application, a medical examination may be required. We also ask you to authorize any doctor, hospital or other organization or person to give us any information which they may have about you or your mental or physical health. We may ask for a report from a consumer reporting agency. These reports provide information about a person's character, residence, activities, general reputation, personal characteristics and mode of living. The agency may get this information through interviews with friends, neighbors and associates. Any person on whom we ask for a report has a right to ask to be interviewed. You may also get a copy of the report from the consumer reporting agency which completed it. An agency may keep the information it has about you and disclose it to other persons. If you would like further information as to the nature and scope of these reports, it will be provided upon request. Any information which we obtain about you will be treated as confidential. However, we may give this information, as necessary, to: your doctor, if we find a serious health problem which you do not know about; persons conducting mortality or morbidity studies; and affiliate companies for marketing purposes. If you ask, we will describe any other circumstances when we may disclose information about you without your prior authorization. - ------------ ORD 84378-82 - ------------ (Continued on reverse) - ------------------------------------------------------------------------------- [ ] The Prudential Insurance Company of America [ ] Pruco Life Insurance Company A Subsidiary of The Prudential Insurance Company of America TEMPORARY INSURANCE AGREEMENT We, the Company, agree to provide temporary insurance as follows: 1. It will start on the latest of these dates: (a) the date of this agreement, (b) the date of completion of all medical examinations agreed to, and (c) any date asked for in the application. 2. This insurance is subject to the terms of the contract applied for. 3. The sum of all death benefits for any person who is to be covered by this insurance will be the amount asked for on that person or $250,000, whichever is less. The temporary insurance will end: 1. When we issue a contract as applied for. It will replace the temporary insurance. 2. When we issue a contract other than as applied for. It will replace the temporary insurance if: (a) it is accepted on delivery (this includes paying at the same time any excess of the correct first premium over the amount shown below); and (b) the persons who are to be covered are living when the contract is delivered. If the contract is not accepted on delivery the temporary insurance will end at once. 3. When we tell you that we rejected the application or when we tell you that we will not consider it on a prepaid basis. 4. At the end of 60 days if the temporary insurance has not been ended as we state in 1, 2 or 3. - ------------- ORD 84376A-82 (Continued on reverse) Printed in U.S.A. - ------------- - ------------------------------------------------------------------------------- Names and addresses of three Friends or Business Associates: 1. Name _______________________________________________________________________ II-155 Address ____________________________________________________________________ 2. Name _______________________________________________________________________ Address ____________________________________________________________________ - ------------------------------------------------------------------------------- II-156 - -------------------------------------------------------------------------------- We may also make a brief report to the Medical Information Bureau (MIB) which provides an information exchange for its member insurance companies. When you apply for life or health insurance or submit a claim for benefits to any member company, MIB will, on request, give that company the information in its file. If you have any questions about any report which MIB may have on you, you may contact MIB at Post Office Box 105, Essex Station, Boston, MA 02112, (617) 426-3660. If you have any questions concerning any of the personal information which we obtain or report, let us know. You have the right to see this information and to correct, amend or delete any information which may be wrong. We will tell you how to do this if you ask us. If we are unable to issue the policy you requested, we will tell you and explain the reasons. Thank you for applying to us for insurance. Corporate Offices, Newark, N.J. These Regional Home Offices of The Prudential Insurance Company of America are also Service Offices of Pruco Life Insurance Company. Central Atlantic Home Office, Northeastern Home Office, Fort Washington, Pa. Boston, Mass. Eastern Home Office, South-Central Home Office, South Plainfield, N.J. Jacksonville, Fla. Mid-America Home Office, Southwestern Home Office, Chicago, Ill. Houston, Tex. North Central Home Office, Western Home Office, Minneapolis, Minn. Los Angeles, Calif. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- We received $_____________ on_________, 19___ from __________________________. This amount was paid when a life insurance application was signed, on the same date, in which ____________________________________________ is named as the proposed Insured. This agreement is issued on the condition that any check, draft or other order for the payment of money is good and can be collected. All checks must be drawn only to the Company and not to any other party. No change may be made in the terms and conditions of this form. No statement which claims to make such a change will bind the Company. Field Office Writing Representative (Agent) - ----------------------------------- ----------------------------------------- The Prudential Insurance Company of America Pruco Life Insurance Company Corporate Offices, Newark, N.J. These Regional Home Offices of The Prudential Insurance Company of America are also Service Offices of Pruco Life Insurance Company. Central Atlantic Home Office, Northeastern Home Office, Fort Washington, Pa. Boston, Mass. Eastern Home Office, South-Central Home Office, South Plainfield, N.J. Jacksonville, Fla. Mid-America Home Office, Southwestern Home Office, Chicago, Ill. Houston, Tex. North Central Home Office, Western Home Office, Minneapolis, Minn. Los Angeles, Calif. _____________________________________________________________ Note--Unless you get a contract, or your money back within eight weeks from the date of this agreement, please notify the Company. Give the amount paid, date of payment, and name of person to whom paid. (Locations are shown above.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 3. Name _______________________________________________________________________ Address ____________________________________________________________________ Furnished by ___________________________________________________________ (Name of Proposed Insured/Applicant) Proposed Insured's Expiration Dates: Auto ___________ Homeowners ______________ - -------------------------------------------------------------------------------- II-157
AGENT'S SUPPLEMENTAL INFORMATION - ----------------------------------------------------------------------------------------------------------------------------------- 1. Give current and last previous HOME and BUSINESS addresses. From To Employer No. Street City or Town State Home Mo. Yr. Mo. Yr. Present ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ Bus. Present - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- 2. If an Investigative Consumer Report is necessary, is a direct interview desired? .............................. Yes [ ] No [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 3. What is the total yearly income of: a. Proposed Insured? $ b. Spouse? $ - ----------------------------------------------------------------------------------------------------------------------------------- 4. Does more than 50% of the proposed Insured's support come from someone else? Yes [ ] No [ ] If "Yes", give that person's: Full name Relationship Amt. of Life ins. in force $ - ----------------------------------------------------------------------------------------------------------------------------------- 5. Who is to pay the premium? (Check one) [ ] Insured [ ] Employer [ ] Spouse [ ] Parent [ ] Other _______________________________ - ----------------------------------------------------------------------------------------------------------------------------------- 6.a. Did someone other than you suggest this insurance? Yes [ ] No [ ] If "Yes", state who and what prompted the request? ________________________________________________________________________________________________________________________________ b. What was the primary source of the Sales Lead? (Check one)(1) [ ] Policyholder Service (2) [ ] Referred Lead (3) [ ] Cold Call - ----------------------------------------------------------------------------------------------------------------------------------- 7. What Sales Services did you use? (Check appropriate boxes) a. [ ] FACTOR 1 b. [ ] FACTOR 2 c. [ ] Other CPI d. [ ] CNA e. [ ] FNA f. [ ] Business Security Analysis g. [ ] Employer's Advisory Service h. [ ] Estate Conservation Service i. [ ] Other __________________________________ - ----------------------------------------------------------------------------------------------------------------------------------- 8. Complete if this application is for business insurance: c. Amount of business insurance in force and applied for in all a. Is firm a: (1) [ ] Sole Proprietorship companies on each officer or member of the firm. (2) [ ] Partnership (3) [ ] Corporation Name Age Position Inforce Applied for b. Is proposed Insured: $ $ [ ] Owner of firm (state _______%) [ ] Employee ________________________________________________________________ - ----------------------------------------------------------------------------------------------------------------------------------- 9. Do you have, from any source, facts which you have not stated any place else in the application which indicate that any person named in 1a or 10 of the application may: (Give details of "Yes" answers in "REMARKS".) Yes No a. replace or change any current insurance or annuity in any company? ............................................ [ ] [ ] b. have in the last 3 years participated in hazardous sports (such as auto racing or parachuting), or been arrested for driving recklessly or while intoxicated? ......................................................... [ ] [ ] c. have frequently drunk to excess, illegally used habit forming drugs or have a record of indictment or conviction of any crime? ...................................................................................... [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 10. Has the last name of any person named in 1a or 10 of the application been changed in the last 5 years (marriage, Yes No court order, etc.)? If "Yes", who, and what was the previous last name? [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 11. Are the proposed Insured and agent related? Yes [ ] No [ ] If "Yes", state relationship: [ ] Self [ ] Other ______________ - ----------------------------------------------------------------------------------------------------------------------------------- 12. a. Proposed Insured's telephone no. b. Social Security no. - ----------------------------------------------------------------------------------------------------------------------------------- Complete 13 if proposed Insured is age 0-14 13. Family Name Date of Present Pending Family Name Date of Present Pending details birth insurance Pru app.? details birth insurance Pru app.? Father Brothers ___________________________________________________________ & Sisters Mother - ----------------------------------------------------------------------------------------------------------------------------------- Complete 14 and 15 if dependent children are proposed for coverage (Give details of "Yes" answers in "REMARKS".) 14. Are any children named in 10 of the application: Yes No a. foster children or children whole legal adoption has not yet been made final? ................................. [ ] [ ] b. living in a household other than the proposed Insured's or dependent on someone other than the proposed Insured? ............................................................................................. [ ] [ ] - ----------------------------------------------------------------------------------------------------------------------------------- 15. Are there any other children less than 18 years of age who have not been named in 10 of the application? ..... Yes [ ] No [ ] - ----------------------------------------------------------------------------------------------------------------------------------- CERTIFICATION I certify that (a) on this date I saw the proposed Insured and (b), except as stated in "REMARKS", I am not aware of any information not shown in the answers to the questions in any Part of this application, that would adversely affect the eligibility, acceptability or insurability of any person proposed for coverage, I recommend that the Company accept the risks proposed for coverage. Date Signature of Writing Representative (Agent) Mgr., Asst. Mgr. or Sales Mgr. must sign if present when application signed , 19 - ----------------------------------------------------------------------------------------------------------------------------------- REMARKS: - --------- ORD 84376 82 - --------- II-158
Pruco Life Insurance Company No. A Subsidiary of The Prudential Insurance Company of America XX XXX XXX -------------- A Supplement to the Application for Life Insurance in which John Doe is named as the proposed Insured. The contract applied for is: [X] Variable Life Insurance [ ] Variable Appreciable Life Insurance [ ] with Variable Insurance Amount [ ] with Fixed Insurance Amount The person who signs below: 1. UNDERSTANDS THAT UNLESS THE CONTRACT APPLIED FOR IS VARIABLE APPRECIABLE LIFE INSURANCE WITH FIXED INSURANCE AMOUNT AND IS NOT FULLY PAID UP, THE DEATH BENEFIT (EXCEPT ANY SUPPLEMENTARY BENEFITS) MAY GO UP OR GO DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE BUT WILL NEVER BE LESS THAN THE GUARANTEED MINIMUM, IF PREMIUMS ARE DULY PAID AND THERE IS NO CONTRACT DEBT; 2. UNDERSTANDS THAT THE CASH VALUES MAY GO UP OR GO DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE AND THAT THERE IS NO GUARANTEED MINIMUM CASH VALUE; Yes No Did the applicant receive the current prospectus for the contract checked above? .................................. [X] [ ] Does the applicant believe that this contract will meet insurance needs and financial objectives? ........................ [X] [ ] The net premium payments (as described in the prospectus) are to be allocated to the appropriate Pruco Life variable contract account for the contract checked above as follows: Subaccount Allocation* ---------- ---------- Bond 20 % (BOND) Money Market 20 % (MMKT) Common Stock 20 % (CSTK) Aggressively Managed Flexible 20 % (AFLX) Conservatively Managed Flexible 20 % (CFLX) _______________________________ ____ % ( ) _______________________________ ____ % ( ) 100 % * If any portion of a net premium is allocated to a particular subaccount, that portion must be at least 10% on the date the allocation takes effect. All percentage allocations must be in whole numbers (e.g. 33% can be selected, but 33 1/3% cannot). Date Signature of Applicant June 1, 1984 /s/ JOHN DOE ________________________________________ __________________________________ - ---------- PLI 49--84 Printed in U.S.A. by PROF - ---------- II-159 XXX XXX XXX PRUCO LIFE INSURANCE COMPANY EASTERN SERVICE OFFICE XXXXXXXXXXXXXXXXXXXXXXXX BOX 388, FORT WASHINGTON, PA 19034 XXXXXXXXXXXXXXXXXXXXXXXX FOR INSURANCE SERVICE CONTACT YOUR XXXXXXXXXXXXXXXXXXXXXXXX REPRESENTATIVE. XXXXXXXXXXXXXXXXXXXXXXXX X - XXXX (REGION - AGENCY CODE) NOTICE OF WITHDRAWAL RIGHT IN ORDER TO COMPLY WITH THE LAWS ADMINISTERED BY THE SECURITIES AND EXCHANGE COMMISSION, WE ARE SENDING YOU THIS NOTICE. PLEASE READ IT CAREFULLY AND KEEP IT WITH YOUR RECORDS. YOU HAVE RECENTLY PURCHASED A VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT FROM PRUCO LIFE. THE BENEFITS OF THIS CONTRACT DEPEND ON THE INVESTMENT EXPERIENCE OF THE MARKET, BOND, COMMON STOCK, AGGRESSIVELY MANAGED FLEXIBLE AND CONSERVATIVELY MANAGED FLEXIBLE SUBACCOUNTS OF PRUCO LIFE'S VARIABLE APPRECIABLE ACCOUNT. THESE SUBACCOUNTS ARE DESCRIBED IN THE PROSPECTUS THAT WAS GIVEN TO YOU AT THE TIME OF SALE. YOU HAVE THE RIGHT TO EXAMINE AND CANCEL THIS CONTRACT. UPON ITS RETURN, YOU ARE ENTITLED TO A FULL REFUND OF ALL PREMIUMS PAID. [WHERE STATE LAW PERMITS, THE PRIOR SENTENCE WILL READ: "UPON ITS RETURN, YOU ARE ENTITLED TO A REFUND OF ALL PREMIUMS PAID, PLUS OR MINUS ANY CHANGE DUE TO INVESTMENT PERFORMANCE IN THE VALUE OF THE INVESTED PORTIONS OF SUCH PREMIUMS."] THE CANCELLATION DEADLINE IS THE LATEST OF: 1. 10 DAYS AFTER YOU HAVE RECEIVED THE CONTRACT. 2. 45 DAYS FROM THE DATE YOU COMPLETED PART 1 OF THE APPLICATION. 3. 10 DAYS FROM THE DATE OF DELIVERY OF THIS NOTICE. IN DETERMINING WHETHER OR NOT TO CANCEL YOUR CONTRACT, YOU SHOULD CONSIDER, ALONG WITH OTHER FACTORS SUCH AS THE NEEDS AND OTHER REASONS WHICH MOTIVATED YOU TO PURCHASE THIS CONTRACT, THE PROJECTED COST AND YOUR ABILITY TO MAKE THE SCHEDULED PREMIUM PAYMENTS AS STATED IN YOUR CONTRACT. PLEASE CONSULT AND REVIEW THE PROSPECTUS YOU HAVE RECEIVED. THE PROSPECTUS DESCRIBES THE DEDUCTIONS FROM PREMIUMS BEFORE AMOUNTS ARE ALLOCATED TO THE SUBACCOUNTS MENTIONED ABOVE. THESE ARE: -- A PER PAYMENT CHARGE OF $2.00 -- A DEDUCTION FOR SALES LOAD OF 5% -- A DEDUCTION OF 2.5% FOR PREMIUM TAX IN ADDITION, THE PROSPECTUS DESCRIBES CERTAIN CHARGES THAT ARE DEDUCTED PERIODICALLY FROM AMOUNTS ALLOCATED TO THE SUBACCOUNTS. THE PROSPECTUS ALSO DESCRIBES CHARGES THAT MAY BE ASSESSED UPON SURRENDER. IF YOU DECIDE TO CANCEL YOUR CONTRACT, COMPLETE THE ENCLOSED FORM AND RETURN IT ALONG WITH YOUR CONTRACT. THE POSTMARK OF THE RETURNED CONTRACT MUST BE ON OR BEFORE THE DEADLINE DESCRIBED ABOVE. II-160 INSTRUCTIONS Please read carefully If, after reading the enclosed notice, you decide to return your contract for cancellation, you must: 1. Sign and date the bottom portion of this form. 2. Mail this notice together with your contract to: Pruco Life Insurance Company Eastern Service Office Box 388 Fort Washington, Pa. 19034 3. Make certain that the postmark on the envelope is on or before the latest date permitted for cancellation as described in the enclosed notice. 4. Check the box at the bottom if you have not yet received your contract when mailing this form. To be Filled Out by Owner To: Pruco Life Pursuant to the terms of the notice previously furnished me by Pruco Life, I hereby return the contract numbered below for cancellation and request a full refund of all premiums paid by me. I release Pruco Life from any claims in connection with the sale or issuance of this contract, and acknowledge that Pruco Life's only liability is the refund of the premiums paid for the contract. [Where state law permits, this paragraph will read: "Pursuant to the terms of the notice previously furnished me by Pruco Life, I hereby return the contract numbered below for cancellation and request a refund of all premiums paid by me, plus or minus any change due to investment performance in the value of the invested portions of such premiums. I release Pruco Life from any claims in connection with the sale or issuance of this contract, and acknowledge that Pruco Life's only liability is the refund of the premiums paid for the contract, plus or minus any change due to investment performance in the value of the invested portions of such premiums."] - ---------------------- --------------------------------------- Date Signature of Contract Owner --------------------------------------- Contract Number --------------------------------------- Name of Insured (if other than Owner) _____ I have not yet received the contract and, should it be received, I will return it to Pruco Life. II-161 EX-99.1.A(10)(B) 15 SUPPLEMENT APPLICATION EXHIBIT 1.A.(10)(b) Pruco Life Insurance Company No. XX XXX XXX ---------------- A Subsidiary of The Prudential Insurance Company of America A Supplement to the Application for Life Insurance in which John Doe is named as the proposed Insured. The contract applied for is: |X| Variable Life Insurance |_| Variable Appreciable Life Insurance |_| with Variable Insurance Amount |_| with Fixed Insurance Amount The person who signs below: 1. UNDERSTANDS THAT UNLESS THE CONTRACT APPLIED FOR IS VARIABLE APPRECIABLE LIFE INSURANCE WITH FIXED INSURANCE AMOUNT AND IS NOT FULLY PAID UP, THE DEATH BENEFIT (EXCEPT ANY SUPPLEMENTARY BENEFITS) MAY GO UP OR GO DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE BUT WILL NEVER BE LESS THAN THE GUARANTEED MINIMUM, IF PREMIUMS ARE DULY PAID AND THERE IS NO CONTRACT DEBT; 2. UNDERSTANDS THAT THE CASH VALUES MAY GO UP OR GO DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE AND THAT THERE IS NO GUARANTEED MINIMUM CASH VALUE; Yes No Did the applicant receive the current prospectus for the contract checked above? ............................ |X| |_| Does the applicant believe that this contract will meet insurance needs and financial objectives? .............. |X| |_| The net premium payments (as described in the prospectus) are to be allocated to the appropriate Pruco Life variable contract account for the contract checked above as follows: Subaccount Allocation+ ---------- ----------- Bond 20% (BOND) Money Market 20% (MMKT) Common Stock 20% (CSTK) Aggressively Managed Flexible 20% (AFLX) Conservatively Managed Flexible 20% (CFLX) _______________________________ ___% ( ) _______________________________ ___% ( ) 100 + If any portion of a net premium is allocated to a particular subaccount, that portion must be at least 10% on the date the allocation takes effect. All percentage allocations must be in whole numbers (e.g. 33% can be selected, but 33 1/3% cannot). Date: June 1, 1984 Signature of Applicant /s/ John Doe ----------------------------- II-162 EX-1.A.(11) 16 NOTICE OF WITHDRAWAL RIGHT EXHIBIT 1.A.(11) XXX XX XXX PRUCO LIFE INSURANCE COMPANY XXXXXXXXXXXXXXXXXX EASTERN SERVICE OFFICE BOX 388, FORT WASHINGTON, PA 19034 XXXXXXXXXXXXXXXXXX FOR INSURANCE SERVICE CONTACT YOUR XXXXXXXXXXXXXXXXXX REPRESENTATIVE. XXXXXXXXXXXXXXXXXX X - XXXX (REGION - AGENCY CODE) NOTICE OF WITHDRAWAL RIGHT IN ORDER TO COMPLY WITH THE LAWS ADMINISTERED BY THE SECURITIES AND EXCHANGE COMMISSION, WE ARE SENDING YOU THIS NOTICE. PLEASE READ IT CAREFULLY AND KEEP IT WITH YOUR RECORDS. YOU HAVE RECENTLY PURCHASED A VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT FROM PRUCO LIFE. THE BENEFITS OF THIS CONTRACT DEPEND ON THE INVESTMENT EXPERIENCE OF THE MONEY MARKET, BOND, COMMON STOCK, AGGRESSIVELY MANAGED FLEXIBLE AND CONSERVATIVELY MANAGED FLEXIBLE SUBACCOUNTS OF PRUCO LIFE'S VARIABLE APPRECIABLE ACCOUNT. THESE SUBACCOUNTS ARE DESCRIBED IN THE PROSPECTUS THAT WAS GIVEN TO YOU AT THE TIME OF SALE. YOU HAVE THE RIGHT TO EXAMINE AND CANCEL THIS CONTRACT. UPON ITS RETURN, YOU ARE ENTITLED TO A FULL REFUND OF ALL PREMIUMS PAID. [WHERE STATE LAW PERMITS, THE PRIOR SENTENCE WILL READ: "UPON ITS RETURN, YOU ARE ENTITLED TO A REFUND OF ALL PREMIUMS PAID, PLUS OR MINUS ANY CHANGE DUE TO INVESTMENT PERFORMANCE IN THE VALUE OF THE INVESTED PORTIONS OF SUCH PREMIUMS."] THE CANCELLATION DEADLINE IS THE LATEST OF: 1. 10 DAYS AFTER YOU HAVE RECEIVED THE CONTRACT. 2. 45 DAYS FROM THE DATE YOU COMPLETED PART 1 OF THE APPLICATION. 3. 10 DAYS FROM THE DATE OF DELIVERY OF THIS NOTICE. IN DETERMINING WHETHER OR NOT TO CANCEL YOUR CONTRACT, YOU SHOULD CONSIDER, ALONG WITH OTHER FACTORS SUCH AS THE NEEDS AND OTHER REASONS WHICH MOTIVATED YOU TO PURCHASE THIS CONTRACT, THE PROJECTED COST AND YOUR ABILITY TO MAKE THE SCHEDULED PREMIUM PAYMENTS AS STATED IN YOUR CONTRACT. PLEASE CONSULT AND REVIEW THE PROSPECTUS YOU HAVE RECEIVED. THE PROSPECTUS DESCRIBES THE DEDUCTIONS FROM PREMIUMS BEFORE AMOUNTS ARE ALLOCATED TO THE SUBACCOUNTS MENTIONED ABOVE. THESE ARE: - A PER PAYMENT CHARGE OF $2.00 - A DEDUCTION FOR SALES LOAD OF 5% - A DEDUCTION OF 2.5% FOR PREMIUM TAX IN ADDITION, THE PROSPECTUS DESCRIBES CERTAIN CHARGES THAT ARE DEDUCTED PERIODICALLY FROM AMOUNTS ALLOCATED TO THE SUBACCOUNTS. THE PROSPECTUS ALSO DESCRIBES CHARGES THAT MAY BE ASSESSED UPON SURRENDER. IF YOU DECIDE TO CANCEL YOUR CONTRACT, COMPLETE THE ENCLOSED FORM AND RETURN IT ALONG WITH YOUR CONTRACT. THE POSTMARK OF THE RETURNED CONTRACT MUST BE ON OR BEFORE THE DEADLINE DESCRIBED ABOVE. II-163 INSTRUCTIONS Please read carefully If, after reading the enclosed notice, you decide to return your contract for cancellation, you must: 1. Sign and date the bottom portion of this form. 2. Mail this notice together with your contract to: Pruco Life Insurance Company Eastern Service Office Box 388 Fort Washington, Pa. 19034 3. Make certain that the postmark on the envelope is on or before the latest date permitted for cancellation as described in the enclosed notice. 4. Check the box at the bottom if you have not yet received your contract when mailing this form. To be Filled Out by Owner To: Pruco Life Pursuant to the terms of the notice previously furnished me by Pruco Life, I hereby return the contract numbered below for cancellation and request a full refund of all premiums paid by me. I release Pruco Life from any claims in connection with the sale or issuance of this contract, and acknowledge that Pruco Life's only liability is the refund of the premiums paid for the contract. [Where state law permits, this paragraph will read: "Pursuant to the terms of the notice previously furnished me by Pruco Life, I hereby return the contract numbered below for cancellation and request a refund of all premiums paid by me, plus or minus any change due to investment performance in the value of the invested portions of such premiums. I release Pruco Life from any claims in connection with the sale or issuance of this contract, and acknowledge that Pruco Life's only liability is the refund of the premiums paid for the contract, plus or minus any change due to investment performance in the value of the invested portions of such premiums."] - ---------------------------- ---------------------------------- Date Signature of Contract Owner ---------------------------------- Contract Number ---------------------------------- Name of Insured (if other than Owner) ______ I have not yet received the contract and, should it be received, I will return it to Pruco Life. II-164 EX-99.1A(13)(A) 17 RIDER FOR INSURED'S WAIVER OF PREMIUM BENEFIT EXHIBIT 1.A.