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.

“Lifetime Income Accelerator is a Prudential optional benefit that will double an investor’s annual income amount when certain conditions are present,” the company says.

The cost of the new HD Lifetime 7 Plus benefit is 0.75%.

The cost is 0.9% for the Spousal HD7 Lifetime Plus version, and 1.1% for the HD Lifetime 7 Plus with Lifetime Income Accelerator version

Another feature is a return-of-principal guarantee, Prudential says.

“If upon the 10th benefit anniversary, an investor has not taken any Lifetime Withdrawals and the current account value is less than the principal value, Prudential will credit the difference directly into the annuity’s account value,” Prudential says.

This guarantee is not available in the state of Washington, the company says.

About 75% of VA buyers elected a Highest Daily option in the fourth quarter of 2008, and total account values with guaranteed withdrawal benefits for life at the end of that period were about $18 billion, Prudential says.

The Prudential units that write the annuities and HD options are responsible for backing the product guarantees.