497 1 ppicdscsupp.htm ppicdscsupp.htm
 
PRUCO LIFE INSURANCE COMPANY
PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT

PRUDENTIAL PREMIER® INVESTMENT VARIABLE ANNUITY
 
 
Supplement dated July 14, 2016
To
Prospectuses dated April 29, 2016

 
This Prospectus Supplement (this “Supplement”) should be read and retained with the prospectus for the Prudential Premier® Investment Variable Annuity.  This Supplement is intended to update certain information in the Annuity Prospectus you own and is not intended to be a prospectus or offer for any other Annuity that you do not own.  Defined terms used herein and not otherwise defined herein shall have the meanings given to them in your Prospectus and Statement of Additional Information (SAI).  If you would like another copy of the current prospectus or SAI, please call us at 1-888-PRU-2888, or visit www.prudentialannuities.com.
 
We are issuing this Supplement to reflect changes to the Contingent Deferred Sales Charge (CDSC) schedule for Prudential Premier® Investment Variable Annuity B Series Applications signed on or after August 8, 2016, and to revise Appendix B for Prudential Premier® Investment Variable Annuity B Series Applications signed on or after August 8, 2016.
 
 
 
 
I.  
For B Series Annuity Applications signed on or after August 8, 2016, the table captioned, “Annuity Owner Transaction Expenses” in the section captioned, “Summary of Contract Fees and Charges” is revised and restated as follows:
 
SUMMARY OF CONTRACT FEES AND CHARGES
 
Below is a description of fees and expenses that you will pay when buying, owning and surrendering one of the Annuities. Also described are fees and expenses at the time you surrender an Annuity, take certain partial withdrawals or transfer Account Value between Investment Options. State premium taxes also may be deducted. Important additional information about these fees and expenses is contained in “Fees, Charges and Deductions” later in this Prospectus.

     
   
ANNUITY OWNER TRANSACTION EXPENSES
 
CONTINGENT DEFERRED SALES CHARGE (CDSC) 1
Age of Purchase Payment Being Withdrawn
Percentage Applied Against Purchase Payment being Withdrawn
 
B SERIES
C SERIES
Less than 1 year old
7.0%
  
1 year old or older, but not yet 2 years old
7.0%
  
2 years old or older, but not yet 3 years old
6.0%
  
3 years old or older, but not yet 4 years old
6.0%
None
4 years old or older, but not yet 5 years old
5.0%
  
5 years old or older
0.0%
  
 
 
Transfer Fee 2 : $10 (currently, after the 20 th transfer each Annuity Year)
 
Tax Charge: 0% - 3.5%
 
 
1   The years referenced in the CDSC table above refer to the length of time since a Purchase Payment was made (i.e. the age of the Purchase Payment). CDSCs are applied against the Purchase Payment(s) being withdrawn. The appropriate percentage is multiplied by the Purchase Payment(s) being withdrawn. Purchase Payments are withdrawn on a “first-in, first-out” basis.
 
 
2   Transfers in connection with a rebalancing or dollar cost averaging program do not count toward the 20 free transfers in an Annuity Year.
 

 
 
 

 
 
II.  
 Expense Examples
 
In the section captioned “Expense Examples”, the following Expense Examples for the B Series and C Series are added:
 
For Applications signed on or after August 8, 2016, Expense Examples are provided as follows:
                 
B Series
 
If you surrender your annuity at the end of the applicable time period:
If you do not surrender your annuity at the end of the applicable time period:
     
 
1 yr
3 yrs
5 yrs
10 yrs
1 yr
 3 yrs
 5 yrs
10 yrs
Assuming maximum fees and expenses of
any of the portfolios available with the benefit
   $1,629
   $3,280
   $4,799
   $7,817
    $929
   $2,680
   $4,299
   $7,817
Assuming minimum fees and expenses of
any of the portfolios available with the benefit
     $955
   $1,374
   $1,807
   $2,706
    $255
    $744
   $1,307
   $2,706

                 
C Series
 
If you surrender your annuity at the end of the applicable time period:
If you do not surrender your annuity at the end of the applicable time period:
     
 
1 yr
   3 yrs
    5 yrs
10 yrs
 1 yr
  3 yrs
5 yrs
10 yrs
Assuming maximum fees and expenses of
any of the portfolios available with the benefit
    $952
  $2,743
   $4,393
   $7,955
 $952
 $2,743
   $4,393
   $7,955
Assuming minimum fees and expenses of any of the portfolios available with the benefit
    $280
    $848
   $1,431
   $2,952
 $280
   $848
   $1,431
   $2,952
 