(13)(a) RIDER FOR INSURED'S WAIVER OF PREMIUM BENEFIT Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Total Disability Benefit.--We will pay scheduled premiums into the contract for you on their due dates while the Insured is totally disabled. But this is subject to all the provisions of this Benefit and of the rest of this contract. Disability Defined.--When we use the words disability and disabled in this Benefit we mean total disability and totally disabled. Here is how we define them: (1) until the Insured has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any of the duties of his or her regular occupation; but (2) after the Insured has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any gainful work for which he or she is reasonably fitted by education, training, or experience. Except for what we state in the next sentence, we will at no time regard an Insured as disabled who is doing gainful work for which he or she is reasonably fitted by education, training, or experience. We will regard an Insured as disabled, even if working or able to work, if he or she incurs, during a period in which premiums are eligible to be waived as we describe below, one of the following: (1) permanent and complete blindness of both eyes; or (2) severance of both hands at or above the wrists or both feet at or above the ankles; or (3) severance of one hand at or above the wrist and one foot at or above the ankle. Premiums Eligible To Be Paid By Us.--lf the Insured becomes disabled before the first contract anniversary after his or her 60th birthday and that disability begins (1) on or after the first contract anniversary after his or her 5th birthday, if the contract date was before that birthday; or (2) on or after the contract date, if that date was on or after his or her 5th birthday, we will pay all scheduled premiums that fall due while he or she stays disabled and before the contract becomes paid-up. If the Insured becomes disabled on or after the first contract anniversary after his or her 6Oth birthday, we will pay only those scheduled premiums that fall due before the first contract anniversary after his or her 65th birthday and while he or she stays disabled and before the contract becomes paid-up. If the Insured becomes disabled on or after the first contract anniversary after his or her 65th birthday, we will not pay any scheduled premiums that fall due in that period of disability. Conditions.--Both of these conditions must be met: (1) The Insured must become disabled while this contract is in force and not in default past the last day of the grace period; (2) The Insured must stay disabled for a period of at least six months while living. Exceptions.--We will not pay any scheduled premiums if the Insured becomes disabled from: (1) an injury he causes to himself, or she causes to herself, on purpose; or (2) sickness or injury due to service on or after the contract date in the armed forces of any country(ies) at war. The word war means declared or undeclared war and includes resistance to armed aggression. Successive Disabilities.--Here is what happens if the Insured has at least one scheduled premium paid by us while disabled, then gets well so that he or she resumes making payments, and then becomes disabled again. In this case, we will not apply the six-month period that would otherwise be required by Condition (2) and will consider the second period of disability to be part of the first period unless (1) the Insured has done gainful work, for which he or she is reasonably fitted, for at least six months between the periods; or (2) the Insured became disabled the second time from an entirely different cause. If we do not apply the six-month period required by Condition (2), we also will not count the days when there was no disability as part of the two year period when disability means the Insured cannot do any of the duties of his or her regular occupation. Notice and Proof of Claim.--Notice and proof of any claim must be given to us while the Insured is living and disabled, or as soon as reasonably possible. If notice or proof is not given as soon as reasonably possible, we will not pay any scheduled premium due more than one year before the date the notice or proof is given to us. We may require proof at reasonable times that the Insured is still disabled. After he or she has been disabled for two years, we will not ask for proof more than once a year. As a part of any proof, we have the right to require that the Insured be examined at our expense by doctors of our choice. Recovery from Disability.--We will stop paying scheduled premiums if (1) disability ends; or (2) we ask for proof that the Insured is disabled and we do not receive it; (Continued on Next Page) AL 100 II-165 (Continued from Preceding Page) or (3) we require that the Insured be examined and he or she fails to do so. Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Unscheduled Premiums During Disability.--During a period of disability, even when we are paying scheduled premiums that fall due, you may make unscheduled premium payments if you wish, as provided in the Unscheduled Premiums section of the contract. Termination.--This Benefit will end and we will make no more scheduled premium payments for you on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the day before the first contract anniversary after the Insured's 65th birthday, unless the Insured has stayed disabled since before the first contract anniversary after the 60th birthday; 3. the date the contract is surrendered under its Cash Value Option, if it has one; 4. the date the contract becomes paid-up; and 5. the date the contract ends for any other reason. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 100 II-166 EX-99.1A(13)(B) 18 RIDER FOR APPLICANT'S WAIVER OF PREMIUM BENEFIT EXHIBIT 1A(13)(b) RIDER FOR APPLICANT'S WAIVER OF PREMIUM BENEFIT Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. DEATH PROVISION Death Benefit.--We will pay into the contract for you on their due dates those scheduled premiums that fall due after the applicant's death but before the benefit termination date which we show in the Contract Data page(s). For us to do so, we must receive due proof that he or she died (1) before that date and (2) while this contract is in force and not in default past the last day of the grace period. But this promise is subject to all the provisions of this Benefit and of the rest of this contract Suicide Exclusion.--If the applicant, whether sane or insane, dies by suicide within the period that we state in the Suicide Exclusion under General Provisions and while this Benefit is in force, we will not pay, under this Benefit, the scheduled premiums we describe above. Instead, we will pay no more than the sum of the monthly charges deducted for the Benefit divided by .925. DISABILITY PROVISION Total Disability Benefit.--Before the benefit termination date, we will pay into the contract for you on their due dates scheduled premiums that fall due while the applicant is totally disabled. But this is subject to all the provisions of this Benefit and of the rest of this contract. Disability Defined.--When we use the words disability and disabled in this Benefit we mean total disability and totally disabled. Here is how we define them: (1) until the applicant has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any of the duties of his or her regular occupation; but (2) after the applicant has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any gainful work for which he or she is reasonably fitted by education, training, or experience. Except for what we state in the next sentence, we will at no time regard an applicant as disabled who is doing gainful work for which he or she is reasonably fitted by education, training, or experience. We will regard an applicant as disabled, even if working or able to work, if he or she incurs, during a period in which premiums are eligible to be waived as we describe below, one of the following: (1) permanent and complete blindness of both eyes; or (2) severance of both hands at or above the wrists or both feet at or above the ankles; or (3) severance of one hand at or above the wrist and one foot at or above the ankle. Premiums Eligible To Be Paid By Us.--lf the applicant becomes disabled before the first contract anniversary after his or her 65th birthday, we will pay only those scheduled premiums that fall due (1) while he or she stays disabled; and (2) before the benefit termination date. If the applicant becomes disabled on or after (1) the first contract anniversary after his or her 65th birthday, or (2) the benefit termination date, we will not pay any scheduled premium that falls due in that period of disability. Conditions.--Both of these conditions must be met: (1) The applicant must become disabled while this contract is in force and not in default past the last day of the grace period. (2) The applicant must stay disabled for a period of at least six months while living. Exceptions.--We will not pay any scheduled premium if the applicant becomes disabled from: (1) an injury he causes to himself, or she causes to herself, on purpose; or (2) sickness or injury due to service on or after the contract date in the armed forces of any country(ies) at war. The word war means declared or undeclared war and includes resistance to armed aggression. Successive Disabilities.--Here is what happens if the applicant has at least one scheduled premium paid by us while disabled, then gets well so that premium payment resumes, and then becomes disabled again. In this case, we will not apply the six-month period that would otherwise be required by Condition (2) and will consider the second period of disability to be part of the first period unless (1) the applicant has done gainful work, for which he or she is reasonably fitted, for at least six months between the periods; or (2) the applicant became disabled the second time from an entirely different cause. If we do not apply the six-month period required by Condition (2), we also will not count the days when there was no disability as part of the two year period when disability means the applicant cannot do any of the duties of his or her regular occupation. (Continued on Next Page) AL 150 II-167 (Continued from Preceding Page) Notice and Proof of Claim.--Notice and proof of any claim must be given to us while the applicant is living and disabled, or as soon as reasonably possible. If notice or proof is not given as soon as reasonably possible, we will not pay any scheduled premium due more than one year before the date the notice or proof is given to us. We may require proof at reasonable times that the applicant is still disabled. After he or she has been disabled for two years, we will not ask for proof more than once a year. As a part of any proof, we have the right to require that the applicant be examined at our expense by doctors of our choice. Recovery from Disability.--We will stop paying scheduled premiums if (1) disability ends; or (2) we ask for proof that the applicant is disabled and we do not receive it; or (3) we require that the applicant be examined and he or she fails to do so. MISCELLANEOUS PROVISIONS Reinstatement.--If this contract is reinstated, it will not include this Benefit on the life of the applicant unless we are given any facts we need to satisfy us that he or she is insurable for the Benefit. Misstatement of Age or Sex.--If the applicant's stated age or sex or both are not correct, here is what we will do. We will change each benefit and any amount payable to what the premiums and charges would have bought for the correct age and sex. Benefit Premiums and Charges.--We show the premiums for this Benefit under the List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Benefit premiums and charges stop on the earlier of (1) the first contract anniversary after the Insured's 24th birthday, and (2) the last contract anniversary before the benefit termination date. Unscheduled Premiums During Disability.--You may make unscheduled premium payments if you wish, as provided in the Unscheduled Premiums section of the contract, even when we are paying scheduled premiums that fall due during a period of the applicants' disability or because of the applicants' death. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the day that is the last premium due date before the benefit termination date we show on the Contract Data page(s); 3. the date the contract is surrendered under its Cash Value Option, if it has one; and 4. the date the contract becomes paid-up; and 5. the date the contract ends for any other reason. Further, if you ask us in writing in the premium period, we will cancel the Benefit as of the date to which premiums are paid. Contract premiums due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 150 Printed in U.S.A. II-168 EX-99.1A(13)(C) 19 RIDER FOR INSURED'S ACCIDENTAL DEATH BENEFIT EXHIBIT 1A(13)(c) RIDER FOR INSURED'S ACCIDENTAL DEATH BENEFIT Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--We will pay the amount of this Benefit that we show on the Contract Data page(s) for the Insured's accidental loss of life. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. Manner of Payment.--We will include in the proceeds of this contract any payment under this Benefit. Conditions.--Both of these conditions must be met: (1) We must receive due proof that the Insured's death was the direct result, independent of all other causes, of accidental bodily injury that occurred on or after the contract date. (2) The death must occur (a) no more than 90 days after the injury; and (b) while the contract is in force. Exclusions.--We will not pay under this Benefit for death caused or contributed to by: (1) suicide or attempted suicide while sane or insane; or (2) infirmity or disease of mind or body or treatment for it; or (3) any infection other than one caused by an accidental cut or wound. Even if death is caused by accidental bodily injury, we will not pay for it under this Benefit if it is caused or contributed to by: (1) service in the armed forces of any country(ies) at war; or (2) war or any act of war; or (3) travel by, or descent from, any aircraft if the Insured had any duties or acted in any capacity other than as a passenger at any time during the flight. But we will ignore (3) if all these statements are true of the aircraft: (a) It has fixed wings and a permitted gross takeoff weight of at least 75,000 pounds. (b) It is operated by an air carrier that is certificated under the laws of the United States or Canada to carry passengers to or from places in those countries. (c) It is not being operated for any armed forces for training or other purposes. As used here, the word aircraft includes rocket craft or any other vehicle for flight in or beyond the earth's atmosphere. The word war means declared or undeclared war and includes resistance to armed aggression. Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. If the Contract Becomes Paid-up.--If the contract becomes paid~p we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time but no less than 4% a year. The Benefit will remain in force, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have no cash value. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the date the contract is surrendered under its Cash Value Option, if it has one; and 3. the date the contract ends for any other reason. Further, if you ask us in writing we will cancel the Benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 110 Printed in U.S.A. II-169 EX-99.1A(13)(D) 20 RIDER FOR LEVEL TERM INSURANCE BENEFIT EXHIBIT 1.A.(13)(d) RIDER FOR LEVEL TERM INSURANCE BENEFIT ON LIFE OF INSURED Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract if it is listed there. Benefit.--We will pay an amount under this Benefit if we receive due proof that the Insured died (1) in the term period for the Benefit; and (2) while this contract is in force and not in default beyond the last day of the grace period. Any proceeds under this contract that may arise from the Insured's death will include this amount. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. We show the amount of term insurance on the Contract Data page(s). We also show the term period for the Benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period. CONVERSION TO ANOTHER PLAN OF INSURANCE Right to Convert.--You may be able to exchange this Benefit for a new contract of life insurance on the Insured's life in either this company or The Prudential Insurance Company of America. In any of these paragraphs, when we use the phrase the company we mean whichever of these companies may issue the new contract. When we use the phrase new contract we mean the contract for which this benefit may be exchanged. You will not have to prove that the Insured is insurable. Conditions.--Your right to make this exchange is subject to all these conditions: (1) You must ask for the exchange in writing and in a form that meets our needs. (2) You must send this contract to us to be endorsed. (3) We must have your request and the contract at our Service Office while the Benefit is in force and before the end of its term period. The new contract will not take effect unless the premiun for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (i ) the insurance under the new contract took effect on its contract date; and (2) this Benefit ended just before that contract date. Contract Date.--The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be after the end of the term period for the Benefit. And it may not be more than 31 days before we have your request at our Service Office. Contract Specifications.--The new contract will be in the same or an equivalent rating class as this contract. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. The new contract may call for annual premiums. If the company agrees, you will be able to have premiums fall due more often. The contract may be any one of the following: 1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount you ask for in your request. But it cannot be less than $10,000 or more than the amount of term insurance for this Benefit. 2. A Variable Life contract, if Pruco Life is regularly issuing such contracts at that time. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than the amount of term insurance for this Benefit. 3. An Appreciable Life contract, or a Variable Appreciable Life contract if Pruco Life Insurance Company is regularly issuing such contracts at that time. Its face amount will be the amount you ask for in your request. But it cannot be less than $50,000 or more than the amount of term insurance for this Benefit. The new contract will not have Supplementary Benefits other than as we describe in this and in the next two paragraphs. If this contract has a benefit for paying scheduled premiums in the event of disability and the company would include a benefit for waiving or paying premiums in other contracts like the new contract, the company will put such a benefit in the new contract. The benefit, if any, in the new contract will be the same one, with the same provisions, that the company puts in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. Such a benefit that would have been allowed under this contract, and that would otherwise be allowed under the new contract, will not be denied just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the scheduled premium frequency that was in effect for this contract when the disability started. (Continued on Next Page) AL 131 II-170 CONVERSION TO ANOTHER PLAN OF INSURANCE (Continued) No premium will be waived or paid for disability under the new contract unless it has such a benefit in the event of disability. This will be so even if scheduled premiums have been paid by us for disability under this contract. Changes.--You may be able to have this Benefit changed to a new contract of life insurance other than in accord with the requirements for exhange that we state above. Or you may be able to exchange this Benefit for an increase in the amount of insuranoe under this contract. But any change may be made only if the company consents, and will be subject to conditions and charges that are then determined. MISCELLANEOUS PROVISIONS Benefit Premium's and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Benefit premiums and monthly charges stop on the contract anniversary at the end of the term period for this Benefit. If the Contract Becomes Paid-Up.--If the contract becomes paid-up we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time but no less than 4% a year. The Benefit will remain in force, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have cash values but no loan value. The cash value for this Benefit will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. We base this net cash value on the Insured's age and sex. The Insured's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit take effect under any contract value options provision that may be in the contract; 2. the end of the last day before the contract date of any other contract (a) for which the Benefit is exchanged, or (b) to which the Benefit is changed; 3. the date the contract is surrendered under its Cash Value Option, if it has one; and 4. the date the oontract ends for any other reason, Further, if you ask us in writing, we will cancel the Benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 131 II-171 EX-99.1A(13)(E) 21 RIDER FOR TERM INSURANCE BENEFIT EXHIBIT 1.A.(13)(e) RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF INSURED--DECREASING AMOUNT Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--We will pay an amount under this Benefit if we receive due proof that the Insured died (1) in the term period for the Benefit; and (2) while this contract is in force and not in default beyond the last day of the grace period. Any proceeds under this contract that may arise from the Insured's death will include this amount. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. We will use the table below to compute the amount we will pay. We show the Initial Amount of Term Insurance under this Benefit on the Contract Data page(s). We also show the term period for the Benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period. TABLE OF AMOUNTS OF INSURANCE Amounts Payable.--We show here the amount we will pay for each $1,000 of Initial Amount of Term Insurance if death occurs in the contract year ending with the anniversary shown. ---------------------------------------------------------------- ANNIVERSARY AMOUNT ANNIVERSARY AMOUNT ---------------------------------------------------------------- 1 $1,000 12 $706 2 986 13 658 3 970 14 603 4 951 15 543 5 931 16 475 6 909 17 400 7 883 18 316 8 855 19 222 9 824 20 200 10 789 BENEFIT EXPIRES 11 750 ON 20TH ANNIVERSARY ---------------------------------------------------------------- (Continued on Next Page) AL 130 II-172 (Continued from Preceding Page) CONVERSION TO ANOTHER PLAN OF INSURANCE Right to Convert.--You may be able to exchange this Benefit for a new contract of life insurance on the Insured's life in either this company or The Prudential Insurance Company of America. In any of these paragraphs, when we use the phrase the company we ean whichever of these companies may issue the new contract. When we use the phrase new contract we mean the contract for which this benefit may be exchanged. You will not have to prove that the Insured is insurable. Conditions.--Your right to make this exchange is subject to all these conditions: (1) The amount we would have paid under this Benefit if the Insured had died just before the contract date of the new contract must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications. (2) You must ask for the exchange in writing and in a form that meets our needs. (3) You must send this contract to us to be endorsed. (4) We must have your request and the contract at our Service Office while the Benefit is in force and at least five years before the end of its term period. The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this Benefit ended just before that contract date. Contract Date.--The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be less than five years before the end of the term period for the Benefit. And it may not be more than 31 days before we have your request at our Service Office. Contract Specifications.--The new contract will be in the same or an equivalent rating class as this contract. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. The new contract may call for annual premiums. If the company agrees, you will be able to have premiums fall due more often. The contract may be any one of the following: 1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount you ask for in your request. But it cannot be less than $10,000 or more than 80% of the amount we would have paid under this Benefit if the Insured had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500. the amount we would have paid must be at least $12,500 for this exchange to be possible.) 2. A contract like the one to which this Benefit is attached, if Pruco Life is regularly issuing such contracts at that time. Its face amount will be the amount you ask for in your request. But it cannot be less than $50,000 or more than 80% of the amount we would have paid under the Benefit if the Insured had died just before the contract date of the new contract. (Since $50,000 is 80% of $62,500, the amount we would have paid must be at least $62,500 for this exchange to be possible.) 3. A contract of life insurance of a kind regularly being issued by Pruco Life Insurance Company at that time for $25,000 or more. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than 80% of the amount we would have paid under the Benefit if the Insured had died just before the contract date of the new contract. (Since $25,000 is 80% of $31,250, the amount we would have paid must be at least $31,250 for this exchange to be possible.) The new contract will not have Supplementary Benefits other than as we describe in this and in the next two paragraphs. If this contract has a benefit for paying scheduled premiums in the event of disability and the company would include a benefit for waiving or paying premiums in other contracts like the new contract, the company will put such a benefit in the new contract. The benefit, if any, in the new contract will be the same one, with the same provisions, that the company puts in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. Such a benefit that would have been allowed under this contract, and that would otherwise be allowed under the new contract, will not be denied just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the scheduled premium frequency that was in effect for this contract when the disability started. (Continued on Next Page) AL 130 II-173 (Continued from Preceding Page) No premium will be waived or paid for disability under the new Contract unless it has such a benefit in the event of disabiIity. This will be so even if scheduled premiums have been paid by us for disability under this contract. Changes.--You may be able to have this Benefit changed to a new contract of life insurance other than in accord with the requirements for exchange that we state above. Or you may be able to exchange this Benefit for an increase in the amount of insurance under this contract. But any change may be made only if the company consents, and will be subject to conditions and charges that are then determined. MISCELLANEOUS PROVISIONS Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages. and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Benefit premiums and monthly charges stop on the contract anniversary at the end of the term period for this Benefit. If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time but no less than 4% a year. The Benefit will remain in force, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have cash values but no loan value. The cash value for this Benefit will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. We base this net cash value on the insured's age and sex. The insured's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the last day before the contract date of any other contract (a) for which the Benefit is exchanged, or (b) to which the Benefit is changed; 3. the date the contract is surrendered under its Cash Value Option, if it has one; and 4. the date the contract ends for any other reason. Further, if you ask us in writing, we will cancel the Benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 130 II-174 EX-99.1A(13)(F) 22 RIDER FOR INTERIM TERM INSURANCE BENEFIT EXHIBIT 1A(13)(f) RIDER FOR INTERIM TERM INSURANCE BENEFIT Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--We will pay the beneficiary an amount under this Benefit if we receive due proof that the Insured died on or after the date of the Benefit but before the contract date. But our payment is subject to the provisions of the Benefit and of the rest of this contract. The amount of the Benefit is equal to the amount of insurance provided by the contract on the contract date. We show the contract date and the date of the Benefit on the Contract Data page(s). Changes in Contract Provisions.--This contract has a Suicide Exclusion and an Incontestability provision. In each of them, we refer to a period of time that extends from the issue date. But for each of them we will count the time from the date of this Benefit, not from the issue date. This contract might have a benefit for the payment of scheduled premiums by us in the event of disability; it might have one that provides accidental death coverage. If so, we might refer in either or both of those benefits to the contract date. But we will use the date of this Benefit, not the contract date. The first scheduled contract premium is due on the contract date. We will grant 31 days of grace for paying it. This will be so even though we state otherwise under Grace Period. Except for the changes we describe above, all the provisions of this contract will be in effect on and after the contract date if the Insured is then living, as if the contract did not have this Benefit. The Benefit will not make any contract value that may be provided by the contract available any sooner. Benefit Premium.--We show the premium for this Benefit on the Contract Data page(s). This premium is to be paid on or before the date of the Benefit. It is not the scheduled premium for the contract. Neither the Benefit nor the premium for it provides any insurance or changes premiums payable, on or after the contract date. Premium Adjustment.--The Insured might die before the contract date. If so, we will return that part of the premium for this Benefit that is more than was needed to pay for the Benefit through the date of death. We will add the amount we return to the amount we would otherwise pay under the Benefit. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 160 II-175 EX-99.1A(13)(G) 23 RIDER FOR OPTION TO PURCHASE ADDITIONAL EXHIBIT 1.A.(13)(g) RIDER FOR OPTION TO PURCHASE ADDITIONAL INSURANCE ON LIFE OF INSURED Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--You have the right under this Benefit to buy more insurance on the Insured's life in either this company or The Prudential Insurance Company of America. You may do this for certain normal option dates and advance option dates, as we explain below. You will not have to prove that the Insured is insurable. We will provide term insurance for a period before any advance option dates as we state under Term Insurance below. But these promises are subject to all the provisions of the Benefit and of the rest of this contract. In any of these paragraphs when we use the phrase the company we mean whichever of these companies may issue the new contract. Normal Option Dates.--These are the anniversaries of this contract on which the Insured's attained age is 25, 28, 31, 34, 37, 40,43, 46, 49 and 52. You may buy a new contract for each normal option date if these four statements apply: (1) You have not used your right for that date by buying a new contract on an advance option date (we explain this below). (2) The Insured signs an application for the new contract, and you sign it, too, if you are not the Insured. (3) We receive the application and the first premium, less the premium credit that we describe below, at our Service Office not more than 31 days after the normal option date. (4) On the normal option date, or, if later, the date we receive the application, the Insured is living and this contract is in force and not in default past its days of grace. The new contract will take effect on the later of those two dates. That date will be its contract date. Your right to buy the new contract will end on the 31st day after the normal option date. But this will not change your right to buy a new contract for any later normal or advance option date. Advance Option Dates.--Except as we state in the next paragraph, an advance option date is the date three months after any of these events: 1. The Insured's marriage. 2. While the Insured is living, the birth of a live child of the Insured for whom the Insured accepts legal responsibility. 3. The lnsured's legal adoption of a child. But the event must take place (1) on or after the later of the date of this contract and the date of Part l of its application; and (2) not later than the date that is one month before the contract anniversary on which the Insured's attained age is 52. If the event takes place less than three months before that anniversary, the related advance option date will be that anniversary and not the date three months after the event. You may buy a new contract for each advance option date if these four statements apply: (1) The Insured signs an application for the new contract, and you sign it, too, if you are not the Insured. (2) We receive the application and the first premium, less the premium credit that we describe below, at our Service Office not later than the advance option date. (3) The Insured is living on the advance option date. (4) This contract is in force on that date and not in default past its days of grace. The new contract will take effect on the advance option date. That will be its contract date. Your right to buy the new contract will end on the advance option date. But this will not change your right to buy a new contract for any later normal or advance option date. Each time you buy a new contract for an advance option date, you will have used your right to buy a new contract for the next normal option date, if any, for which you could otherwise have bought one. But even if you have used your right to buy for all normal option dates, advance option dates may still occur as we state above. If the company lets you combine two or more new contracts you can buy under this Benefit into one, you will use your right to buy new contracts for the same number of future normal option dates as if the new contracts had not been combined. (Continued on Next Page) AL 140 II-176 (Continued from Preceding Page) Term Insurance.--For each event that gives rise to an advance option date, we will provide term insurance on the Insured's life, as long as this contract is in force. The term insurance will be automatic. There is no need to ask for it. Its amount will be the option amount. We will pay that amount if the Insured dies on or after the date of the event but before (1) the advance option date; or (2) the date this Benefit ends, if sooner. We will include it in the proceeds of this contract. But if this contract limits or excludes war or aviation risks, the term insurance will limit or exclude them in the same way. Contract Specifications.--The new contract you buy for a normal option date or advance option date will be in the same or an equivalent rating class as this contract. If this contract limits or excludes war or aviation risks, the company will have the right to limit or exclude them in the new contract, too. If the company does so, the provision in the new contract will be the same one the company puts in other contracts like the new one on its contract date. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. The new contract may call for annual premiums. If the company agrees, you will be able to have premiums fall due more often. If the option amount for this Benefit which we show in the Contract Data pages is less than $25,000, the new contract may be one we describe in paragraph 1 below. If the option amount is $25,000 or more, the new contract can be one we describe in either of paragraphs 1 and 2. 1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount you ask for in your request. But it cannot be less than $10,000, or more than the option amount for this Benefit. 2. A contract of life insurance of a kind regularly being issued by Pruco Life Insurance Company at that time for $25,000 or more. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than the option amount for this Benefit. The new contract will not have Supplementary Benefits other than as we describe in this and in the next three paragraphs. If this contract has a benefit for paying scheduled premiums in the event of disability and the company would include a benefit for waiving or paying premiums in other contracts like the new contract, the company will put such a benefit in the new contract. Such a benefit, that would have been allowed under this contract and that would otherwise be allowed under the new contract, will not be denied just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the scheduled premium frequency that was in effect for this contract when the disability started. No premium will be waived or paid for disability under the new contract unless it has such a benefit in the event of disability. This will be so even if scheduled premiums have been paid by us for disability under this contract. If this contract has an accidental death benefit, and the company would regularly issue contracts like the new contract with either that benefit or an accidental death and dismemberment benefit, the company will put that kind of benefit in the new contract, as stated in General below. But (1) you must ask for it when you apply for the new contract; and (2) the amount of any accidental death benefit in the new contract will not be more than the face amount of the new contract. General.--Any benefit for waiving or paying premiums in event of disability and any accidental death benefit or accidental death and dismemberment benefit in the new contract will be the same one, with the same provisions, (Continued on Next Page) AL 140 II-177 (Continued from Preceding Page) that the company puts in other contracts like it on its contract date. In any of these paragraphs, when we use the phrases other contracts like it and other contracts like the new contract, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. Changes.--On a normal or advance option date you may be able to buy a new contract of life insurance other than in accord with the requirements that we state above. Or you may be able to use the option to increase the amount of insurance under this contract. But either may be done only if the company consents, and will be subject to conditions and charges that are then determined. Premium Credit.--A premium credit will be allowed on the first premium for the new contract, if it is of a kind described in paragraph 1 or 2 above. The credit will be at least $1 for each full $1,000 of face amount of the new contract. If (1) the new contract calls for premiums to be paid more often than annually; and (2) the credit would be more than that first premium, you may choose to have premiums paid less often to get the full credit. Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The premiums for this Benefit stop on the contract anniversary on which the Insured's attained age is 52. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Reductions in the Contract Data pages. The charges for this Benefit will stop on the contract anniversary on which the Insured's attained age's 52. If the Contract Becomes Paid-up.--lf the contract becomes paid-up before attained age 52 we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time, but no less than 4% a year. The Benefit will remain in force until the earliest of the dates in paragraphs 2, 3 and 4 under Termination below, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have no cash value. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the 31st day after the contract anniversary on which the Insured's attained age is 52; 3. the date the contract is surrendered under its Cash Value Option, if it has one; and 4. the date the contract ends for any other reason. Further, if you ask us in writing, we will cancel the Benefit as of the first monthly date on or after which we receive your request. Contract premiums due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 140 II-178 EX-99.1A(13)(H) 24 RIDER FOR TERM BENEFIT ON LIFE OF INSURED SPOUSE EXHIBIT 1.A.(13)(h) RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF INSURED SPOUSE--DECREASING AMOUNT Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--We will pay an amount under this Benefit if we receive due proof that the insured spouse died (1) in the term period for the Benefit; and (2) while this contract is in force and not in default beyond the last day of the grace period. We will pay this amount to the beneficiary for insurance payable upon the insured spouse's death. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. The phrase insured spouse means the Insured's spouse named in the application for this contract. We will use the table below to compute the amount we will pay. We show the Initial Amount of Term Insurance under this Benefit on the Contract Data page(s). We also show the term period for the Benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period. TABLE OF AMOUNTS OF INSURANCE Amounts Payable.--We show here the amount we will pay for each $1,000 of Initial Amount of Term Insurance if death occurs in the contract year ending with the anniversary shown. ------------------------------------------------------------------------ ANNIVERSARY AMOUNT ANNIVERSARY AMOUNT ------------------------------------------------------------------------ 1 $1,000 12 $706 2 986 13 658 3 970 14 603 4 951 15 543 5 931 16 475 6 909 17 400 7 883 18 316 8 855 19 222 9 824 20 200 10 789 BENEFIT EXPIRES 11 750 ON 20TH ANNIVERSARY ------------------------------------------------------------------------ (Continued on Next Page) AL 180 II-179 (Continued from Preceding Page) PAID-UP lNSURANCE ON DEATH OF INSURED Paid-up Insurance on Life of Insured Spouse.--The Insured might die (1) in the term period for this Benefit; (2) while this contract is in force and not in default past the last day of the grace period; and (3) while the insured spouse is living. In this case, the insurance on the life of the insured spouse under the Benefit will become paid-up term insurance for decreasing amounts. We will compute these amounts from the Table of Amounts of Insurance. While the paid-up insurance is in effect, the contract will remain in force until the end of the term period for the Benefit. The paid-up insurance will have cash values but no loan value. If this Benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. We base this net cash value on the insured spouse's age and sex. The insured spouse's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year. We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them. CONVERSION TO ANOTHER PLAN OF INSURANCE Right to Convert.--While the Insured is living, you may be able to exchange this Benefit for a new contract of life insurance on the life of the insured spouse in either this company or The Prudential Insurance Company of America. In any of these paragraphs, when we use the phrase the company we mean whichever of these companies may issue the new contract. And where we use the phrase new contract we mean the contract for which the Benefit may be exchanged. You will not have to prove that the insured spouse is insurable. Conditions.--Your right to make this exchange is subject to all these conditions: (1) The amount we would have paid under this Benefit if the insured spouse had died just before the contract date of the new contract must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications. (2) You must ask for the exchange in writing and in a form that meets our needs. (3) You must send this contract to us to be endorsed. (4) We must have your request and the contract at our Service Office while the Benefit is in force and at least five years before the end of its term period. The new contract will not take effect unless the premium for it is paid while the insured spouse is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this Benefit ended just before that contract date. Contract Date.--The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be less than five years before the end of the term period for the Benefit. And it may not be more than 31 days before we have your request at our Service Office. Contract Specifications.--The new contract will be in the standard or equivalent rating class. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. The new contract may call for annual premiums. If the company agrees, you will be able to have premiums fall due more often. The contract may be any one of the following: 1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount you ask for in your request. But it cannot be less than $10,000 or more than 80% of the amount we would have paid under this Benefit if the insured spouse had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500, the amount we would have paid must be at least $12,500 for this exchange to be possible.) 2. A contract like the one to which this Benefit is attached, if Pruco Life Insurance Cdmpany is regularly issuing such contracts at that time. Its face amount will be the amount you ask for in your request. But it cannot be less than $50,000 or more than 80% of the amount we would have paid under the Benefit if the insured spouse had died just before the contract date of the new contract. (Since $50,000 is 80% of $62,500, the amount we would have paid must be at least $62,500 for this exchange to be possible.) (Continued an Next Page) AL 180 II-180 (Continued from Preceding Page) 3. A contract of life insurance of a kind regularly being issued by Pruco Life Insurance Company at that time for $25,000 or more. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than 80% of the amount we would have paid under the Benefit if the insured spouse had died just before the contract date of the new contract. (Since $25,000 is 80% of $31,250, the amount we would have paid must be at least $31,250 for this exchange to be possible.) The new contract will not have Supplementary Benefits other than as we describe in this and in the next paragraph. If the company would include in other contracts like the new contract a benefit for waiving or paying premiums in the event of disability, here is what the company will do. Even though this contract does not have such a benefit on the life of the insured spouse, the company will put it in the new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that the company puts in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. No premium will be waived or paid by us for disability under the new contract unless the disability started on or after its contract date. And no premium will be waived or paid by us for disability under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if scheduled premiums have been paid by us under this contract. Changes.--You may be able to have this Benefit changed to a new contract of life insurance other than in accord with the requirements for exchange that we state above. But any change may be made only if the company consents, and will be subject to conditions and charges that are then determined. MISCELLANEOUS PROVISIONS Ownership and Control.--Unless we endorse this contract to say otherwise, while the Insured is living the owner alone may exercise all ownership and control of this contract. This includes, but is not limited to, these rights: (1) to assign the contract; and (2) to change any subsequent owner. A request for such a change must be in writing to us at our Service Office and in a form that meets our needs. The change will take effect only when we endorse the contract to show it. Unless we endorse this contract to say otherwise: (1) while any insurance is in force after the Insured's death, the owner of the contract will be the insured spouse; and (2) the owner alone will be entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. But any insurance payable upon the Insured's death will be payable to the beneficiary for that insurance. Beneficiary.--The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured. Unless we endorse this contract to say otherwise, the beneficiary for insurance payable upon the death of the insured spouse will be the Insured if living, otherwise the estate of the insured spouse. The beneficiary for insurance payable upon the death of the insured spouse may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the insured spouse is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. Misstatement of Age or Sex.--If the insured spouse's stated age or sex or both are not correct, we will change each benefit and any amount payable to what the premiums and charges would have bought for the correct age and sex. Suicide Exclusion.--If the insured spouse, whether sane or insane, dies by suicide within the period which we state in the Suicide Exclusion under General Provisions and while this Benefit is in force, we will not pay the amount we describe under Benefit above. Instead, we will pay no more than the sum of the monthly charges deducted for this Benefit to the date of death divided by .925. We will make that payment in one sum. Reinstatement.--If this contract is reinstated, it will not include the insurance that we provide under this Benefit on the life of the insured spouse unless we are given any facts we need to satisfy us that the insured spouse is insurable for the Benefit. (Continued an Next Page) AL 180 II-181 (Continued from Preceding Page) Contract Value Options.--If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only. Contract Loans.--If this contract has a Loans provision, we will not consider any contract debt when we determine the amount payable, if any, at the death of the insured spouse. Incontestability.--Exoept for default, we will not contest this Benefit after it has been in force during the insured spouse's lifetime for two years from the issue date. Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Benefit premiums and monthly charges stop on the earliest of (1) the death of the insured, (2) the death of the spouse, and (3) the contract anniversary at the end of the term period for this Benefit. If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time but no less than 4% a year. The Benefit will remain in force, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have cash values but no loan value. The basis for determining the net cash value will be as we state in the second paragraph under Paid-up Insurance above. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the last day before the contract date of any other contract (a) for which the Benefit is exchanged, or (b) to which the Benefit is changed; 3. the date the contract is surrendered under its Cash Value Option, if it has one, or the paid-up insurance, if any, under the Benefit is surrendered; and 4. the date the contract ends for any other reason. Further, if you ask us in writing, we will cancel the Benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 180 II-182 EX-99.1A(13)(I) 25 RIDER FOR LEVEL TERM INSURANCE BENEFIT EXHIBIT 1.A.(13)(i) RIDER FOR LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--We will pay an amount under this Benefit if we receive due proof that a dependent child died (1) before the term insurance provided by the Benefit on his or her life ends; and (2) while this contract is in force and not in default past the last day of the grace period. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. The phrase dependent child means the Insured's child, stepchild or legally adopted child who (1) has reached the 15th day of life; and (2) has not reached the first contract anniversary after his or her 25th birthday; and either (3) is named in the application for this contract and on the date of the application has not reached his or her 18th birthday; or (4) is acquired by the Insured after the date of the application but before the child's 18th birthday. We show the amount of term insurance under this Benefit on the Contract Data page(s). The insurance on each dependent child's life will end on the earlier of: (1) the day before the first contract anniversary after the child's 25th birthday; and (2) the day before the first contract anniversary after the Insured's 65th birthday. PAID-UP INSURANCE ON DEATH OF INSURED Paid-up Insurance on Dependent Children.--The Insured might die while this contract is in force and not in default past the last day of the grace period. In this case, any term insurance provided by this Benefit on a dependent child's life will become paid-up term insurance. While this paid-up insurance is in effect, the contract will remain in force. The paid-up insurance will have cash values but no loan value. If this Benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. To compute this net cash value, we use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year. We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them. CONVERSION OF INSURANCE ON DEPENDENT CHILDREN Right to Convert.--If the insurance on a dependent child ends as we state in the last paragraph under Benefit above, that child may be able to obtain a new contract of life insurance on his or her life, in either this company or The Prudential Insurance Company of America. In any of these paragraphs, when we use the phrase the company we mean whichever of these companies may issue the new contract. It will not be necessary to prove that the child is insurable. Conditions.--The right to obtain a new contract is subject to all these conditions: (1) The insurance on the child must end while this contract is in force and not in defauh past the last day of the grace period. (2) The amount of the new contract must meet the minimum as we describe under Contract Specifications. (3) We must have a written application for the new contract at our Service Office no later than the date the insurance on the child ends. The new contract will not take effect unless the premium for it is paid while the child is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the insurance under the new contract took effect on its contract date. (Continued on Next Page) AL 182 II-183 (Continued from Preceding Page) Contract Date.--The date of the new contract will be the day after the date the insurance on the dependent child ends. Contract Specifications.--The new contract will be in the standard or an equivalent rating class. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. The new contract may call for annual premiums. If the company agrees, the owner of the new contract will be able to have premiums fall due more often. The contract may be any one of the following: 1. A contract like the one to which this Benefit is attached, if Pruco Life Insurance Company is regularly issuing such contracts at that time. Its face amount will be the amount asked for in your request. But it cannot be less than $50,000 or more than five times the amount of insurance on the child's life under the Benefit. 2. A Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age for the new contract is less than 15 years). In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount asked for in your request. But it cannot be less than $5,000 or more than five times the amount of insurance on the child's life under this Benefit. 3. A contract of life insurance of a kind regularly being issued by Pruco Life Insurance Company at that time for $25,000 or more. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than five times the amount of insurance on the child's life under the Benefit. The new contract will not have Supplementary Benefits other than as we describe in this and in the next paragraph. If the company would include in other contracts like the new contract a benefit for waiving or paying premiums in the event of disability, here is what the company will do. Even though this contract does not have such a benefit on the life of that child, the company will put it in the new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that the company puts in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. No premium will be waived or paid by us for disability under the new contract unless the disability started on or after its contract date. And no premium will be waived or paid by us for disability under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if scheduled premiums have been paid by us under this contract. Changes.--If the insurance on a dependent child ends as we state in the last paragraph under Benefit above, that child may be able to obtain a new contract of life insurance other than in accord with the requirements we state in this form. But this kind of change may be made only if the company consents and will be subject to conditions and charges that are then determined. MISCELLANEOUS PROVISIONS Beneficiary.--The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured. Unless we endorse this contract to say otherwise, these two statements will apply: (1) The beneficiary for insurance payable upon the death of a dependent child will be the Insured if living, otherwise the beneficiary for this insurance named in the application. (2) If no such beneficiary is living when insurance under this Benefit becomes payable, we will make the payment in one sum to the estate of the later to die of the Insured and such beneficiary. The beneficiary for insurance payable upon the death of a dependent child may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the child is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. (Continued on Next Page) AL--182 II-184 (Continued from Preceding Page) Reinstatement.--If this contract is reinstated, it will not include the insurance that we provide under this Benefit on the dependent children unless you give us any facts we need to satisfy us that each child who is to be insured on or within 15 days after the date of reinstatement is insurable for the Benefit. If you do not give us the facts we need for any child, the Benefit may be reinstated if all the other conditions are met to reinstate the contract. But you must send the contract to us to be endorsed to show that the child is not insured under the Benefit. Contract Value Options.--If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only. Contract Loans.--If this contract has a Loans provision, we will not consider any contract debt when we determine the amount payable, if any, at the death of a dependent child. Incontestability.--Except for non-payment of premium, we will not contest this Benefit with respect to the insurance on any dependent child's life after it has been in force during the child's lifetime for two years from the issue date. Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Benefit premiums and monthly charges stop on the earliest of the death of the Insured and the first contract anniversary after the Insured's 65th Brithday. If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time but no less than 4% a year. The Benefit will remain in force, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have cash values but no loan value. The net cash value will be the present value at that time of the future monthly charges that would then remain to be paid under this Benefit if the contract had not become paid-up. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the day before the first contract anniversary after the Insured's 65th birthday; 3. the date the contract is surrendered under its Cash Value Option, if it has one, or the paid-up insurance, if any, under the Benefit is surrendered; and 4. the date the contract ends for any other reason. Further, if you ask us in writing in the premium period, we will cancel the Benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ SPECIMEN SIGNATURE Secretary AL 182 II-185 EX-99.1A(13)(J) 26 RIDER FOR LEVEL TERM INSURANCE BENEFIT EXHIBIT 1.A.(13)(j) RIDER FOR LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--We will pay an amount under this Benefit if we receive due proof that a dependent child died (1) before the term insurance provided by the Benefit on his or her life ends; and (2) while this contract is in force and not in default past the last day of the grace period. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. The phrase dependent child means the Insured's child, stepchild or legally adopted child who (1) has reached the 15th day of life; and (2) has not reached the first contract anniversary after his or her 25th birthday; and either (3) just before the contract date of this contract was insured under the earlier contract from which this contract was exchanged or changed; or (4) is acquired by the Insured on or after the date of this contract but before the child's 18th birthday. We show the amount of term insurance under this Benefit on the Contract Data page(s). The insurance on each dependent child's life will end on the earlier of: (1) the day before the first contract anniversary after the child's 25th birthday; and (2) the day before the first contract anniversary after the Insured's 65th birthday. PAID-UP INSURANCE ON DEATH OF INSURED Paid-up Insurance on Dependent Children.--The Insured might die while this contract is in force and not in default past the last day of the grace period. In this case, any term insurance provided by this Benefit on a dependent child's life will become paid-up term insurance. While this paid-up insurance is in effect, the contract will remain in force. The paid-up insurance will have cash values but no loan value. If this Benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. To compute this net cash value, we use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year. We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them. CONVERSION OF INSURANCE ON DEPENDENT CHILDREN Right to Convert.--If the insurance on a dependent child ends as we state in the last paragraph under Benefit above, that child may be able to obtain a new contract of life insurance on his or her life, in either this company or The Prudential Insurance Company of America. In any of these paragraphs, when we use the phrase the company we mean whichever of these companies may issue the new contract. It will not be necessary to prove that the child is insurable. Conditions.--The right to obtain a new contract is subject to all these conditions: (1) The insurance on the child must end while this contract is in force and not in default past the last day of the grace period. (2) The amount of the new contract must meet the minimum as we describe under Contract Specifications. (3) We must have a written application for the new contract at our Service Office no later than the date the insurance on the child ends. The new contract will not take effect unless the premium for it is paid while the child is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the insurance under the new contract took effect on its contract date. (Continued on Next Page) AL 184 II-186 (Continued from Preceding Page) Contract Date.--The date of the new contract will be the day after the date the insurance on the dependent child ends. Contract Specifications.--The new contract will be in the standard or an equivalent rating class. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. The new contract may call for annual premiums. If the company agrees, the owner of the new contract will be able to have premiums fall due more often. The contract may be any one of the following: 1. A contract like the one to which this Benefit is attached, if Pruco Life Insurance Company is regularly issuing such contracts at that time. Its face amount will be the amount asked for in your request. But it cannot be less than $50,000 or more than five times the amount of insurance on the child's life under the Benefit. 2. A Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age for the new contract is less than 15 years). In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount asked for in your request. But it cannot be less than $5,000 or more than five times the amount of isurance on the child's life under this Benefit. 3. A contract of life insurance of a kind regularly being issued by Pruco Life Insurance Company at that time for $25,000 or more. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than five times the amount of insurance on the child's life under the Benefit. The new contract will not have Supplementary Benefits other than as we describe in this and in the next paragraph. If the company would include in other contracts like the new contract a benefit for waiving or paying premiums in the event of disability, here is what the company will do. Even though this c5ntract does not have such a benefit on the life of that child, the company will put it in the new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that the company puts in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. No premium will be waived or paid by us for disability under the new contract unless the disability started on or after its contract date. And no premium will be waived or paid by us for disability under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if scheduled premiums have been paid by us under this contract. Changes.--If the insurance on a dependent child ends as we state in the last paragraph under Benefit above, that child may be able to obtain a new contract of life insurance other than in accord with the requirements we state in this form. But this kind of change may be made only if the company consents and will be subject to conditions and charges that are then determined. MISCELLANEOUS PROVISIONS Beneficiary.--The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured. Unless we endorse this contract to say otherwise, these two statements will apply: (1) The beneficiary for insurance payable upon the death of a dependent child will be the Insured if living, otherwise the beneficiary for insurance payable upon the death of the Insured. (2) If no such beneficiary is living when insurance under this Benefit becomes payable, we will make the payment in one sum to the estate of the later to die of the Insured and such beneficiary. The beneficiary for insurance payable upon the death of a dependent child may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the child is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. (Continued on Next Page) AL 184 II-187 (Continued from Preceding Page) Reinstatement.--If this contract is reinstated, it will not include the insurance that we provide under this Benefit on the dependent children unless you give us any facts we need to satisfy us that each child who is to be insured on or within 15 days after the date of reinstatement is insurable for the Benefit. If you do not give us the facts we need for any child, the Benefit may be reinstated if all the other conditions are met to reinstate the contract. But you must send the contract to us to be endorsed to show that the child is not insured under the Benefit. Contract Value Options.--If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only. Contract Loans.--If this contract has a Loans provision, we will not consider any contract debt when we determine the amount payable, if any, at the death of a dependent child. Incontestability.--Except for non-payment of premium, we will not contest this Benefit with respect to the insurance on any dependent child's life after it has been in force during the child's lifetime for two years from (1) the date the level term insurance benefit on dependent children began under the earliest contract; or, if later, (2) the date of any rider that added the child for coverage under any such earlier contract. But, in any case, if there was a later reinstatement of any such earlier contract, then the two years will start on the date of the most recent reinstatement. Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Benefit premiums and monthly charges stop on the earliest of the death of the Insured and the first contract anniversary after the Insured's 65th Birthday. If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time but no less than 4% a year. The Benefit will remain in force, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have cash values but no loan value. The net cash value will be the present value at that time of the future monthly charges that would then remain to be paid under this Benefit if the contract had not become paid-up. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the day before the first contract anniversary after the Insured's 65th birthday; 3. the date the contract is surrendered under its Cash Value Option, if it has one, or the paid-up insurance, if any, under the Benefit is surrendered; and 4. the date the contract ends for any other reason. Further, if you ask us in writing in the premium period, we will cancel the Benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 184 II-188 EX-99.1A(13)(K) 27 RIDER FOR LEVEL TERM INSURANCE BENEFIT EXHIBIT 1.A.(13)(k) RIDER FOR LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--We will pay an amount under this Benefit if we receive due proof that a dependent child died (1) before the term insurance provided by the Benefit on his or her life ends: and (2) while this contract is in force and not in default past the last day of the grace period. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. The phrase dependent child means the Insured's child, stepchild or legally adopted child who (1) has reached the 15th day of life: and (2) has not reached the first contract anniversary after his or her 25th birthday: and either (3) is named in the request for change which is attached to and made a part of this contract, and on the date of the request has not reached his or her 18th birthday: or (4) is acquired by the Insured after the date of the request but before the child's 18th birthday. We show the amount of term insurance under this Benefit on the Contract Data page(s). The insurance on each dependent child's life will end on the earlier of: (1) the day before the first contract anniversary after the child's 25th birthday: and (2) the day before the first contract anniversary after the Insured's 65th birthday. PAID-UP INSURANCE ON DEATH OF INSURED Paid-up Insurance on Dependent Children.--The Insured might die while this contract is in force and not in default past the last day of the grace period. In this case, any term insurance provided by this Benefit on a dependent child's life will become paid-up term insurance. While this paid-up insurance is in effect, the contract will remain in force. The paid up insurance will have cash values but no loan value. If this Benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. To compute this net cash value, we use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year. We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them. CONVERSION OF INSURANCE ON DEPENDENT CHILDREN Right to Convert.--If the insurance on a dependent child ends as we state in the last paragraph under Benefit above, that child may be able to obtain a new contract of life insurance on his or her life, in either this company or The Prudential Insurance Company of America. In any of these paragraphs, when we use the phrase the company we mean whichever of these companies may issue the new contract. It will not be necessary to prove that the child is insurable. Conditions.--The right to obtain a new contract is subject to all these conditions: (1) The insurance on the child must end while this contract is in force and not in default past the last day of the grace period. (2) The amount of the new contract must meet the minimum as we describe under Contract Specifications. (3) We must have a written application for the new contract at our Service Office no later than the date the insurance on the child ends. The new contract will not take effect unless the premium for it is paid while the child is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the insurance under the new contract took effect on its contract date. (Continued on Next Page) AL 185 II-189 (Continued from Preceding Page) Contract Date.--The date of the new contract will be the day after the date the insurance on the dependent child ends. Contract Specifications.--The new contract will be in the standard or an equivalent rating class. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. The new contract may call for annual premiums. If the company agrees, the owner of the new contract will be able to have premiums fall due more often. The contract may be any one of the following: 1. A contract like the one to which this Benefit is attached, if Pruco Life Insurance Company is regularly issuing such contracts at that time. Its face amount will be the amount asked for in your request. But it cannot be less than $50,000 or more than five times the amount of insurance on the child's life under the Benefit. 2. A Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age for the new contract is less than 15 years). In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount asked for in your request. But it cannot be less than $5,000 or more than five times the amount of insurance on the child's life under this Benefit. 3. A contract of life insurance of a kind regularly being issued by Pruco Life Insurance Company at that time for $25,000 or more. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than five times the amount of insurance on the child's life under the Benefit. The new contract will not have Supplementary Benefits other than as we describe in this and in the next paragraph. If the company would include in other contracts like the new contract a benefit for waiving or paying premiums in the event of disability, here is what the company will do. Even though this contract does not have such a benefit on the life of that child, the company will put it in the new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that the company puts in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. No premium will be waived or paid by us for disability under the new contract unless the disability started on or after its contract date. And no premium will be waived or paid by us for disability under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if scheduled premiums havE been paid by us under this contract. Changes.--If the insurance on a dependent child ends as we state in the last paragraph under Benefit above, that child may be able to obtain a new contract of life insurance other than in accord with the requirements we state in this form. But this kind of change may be made only if the company consents and will be subject to conditions and charges that are then determined. MISCELLANEOUS PROVISIONS Beneficiary.--The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured. Unless we endorse this contract to say otherwise, the beneficiary for insurance payable upon the death of a dependent child will be the Insured if living, otherwise the estate of the Insured. The beneficiary for insurance payable upon the death of a dependent child may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office: this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the child is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. (Continued on Next Page) AL 185 II-190 (Continued from Preceding Page) Reinstatement.--If this contract is reinstated, it will not include the insurance that we provide under this Benefit on the dependent children unless you give us any facts we need to satisfy us that each child who is to be insured on or within 15 days after the date of reinstatement is insurable for the Benefit. If you do not give us the facts we need for any child, the Benefit may be reinstated if all the other conditions are met to reinstate the contract. But you must send the contract to us to be endorsed to show that the child is not insured under the Benefit. Contract Value Options.--If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only. Contract Loans.--If this contract has a Loans provision, we will not consider any contract debt when we determine the amount payable, if any, at the death of a dependent child. Incontestability.--Except for non-payment of premium, we will not contest this Benefit with respect to the insurance on any dependent child's life after it has been in force during the child's lifetime for two years from the issue date. Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Benefit premiums and monthly charges stop on the earliest of the death of the Insured and the first contract anniversary after the Insured's 65th Birthday. If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time but no less than 4% a year. The Benefit will remain in force, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have cash values but no loan value. The net cash value will be the present value at that time of the future monthly charges that would then remain to be paid under this Benefit if the contract had not become paid-up. Termination.--This Benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default: it will not continue if a benefit takes effect under any contract value options provision that may be in the contract: 2. the end of the day before the first contract anniversary after the Insured's 65th birthday: 3. the date the contract is surrendered under its Cash Value Option, if it has one, or the paid-up insurance, if any, under the Benefit is surrendered: and 4. the date the contract ends for any other reason. Further, if you ask us in writing in the premium period, we will cancel the Benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 185 II-191 EX-99.1A(13)(P) 28 VARIABLE REDUCED PAID-UP INSURANCE EXHIBIT 1.A.