Variable Appreciable Life (VAL) - Prudential Financial

Variable
Appreciable Life® (VAL)

AB O U T Y O U R VA L P R E M I U M C H AN G E

IFS-A001248 Ed. 8/03

Your Variable Appreciable Life® (VAL)
insurance policy was designed with flexible
premium payments and a choice of investment
options to meet your changing goals and financial
needs. VAL also has a premium change, which allows
us to provide permanent life insurance with a death
benefit guarantee at a modest initial premium. The
death benefit guarantee states that, if all scheduled
premiums are paid when due and no loans or
withdrawals are made, the policy will not lapse
regardless of investment performance.

We provide this brochure to help explain the
premium change for your VAL policy. The premium
change is the point at which the scheduled premium
in the policy changes. It is described in greater detail
in the VAL prospectus and your policy. Since VAL
is a modified flexible premium policy, we strongly
suggest you discuss your premium payment options
with your licensed financial professional.

What is My Premium Change Date?

Your actual premium change date depends on which
company issued your VAL policy. You can identify
whether you have a Pruco Life or Prudential policy
by looking at the upper right-hand corner of the first
page of your policy.

If your policy was Your premium change
issued by:
date will be:
The Prudential Insurance
Company of America on the policy anniversary after
age 65 or 7 years after issue,
Pruco Life Insurance whichever is later. Your policy
Company or Pruco Life generally starts with a number (9
Insurance Company of or 7).
New Jersey
on the policy anniversary after
age 65 or 10 years after issue,
whichever is later. Your policy
generally starts with a letter (R
or Q).

What Will My New Premium Be?

On your premium change date, we calculate a new
scheduled premium. The new scheduled premium
depends on a number of things, including premium
payments made, investment perform-ance, and the
Contract Fund value (minus any excess premium
payments) on the premium change date. The new
scheduled premium can never be more than the
guaranteed maximum scheduled premium shown in
your policy but may be higher than the initial
scheduled premium.

However, the new scheduled premium will generally
be at or close to the level of your initial scheduled
premium if, prior to the premium change date, all of
the following are true:

I you have paid all scheduled premiums when due
or you made them up with interest.

I you have taken no loans or withdrawals.

I our current level of charges has continued.

I your Contract Fund has earned an average of
6%–7% net.

After the premium change date (assuming no new
loans or withdrawals), payment of the new
scheduled premium when due will guarantee your
policy against lapse regardless of investment
performance.

What Determines My Contract Fund Value?

Your actual Contract Fund on the premium change
date is affected by several factors, including:

I Payment of scheduled premiums when due (or made
up with interest): VAL is a modified flexible
premium policy. You might choose to pay more or
less than the scheduled premium or to skip some
payments altogether. However, paying scheduled
premiums when due (assuming no loans or
withdrawals) will keep the death benefit
guarantee in effect regardless of investment
performance.

I Payment of any unscheduled premiums:
Unscheduled premium payments may accelerate
the growth of your Contract Fund. Although any
growth attributable to the excess premiums is
taken into account in the recalculation on your
premium change date, excess premiums
themselves are not.

I Investment results of your chosen investment
options: You choose the investment option(s) in
which to invest your net premiums. The value of
your Contract Fund will fluctuate with the
performance of the underlying investment
option(s). Funds in the Fixed-Rate Option earn
interest at a minimum annual rate of 4%, plus
excess interes, if any, at a rate set by us.

I Policy charges: Your policy is charged for
administrative expenses, the cost of insurance, for
maintaining the death benefit guarantee, for
applicable sales charges, and for any additional
benefits and riders. These charges may increase
from current levels up to the maximum amounts
set forth in the policy.

I Taking any withdrawals: A withdrawal* from your
policy can affect the future payments required.
There is a wide range of possible withdrawal
patterns, and it is not possible to predict the
effect of each withdrawal on future policy values.
A small withdrawal may have little effect, but any
withdrawal reduces your Contract Fund and
could thus increase your new scheduled
premium. Upon request, we will let you know the
amount you can withdraw.

I Taking any loans: When you take out a
policy loan,* an amount equal to your loan
is transferred out of your investment options into
a separate loan account. When a loan exists and
is outstanding, the amount that was transferred
out of the investment options remains part of the
Contract Fund but no longer earns the rate of
return of those investment options. The Fixed-
Rate Loan option carries an interest charge for the
loan of 5.5% but is credited with interest at an
annual effective rate of 4%. There is also a Variable
Rate option with interest credited at 1% below the
variable rate interest charge. Periodically, we
increase the portion of the Contract Fund in the
investment options by interest credits accrued on
the loan.