III.  
In the section captioned “Fees, Charges and Deductions”, the paragraphs under “EXAMPLES” are replaced in their entirety as follows:
 
EXAMPLES
 
These examples are designed to show you how the CDSC is calculated. They do not take into account any other fees and charges. The examples illustrate how the CDSC would apply to reduce your Account Value based on the timing and amount of your withdrawals. They also illustrate how a certain amount of your withdrawal, the “Free Withdrawal Amount,” is not subject to the CDSC. The Free Withdrawal Amount is equal to 10% of all Purchase Payments currently subject to a CDSC in each year and is described in more detail in “Access to Account Value,” later in this Prospectus.
 
Assume you purchase your B Series Annuity with a $75,000 initial Purchase Payment and you make no additional Purchase Payments for the life of your Annuity.
 
Example 1
 
Assume the following:
 
·  
two years after the purchase, your Unadjusted Account Value is $85,000 (your Purchase Payment of $75,000 plus $10,000 of investment gain);
 
·  
the free withdrawal amount is $7,500 (10% of $75,000);
 
·  
the applicable CDSC is 6%.
 
If you request a withdrawal of $50,000, $7,500 is not subject to the CDSC because it is the free withdrawal amount. The remaining amount of your withdrawal is subject to the 6% CDSC. The CDSC in this example is 6% of $42,500, or $2,550.
 
Gross Withdrawal or Net Withdrawal . You can request either a gross withdrawal or a net withdrawal. In a gross withdrawal, you request a specific withdrawal amount with the understanding that the amount you actually receive is reduced by any applicable CDSC and/or tax withholding. In a net withdrawal, you request a withdrawal for an exact dollar amount with the understanding that any applicable deduction for CDSC and/or tax withholding is taken from your Unadjusted Account Value. This means that an amount greater than the amount of your requested withdrawal will be deducted from your Unadjusted Account Value. To make sure that you receive the full amount requested, we calculate the entire amount, including the amount generated due to the CDSC or tax withholding that will need to be withdrawn. We then apply the CDSC or tax withholding to that entire amount. As a result, you will pay a greater CDSC or have more tax withheld if you elect a net withdrawal.
 
·  
If you request a gross withdrawal, the amount of the CDSC will reduce the amount of the withdrawal you receive. In this case, the CDSC would equal $2,550 (($50,000 – the free withdrawal amount of $7,500 = $42,500) x 0.06 = $2,550). You would receive $47,450 ($50,000 – $2,550). To determine your remaining Unadjusted Account Value after your withdrawal, we reduce your initial Unadjusted Account Value by the amount of your requested withdrawal. In this case, your Unadjusted Account Value would be $35,000 ($85,000 – $50,000).
 
·  
If you request a net withdrawal, we first determine the entire amount that will need to be withdrawn in order to provide the requested payment. We do this by first subtracting the free withdrawal amount and dividing the resulting amount by the result of 1 minus the surrender charge. Here is the calculation: $42,500/(1 – 0.06) = $45,212.77. This is the total amount to which the CDSC will apply. The amount of the CDSC is $2,712.77. Therefore, in order to for you to receive the full $50,000, we will need to deduct $52,712.77 from your Unadjusted Account Value, resulting in remaining Unadjusted Account Value of $32,287.23.
 
Example 2
 
Assume the following:
 
·  
you took the withdrawal described above as a gross withdrawal;
 
·  
two years after the withdrawal described above, the Unadjusted Account Value is $48,500 ($35,000 of remaining Unadjusted Account Value plus $13,500 of investment gain);
 
·  
the free withdrawal amount is still $7,500 because no additional Purchase Payments have been made and the Purchase Payment is still subject to a CDSC; and
 
·  
the applicable CDSC in Annuity Year 4 is now 5%.
 
If you now take a second gross withdrawal of $10,000, $7,500 is not subject to the CDSC because it is the free withdrawal amount. The remaining $2,500 is subject to the 5% CDSC or $125 and you will receive $9,875.
 
On the day that we process your request for a withdrawal, we calculate a CDSC based on any Purchase Payments not previously withdrawn. If your Account Value has declined in value, or if you had made prior withdrawals that reduced your Account Value, the dollar amount of your requested withdrawal may represent, as a percentage of the Purchase Payments being withdrawn, a dollar amount that is greater than your Account Value. As CDSC is calculated as a percentage of Purchase Payments being withdrawn, withdrawals in certain scenarios will result in a higher dollar charge than if CDSC was calculated as a percentage of your Account Value.
 