(13)(p) Pruco Life Insurance Company | Insured |Rider for Policy No. | | | | |_____________________________________ |______________________________________ VARIABLE REDUCED PAID-UP INSURANCE This contract is no longer in force on a premium paying basis. It is being kept in force as variable reduced paid-up insurance on the Insured's life. as we state under Contract Value Options in the contract. The new amount of insurance and its effective date are shown in the attached Table of Values. Unless otherwise stated in the Table. any contract debt was deducted when we computed the net cash value that was used to provide the reduced paid-up insurance. The cash value of the variable reduced paid-up insurance will continue to vary according to the investment results in the separate account. There is no guaranteed minimum cash value under this option. The death benefit under this option may change from day to day, but it will never be less than the amount determined as of the day of default. The death benefit will increase if investment results are in excess of the assumed rate or mortality charges lower than the maximum rate. The death benefit will decrease if investment results are less than the assumed rate. but it will not decrease below the amount determined on the day of default. As of the effective date shown in the Table each of these items no longer applies: (11 the Tabular Contract Fund Values and Tabular Cash Values shown on page 4 in the contract; (2) any Supplementary Benefits or other extra benefits that were made a part of the contract by rider or endorsement: and (3) any provisions of the contract that do not apply to the reduced paid-up insurance. If this contract is reinstated, the contract fund that applies upon reinstatement is as we state under Premium Payment and Reinstatement. The cash value and net cash value will be as we state under Contract Value Options. The attached Table shows values at the ends of contract years. If we need to compute values at some time during a contract year, we will count the time since the start of the year. We will let you know the values for other durations if you ask for them. | Rider attached to and made a part of this contract | | Pruco Life Insurance Company | | By /s/ DOROTHY K. LIGHT | Secrerary | | Date Attest |___________________________________________________ - ----------- PLI 121--84 - ----------- II-192 EX-99.1A(13)(Q 29 AVIATION RISK EXCLUSION EXHIBIT 1.A.(13)(q) Pruco Life Insurance Company | Insured | Rider for Policy No. | | | | |_____________________________________ |______________________________________ AVIATION RISK EXCLUSION Conditions of Exclusion.--We will pay the limited payment we describe below, and not what we would otherwise pay, if (1) the Insured dies as a result of travel by, or descent from, any aircraft; and (2) the Insured had any duties or acted in any capacity other than as a passenger at any time during the flight. But this Exclusion will not apply if all these statements are true of the aircraft: (1) It has fixed wings and a permitted gross takeoff weight of at least 75,000 pounds. (2) It is operated by an air carrier that is certificated under the laws of the United States or Canada to carry passengers to or from places in those countries. (3) It is not being operated for any armed forces for training or other purposes. As used here, the word aircraft includes rocket craft or any other vehicle for flight in or beyond the earth's atmosphere. Limited Payment.--The limited payment will be (1) the sum of the premiums that were paid for this contract minus any expense and insurance charges made for insurance coverage on persons other than the Insured, minus (2) any contract debt adjusted for unearned loan interest, minus (3) any partial surrenders made under the contract (including surrender charges). But if the reserve for the contract, when computed as we state under Reserves, is greater than the amount we describe here, the limited payment will be equal to the reserve. Also, the limited payment will never be more than we would have paid if this Exclusion were not in the contract. The limited payment will be payable to the beneficiary for insurance otherwise payable upon the Insured's death. Paid-up and Other Insurance on the Insured's Life.--This Exclusion also applies to any paid-up insurance on the Insured that takes effect in accord with any such provision that may be in the contract. We will put this Exclusion in any contract on the Insured's life to which you change, or for which you exchange, this contract or any of its benefits. Paid-up Insurance on Other Persons. This contract might include insurance on the life of someone other than the Insured. And it might have a provision that makes that insurance paid-up if the Insured dies. This Exclusion will not affect any such provision. Effect of Incontestability.--In any case where this Exclusion applies, the Incontestability provision of this contract will not be deemed to make us pay more than as we state under Limited Payment. Reserves.--We might have to compute a reserve to find the limited payment. If so, the reserve will be equal to the contract value on the date of the Insured's death less any contract debt adjusted for unearned loan interest. | Rider attached to and made a part of this contract | | Pruco Life Insurance Company, | | By /s/ DOROTHY K. LIGHT | Secrerary | | Date Attest |___________________________________________________ - ----------- PLI 122--84 - ----------- II-193 EX-99.1A(13)(R) 30 MILITARY AVIATION RISK EXCLUSION EXHIBIT 1.A.(13)(r) Pruco Life Insurance Company | Insured | Rider for Policy No. | | | John Doe | XX XXX XXX |_____________________________________ |______________________________________ MILITARY AVIATION RISK EXCLUSION Conditions of Exclusion.--We will pay the limited payment we describe below, and not what we would otherwise pay, if (1) the Insured dies as a result of travel by, or desceni from, any aircraft operated by or for any armed forces; and (2) the Insured had any duties or acted in any capacity other than as a passenger at any time during the flight. As used here, the word aircraft includes rocket craft or any other vehicle for flight in or beyond the earth's atmosphere. Limited Payment.--The limited payment will be (1) the sum of the premiums that were paid for this contract minus any expense and insurance charges made for insurance coverage on persons other than the Insured, minus (2) any contract debt adjusted for unearned loan interest, minus (3) any partial surrenders made under the contract (including surrender charges). But if the reserve for the contract, when computed as we state under Reserves, is greater than the amount we describe here, the limited payment will be equal to the reserve. Also, the limited payment will never be more than we would have paid if this Exclusion were not in the contract. The limited payment will be payable to the beneficiary for insurance otherwise payable upon the Insured's death. Paid-up and Other Insurance on the Insured's Life.--This Exclusion also applies to any paid-up insurance on the Insured that takes effect in accord with any such provision that may be in the contract. We will put this Exclusion in any contract on the Insured's life to which you change, or for which you exchange, this contract or any of its benefits. Paid-up Insurance on Other Persons.--This contract might include insurance on the life of someone other than the Insured. And it might have a provision that makes that insurance paid-up if the Insured dies. This Exclusion will not affect any such provision. Effect of lncontestability.--In any case where this Exclusion applies, the Incontestability provision of this contract will not be deemed to make us pay more than as we state under Limited Payment. Reserves.--We might have to compute a reserve to find the limited payment. If so, the reserve will be equal to the contract value on the date of the Insured's death less any contract debt adjusted for unearned loan interest. | Rider attached to and made a part of this contract | | Pruco Life Insurance Company, | | By /s/ SPECIMEN | Secrerary | | Date December 1, 1984 Attest M. Smith |___________________________________________________ - ----------- PLI 123--84 - ----------- II-194 EX-99.1A(13)(S) 31 WAR RISK EXCLUSION EXHIBIT 1.A.(13)(s) Pruco Life Insurance Company | Insured | Rider for Policy No. | | | John Doe | XX XXX XXX |_____________________________________ |______________________________________ WAR RISK EXCLUSION Conditions of Exclusion.--We will pay the limited payment we describe below, and not what we would otherwise pay, if the Insured's death results from any one or more of the following causes: (1) war; (2) any act of war; or (3) the special hazards due to service in the armed forces of any country(ies). But this Exclusion will not apply unless all these conditions exist: (1) The cause of death occurs while the Insured is in the armed forces of any country(ies) at war. (2) The cause of death occurs while the Insured is outside the Home Areas. (3) The death occurs (a) outside the Home Areas, or (b) within six months after the Insured's return to the Home Areas while in such forces or within six months after the end of service in such forces, whichever is earlier. As used here, the word war means declared or undeclared war and includes resistance to armed aggression. The phrase Home Areas means the fifty states of the United States of America, the District of Columbia, The Commonwealth of Puerto Rico, The Virgin Islands of the United States, or Canada. Limited Payment.--The limited payment will be (1) the sum of the premiums that were paid for this contract minus any expense and insurance charges made for insurance coverage on persons other than the Insured, minus (2) any contract debt adjusted for unearned loan interest, minus (3) any partial surrenders made under the contract (including surrender charges). But if the reserve for the contract, when computed as we state under Reserves, is greater than the amount we describe here, the limited payment will be equal to the reserve. Also, the limited payment will never be more than we would have paid if this Exclusion were not in the contract. The limited payment will be payable to the beneficiary for insurance otherwise payable upon the Insured's death. Paid-up and Other Insurance on the Insured's Life.--This Exclusion also applies to any paid-up insurance on the Insured that takes effect in accord with any such provision that may be in the contract. We will put this Exclusion in any contract on the Insured's life to which you change, or for which you exchange, this contract or any of its benefits. Paid-up Insurance on Other Persons.--This contract might include insurance on the life of someone other than the Insured. And it might have a provision that makes that insurance paid-up if the Insured dies. This Exclusion will not affect any such provision. Effect of Incontestability.--In any case where this Exclusion applies, the Incontestability provision of this contract will not be deemed to make us pay more than as we state under Limited Payment. Reserves.--We might have to compute a reserve to find the limited payment. If so, the reserve will be equal to the contract value on the date of the Insured's death less any contract debt adjusted for unearned loan interest. Rider attached to and made a part of this contract on the Contract Date Pruco Life Insurance Company, By /s/ SPECIMEN Secrerary - ----------- PLI 124--84 - ----------- II-195 EX-99.1A(13)(W) 32 ENDORSEMENTS EXHIBIT 1.A(13)(w) ENDORSEMENTS (Only we can endorse this contract.) ALTERATION OF TEXT The provision of this policy entitled "Interest Charge" is replaced at issue by the following: Interest Charge.--We will charge interest daily on any loan. Interest is due on each contract anniversary, or when the loan is paid back if that comes first. If interest is not paid when due, it will become part of the loan. Then we will start to charge interest on it, too. The loan interest rate is the annual rate we set from time to time. The rate will never be greater than is permitted by law. It will change only on a contract anniversary. Before the start of each contract year, we will determine the loan interest rate we can charge for that contract year. To do this, we will first find the rate that is the greater of (1) The Published Monthly Average (which we describe below) for the calendar month ending two months before the calendar month of the contract anniversary; and (2) the assumed rate of return for this contract, plus 1%. If that greater rate is at least 1/2% more than the loan interest rate we had set for the current contract year, we have the right to increase the loan interest rate by at least 1/2%, up to that greater rate. If it is at least 1/2% less, we will decrease the loan interest rate to be no more than the greater rate. We will not change that loan interest rate by less than 1/2%. When you make a loan we will tell you the initial interest rate for the loan. We will send you a notice if there is to be an increase in the rate. The Published Monthly Average means: 1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor to that service; or 2. If that average is no longer published, a substantially similar average, established by the insurance regulator where this contract is delivered. Example 1: Suppose the contract date is in 1987. Six months before the anniversary in 1996 you borrow $1,000 out of a $4,000 loan value. Assume we charge 8% a year. Three months later, but still three months before the anniversary, we will have charged about $20 interest. This amount will be a few cents more or less than $20 since some months have more days than others. The interest will not be due until the anniversary unless the loan is paid back sooner. The loan will still be $1,000. The contract debt will be $1,020, since contract debt includes interest charged but not yet due. On the anniversary in 1996 we will have charged about $40 interest. The interest will then be due. Example 2: Suppose the $40 interest in example 3 is paid on the anniversary. The loan and contract debt will each become $1,000 right after the payment. Example 3: Suppose the $40 interest in example 3 is not paid on the anniversary. The interest will become part of the loan, and we will begin to charge interest on it, too. The loan and contract debt will each become $1,040. The provision of this policy entitled "Effect of a Loan" is amended at issue by the addition of this statement. Any reference in the provision entitled "Effect of a Loan" to "4% a year" is replaced by "1% less than the loan interest rate for the contract year." Rider attached to and made a part of this contract on the Contract Date Pruco Life Insurance Company, By /s/ SPECIMEN Secretary - ----------- PLI 125--84 - ----------- II-196 EX-99.1A(13)(X) 33 ENDORSEMENTS EXHIBIT 1.A(13)(x) ENDORSEMENTS (Only we can endorse this contract.) AUTOMATIC PREMIUM LOAN This endorsement is attached to and made a part of this contract on the contract date: If this provision is in effect at the end of a grace period any premium not paid will be paid by charging it as a loan on the contract. But this will be done only if the contract fund, minus any contract debt is enough to do so Pruco Life Insurance Company By /s/ ISABELLE L. KIRCHNER ------------------------------ Secretary - ---------- PLI 114-84 - ---------- II-197 EX-99.1A(13)(Z) 34 OPTION TO INCREASE OR DECREASE FACE AMOUNT EXHIBIT 1.A.(13)(z) PRUCO LIFE INSURANCE COMPANY This endorsement is attached to and made a part of the contract on the contract date. OPTION TO INCREASE OR DECREASE FACE AMOUNT INCREASE IN FACE AMOUNT Right to Increase Face Amount.--On or after the first contract anniversary, but no earlier than January 1, 1987 in any event, you may be able to increase the face amount of this contract. The effective date of the increase will be the date you choose in your request, but see "Effective Date of Increase" below. The increased face amount will be the amount you choose, but see "Conditions" below. Conditions.--Your right to increase face amount is subject to all these conditions: (1) You must ask for the increase in writing on a form which meets our needs. (2) The amount of the immediate increase in face amount must be at least $25,000. This contract may be one that was issued below age 15, where the initial face amount increases by 50% at age 21. (See "Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower" on page 6.) If so, when a request for increase is made before age 21, it is the amount of the immediate increase in face amount which must be at least $25,000. (3) The insured must give us any facts we need to satisfy us that he or she is then insurable for the amount of increase. (4) If we request, you must send us the contract to be endorsed. (5) The contract must not be paid-up or in defauit on the effective date of the increase. We must not be waiving or paying premiums on the effective date of the increase because of the disability of the insured, or of the applicant in the case of a contract which was issued below age 15. Nor may the contract be in the six month waiting period after the beginning of disability, required before disability benefits begin. (6) You must pay a premium as determined by us, at the time of the increase. II-198 -2- (7) More than one increase may be made in a contract year only with our consent. (8) Between the contract date and the effective date requested by you for the increase, we may have changed any of the bases for determining benefits or computing charges for newly issued contracts of the same kind. If so, we have the right to deny the request for increase. Recomputations.--When you request an increase in face amount, we will recompute the scheduled premiums, deferred sales and underwriting charges, tabular values and monthly deductions from the contract fund for the contract. You may, if permitted by applicable state law, decide whether you want us to recompute these amounts as of the last previous or next following contract anniversary. The amount of payment required on the date of increase, (condition 6 above,) will depend upon the anniversary you choose for recomputing. We will tell you the amount of payment required for each anniversary. Effective Date of Increase.--The effective date of increase will be the date you choose or, if later, the date when we have all of the following: your properly completed request, any required evidence of the insurability of the insured, and the required payment. (See Conditions 1, 3, and 6 above.) Evidence of Increase.--Upon an increase in face amount we will send you endorsement pages for your contract or endorse your contract ourselves, (see Condition 4 above,) with pages which provide the recomputed amounts mentioned above and describe how the increase in face amount affects other contract provisions. Suicide Exclusion and Incontestability.--Upon an increase in face amount, the period stated in the Suicide Exclusion and Incontestability provisions on page__will begin, for the amount of increase, on the effective date of the increase and not on the contract date or on other earlier date(s) which may apply to any previous increase(s). Right to Cancel Contract and Exchange of Contract.--Upon an increase in face amount, these rights, described on the cover of this contract and on page ___, will apply to the amount of the increase. The periods within which you may exercise your Right to Cancel will, for the amount of increase in face amount only, run from the last to occur of (1) 45 days after you sign the request for the increase; (2) 10 days after receipt of the endorsement or endorsed contract; and (3) 10 days after receipt of the Notice of Withdrawal Right as it pertains II-199 -3- to the increase in face amount. When we receive your request to cancel, the increase in face amount will be canceled from the start and we will promptly give you back the total premiums paid for and since the increase which can be attributed to the increase. Charges deducted since the increase will be recomputed as though there had been no increase. Scheduled premiums, deferred sales and underwriting charges, tabular values and monthly deductions will be restored to what they would have been if there were no increase. The right to exchange as described under Exchange of Contract on page ___ will exist for the amount of the increase for 24 months after the effective date of the increase. Exercise of Contract Value Options After Increase in Face Amount.--If the contract is in default past its days of grace or is surrendered after one or more increases in face amount, here is what we will do. In computing the net cash value to be paid on surrender or to be used in determining the period of extended insurance or amount of variable reduced paid-up insurance, (see Contract Value Options, page ___,) any surrender used in the calculation will be the sum of: (a) the surrender charge that would have applied in this situation if there had been no increase in face amount; and (b) the surrender charge(s) that would have applied if each increase in face amount had been achieved by the issuance of a new contract that is in default past its days of grace or is being surrendered. For the purposes of making this calculation all premiums paid after an increase in face amount are deemed to have been made in part in payment for the face amount of the contract not considering any increase(s) in face amount, and in part in payment for each increase, in the same proportion as the portion of the scheduled premium that applies to each of these parts. DECREASE IN FACE AMOUNT Right to Decrease Face Amount.--On or after the first contract anniversary, but no earlier than January 1, 1987 in any event, you may be able to decrease the face amount of this contract. The effective date of the decrease will be the first monthly date after you ask for the decrease on a form which meets our needs. Conditions.--Your right to decrease face amount is subject to all these conditions: (1) You must ask for the decrease in writing on a form which meets our needs. II-200 -4- (2) The amount of the decrease in face amount must be at least $10,000, and may not reduce the face amount to less than $50,000. This contract may be one that was issued below age 15, where the initial face amount increases by 50% at age 21. (See "increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower" on page 6.) If so, when a request for decrease is made before age 21, it may not reduce the face amount immediately after the decrease to less than $33,333. (3) If we request, you must send us the contract to be endorsed. (4) The contract must not be paid-up or in default past its days of grace on the effective date of the decrease. (5) More than one decrease may be made in a contract year only with our consent. (6) The amount of the decrease in face amount may not be so great as to cause the contract to fail to qualify as life insurance under provisions of the Internal Revenue Code. Effect of Decrease.--A decrease made in accord with this provision will decrease the face amount of the contract without a corresponding reduction in the contract fund. This differs from a partial withdrawal (see page ___) which (reduces both face amount and contract fund). At present this will require a separate form for each type of VAL (reduces the contract fund but not the face amount). A $15 processing fee is charged when a decrease is made. You may choose to pay the charge in cash, but if not, it will be deducted from the contract fund. The contract fund will also be reduced by the amount of any surrender charge that may apply to the decrease. A decrease in face amount will cause proportionate reductions in scheduled premiums, tabular values, any remaining schedule of surrender charges, the monthly charges for administration, mortality risk and cost of expected mortality, and any charge for extra rating class. There may also be a reduction in any charge for extra benefits, if the amount of such benefits are affected by the decrease. II-201 -5- Evidence of Decrease.--Upon decrease in face amount we will send you endorsement pages for your contract or endorse your contract ourselves, (see Condition 3 above,) with pages which provide the recomputed amounts mentioned above and described how the decrease in face amount affects other contract provisions. II-202 EX-99.1A(13)(AA)(I) 35 SUPPLEMENTARY MONTHLY RENEWABLE NON-CONV. EXHIBIT 1.A.(13)(aa)(i) PRUCO LIFE INSURANCE COMPANY Insured Rider for Policy No. SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE ONE MONTH TERM INSURANCE Monthly Term Insurance.--Under this rider, we will provide monthly term insurance on the Insured's life. We will do this during any Contract Month which begins on a Monthly Date on which the contract is not in default. You will not have to prove to us that the Insured is insurable to continue this insurance from month to month provided the rider has not ended as described in the Termination section. We make these promises subject to all the provisions of this rider and of the rest of this contract. The amount of insurance provided by this rider is included in the Basic Amount as modified by this rider (see Table of Basic Amounts). The insurance for any contract month will start on the Monthly Date which begins that Contract Month; it will end at the end of the day before the next Monthly Date. We will deduct the charge for monthly term insurance under this rider from the contract fund. The charge will be no more than the amount we describe under Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under Current Rates. TABLE OF AMOUNTS OF INSURANCE Tabular Amounts.--We show here the tabular amount of insurance for each $1,000 of Initial Amount of Term Insurance if death occurs in the contract year that begins when the insured is the attained age shown. The tabular amount of insurance at any time is equal to the appropriate amount shown below times the number of $1,000's of Initial Amount of Term Insurance, including any fraction, shown on the Contract Data page(s). Example: Suppose the Initial Amount of Term Insurance is $100,500. The number of $1,000's of Initial Amount of Term Insurance is 100.5. The tabular amount of insurance is $100,500 at attained age 70 and $50,250 at attained age 86.