What Happens to Any Additional Premiums
that I’ve Paid?

Your VAL policy offers flexible premiums.
This means that your policy gives you the option of
paying more, and in some situations less, than your
scheduled premiums, subject to certain minimums
and maximums.

* Life insurance policy cash values are accessed
through withdrawals and policy loans. Loans are
at interest. In general, loans are not taxable, but
withdrawals are taxable to the extent they exceed
basis in the contract. Loans outstanding at
policy lapse or surrender prior to the death of the
insured will cause immediate taxation to the
extent of gain in the contract.Unpaid loans and
withdrawals cause a reduction in cash values
and policy benefits and negate any guarantee
against lapse. For policies that are modified
endowment contracts, distributions (including
loans) are taxable to the extent of income in the
contract, and an additional 10% federal income
tax penalty may apply. You may wish to consult
your tax advisor for advice regarding your
particular situation.

To keep track of the premiums that are due
and paid, each policy has a “premium account.”

The premium account tracks the total scheduled
premiums paid to date versus the total scheduled
premiums due. Both are accumulated at 4%. The
purpose of the premium account is to monitor the
policy’s guarantee against lapse (also known as the
death benefit guarantee). If the premium account
has a zero balance, meaning, all scheduled premiums
were paid when due and no withdrawals taken) or
a positive balance (additional unscheduled premium
payments made), then the policy will not lapse
regardless of investment performance. Withdrawals
are considered to be negative premiums in the
premium account.

On the premium change date, any excess
premiums may be either applied toward future
premiums due or withdrawn without canceling the
guarantee against lapse.

For example:

Bob Smith has a VAL policy. On his premium
change date, the total amount of premiums
due on his policy is $10,000. Bob has paid all
scheduled premiums when due, has made
several unscheduled premium payments,
and has taken no loans or withdrawals. His
total premiums paid equal $12,000. Bob
therefore has additional premium payments
of $2,000, which can be used to pay future
premiums or be withdrawn without
canceling the guarantee against lapse (death
benefit guarantee).

Please remember that withdrawals are subject to
fees as described in your VAL prospectus, and may
also have tax consequences. You should consult
with your tax advisor before making any withdrawals
from your VAL policy.

How Can I Find Out How My Policy Is Doing?

Shortly after the policy anniversary each year, we
will send you an Annual Statement on your policy
values. You will also receive a prospectus each May
either by mail, or electronically. Your Annual
Statement provides you with a detailed report of the
transactions that occurred during the previous
policy year.

On the first page of your Annual Statement, you’ll
find a quick overview of your policy values. Other
pages generally list details including:

I your investment options and values—including
month-by-month increases or decreases in the
value of your investment options.

I premium allocations.

I scheduled premiums that were due and paid.

I the net rate of return on your investments.

I projected values.

I a month-by-month summary of your policy
activity for the year.

In March and August of each year, we send you a
report on the investments in The Prudential Series
Fund Inc. The Series Fund is the under-lying
investment company that provides most of the
investment options in VAL. The report pub-lished in
March covers activity for the previous calendar
year. The August report covers the first six months
of the current year.

You can generally get an update of your values at
any time if you have enrolled for free online account
access at www.prudential.com. Or, you can contact
your licensed financial professional or the Customer
Service Office for this information.

We encourage you to review your VAL
policy and meet with your licensed financial
professional annually to discuss any questions you
have.

This brochure must be preceded or accompanied by
a current VAL prospectus.

Prudential Financial and Appreciable Life are
service marks of The Prudential Insurance Company
of America and its affiliates.

Prior to September 1988, Variable Appreciable
Life (VAL) was issued by Pruco Life Insurance
Company and Pruco Life Insurance Company of
New Jersey, both located at 213 Washington Street,
Newark, NJ 07102-2992. Beginning in September
1988, VAL was issued by The Prudential Insurance
Company of America, 751 Broad Street, Newark, NJ
07102-3777. All VAL was offered by prospectus only
through Pruco Securities, LLC (member SIPC), 751
Broad Street, Newark, NJ 07102-3777. All are
Prudential Financial companies, and each is solely
responsible for its own financial condition and
contractual obligations. All guarantees are based
on the claims-paying ability of the issuing company.

©2005 The Prudential Insurance Company of America
751 Broad Street, Newark, NJ 07102-3777
www.prudential.com

ALL RIGHTS RESERVED

IFS-A001248 Ed. 01/2005
CAT 15M8847