Please note that if you elect the Tax Efficient Annuity Payout Option, net withdrawals are not available of your Tax Efficient Annuity Amount. All tax efficient annuity payments will be gross distributions.
 
We may waive any applicable CDSC under certain circumstances described below in “Exceptions/Reductions to Fees and Charges.”

 
 
IV. Appendix B is hereby replaced in its entirety by the following for applications signed on or after August 8, 2016:

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APPENDIX B – SELECTING THE VARIABLE ANNUITY THAT’S RIGHT FOR YOU
 
Pruco Life Insurance Company offers two deferred variable annuity products in this Prospectus. Both annuities, (B and C Series) have different features and benefits that may be appropriate for you based on your individual financial situation and how you intend to use the Annuity. Both of these Annuities may be available to you, depending on factors such as the broker-dealer through which your Annuity was sold. You can verify which of these Annuities is available to you by speaking to your Financial Professional or calling 1-888-PRU-2888.
 
Among the factors you should consider when choosing which annuity product and benefit may be most appropriate for your individual needs are the following:
 
·  
Your age;
 
 
·  
The amount of your initial Purchase Payment and any planned future Purchase Payments into the Annuity;
 
·  
How long you intend to hold the Annuity (also referred to as “investment time horizon”);
 
·  
Your desire to make withdrawals from the Annuity and the timing of those withdrawals;
 
·  
Your investment objectives;
 
·  
The guarantees that an optional benefit may provide; and
 
·  
Your desire to minimize costs and/or maximize return associated with the Annuity.
 
You can compare the costs of the B Series and C Series by examining the section in this prospectus entitled “Summary of Contract Fees and Charges”. There are trade-offs associated with the costs and benefits provided by both of the Series. The B Series has Contingent Deferred Sales Charge (CDSC) associated with it, while the C Series does not. The B Series provides a higher Surrender Value in long-term scenarios than the C Series. Because the C Series does not have a CDSC, it provides a higher Surrender Value in short-duration scenarios. In choosing which Series to purchase, you should consider the features and the associated costs that offer the greatest value to you including the different ongoing fees and charges you pay to stay in the Annuity.
 
The following chart outlines some of the different features for each Annuity sold through this Prospectus. The availability of an optional benefit, such as the one noted in the chart, will increase the total cost of the Annuity. You should carefully consider which features you plan to use when selecting your Annuity, and the impact of such features in relation to your investment objectives and which share class may be most appropriate for you.
 
To demonstrate the impact of the various expense structures, the hypothetical examples on the following pages reflect the Account Value and Surrender Value of each Annuity over a variety of holding periods. These charts reflect the impact of different hypothetical rates of return and the comparable value of each of the Annuities (which reflects the charges associated with each Annuity) under the assumptions noted.
 
Pruco Comparison.
 
Below is a summary of the Prudential Premier ® Investment Variable Annuity SM B and C Series sold through this Prospectus. Your registered Financial Professional can provide you with the summary prospectuses or statutory prospectuses for the underlying Portfolios and can guide you through “Selecting the Annuity That’s Right For You” and help you decide upon the Annuity that would be most advantageous for you given your individual needs. Please read the Prospectus carefully before investing. The Company does not make recommendations or provide investment advice.
 
B-1
 


 

 


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Annuity Comparison
B Series
C Series
Minimum Investment
$10,000
$10,000
Maximum Issue Age
85
85
Maximum Issue Age (Return of Purchase Payments Death Benefit)
79
79
Contingent Deferred Sales Charge Schedule (Based on date of each purchase payment) May vary by state
5 Years
(7%, 7%, 6%, 6%, 5%, 0%)
None
Account Value Based Insurance Charge
0.55%
0.68%
Premium Based Insurance Charge (Annual Equivalent)
0.55%
0.67%
Optional Return of Purchase Payments Death Benefit (Total Annual Charge)
(For Annuities issued prior to August 24, 2015, the Premium Based Charge is 0.15% and the Account Value Base Charge is 0.15% for both the B Series and the C Series.)
0.17% Premium Based and 0.18% Account Value Based
0.17% Premium Based and 0.18% Account Value Based
Annuity Comparison
B Series
C Series
Annual Maintenance Fee
Lesser of:
 
