The Prudential Annuities unit at Prudential Financial Inc. has changed the Highest Daily optional variable annuity benefits program.
The unit includes Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey and Prudential Annuities Life Assurance Corp.
Prudential, Newark, N.J., sells the Highest Daily option with variable annuities from the Prudential issuing companies.
The new versions, the Highest Daily Lifetime 7 Plus and Spousal Highest Daily Lifetime 7 Plus editions, will replace the Highest Daily Lifetime Seven and Spousal Highest Daily Lifetime Seven editions in all states where they have been approved, Prudential says.
If VA holders avoid taking lifetime withdrawals, investors are guaranteed a minimum “Protected Withdrawal Value” of 200% of the account value at 10 years, 400% at 20 years or 600% at 25 years.
If the minimum guarantee exceeds an investor’s current Protected Withdrawal Value, that minimum becomes the new basis for lifetime income and will continue to grow at a compounded 7% rate until the first Lifetime Withdrawal, Prudential says.
“The Protected Withdrawal Value is available through withdrawals; it is not available as a lump sum,” Prudential says.
Prudential also changed the step-up mechanism, which can increase the Protected Withdrawal Value, and it has lowered the minimum issue age for the Highest Daily Lifetime 7 Plus and HD Lifetime 7 Plus with Lifetime Income Accelerator to 45, from 55.