ATTAINED AGE TABULAR AMOUNT PAYABLE ATTAINED AGE TABULAR AMOUNT PAYABLE 80 and below 1000 90 300 81 900 91 250 82 800 92 200 83 700 93 175 84 600 94 150 85 550 95 125 86 500 96 100 87 450 97 75 88 400 98 50 89 350 99 25
(Continued on Next Page) VALA 500 II-203 (Continued from Preceding Page) Target Amount.--We compute the Target Amount on each Monthly Date. It will be the larger of the amounts in (1) and (2), where (1) is the tabular amount of insurance under this rider; (2) is the amount of insurance, but not more than the Initial Amount of Term Insurance, that can be provided at then current rates (which we describe under Current Rates) by a charge equal to the maximum guaranteed charge for the tabular amount of insurance under this rider. Rider Premiums and Charges.--We show the premiums for this rider in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages; the balance is the invested premium amount which is added to the contract fund. We will deduct from the contract fund on each Monthly Date, for the insurance we provide under this rider, a charge for any portion of the basic amount which exceeds the contract fund and for which we do not otherwise charge under the terms of the contract or under the terms any extra benefit other than this rider. Maximum Guaranteed Charges.--The maximum guaranteed charges per $1,000 of Initial Amount of Term Insurance are included in the Schedule of Monthly Deductions in the Contract Data pages. The amount we deduct on a Monthly Date will not be more than this charge multiplied by the number of $1,000's of Initial Amount of Term Insurance. Current Rates.--From time to time we will set the current rates based on the Insured's rating class, sex and attained age for the insurance we provide under this rider. They will not be more than the maximum guaranteed rates. We will set rates based on our expectations as to future experience. At least once every five years, but not more often than once a year, we will consider the need to change the rates. We will change them only if we do so for all riders like this one dated in the same year as this one. MISCELLANEOUS PROVISIONS General.--Where there is no conflict with this rider, the provisions of this contract will also apply to the rider. Paid-up Contract. - The Paid-up Contract section of the contract is amended by adding the following sentence. In no event will this contract become fully paid-up prior to the termination of rider VALA 500. Basic Amount.--While this rider remains in force, the Table of Basic Amounts in the contract is replaced with the table that follows. We have made this change so the contract and this rider together will comply with Section 7702 of the Internal Revenue Code of 1954 as amended. VALA 500 II-204 (Continued from Preceding Page) TABLE OF BASIC AMOUNTS When the proceeds arise from the Insured's death: And The Contract Is In Force: on a premium paying basis and not in default past its days of grace as variable reduced paid-up insurance (see page 13) as extended insurance (see page 13) Then The Basic Amount Is: the larger of: (1) the face amount (see paqe 3), plus the Target Amount described in rider VALA 500; and (2) the amount of insurance provided by the contract fund at the net single premium rate; plus the amount of any extra benefits other than those provided under rider VALA 500. the amount of variable reduced paid-up insurance (see page 13) the amount of term insurance, if the Insured dies in the term (see page 13); otherwise zero. And We Adjust The Basic Amount For: contract debt (see page 15), plus any charges due in the days of grace (see page 8). contract debt nothing. Unscheduled Premiums.--The second paragraph of the Unscheduled Premiums provision is amended by adding the following sentence: Or if we determine at any time that the amount of insurance provided by the contract fund at the net single premium rate exceeds the face amount, plus the Target Amount, then, we have the right to refuse to accept further premium payments, or to limit the amount or frequency of premium payments thereafter. Termination.--This rider will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the day before the anniversary on which the Insured's attained age is 100; 3. the date the contract is surrendered under its Cash Value Option; and 4. the date the contract ends for any other reason. Further, if you ask us in writing, we will cancel the rider as of the first Monthly Date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. Rider attached to and made a part of this contract on the Contract Date Pruco Life Insurance Company By Secretary VALA 500 II-205 CONTRACT DATA INSURED'S SEX AND ISSUE AGE M-35 RATING CLASS NON-SMOKER INSURED JOHN DOE XX XXX XXX POLICY NUMBER FACE AMOUNT $50,000 JUL 1, 1986 CONTRACT DATE CONTRACT PREMIUM PERIOD LIFE JUL 1, 2016 CHANGE DATE AGENCY R-NK 1 BENEFICIARY WIFE, LIFE, WIFE LIST OF CONTRACT MINIMUMS THE MINIMUM PREMIUM IS $25. LIST OF SUPPLEMENTARY BENEFITS (EACH BENEFIT IS DESCRIBED IN THE FORM THAT BEARS THE NUMBER SHOWN FOR IT VALA 500 MONTHLY REVEWABLE TERM INSURANCE INITIAL AMOUNT OF TERM INSURANCE IS $100,000-- **** END OF LIST **** SCHEDULE OF PREMIUMS PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE. SCHEDULED PREMIUMS ARE $XXX.XX EACH CHANGING ON JULY 1, 1987 TO $XXX.XX EACH CHANGING ON JULY 1, 1988 TO $XXX.XX EACH CHANGING ON JULY 1, 1989 TO $XXX.XX EACH CHANGING ON JULY 1, 1990 TO $XXX.XX EACH CHANGING ON JULY 1, 1991 TO $XXX.XX EACH CHANGING ON JULY 1, 1992 TO $XXX.XX EACH CHANGING ON JULY 1, 1993 TO $XXX.XX EACH CHANGING ON JULY 1, 1994 TO $XXX.XX EACH CHANGING ON JULY 1, 1995 TO $XXX.XX EACH CHANGING ON JULY 1, 1996 TO $XXX.XX EACH CHANGING ON JULY 1, 1997 TO $XXX.XX EACH CHANGING ON JULY 1, 1998 TO $XXX.XX EACH CHANGING ON JULY 1, 1999 TO $XXX.XX EACH CHANGING ON JULY 1, 2000 TO $XXX.XX EACH CHANGING ON JULY 1, 2001 TO $XXX.XX EACH CHANGING ON JULY 1, 2002 TO $XXX.XX EACH CONTRACT DATA CONTINUED ON NEXT PAGE Paqe 3(84)VA II-206 CHANGING ON JULY 1, 2003 TO $XXX.XX EACH CHANGING ON JULY 1, 2004 TO $XXX.XX EACH CHANGING ON JULY 1, 2005 TO $XXX.XX EACH CHANGING ON JULY 1, 2006 TO $XXX.XX EACH CHANGING ON JULY 1, 2007 TO $XXX.XX EACH CHANGING ON JULY 1, 2006 TO $XXX.XX EACH CHANGING ON JULY 1, 2009 TO $XXX.XX EACH CHANGING ON JULY 1, 2010 TO $XXX.XX EACH CHANGING ON JULY 1, 2011 TO $XXX.XX EACH CHANGING ON JULY 1 2012 TO $XXX.XX EACH CHANGING ON JULY 1, 2013 TO $XXX.XX EACH CHANGING ON JULY 1, 2014 TO $XXX.XX THEREAFTER CONTRACT PREMIUMS INCLUDE THE PREMIUMS FOR THE FOLLOWING SUPPLEMENTARY BENEFITS: PREMIUMS FOR BENEFIT VALA 500 ARE $XXX.XX EACH CHANGING ON JULY 1, 1987 TO $ 195.00 EACH CHANGING ON JULY 1, 1988 TO $ 210.00 EACH CHANGING ON JULY 1, 1989 TO $ 229.00 EACH CHANGING ON JULY 11 1990 TO $ 247.00 EACH CHANGING ON JULY 1, 1991 TO $ 335.00 EACH CHANGING ON JULY 1, 1992 TO $ 364.00 EACH CHANGING ON JULY 1, 1993 TO $ 395.00 EACH CHANGING ON JULY 1, 1994 TO $ 428.00 EACH CHANGING ON JULY 1, 1995 TO $ 464.00 EACH CHANGING ON JULY 1, 1996 TO $ 503.00 EACH CHANGING ON JULY 1, 1997 TO $ 544.00 EACH CHANGING ON JULY 1, 1998 TO $ 588.00 EACH CHANGING ON JULY 1, 1999 TO $ 635.00 EACH CHANGING ON JULY 1, 2000 TO $ 687.00 EACH CHANGING ON JULY 1, 2001 TO $ 745.00 EACH CHANGING ON JULY 1, 2002 TO $ 812.00 EACH CHANGING ON JULY 1, 2003 TO $ 887.00 EACH CHANGING ON JULY 1, 2004 TO $ 973.00 EACH CHANGING ON JULY 1, 2005 TO $1067.00 EACH CHANGING ON JULY 1, 2006 TO $1169.00 EACH CHANGING ON JULY 1, 2007 TO $1277.00 EACH CHANGING ON JULY 1, 2008 TO $1391.00 EACH CHANGING ON JULY 1, 2009 TO $1513.00 EACH CHANGING ON JULY 1, 2010 TO $1647.00 EACH CHANGING ON JULY 1, 2011 TO $1796.00 EACH CHANGING ON JULY 1, 2012 TO $1946.00 EACH CHANGING ON JULY 1, 2013 TO $2154.00 EACH CHANGING ON JULY 1, 2014 TO $2368.00 EACH CHANGING ON JULY 1, 2015 TO $2604.00 EACH CHANGING ON JULY 1, 2016 TO $2860.00 EACH CHANGING ON JULY 1, 2017 TO $3133.00 EACH CHANGING ON JULY 1, 2018 TO $3425.00 EACH CHANGING ON JULY 1, 2019 TO $3738.00 EACH CHANGING ON JULY 1, 2020 TO $4085.00 EACH CHANGING ON JULY 1, 2021 TO $4477.00 EACH CONTRACT DATA CONTINUED ON NEXT PAGE Page 3A(84)VA II-207 CHANGING ON JULY 1, 2022 TO $4927.00 EACH CHANGING ON JULY 1, 2023 TO $5445.00 EACH CHANGING ON JULY 1, 2024 TO $6032.00 EACH CHANGING ON JULY 1, 2025 TO $6680.00 EACH CHANGING ON JULY 1, 2026 TO $7376.00 EACH CHANGING ON JULY 1, 2027 TO $8110.00 EACH CHANGING ON JULY 1, 2028 TO $8874.00 EACH CHANGING ON JULY 1, 2029 TO $9675.00 EACH CHANGING ON JULY 1, 2030 TO $10540.0U EACH CHANGING ON JULY 1, 2031 TO $15293.00 EACH *****END OF SCHEDULE***** SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00. FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%. AFTER DEDUCTION OF THIS AMOUNT, THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.) *****END OF SCHEDULE***** SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND THE MONTHLY ADMINISTRATION CHARGE IS $5.50. THE MONTHLY CHARGE TO GUARANTEE THE MINIMUM DEATH BENEFIT IS $1.50. MONTHLY DEDUCTIONS FOR ANY SUPPLEMENTARY BENEFITS CONSIST OF A FIXED CHARGE PLUS AN AMOUNT THAT DEPENDS ON THE INSURANCE PROVIDED BY RIDER VALA 500. MONTHLY DEDUCTIONS FOR SUPPLEMENTAL BENEFIT VALA 500 ARE BASED ON THE NUMBER OF UNITS OF INSURANCE, INCLUDING ANY FRACTION, ON THE MONTHLY DATE AND THE MONTHLY RATE PER UNIT OF INSURANCE. THE NUMBER OF UNITS OF INSURANCE IS EQUAL TO THE INSURANCE PROVIDED BY RIDER VALA 500 DIVIDED BY THE TABULAR AMOUNT OF INSURANCE PER S1,000 OF INITIAL AMOUNT OF TERM INSURANCE. THE DEDUCTION MAY BE ADJUSTED AS DESCRIBED IN RIDER VALA 500. MAXIMUM MONTHLY FIXED RATE PER UNIT OF MONTHLY DEDUCTIONS ARE CHARGE INSURANCE CHANGING ON JULY 1, 1987 TO XX.XX .XXXXX CHANGING ON JULY 1, 1988 TO XX.XX .XXXXX CHANGING ON JULY 1, 1989 TO XX.XX .XXXXX CHANGING ON JULY 1, 1990 TO XX.XX .XXXXX CHANGING ON JULY 1, 1991 TO XX.XX .XXXXX CHANGING ON JULY 1, 1992 TO XX.XX .XXXXX CHANGING ON JULY 1, 1993 TO XX.XX .XXXXX CHANGING ON JULY 1, 1994 TO XX.XX .XXXXX CONTRACT DATA CONTINUED ON NEXT PAGE Page 3B(84)VA II-208 CHANGING ON JULY 1, 1995 TO XX.XX .XXXXX CHANGING ON JULY 1, 1996 TO XX.XX .XXXXX CHANGING ON JULY 1, 1997 TO XX.XX .XXXXX CHANGING ON JULY 1, 1998 TO XX.XX .XXXXX CHANGING ON JULY 1, 1999 TO XX.XX .XXXXX CHANGING ON JULY 1, 2000 TO XX.XX .XXXXX CHANGING ON JULY 1, 2001 TO XX.XX .XXXXX CHANGING ON JULY 1, 2002 TO XX.XX .XXXXX CHANGING ON JULY 1, 2003 TO XX.XX .XXXXX CHANGING ON JULY 1, 2004 TO XX.XX .XXXXX CHANGING ON JULY 1, 2005 TO XX.XX .XXXXX CHANGING ON JULY 1, 2006 TO XX.XX .XXXXX CHANGING ON JULY 1, 2007 TO XX.XX .XXXXX CHANGING ON JULY 1, 2008 TO XX.XX .XSXXX CHANGING ON JULY 1, 2009 TO XX.XX .XXSSX CHANGING ON JULY 1, 2010 TO XX.XX .XXXXX CHANGING ON JULY 1, 2011 TO XX.XX .XXXXX CHANGING ON JULY 1, 2012 TO XX.XX .XXXXX CHANGING ON JULY 1, 2013 TO XX.XX .XXXXX CHANGING ON JULY 1, 2014 TO XX.XX .XXXXX CHANGING ON JULY 1, 2015 TO XX.XX .XXXXX CHANGING ON JULY 1, 2016 TO XX.XX .XXXXX CHANGING ON JULY 1, 2017 TO XX.XX .XXXXX CHANGING ON JULY 1, 2018 TO XX.XX .XXXXX CHANGING ON JULY 1, 2019 TO XX.XX .XXXXX CHANGING ON JULY 1, 2020 TO XX.XX .XXXXX CHANGING ON JULY 1, 2021 TO XX.XX .XXXXX CHANGING ON JULY 1, 2022 TO XX.XX .XXXXX CHANGING ON JULY 1, 2023 TO XX.XX .XXXXX CHANGING ON JULY 1, 2024 TO XX.XX .XXXXX CHANGING ON JULY 1, 2025 TO XX.XX .XXXXX CHANGING ON JULY 1, 2026 TO XX.XX .XXXXX CHANGING ON JULY 1, 2027 TO XX.XX .XXXXX CHANGING ON JULY 1, 2028 TO XX.XX .XXXXX CHANGING ON JULY 1, 2029 TO XX.XX .XXXXX CHANGING ON JULY 1, 2030 TO XX.XX .XXXXX CHANGING ON JULY 1, 2031 TO XX.XX .XXXXX *****END OF SCHEDULE***** Page 3C(84)VA II-209 EX-99.1A(13)(AA)(II) 36 SUPPLEMENTARY MONTHLY RENEWABLE NON-CONV. EXHIBIT 1.A.(13)(aa)(ii) PRUCO LIFE INSURANCE COMPANY Insured Rider for Policy No. SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE ONE MONTH TERM INSURANCE Monthly Term Insurance.--Under this rider, we will provide monthly term insurance on the Insured's life. We will do this during any Contract Month which begins on a Monthly Date on which the contract is not in default. You will not have to prove to us that the Insured is insurable to continue this insurance from month to month provided the rider has not ended as described in the Termination section. We make these promises subject to all the provisions of this rider and of the rest of this contract. The amount of insurance during any Contract Month will be the Target Amount (which we describe under Target Amount) for that Contract Month. The insurance will start on the Monthly Date which begins that Contract Month; it will end at the end of the day before the next Monthly Date. Any proceeds under this contract that may arise from the Insured's death while this rider is in force will include the Target Amount. We will deduct the charge for monthly term insurance under this rider from the contract fund. The charge will be no more than the amount we describe under Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under Current Rates. TABLE OF AMOUNTS OF INSURANCE Tabular Amounts.--We show here the tabular amount of insurance for each $1,000 of Initial Amount of Term Insurance if death occurs in the contract year that begins when the insured is the attained age shown. The tabular amount of insurance at any time is equal to the appropriate amount shown below times the number of $1,000's of Initial Amount of Term Insurance, including any fraction, shown on the Contract Data page(s). Example: Suppose the Initial Amount of Term Insurance is $100,500. The number of $1,000's of Initial Amount of Term Insurance is 100.5. The tabular amount of insurance is $100,500 at attained age 70 and $50,250 at attained age 86.
ATTAINED AGE TABULAR AMOUNT PAYABLE ATTAINED AGE TABULAR AMOUNT PAYABLE 80 and below 1000 90 300 81 900 91 250 82 800 92 200 83 700 93 175 84 600 94 150 85 550 95 125 86 500 96 100 87 450 97 75 88 400 98 50 89 350 99 25
(Continued on Next Page) VALB 500 II-210 (Continued from Preceding Page) Target Amount.--We compute the Target Amount on each Monthly Date. It will be the larger of the amounts in (1) and (2), where: (1) is the tabular amount of insurance under this rider; and (2) is the amount of insurance, but not more than the Initial Amount of Term Insurance, that would be provided at then current rates (which we describe under Current Rates) by a charge equal to the maximum guaranteed charge for the tabular amount of insurance under this rider. Rider Premiums and Charges.--We show the premiums for this rider in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages; the balance is the invested premium amount which is added to the contract fund. Maximum Guaranteed Charges.--The maximum guaranteed charges per $1,000 of Initial Amount of Term Insurance are included in the Schedule of Monthly Deductions in the Contract Data pages. The amount we deduct on a Monthly Date will not be more than this charge multiplied by the number of $1,000's of Initial Amount of Term Insurance. Current Rates.--From time to time we will set the current rates based on the Insured's rating class, sex and attained age for the insurance we provide under this rider. They will not be more than the maximum guaranteed rates. We will set rates based on our expectations as to future experience. At least once every five years, but not more often than once a year, we will consider the need to change the rates. We will change them only if we do so for all riders like this one dated in the same year as this one. MISCELLANEOUS PROVISIONS General.--Where there is no conflict with this rider, the provisions of this contract will also apply to the rider. Paid-up Contract.--The Paid-up Contract section of the contract is amended by adding the following sentence. In no event will this contract become fully paid-up prior to the termination of rider VALB 500. Basic Amount.--While this rider remains in force, the Table of Basic Amounts in the contract is replaced with the table that follows. We have made this change so the contract and this rider together will comply with Section 7702 of the Internal Revenue Code of 1954 as amended. We will deduct from the contract fund on each Monthly Date a charge for any portion of the basic amount which exceeds the contract fund and for which we do not otherwise charge under the terms of an extra benefit. We will deem this portion of the basic amount, and the charge for it, to be made under the terms of the contract and not under this rider. VALB 500 II-211 (Continued from Preceding Page) TABLE OF BASIC AMOUNTS When the proceeds arise from the Insured's death: And The Contract Is In Force: on a premium paying basis and not in default past its days of grace Then The Basic Amount Is: the larger of: (1) the face amount (see page 3), plus any excess of the contract fund (see page 10) over the tabular contract fund (see page 12), plus the Target Amount described in rider VALB 500; and (2) the amount of insurance provided by the contract fund at the net single premium rate; plus the amount of any extra benefits other than those provided under Rider VALB 500. And We Adjust The Basic Amount For: contract debt (see page 15), plus any charges due in the days of grace (see page 8). And The Contract Is In Force: as variable reduced paid-up insurance (see page 13) Then The Basic Amount Is: the amount of variable reduced paid-up insurance (see page 13) And We Adjust The Basic Amount For: contract debt. And The Contract Is In Force: as extended insurance (see page 13) Then The Basic Amount Is: the amount of term insurance, if the Insured dies in the term (see page 13); otherwise zero And We Adjust The Basic Amount For: nothing. Unscheduled Premiums.--The second paragraph of the Unscheduled Premiums provision is amended by adding the following sentence: Or if we determine at any time that the amount of insurance provided by the contract fund at the net single premium rate exceeds the face amount, plus any excess of the contract fund over the tabular contract fund, plus the Target Amount, then, we have the right to refuse to accept further premium payments, or to limit the amount or frequency of premium payments thereafter. Termination.--This rider will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the day before the anniversary on which the Insured's attained age is 100; 3. the date the contract is surrendered under its Cash Value Option; and 4. the date the contract ends for any other reason. Further, if you ask us in writing, we will cancel the rider as of the first Monthly Date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. Rider attached to and made a part of this contract on the Contract Date Pruco Life Insurance Company By Secretary VALB 500 II-212 CONTRACT DATA INSURED'S SEX AND ISSUE AGE M-35 RATING CLASS NON-SMOKER INSURED JOHN DOE XX XXX XXX POLICY NUMBER FACE AMOUNT $50,000 JUL 1, 1986 CONTRACT DATE CONTRACT PREMIUM PERIOD LIFE JUL 1, 2016 CHANGE DATE AGENCY R-NK 1 BENEFICIARY WIFE, LIFE, WIFE LIST OF CONTRACT MINIMUMS THE MINIMUM PREMIUM IS $25. LIST OF SUPPLEMENTARY BENEFITS (EACH BENEFIT IS DESCRIBED IN THE FORM THAT BEARS THE NUMBER SHOWN FOR IT). VALB 500 MONTHLY REVEWABLE TERM INSURANCE INITIAL AMOUNT OF TERM INSURANCE IS $100,000-- **** END OF LIST **** SCHEDULE OF PREMIUMS PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE. SCHEDULED PREMIUMS ARE $XXX.XX EACH CHANGING ON JULY 1, 1987 TO $XXX.XX EACH CHANGING ON JULY 1, 1988 TO $XXX.XX EACH CHANGING ON JULY 1, 1989 TO $XXX.XX EACH CHANGING ON JULY 1, 1990 TO $XXX.XX EACH CHANGING ON JULY 1, 1991 TO $XXX.XX EACH CHANGING ON JULY 1, 1992 TO $XXX.XX EACH CHANGING ON JULY 1, 1993 TO $XXX.XX EACH CHANGING ON JULY 1, 1994 TO $XXX.XX EACH CHANGING ON JULY 1, 1995 TO $XXX.XX EACH CHANGING ON JULY 1, 1996 TO $XXX.XX EACH CHANGING ON JULY 1, 1997 TO $XXX.XX EACH CHANGING ON JULY 1, 1998 TO $XXX.XX EACH CHANGING ON JULY 1, 1999 TO $XXX.XX EACH CHANGING ON JULY 1, 2000 TO $XXX.XX EACH CHANGING ON JULY 1, 2001 TO $XXX.XX EACH CHANGING ON JULY 1, 2002 TO $XXX.XX EACH CONTRACT DATA CONTINUED ON NEXT PAGE Paqe 3(84)VB II-213 CHANGING ON JULY 1, 2003 TO $XXX.XX EACH CHANGING ON JULY 1, 2004 TO $XXX.XX EACH CHANGING ON JULY 1, 2005 TO $XXX.XX EACH CHANGING ON JULY 1, 2006 TO $XXX.XX EACH CHANGING ON JULY 1, 2007 TO $XXX.XX EACH CHANGING ON JULY 1, 2008 TO $XXX.XX EACH CHANGING ON JULY 1, 2009 TO $XXX.XX EACH CHANGING ON JULY 1, 2010 TO $XXX.XX EACH CHANGING ON JULY 1, 2011 TO $XXX.XX EACH CHANGING ON JULY 1 2012 TO $XXX.XX EACH CHANGING ON JULY 1, 2013 TO $XXX.XX EACH CHANGING ON JULY 1, 2014 TO $XXX.XX THEREAFTER CONTRACT PREMIUMS INCLUDE THE PREMIUMS FOR THE FOLLOWING SUPPLEMENTARY BENEFITS: PREMIUMS FOR BENEFIT VALB 500 ARE $XXX.XX EACH CHANGING ON JULY 1, 1987 TO $ 195.00 EACH CHANGING ON JULY 1, 1988 TO $ 210.00 EACH CHANGING ON JULY 1, 1989 TO $ 229.00 EACH CHANGING ON JULY 11 1990 TO $ 247.00 EACH CHANGING ON JULY 1, 1991 TO $ 335.00 EACH CHANGING ON JULY 1, 1992 TO $ 364.00 EACH CHANGING ON JULY 1, 1993 TO $ 395.00 EACH CHANGING ON JULY 1, 1994 TO $ 428.00 EACH CHANGING ON JULY 1, 1995 TO $ 464.00 EACH CHANGING ON JULY 1, 1996 TO $ 503.00 EACH CHANGING ON JULY 1, 1997 TO $ 544.00 EACH CHANGING ON JULY 1, 1998 TO $ 588.00 EACH CHANGING ON JULY 1, 1999 TO $ 635.00 EACH CHANGING ON JULY 1, 2000 TO $ 687.00 EACH CHANGING ON JULY 1, 2001 TO $ 745.00 EACH CHANGING ON JULY 1, 2002 TO $ 812.00 EACH CHANGING ON JULY 1, 2003 TO $ 887.00 EACH CHANGING ON JULY 1, 2004 TO $ 973.00 EACH CHANGING ON JULY 1, 2005 TO $1067.00 EACH CHANGING ON JULY 1, 2006 TO $1169.00 EACH CHANGING ON JULY 1, 2007 TO $1277.00 EACH CHANGING ON JULY 1, 2008 TO $1391.00 EACH CHANGING ON JULY 1, 2009 TO $1513.00 EACH CHANGING ON JULY 1, 2010 TO $1647.00 EACH CHANGING ON JULY 1, 2011 TO $1796.00 EACH CHANGING ON JULY 1, 2012 TO $1946.00 EACH CHANGING ON JULY 1, 2013 TO $2154.00 EACH CHANGING ON JULY 1, 2014 TO $2368.00 EACH CHANGING ON JULY 1, 2015 TO $2604.00 EACH CHANGING ON JULY 1, 2016 TO $2860.00 EACH CHANGING ON JULY 1, 2017 TO $3133.00 EACH CHANGING ON JULY 1, 2018 TO $3425.00 EACH CHANGING ON JULY 1, 2019 TO $3738.00 EACH CHANGING ON JULY 1, 2020 TO $4085.00 EACH CHANGING ON JULY 1, 2021 TO $4477.00 EACH CONTRACT DATA CONTINUED ON NEXT PAGE Page 3A(84)VB II-214 CHANGING ON JULY 1, 2022 TO $4927.00 EACH CHANGING ON JULY 1, 2023 TO $5445.00 EACH CHANGING ON JULY 1, 2024 TO $6032.00 EACH CHANGING ON JULY 1, 2025 TO $6680.00 EACH CHANGING ON JULY 1, 2026 TO $7376.00 EACH CHANGING ON JULY 1, 2027 TO $8110.00 EACH CHANGING ON JULY 1, 2028 TO $8874.00 EACH CHANGING ON JULY 1, 2029 TO $9675.00 EACH CHANGING ON JULY 1, 2030 TO $10540.00 EACH CHANGING ON JULY 1, 2031 TO $15293.00 EACH *****END OF SCHEDULE***** SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00. FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%. AFTER DEDUCTION OF THIS AMOUNT, THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.) *****END OF SCHEDULE***** SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND THE MONTHLY ADMINISTRATION CHARGE IS $5.50. THE MONTHLY CHARGE TO GUARANTEE THE MINIMUM DEATH BENEFIT IS $1.50. MONTHLY DEDUCTIONS FOR ANY SUPPLEMENTARY BENEFITS CONSIST OF A FIXED CHARGE PLUS AN AMOUNT THAT DEPENDS ON THE INSURANCE PROVIDED BY DEFINED IN RIDER VALB 500. MONTHLY DEDUCTIONS FOR SUPPLEMENTAL BENEFIT VALB 500 ARE BASED ON THE NUMBER OF UNITS OF INSURANCE, INCLUDING ANY FRACTION, ON THE MONTHLY DATE AND THE MONTHLY RATE PER UNIT OF INSURANCE. THE NUMBER OF UNITS OF INSURANCE IS EQUAL TO THE INSURANCE PROVIDED BY RIDER VALB 500 DIVIDED BY THE TABULAR AMOUNT OF INSURANCE PER S1,000 OF INITIAL AMOUNT OF TERM INSURANCE. THE DEDUCTION MAY BE ADJUSTED AS DESCRIBED IN RIDER VALB 500. MAXIMUM MONTHLY FIXED RATE PER UNIT OF MONTHLY DEDUCTIONS ARE CHARGE INSURANCE CHANGING ON JULY 1, 1987 TO XX.XX .XXXXX CHANGING ON JULY 1, 1988 TO XX.XX .XXXXX CHANGING ON JULY 1, 1989 TO XX.XX .XXXXX CHANGING ON JULY 1, 1990 TO XX.XX .XXXXX CHANGING ON JULY 1, 1991 TO XX.XX .XXXXX CHANGING ON JULY 1, 1992 TO XX.XX .XXXXX CHANGING ON JULY 1, 1993 TO XX.XX .XXXXX CHANGING ON JULY 1, 1994 TO XX.XX .XXXXX CONTRACT DATA CONTINUED ON NEXT PAGE Page 3B(84)VB II-215 CHANGING ON JULY 1, 1995 TO XX.XX .XXXXX CHANGING ON JULY 1, 1996 TO XX.XX .XXXXX CHANGING ON JULY 1, 1997 TO XX.XX .XXXXX CHANGING ON JULY 1, 1998 TO XX.XX .XXXXX CHANGING ON JULY 1, 1999 TO XX.XX .XXXXX CHANGING ON JULY 1, 2000 TO XX.XX .XXXXX CHANGING ON JULY 1, 2001 TO XX.XX .XXXXX CHANGING ON JULY 1, 2002 TO XX.XX .XXXXX CHANGING ON JULY 1, 2003 TO XX.XX .XXXXX CHANGING ON JULY 1, 2004 TO XX.XX .XXXXX CHANGING ON JULY 1, 2005 TO XX.XX .XXXXX CHANGING ON JULY 1, 2006 TO XX.XX .XXXXX CHANGING ON JULY 1, 2007 TO XX.XX .XXXXX CHANGING ON JULY 1, 2008 TO XX.XX .XSXXX CHANGING ON JULY 1, 2009 TO XX.XX .XXSSX CHANGING ON JULY 1, 2010 TO XX.XX .XXXXX CHANGING ON JULY 1, 2011 TO XX.XX .XXXXX CHANGING ON JULY 1, 2012 TO XX.XX .XXXXX CHANGING ON JULY 1, 2013 TO XX.XX .XXXXX CHANGING ON JULY 1, 2014 TO XX.XX .XXXXX CHANGING ON JULY 1, 2015 TO XX.XX .XXXXX CHANGING ON JULY 1, 2016 TO XX.XX .XXXXX CHANGING ON JULY 1, 2017 TO XX.XX .XXXXX CHANGING ON JULY 1, 2018 TO XX.XX .XXXXX CHANGING ON JULY 1, 2019 TO XX.XX .XXXXX CHANGING ON JULY 1, 2020 TO XX.XX .XXXXX CHANGING ON JULY 1, 2021 TO XX.XX .XXXXX CHANGING ON JULY 1, 2022 TO XX.XX .XXXXX CHANGING ON JULY 1, 2023 TO XX.XX .XXXXX CHANGING ON JULY 1, 2024 TO XX.XX .XXXXX CHANGING ON JULY 1, 2025 TO XX.XX .XXXXX CHANGING ON JULY 1, 2026 TO XX.XX .XXXXX CHANGING ON JULY 1, 2027 TO XX.XX .XXXXX CHANGING ON JULY 1, 2028 TO XX.XX .XXXXX CHANGING ON JULY 1, 2029 TO XX.XX .XXXXX CHANGING ON JULY 1, 2030 TO XX.XX .XXXXX CHANGING ON JULY 1, 2031 TO XX.XX .XXXXX *****END OF SCHEDULE***** Page 3C(84)VB II-216 EX-99.1.A(13)(BB) 37 RIDER FOR TERM INSURANCE BENEFIT EXHIBIT 1.A.(13)(bb) RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF INSURED--DECREASING AMOUNT AFTER THREE YEARS Read the list of Supplementary Benefits on the Contract Data page(s). This benefit is a part of this contract only if it is listed there. Benefit.--We will pay an amount under this Benefit if we receive due proof that the Insured died (1) in the term period for the Benefit; and (2) while this contract is in force and not in default beyond the last day of the grace period. Any proceeds under this contract that may arise from the Insured's death will include this amount. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. We will use the table below to compute the amount we will pay. We show the Initial Amount of Term Insurance under this Benefit on the Contract Data page(s). We also show the term period for the Benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period. TABLE OF AMOUNTS OF INSURANCE Amounts Payable.--We show here the amount we will pay, based on the Insured's issue age, for each $1,000 of Initial Amount of Term Insurance if death occurs in the contract year ending with the anniversary shown.