· $50, or
 
· 2% of Unadjusted Account Value
 
· Waived for Purchase Payments equal to, or greater than $100,000
Lesser of:
 
· $50, or
 
· 2% of Unadjusted Account Value
 
· Waived for Purchase Payments equal to, or greater than $100,000
MVA Options
6 and 12 month
DCA MVA options;
6 and 12 month
DCA MVA options;
Variable Investment Options (For Annuities issued prior to August 24, 2015, not all options available if you elect the Return of Purchase Payments Death Benefit)
Advanced Series Trust
BlackRock Variable Series Funds, Inc.
JP Morgan Insurance Trust
Advanced Series Trust
BlackRock Variable Series Funds, Inc.
JP Morgan Insurance Trust
Basic Death Benefit
Unadjusted Account Value
Unadjusted Account Value
Optional Death Benefit (Return of Purchase Payments Death Benefit)
Greater of:
 
· Purchase Payments minus proportional withdrawals;
and
 
· Unadjusted Account Value
Greater of:
 
· Purchase Payments minus proportional withdrawals; and
 
· Unadjusted Account Value
 
HYPOTHETICAL ILLUSTRATION
 
The following examples outline the value of each Annuity as well as the amount that would be available to an investor as a full surrender. We assume the surrender is taken on the day immediately prior to the surrender charge change that precedes the Annuity Anniversary specified (or, two days before the Annuity Anniversary specified). The “Annuity Anniversary” is the anniversary of the Issue Date of the Annuity. The values shown below are based on the following assumptions: An initial investment of $100,000 is made into each Annuity earning a gross rate of return of 0% and 6% and 10%, respectively.
 
The examples further assume that no additional Purchase Payments or withdrawals are made from the Annuity. The hypothetical gross rates of return are reduced by the arithmetic average of the fees and expenses of the applicable underlying Portfolios (which is 1.48% for both Series) as of December 31, 2015 and the charges deducted from the Annuity at the Separate Account level. The arithmetic average of all fund expenses is computed by adding Portfolio management fees, 12b-1 fees and other expenses of all the underlying Portfolios and then dividing by the number of Portfolios. For purposes of the illustrations, we do not reflect any expense reimbursements or expense waivers that might apply and are described in the “Summary of Contract Fees and Charges.” The Separate Account level charge refers to the Account Value Based Insurance Charge. The Premium Based and the Account Value Based Insurance Charges are included in the following examples.
 
The Account Value and Surrender Value are further reduced by the Annual Maintenance Fee, if applicable.
 
The Account Value assumes no surrender, while the Surrender Value assumes a 100% surrender two days prior to the Annuity Anniversary, as described above, therefore reflecting the CDSC applicable to that Annuity Year. Note that a withdrawal on the Annuity Anniversary, or the day before the Annuity Anniversary, would be subject to the CDSC applicable to the next Annuity Year, which may be lower. The CDSC is calculated based on the date that the Purchase Payment was made and for purposes of these examples, we assume that a single Purchase Payment of $100,000 was made on the Issue Date. The values that you actually experience under an Annuity will be different from what is depicted here if any of the assumptions we make here differ from your circumstances, however the relative values for each Annuity reflected below will remain the same. (We will provide your Financial Professional with a personalized illustration upon request).
 
B-2
 


 

 


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B Series
                  
                           
   
0% Gross Rate of Return
6% Gross Rate of Return
10% Gross Rate of Return
            
   
All years
-2.78%
All years
3.47%
All years
7.50%
            
 
Yr
Annuity
Value
Surrender
Value
Annuity
Value
Surrender
Value
Annuity Value
Surrender
Value
            
 
1
97,575
90,575
103,426
96,426
107,326
100,326
            
 
2
95,059
88,059
106,852
99,852
115,095
108,095
            
 
3
92,594
86,594
110,409
104,409
123,468
117,468
            
 
4
90,179
84,179
114,105
108,105
132,493
126,493
            
 
5
87,813
82,813
117,942
112,942
142,219
137,219
            
 
6
85,494
85,494
121,928
121,928
152,701
152,701
            
 
7
83,223
83,223
126,067
126,067
163,999
163,999
            
 
8
80,997
80,997
130,366
130,366
176,175
176,175
            
 
9
78,816
78,816
134,831
134,831
189,298
189,298
            
 
10
76,680
76,680
139,468
139,468
203,441
203,441
            
 
11
74,586
74,586
144,284
144,284
218,684
218,684
            
 
12
72,535
72,535
149,286
149,286
235,113
235,113
            
 
13
70,526
70,526
154,480
154,480
252,819
252,819
            
 
14
68,557
68,557
159,875
159,875
271,901
271,901
            
 
15
66,627
66,627
165,478
165,478
292,468
292,468
            
 
16
64,737
64,737
171,297
171,297
314,634
314,634
            
 
17
62,885
62,885
177,341
177,341
338,523
338,523
            
 
18
61,071
61,071
183,618
183,618
364,270
364,270
            
 
19
59,293
59,293
190,136
190,136
392,019
392,019
            
 
20
57,551
57,551
196,906
196,906
421,926
421,926
            
 
21
55,844
55,844
203,937
203,937
454,159
454,159
            
 
22
54,172
54,172
211,240
211,240
488,897
488,897
            
 
23
52,534
52,534
218,824
218,824
526,337
526,337
            
 
24
50,929
50,929
226,700
226,700
566,689
566,689
            
 
25
49,356
49,356
234,881
234,881
610,178
610,178
            
                           
 
Assumptions:
                      
 
a. $100,000 initial investment
                    
 
b. Fund Expenses = 1.48%
                    
 
c. No optional benefits
                      
 
d. Annuity for which application was signed on or after August 8, 2016
                  
 
e. Surrender value is accounted for 2 days prior to contract anniversary
                
                           
 
The shaded values indicate the highest Surrender Values in that year based on the stated assumptions. Assuming a 0%, 6% and 10% gross annual return, the B-Series has the highest Surrender Value starting in Annuity Year 6.
 
B-3
 


 


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C Series
                  
                           
   
0% Gross Rate of Return
6% Gross Rate of Return
10% Gross Rate of Return
            
   
All years
-3.12%
All years
3.24%
All years
7.30%
            
 
Yr
Annuity
Value
Surrender
Value
Annuity
Value
Surrender
Value
Annuity Value
Surrender
Value
            
 
1
97,359
97,359
103,199
103,199
107,092
107,092
            
 
2
94,605
94,605
106,354
106,354
114,567
114,567
            
 
3
91,910
91,910
109,626
109,626
122,613
122,613
            
 
4
89,273
89,273
113,019
113,019
131,273
131,273
            
 
5
86,692
86,692
116,540
116,540
140,594
140,594
            
 
6
84,168
84,168
120,191
120,191
150,627
150,627
            
 
7
81,697
81,697
123,978
123,978
161,426
161,426
            
 
8
79,280
79,280
127,905
127,905
173,049
173,049
            
 
9
76,914
76,914
131,979
131,979
185,560
185,560
            
 
10
74,599
74,599
136,205
136,205
199,026
199,026
            
 
11
72,335
72,335
140,588
140,588
213,520
213,520
            
 
12
70,118
70,118
145,134
145,134
229,121
229,121
            
 
13
67,950
67,950
149,849
149,849
245,913
245,913
            
 
14
65,828
65,828
154,739
154,739
263,988
263,988
            
 
15
63,752
63,752
159,812
159,812
283,442
283,442
            
 
16
61,720
61,720
165,073
165,073
304,381
304,381
            
 
17
59,732
59,732
170,530
170,530
326,919
326,919
            
 
18
57,787
57,787
176,190
176,190
351,178
351,178
            
 
19
55,884
55,884
182,061
182,061
377,289
377,289
            
 
20
54,021
54,021
188,150
188,150
405,394
405,394
            
 
21
52,199
52,199
194,466
194,466
435,645
435,645
            
 
22
50,415
50,415
201,016
201,016
468,205
468,205
            
 
23
48,671
48,671
207,811
207,811
503,251
503,251
            
 
24
46,963
46,963
214,858
214,858
540,973
540,973
            
 
25
45,292
45,292
222,168
222,168
581,575
581,575
            
                           
 
Assumptions:
                      
 
a. $100,000 initial investment
                    
 
b. Fund Expenses = 1.48%
                    
 
c. No optional benefits
                      
 
d. Annuity for which application was signed on or after August 8, 2016
                  
 
e. Surrender value is accounted for 2 days prior to contract anniversary
                
                                                                   
 
The shaded values indicate the highest Surrender Values in that year based on the stated assumptions. Assuming a 0%, 6% and 10% gross annual return, the C-Series has the highest Surrender Value in Annuity Years 1 through 5.
 
B-4
 


 

 
THIS SUPPLEMENT SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.

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