- ---------------------------------------------------------------------------------------------------------------------- ISSUE AGE - ---------------------------------------------------------------------------------------------------------------------- ANNIVER- SARY 18 19 20 21 22 23 24 25 26 27 28 - ---------------------------------------------------------------------------------------------------------------------- 1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 4 978 977 977 976 976 975 974 974 973 972 971 5 956 955 953 952 951 950 949 947 946 944 943 6 933 932 930 929 927 925 923 921 919 917 914 7 911 909 907 905 902 900 897 895 892 889 886 8 889 886 884 881 878 875 872 868 865 861 857 9 867 864 860 857 854 850 846 842 838 833 829 10 844 841 837 833 829 825 821 816 811 806 800 11 822 818 814 810 805 800 795 789 784 778 771 12 800 795 791 786 780 775 769 763 757 750 743 13 778 773 767 762 756 750 744 737 730 722 714 14 756 750 744 738 732 725 718 710 703 694 686 15 733 727 721 714 707 700 692 684 676 667 657 16 711 705 698 690 683 675 667 658 649 639 629 17 689 682 674 667 659 650 641 632 622 611 600 18 667 659 651 643 634 625 615 605 595 583 571 19 644 636 628 619 610 600 590 579 568 556 543 20 622 614 605 595 585 575 564 553 540 528 514 21 600 591 581 571 561 550 538 526 513 500 486 22 578 568 558 548 537 525 513 500 486 472 457 23 556 545 535 524 512 500 487 474 459 444 429 24 533 523 512 500 488 475 462 447 432 417 400 25 511 500 488 476 463 450 436 421 405 389 371 26 489 477 465 452 439 425 410 395 378 361 343 27 467 454 442 429 415 400 385 368 351 333 314 28 445 432 419 405 390 375 359 342 324 306 286 29 422 409 395 381 366 350 333 316 297 278 257 30 400 386 372 357 341 325 308 289 270 250 229 31 378 364 349 333 317 300 282 263 243 222 200 32 356 341 325 310 293 275 256 237 216 200 200 33 333 318 302 286 268 250 231 210 200 200 200 34 311 295 279 262 244 225 205 200 200 200 200 35 289 273 256 238 220 200 200 200 200 200 200 - ---------------------------------------------------------------------------------------------------------------------- (Table Continued on Next Page)
AL 136 II-217
(Table Continued from Preceding Page) - ---------------------------------------------------------------------------------------------------------------------- ISSUE AGE - ---------------------------------------------------------------------------------------------------------------------- ANNIVER- SARY 18 19 20 21 22 23 24 25 26 27 28 - ---------------------------------------------------------------------------------------------------------------------- 36 $267 $250 $232 $214 $200 $200 $200 $200 $200 $200 $200 37 245 227 209 200 200 200 200 200 200 200 200 38 222 204 200 200 200 200 200 200 200 200 * 39 200 200 200 200 200 200 200 200 200 * 40 200 200 200 200 200 200 200 200 * 41 200 200 200 200 200 200 200 * 42 200 200 200 200 200 200 * 43 200 200 200 200 200 * 44 200 200 200 200 * 45 200 200 200 * 46 200 200 * 47 200 * *NO AMOUNT PAYABLE IF DEATH OCCURS IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR. - ----------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------- ISSUE AGE - ---------------------------------------------------------------------------------------------------------------------- ANNIVER- SARY 29 30 31 32 33 34 35 36 37 38 39 40 41 42 - ---------------------------------------------------------------------------------------------------------------------- 1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 l000 3 1000 1000 1000 1000 l000 1000 1000 1000 1000 1000 1000 1000 1000 1000 4 971 970 969 968 967 966 964 963 962 960 958 957 955 952 5 941 939 938 935 933 931 929 926 923 920 917 913 909 905 6 912 909 906 903 900 897 893 889 885 880 875 870 864 857 7 882 879 875 871 867 862 857 852 846 840 833 826 818 810 8 853 849 844 839 833 828 821 815 808 800 792 783 773 762 9 824 818 813 806 800 793 786 778 769 760 750 739 727 714 10 794 788 781 774 767 759 750 741 731 720 708 696 682 667 11 765 758 750 742 733 724 714 704 692 680 667 652 636 619 12 735 727 719 710 700 690 679 667 654 640 625 609 591 571 13 706 697 688 677 667 655 643 630 615 600 583 565 546 524 14 676 667 656 645 633 621 607 593 577 560 542 522 500 476 15 647 636 625 613 600 586 571 556 538 520 500 478 455 429 16 618 606 594 581 567 552 536 518 500 480 458 435 409 381 17 588 576 563 548 533 517 500 481 462 440 417 391 364 333 18 559 546 531 516 500 483 464 444 423 400 375 348 318 286 19 529 515 500 484 467 448 429 407 385 360 333 304 273 238 20 500 485 469 452 433 414 393 370 346 320 292 261 227 200 21 471 455 438 419 400 379 357 333 308 280 250 217 200 200 22 441 424 406 387 367 345 322 296 269 240 208 200 200 200 23 412 394 375 355 333 310 286 259 231 200 200 200 200 200 24 382 364 344 323 300 276 250 222 200 200 200 200 200 * 25 353 333 313 290 267 241 214 200 200 200 200 200 * 26 324 303 281 258 233 207 200 200 200 200 200 * 27 294 273 250 226 200 200 200 200 200 200 * 28 265 243 219 200 200 200 200 200 200 * 29 235 212 200 200 200 200 200 200 * 30 206 200 200 200 200 200 200 * 31 200 200 200 200 200 200 * 32 200 200 200 200 200 * 33 200 200 200 200 * 34 200 200 200 * 35 200 200 * 36 200 * *NO AMOUNT PAYABLE IF DEATH OCCURS IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR. - ---------------------------------------------------------------------------------------------------------------------- (Table Continued on Next Page)
AL 136 II-218
(Table Continued from Preceding Page) - ----------------------------------------------------------------------------------------------------------------------------------- ISSUE AGE - ----------------------------------------------------------------------------------------------------------------------------------- ANNIVER- SARY 43 44 45 46 47 48 49 50 51 52 53 54 55 - ----------------------------------------------------------------------------------------------------------------------------------- 1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 4 950 947 944 941 938 933 929 923 917 909 900 889 875 5 900 895 889 882 875 867 857 846 833 818 800 778 750 6 850 842 833 824 813 800 786 769 750 727 700 667 625 7 800 789 778 765 750 733 714 692 667 636 600 556 500 8 750 737 722 706 688 667 643 615 583 545 500 444 375 9 700 684 667 647 625 600 571 538 500 455 400 333 250 10 650 632 611 588 563 533 500 462 417 364 300 222 200 11 600 579 556 529 500 467 429 385 333 273 200 200 * 12 550 526 500 471 438 400 357 308 250 200 200 * 13 500 474 444 412 375 333 286 231 200 200 * 14 450 421 389 353 313 267 214 200 200 * 15 400 368 333 294 250 200 200 200 * 16 350 316 278 235 200 200 200 * 17 300 263 222 200 200 200 * 18 250 211 200 200 200 * 19 200 200 200 200 * 20 200 200 200 * 21 200 200 * 22 200 * *NO AMOUNT PAYABLE IF DEATH OCCURS IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR. - -----------------------------------------------------------------------------------------------------------------------------------
CONVERSION TO ANOTHER PLAN OF INSURANCE Right To Convert.--You may be able to exchange this Benefit for a new contract of life insurance on the Insured's life in either this company or The Prudential Insurance Company of America. In any of these paragraphs, when we use the phrase the company we mean whichever of these companies may issue the new contract. And where we use the phrase new contract we mean the contract for which the Benefit may be exchanged. You will not have to prove that the Insured is insurable. Conditions.--Your right to make this exchange is subject to all these conditions: (1) The amount we would have paid under this Benefit if the Insured had died just before the contract date of the new contract must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications. (2) You must ask for the exchange in writing and in a form that meets our needs. (3) You must send this contract to us to be endorsed. (4) We must have your request and the contract at our Service Office while the Benefit is in force and at least five years before the end of its term period. The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this Benefit ended just before that contract date. Contract Date.--The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be less than five years before the end of the term period for the Benefit. And it may not be more than 31 days before we have your request at our Service Office. Contract Specifications.--The new contract will be in the same rating class as this contract. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. (Continued on Next Page) AL 136 II-219 (Continued from Preceding Page) The new contract may call for annual premiums. If the company agrees, you will be able to have premiums fall due more often. The contract may be any one of the following: 1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount you ask for in your request. But it cannot be less than $10,000 or more than 80% of the amount we would have paid under this Benefit if the Insured had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500, the amount we would have paid must be at least $12,500 for this exchange to be possible.) 2. A contract like the one to which this Benefit is attached, if Pruco Life is regularly issuing such contracts at that time. Its face amount will be the amount you ask for in your request. But it cannot be less than $50,000 or more than 80% of the amount we would have paid under the Benefit if the Insured had died just before the contract date of the new contract. (Since $50,000 is 80% of $62,500, the amount we would have paid must be at least $62,500 for this exchange to be possible.) 3. A contract of life insurance of a kind regularly being issued by Pruco Life Insurance Company at that time for $25,000 or more. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than 80% of the amount we would have paid under the Benefit if the Insured had died just before the contract date of the new contract. (Since $25,000 is 80% of $31,250, the amount we would have paid must be at least $31,250 for this exchange to be possible.) The new contract will not have Supplementary Benefits other than as we describe in this and in the next two paragraphs. If this contract has a benefit for paying scheduled premiums in the event of disability and the company would include a benefit for waiving or paying premiums in other contracts like the new contract, the company will put such a benefit in the new contract. The benefit, if any, in the new contract will be the same one, 'with the same provisions, that the company puts in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. Such a benefit that would have been allowed under this contract, and that would otherwise be allowed under the new contract, will not be denied just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the scheduled premium frequency that was in effect for this contract when the disability started. No premium will be waived or paid for disability under the new contract unless it has such a benefit in the event of disability. This will be so even if scheduled premiums have been paid by us for disability under this contract. Changes.--You may be able to have this Benefit changed to a new contract of life insurance other than in accord with the requirements for exchange that we state above. Or you may be able to exchange this Benefit for an increase in the amount of insurance under this contract. But any change may be made only if the company consents, and will be sublect to conditions and charges that are then determined. MISCELLANEOUS PROVISIONS Benefit Premiums and Charges.--We show the premiums for this Benefit under List of Supplementary Benefits in the Contract Data pages, and these premiums are included in the Scheduled Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this Benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions in the Contract Data pages. Benefit premiums and monthly charges stop on the contract anniversary at the end of the term period for this Benefit. If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct from the contract fund the present value at that time of future charges for this Benefit, discounted at a rate we set from time to time but no less than 4% a year. The Benefit will remain in force, but thereafter we will make no deductions from the contract fund to pay for it. The Benefit will have cash values but no loan value. The cash value for this Benefit will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. We base this net cash value on the (Continued on Next Page) AL 136 II-220 (Continued from Preceding Page) Insured's age and sex. The insured's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year. Termination.--This benefit will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the last day before the contract date of any other contract (a) for which the Bnefit is exchanged, or (b) to which the benefit is changed; 3. the date the contract is surrendered under its Cash Value Option, if it has one; and 4. the date the contract ends for any other reason. Further, if you ask us in writing, we will cancel the Benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. This Supplementary Benefit rider attached to this contract on the Contract Date Pruco Life Insurance Company, By /s/ ISABELLE L. KIRCHNER Secretary AL 136 II-221 EX-1.A(13)(CC) 38 RIDER FOR TERM INSURANCE BENEFIT EXHIBIT 1.A.(13)(cc) - -------------------------------------------------------------------------------- RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF INSURED SPOUSE DECREASING AMOUNT AFTER THREE YEARS Read the list of Supplementary Benefits on the Contract Data page(s). This Benefit is a part of this contract only if it is listed there. Benefit.--We will pay an amount under this Benefit if we receive due proof that the insured spouse died (1) in the term period for the Benefit; and (2) while this contract is in force and not in default beyond the last day of the grace period. We will pay this amount to the beneficiary for insurance payable upon the insured spouse's death. But our payment is subject to all the provisions of the Benefit and of the rest of this contract. The phrase insured spouse means the Insured's spouse named in the application for this contract. We will use the table below to compute the amount we will pay. We show the Initial Amount of Term Insurance under this Benefit on the Contract Data page(s). We also show the term period for the Benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period. TABLE OF AMOUNTS OF INSURANCE Amounts Payable.--We show here the amount we will pay, based on the insured spouse's issue age, for each $1,000 of Initial Amount of Term Insurance if death occurs in the contract year ending with the anniversary shown.
- ------------------------------------------------------------------------------------------------------------------------ ISSUE AGE - ------------------------------------------------------------------------------------------------------------------------ ANNIVER- SARY 18 19 20 21 22 23 24 25 26 27 28 29 30 31 - ------------------------------------------------------------------------------------------------------------------------ 1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 4 978 977 977 976 976 975 974 974 973 972 971 971 970 969 5 956 955 953 952 951 950 949 947 946 944 943 941 939 938 6 933 932 930 929 927 925 923 921 919 917 914 912 909 906 7 911 909 907 905 902 900 897 895 892 889 886 882 879 875 8 889 886 884 881 878 875 872 868 865 861 857 853 849 844 9 867 864 860 857 854 850 846 842 838 833 829 824 818 813 10 844 841 837 833 829 825 821 816 811 806 800 794 788 781 11 822 818 814 810 805 800 795 789 784 778 771 765 758 750 12 800 795 791 786 780 775 769 763 757 750 743 735 727 719 13 778 773 767 762 756 750 744 737 730 722 714 706 697 688 14 756 750 744 738 732 725 718 710 703 694 686 676 667 656 15 733 727 721 714 707 700 692 684 676 667 657 647 636 625 16 711 705 698 690 683 675 667 658 649 639 629 618 606 594 17 689 682 674 667 659 650 641 632 622 611 600 588 576 563 18 667 659 651 643 634 625 615 605 595 583 571 559 546 531 19 644 636 628 619 610 600 590 579 568 556 543 529 515 500 20 622 614 605 595 585 575 564 553 540 528 514 500 485 469 - ------------------------------------------------------------------------------------------------------------------------ (Table Continued on Next Page)
AL 181 II-222
(Table Continued from Preceding Page) - ------------------------------------------------------------------------------------------------------------------------ ISSUE AGE - ------------------------------------------------------------------------------------------------------------------------ ANNIVER- SARY 18 19 20 21 22 23 24 25 26 27 28 29 30 31 - ------------------------------------------------------------------------------------------------------------------------ 21 $600 $591 $581 $571 $561 $550 $538 $526 $513 $500 $486 $471 $455 $438 22 578 568 558 548 537 525 513 500 486 472 457 441 424 406 23 556 545 535 524 512 500 487 474 459 444 429 412 394 375 24 533 523 512 500 488 475 462 447 432 417 400 382 364 344 25 511 500 488 476 463 450 436 421 405 389 371 353 333 313 26 489 477 465 452 439 425 410 395 378 361 343 324 303 281 27 467 454 442 429 415 400 385 368 351 333 314 294 273 250 28 445 432 419 405 390 375 359 342 324 306 286 265 243 219 29 422 409 395 381 366 350 333 316 297 278 257 235 212 200 30 400 386 372 357 341 325 308 289 270 250 229 206 200 200 31 378 364 349 333 317 300 282 263 243 222 200 200 200 200 32 356 341 325 310 293 275 256 237 216 200 200 200 200 200 33 333 318 302 286 268 250 231 210 200 200 200 200 200 200 34 311 295 279 262 244 225 205 200 200 200 200 200 200 200 35 289 273 256 238 220 200 200 200 200 200 200 200 200 * 36 267 250 232 214 200 200 200 200 200 200 200 200 * 37 245 227 209 200 200 200 200 200 200 200 200 * 38 222 204 200 200 200 200 200 200 200 200 * 39 200 200 200 200 200 200 200 200 200 * 40 200 200 200 200 200 200 200 200 * 41 200 200 200 200 200 200 200 * 42 200 200 200 200 200 200 * 43 200 200 200 200 200 * 44 200 200 200 200 * 45 200 200 200 * 46 200 200 * 47 200 * 48 * *NO AMOUNT PAYABLE IF DEATH OCCURS IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR. - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ ISSUE AGE - ------------------------------------------------------------------------------------------------------------------------ ANNIVER- SARY 32 33 34 35 36 37 38 39 40 41 42 43 44 45 - ------------------------------------------------------------------------------------------------------------------------ 1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 4 968 967 966 964 963 962 960 958 957 955 952 950 947 944 5 935 933 931 929 926 923 920 917 913 909 905 900 895 889 6 903 900 897 893 889 885 880 875 870 864 857 850 842 833 7 871 867 862 857 852 846 840 833 826 818 810 800 789 778 8 839 833 828 821 815 808 800 792 783 773 762 750 737 722 9 806 800 793 786 778 769 760 750 739 727 714 700 684 667 10 774 767 759 750 741 731 720 708 696 682 667 650 632 611 11 742 733 724 714 704 692 680 667 652 636 619 600 579 556 12 710 700 690 679 667 654 640 625 609 591 571 550 526 500 13 677 667 655 643 630 615 600 583 565 546 524 500 474 444 14 645 633 621 607 593 577 560 542 522 500 476 450 421 389 15 613 600 586 571 556 538 520 500 478 455 429 400 368 333 16 581 567 552 536 518 500 480 458 435 409 381 350 316 278 - ----------------------------------------------------------------------------------------------------------------------- (Table Continued on Next Page)
AL 181 II-223
(Table Continued from Preceding Page) - ------------------------------------------------------------------------------------------------------------------------ ISSUE AGE - ------------------------------------------------------------------------------------------------------------------------ ANNIVER- SARY 32 33 34 35 36 37 38 39 40 41 42 43 44 45 - ------------------------------------------------------------------------------------------------------------------------ 17 $548 $533 $517 $500 $481 $462 $440 $417 $391 $364 $333 $300 $263 $222 18 516 500 483 464 444 423 400 375 348 318 286 250 211 200 19 484 467 448 429 407 385 360 333 304 273 238 200 200 200 20 452 433 414 393 370 346 320 292 261 227 200 200 200 200 21 419 400 379 357 333 308 280 250 217 200 200 200 200 * 22 387 367 345 322 296 269 240 208 200 200 200 200 * 23 355 333 310 286 259 231 200 200 200 200 200 * 24 323 300 276 250 222 200 200 200 200 200 * 25 290 267 241 214 200 200 200 200 200 * 26 258 233 207 200 200 200 200 200 * 27 226 200 200 200 200 200 200 * 28 200 200 200 200 200 200 * 29 200 200 200 200 200 * 30 200 200 200 200 * 31 200 200 200 * 32 200 200 * 33 200 * 34 * *NO AMOUNT PAYABLE IF DEATH OCCURS IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR. - ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------ ISSUE AGE - ------------------------------------------------------------------------------------------------------------------------ ANNIVER- SARY 46 47 48 49 50 51 52 53 54 55 - ------------------------------------------------------------------------------------------------------------------------ 1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 4 941 938 933 929 923 917 909 900 889 875 5 882 875 867 857 846 833 818 800 778 750 6 824 813 800 786 769 750 727 700 667 625 7 765 750 733 714 692 667 636 600 556 500 8 706 688 667 643 615 583 545 500 444 375 9 647 625 600 571 538 500 455 400 333 250 10 588 563 533 500 462 417 364 300 222 200 11 529 500 467 429 385 333 273 200 200 * 12 471 438 400 357 308 250 200 200 * 13 412 375 333 286 231 200 200 * 14 353 313 267 214 200 200 * 15 294 250 200 200 200 * 16 235 200 200 200 * 17 200 200 200 * 18 200 200 * 19 200 * 20 * *NO AMOUNT PAYABLE IF DEATH OCCURS IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR. - ------------------------------------------------------------------------------------------------------------------------ (Table Continued on Next Page)
AL 181 II-224 (Continued from Preceding Page) PAID-UP INSURANCE ON DEATH OF INSURED Paid-up Insurance on Life of Insured Spouse.--The Insured might die (1) in the term period for this Benefit; (2) while this contract is in force and not in default past the last day of the grace period; and (3) while the insured spouse is living. In this case, the insurance on the life of the insured spouse under the Benefit will become paid-up term insurance for decreasing amounts. We will compute these amounts from the Table of Amounts of Insurance. While the paid-up insurance is in effect, the contract will remain in force until the end of the term period for the Benefit. The paid-up insurance will have cash values but no loan value. If this Benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. We base this net cash value on the insured spouse's age and sex. The insured spouse's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year. We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them. CONVERSION TO ANOTHER PLAN OF INSURANCE Right to Convert.--While the Insured is living, you may be able to exchange this Benefit for a new contract of life insurance on the life of the insured spouse in either this company or The Prudential Insurance Company of America. In any of these paragraphs, when we use the phrase the company we mean whichever of these companies may issue the new contract. And where we use the phrase new contract we mean the contract for which the Benefit may be exchanged. You will not have to prove that the insured spouse is insurable. Conditions.--Your right to make this exchange is subject to all these conditions: (1) The amount we would have paid under this Benefit if the insured spouse had died just before the contract date of the new contract must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications. (2) You must ask for the exchange in writing and in a form that meets our needs. (3) You must send this contract to us to be endorsed. (4) We must have your request and the contract at our Service Office while the Benefit is in force and at least five years before the end of its term period. The new contract will not take effect unless the premium for it is paid while the insured spouse is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this Benefit ended just before that contract date. Contract Date.--The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be less than five years before the end of the term period for the Benefit. And it may not be more than 31 days before we have your request at our Service Office. Contract Specifications.--The new contract will be in the standard or equivalent rating class. The company will set the issue age and the premiums for the new contract in accord with its regular rules in use on the date of the new contract. The new contract may call for annual premiums. If the company agrees, you will be able to have premiums fall due more often. The contract may be any one of the following: 1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued by The Prudential Insurance Company of America. Its face amount will be the amount you ask for in your request. But it cannot be less than $10,000 or more than 80% of the amount we would have paid under this Benefit if the insured spouse had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500, the amount we would have paid must be at least $12,500 for this exchange to be possible.) 2. A contract like the one to which this Benefit is attached, if Pruco Life Insurance Company is regularly issuing such contracts at that time. Its face amount will be the amount you ask for in your request. But it cannot be less than $50,000 or more than 80% of the amount we would have paid under the Benefit if the insured spouse had died just before the contract date of the new contract. (Since $50,000 is 80% of $62,500, the amount we would have paid must be at least $62,500 for this exchange to be possible.) (Continued on Next Page) AL 181 II-225 (Continued from Preceding Page) 3. A contract of life insurance of a kind regularly being issued by Pruco Life Insurance Company at that time for $25,000 or more. Its face amount will be the amount you ask for in your request. But it cannot be less than $25,000 or more than 80% of the amount we would have paid under the Benefit if the insured spouse had died just before the contract date of the new contract. (Since $25,000 is 80% of $31,250, the amount we would have paid must be at least $31,250 for this exchange to be possible.) The new contract will not have Supplementary Benefits other than as we describe in this and in the next paragraph. If the company would include in other contracts like the new contract a benefit for waiving or paying premiums in the event of disability, here is what the company will do. Even though this contract does not have such a benefit on the life of the insured spouse, the company will put it in the new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that the company puts in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts the company would regularly issue on the same plan and for the same rating class, amount, issue age and sex. No premium will be waived or paid by us for disability under the new contract unless the disability started on or after its contract date. And no premium will be waived or paid by us for disability under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if scheduled premiums have been paid by us under this contract. Changes.--You may be able to have this Benefit changed to a new contract of life insurance other than in accord with the requirements for exchange that we state above. But any change may be made only if the company consents, and will be subject to conditions and charges that are then determined. MISCELLANEOUS PROVISIONS Ownership and Control.--Unless we endorse this contract to say otherwise, while the Insured is living the owner alone may exercise all ownership and control of this contract. This includes, but is not limited to, these rights: (1) to assign the contract; and (2) to change any subsequent owner. A request for such a change must be in writing to us at our Service Office and in a form that meets our needs. The change will take effect only when we endorse the contract to show it. Unless we endorse this contract to say otherwise: (1) while any insurance is in force after the Insured's death, the owner of the contract will be the insured spouse; and (2) the owner alone will be entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. But any insurance payable upon the Insured's death will be payable to the beneficiary for that insurance. Beneficiary.--The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured. Unless we endorse this contract to say otherwise, the beneficiary for insurance payable upon the death of the insured spouse will be the Insured if living, otherwise the estate of the insured spouse. The beneficiary for insurance payable upon the death of the insured spouse may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Service Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the insured spouse is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. Misstatement of Age or Sex.--If the insured spouse's stated age or sex or both are not correct, we will change each benefit and any amount payable to what the premiums and charges would have bought for the correct age and sex. The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the insured spouse would attain a certain age on that date. If we find that the issue age for the insured spouse was wrong, we will correct that date. Suicide Exclusion.--If the insured spouse, whether sane or insane, dies by suicide within the period which we state in the Suicide Exclusion under General Provisions and while this Benefit is in force, we will not pay the amount we describe under Benefit above. Instead, we will pay no more than the sum of the monthly charges deducted for this Benefit to the date of death divided by .925. We will make that payment in one sum. (Continued on Next Page) AL 181 II-226 EX-99.1(A)(13)(DD) 39 ENDORSEMENTS EXHIBIT 1.A.(13)(dd) ENDORSEMENTS (Only we can endorse this contract.) This endorsement is attached to and made a part of this contract on the contract date: Any reference, in any provision of this contract, to the sex of any person will be ignored except for the purpose of identification. For any settlement payable for the lifetime of one or more payees, the female rates we show in the contract will apply to both male and female payees. The provision of this policy entitled "Basis of Computation" is replaced by the following: BASIS OF COMPUTATION Mortality Tables Described.--Except for what we say in the next paragraph, we base all net premiums and net values to which we refer in this contract on the Insured's issue age and on the length of time since the contract date. We use the Commissioners 1980 Standard Ordinary Mortality Table B and continuous functions based on age last birthday. For extended insurance, we base net premiums and net value on the Commissioners 1980 Extended Term Insurance Table B. Interest Rate.--For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year. Exclusions.--When we compute net values we exclude the value of any Supplementary Benefits and any other extra benefits added by rider to this contract. Values After 20 Contract Years.--Tabular cash values not shown on page 4 will be the net level reserves, taking into account modified premiums. To compute them, we will use the mortality table and interest rate we describe above. There will be the same exclusions. Minimum Legal Values.--The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits. The provision of this contract entitled AUTOMATIC BENEFIT is replaced at issue by the following: AUTOMATIC BENEFIT When the contract is in default, it will stay in force as reduced paid-up insurance. Pruco Life Insurance Company, By Isabelle L. Kirchner ---------------------------------- Secretary PLI 251--86 II-227 EX-99.1(A)(13)(EE) 40 SUPP. RENEWABLE ONE MONTH TERM INSURANCE EXHIBIT 1.A.(13)(ee) SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE ONE MONTH TERM INSURANCE Monthly Term Insurance.--Under this rider, we will provide monthly term insurance on the Insured's life. We will do this during any Contract Month which begins on a Monthly Date on which the contract is not in default. You will not have to prove to us that the Insured is insurable to continue this insurance from month to month provided the rider has not ended as described in the Termination section. We make these promises subject to all the provisions of this rider and of the rest of this contract. The amount of insurance provided by this rider is included in the Basic Amount as modified by this rider (see Table of Basic Amounts). The insurance for any contract month will start on the Monthly Date which begins that Contract Month; it will end at the end of the day before the next Monthly Date. We will deduct the charge for the insurance we provide under this rider from the contract fund. The charge will be no more than the amount we describe under Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under Current Rates. TABLE OF AMOUNTS OF INSURANCE Tabular Amounts.--We show here the tabular amount of insurance for each $1,000 of Initial Amount of Term Insurance if death occurs in the contract year that begins when the Insured is the attained age shown. The tabular amount of insurance at any time is equal to the appropriate amount shown below times the number of $1,000's of Initial Amount of Term Insurance, including any fraction, shown on the Contract Data page(s). Example: Suppose the Initial Amount of Term Insurance is $100,500. The number of $1,000's of Initial Amount of Term Insurance is 100.5. The tabular amount of insurance is $100,500 at attained age 70 and $50,250 at attained age 86.
- ----------------------------------------------------------------------------------------------------------- ATTAINED AGE TABULAR AMOUNT PAYABLE ATTAINED AGE TABULAR AMOUNT PAYABLE - ----------------------------------------------------------------------------------------------------------- 80 and below 1000 90 300 81 900 91 250 82 800 92 200 83 700 93 175 84 600 94 150 85 550 95 125 86 500 96 100 87 450 97 75 88 400 98 50 89 350 99 25 - -----------------------------------------------------------------------------------------------------------
(Continued on Next Page) AL 500A II-228 (Continued from Preceding Page) Target Amount.--We compute the Target Amount on each Monthly Date. It will be the larger of the amounts in (1) and (2), where (1) is the tabular amount of insurance under this rider; (2) is the amount of insurance, but not more than the Initial Amount of Term Insurance, that can be provided at then current rates (which we describe under Current Rates) by a charge equal to the maximum guaranteed charge for the tabular amount of insurance under this rider. Rider Premiums and Charges.--We show the premiums for this rider in the Contract Data pages, and these premiums are included in the Schedule of Premiums shown in these pages. From each premium payment, we make the deductions shown under Schedule of Expense Charges From Premium Payments in these pages; the balance is the invested premium amount which is added to the contract fund. We will deduct from the contract fund on each Monthly Date, for the insurance we provide under this rider, a charge for any portion of the Basic Amount which exceeds the contract fund and for which we do not otherwise charge under the terms of the contract or under the terms, of any extra benefit other than this rider. Maximum Guaranteed Charges.--The maximum guaranteed charges per unit of Target Amount are included in the Schedule of Monthly Deductions From Contract Fund in the Contract Data pages. These rates apply to the insurance we provide under this rider. The amount we deduct on a Monthly Date for the Target Amount will not be more than this charge multiplied by the number of $1,000's of Initial Amount of Term Insurance. Current Rates.--From time to time we will set the current rates for the insurance we provide under this rider. They will be based on the Insured's rating class, sex and attained age. They will not be more than the maximum guaranteed rates. We will set rates based on our expectations as to future experience. At least once every five years, but not more often than once a year, we will consider the need to change the rates. We will change them only if we do so for all riders like this one dated in the same year as this one. MISCELLANEOUS PROVISIONS General.--Where there is no conflict with this rider, the provisions of this contract will also apply to the rider. Death Benefit.--While this rider remains in force, the following two changes to the contract apply. The definition of the insurance amount is amended by deleting item (2), "the contract fund divided by the net single premium per $1 at the Insured's attained age on that date." The Table of Basic Amounts in the contract is replaced with the table that follows. We have made these changes so the contract and this rider together will comply with Section 7702 of the Internal Revenue Code of 1954 as amended. AL 500A II-229 (Continued from Preceding Page)
- ----------------------------------------------------------------------------------------------------------------------------- TABLE OF BASIC AMOUNTS - ----------------------------------------------------------------------------------------------------------------------------- When the proceeds arise from the Insured's death: - ----------------------------------------------------------------------------------------------------------------------------- And The Contract Is In Force: Then The Basic Amount Is: And We Adjust The Basic Amount For: - ----------------------------------------------------------------------------------------------------------------------------- and not in default past its the larger of: (1) the insurance amount, contract debt, plus any charges due in days of grace plus the Target Amount described in rider the days of grace. AL 500A; and (2) the contract fund divided by the net single premium per $1 at the Insured's attained age; plus the amount of any extra benefits arising from the Insured's death other than those provided under rider AL 500A. - ----------------------------------------------------------------------------------------------------------------------------- as reduced paid-up insurance the amount of reduced paid-up insurance contract debt. - ----------------------------------------------------------------------------------------------------------------------------- as extended insurance the amount of term insurance, if the nothing. Insured dies in the term; otherwise zero - -----------------------------------------------------------------------------------------------------------------------------
Termination.--This rider will end on the earliest of: 1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract; 2. the end of the day before the anniversary on which the Insured's attained age is 100; 3. the date the contract is surrendered under its Cash Value Option; and 4. the date the contract ends for any other reason. Further, if you ask us in writing and we agree, we will cancel the rider as of the first Monthly Date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly. Rider attached to and made a part of this contract on the Contract Date Pruco Life Insurance Company By ISABELLE L. KIRCHNER Secretary AL 500A II-230 EX-99.3C 41 OPINION & CONSENT/KIRSCH Exhibit 3 April 25, 1997 Pruco Life Insurance Company 213 Washington Street Newark, New Jersey 07102-2992 Gentlemen: In my capacity as Chief Legal Officer of Pruco Life Insurance Company ("Pruco Life"), I have reviewed the establishment on January 13, 1984 of Pruco Life Variable Appreciable Account (the "Account")by the Executive Committee of the Board of Directors of Pruco Life as a separate account for assets applicable to certain variable life insurance contracts, pursuant to the provisions of Section 20-651 of the Arizona Insurance Code. I am responsible for oversight of the preparation and review of the Registration Statement on Form S-6, as amended, filed by Pruco Life with the Securities and Exchange Commission (Registration No. 2-89558) under the Securities Act of 1933 for the registration of certain variable appreciable life insurance contracts issued with respect to the Account. I am of the following opinion: (1) Pruco Life was duly organized under the laws of Arizona and is a validly existing corporation. (2) The Account has been duly created and is validly existing as a separate account pursuant to the aforesaid provisions of Arizona law. (3) The portion of the assets held in the Account equal to the reserve and other liabilities for variable benefits under the variable appreciable life insurance contracts is not chargeable with liabilities arising out of any other business Pruco Life may conduct. (4) The variable appreciable life insurance contracts are legal and binding obligations of Pruco Life in accordance with their terms. In arriving at the foregoing opinion, I have made such examination of law and examined such records and other documents as I judged to be necessary or appropriate. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ - --------------------------- Clifford E. Kirsch II-231 EX-99.6C 42 OPINION & CONSENT/SCHIZ Exhibit 6 April 25, 1997 Pruco Life Insurance Company 213 Washington Street Newark, New Jersey 07102-2992 To Pruco Life Insurance Company: This opinion is furnished in connection with the registration by Pruco Life Insurance Company of variable appreciable life insurance contracts ("Contracts") under the Securities Act of 1933. The prospectus included in Post-Effective Amendment No. 26 to Registration Statement No. 2-89558 on Form S-6 describes the Contracts. I have reviewed the two Contract forms and I have participated in the preparation and review of the Registration Statement and Exhibits thereto. In my opinion: (1) The illustrations of cash surrender values and death benefits included in the section of the prospectus entitled "Illustrations", based on the assumptions stated in the illustrations, are consistent with the provisions of the respective forms of the Contracts. The rate structure of the Contracts has not been designed so as to make the relationship between premiums and benefits, as shown in the illustrations, appear more favorable to a prospective purchaser of a Contract for male age 35 than to prospective purchasers of Contracts on males of other ages or on females. (2) The illustration of the effect of a Contract loan on the cash surrender value included in the section entitled "Contract Loans", based on the assumptions stated in the illustration, is consistent with the provisions of the Form A Contract. (3) The illustrations of the effect of an increase in the Contract fund on the increase in insurance amount shown in the section entitled "Revised Contracts" (How a Contract's Death Benefit will Vary") are consistent with the provisions of the Revised Form A and Form B Contracts. I hereby consent to the use of this opinion as an exhibit to the Registration Statement and to the reference to my name under the heading "Experts" in the prospectus. Very truly yours, /s/ - ------------------------------ Pam A. Schiz, FSA, MAAA Actuarial Director The Prudential Insurance Company of America II-232 EX-27 43 FINANCIAL DATA SCHEDULE
6 1000 YEAR DEC-31-1996 DEC-31-1996 2,129,061 2,618,267 0 0 0 2,618,267 0 0 0 0 0 0 144,714 0 0 0 0 0 0 2,618,267 81,449 0 195,579 10,495 70,954 21,275 43,283 331,091 0 0 0 0 0 0 0 279,968 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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