CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS NOT FOR CONSUMER USE. Life Insurance in Retirement Planning And the Social Security Delay Strategy 1 PRESENTED BY: Joe Sample, [Designations per field stationery guidelines] [Company Approved Title] [Agency Name] [The Prudential Insurance Company of America][if Agency Distribution] [1234 Main Street, Suite 1, Floor 10] [Anywhere], [ST] [12345] [in required states] [ Insurance License Number ] Phone [ ] Fax [ ] Ed. 12/2014 Exp. 06/10/2016 © 2014 Prudential Financial, Inc. and its related entities.

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS NOT FOR CONSUMER USE. 2

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 3  Death benefit protection  Income protection  Legacy goals  Cash value NOT FOR CONSUMER USE. Permanent Life Insurance

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 4 The number of years Americans are living longer than the previous generation NOT FOR CONSUMER USE. Source: Bringyourchallenges.com 7 The odds of one person in a couple who is age 65 of living to % The first person to live to 150 is alive today. 150 Longevity planning

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS Source: Congressional research service, "Income of Americans age 65 and older", published in 2009 & 2012 NOT FOR CONSUMER USE. 5 Total Income by Source of Persons Aged 65+, Top Quartile Other = Alimony, unemployment, assistance from family & friends Reliance on Social Security

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS  Deferring Social Security income increases the benefit and any Cost of Living adjustments (COLA) on it  Increases benefits to your surviving spouse Reliance on Social Security NOT FOR CONSUMER USE. 6

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS High Income Earners Doctors Biz Owners Executives Surgeons Engineers Attorneys Dentists Orthodontists IT Managers Yourself? 7 NOT FOR CONSUMER USE.  Married or single  Under age 55 and need death benefit protection  Maximizing traditional retirement plans  Additional income to allocate towards savings Clients who may benefit

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS Consider clients who:  Believe that life expectancy will be greater than age 80  Enjoy very good health  Are under age 55 Since a significant amount of time is needed to accumulate cash value so the sooner a client starts, the better. 8 NOT FOR CONSUMER USE. Clients who may benefit

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 9 NOT FOR CONSUMER USE. Age Benefit % Reduced Benefit 6270% 6375% 6480% 6587% 6693% Full Retirement Age 67100% Increased Benefit 68108% 69116% 70124% People born before 1960 have a Full Retirement Age of 66. People born in 1960 and later have a Full Retirement Age of 67. How delaying Social Security income increases benefits more than at age 62 50%

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 10 NOT FOR CONSUMER USE. Reduced BenefitFRAIncreased Benefit Reduction/Increase70%75%80%87%93%100%108%116%124% Annual Benefit taken at: For a 50-year-old High wage earner $30,070$33,120$36,318$40,445$44,777$49,318$54,754$60,457$66,436 A 50-year-old today:  At age 67 could receive $49K in benefits with a 2.8% COLA* assumption.  At age 70 could receive $66,436 a year. * COLA is not guaranteed. Delaying increases benefits

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS *Assuming annual COLA of 2.8% 11 NOT FOR CONSUMER USE. Total benefits collected by age 85 Start benefit at 62$1,009,651 Start benefit at 70$1,318,211 Additional benefit by delaying $308,560 Benefits collected by age 85* How much more money?

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 12 NOT FOR CONSUMER USE. How to fund delaying benefits Options  Work Longer  Use personal savings  Draw on pension income  Access life insurance policy cash value via loans or withdrawals* * Loans are charged interest; they are usually not taxable. Withdrawals are generally taxable to the extent they exceed basis in the policy. Loans that remain unpaid when the policy lapses or is surrendered while the insured is alive will be taxed immediately to the extent of gain in the policy. Your client's should consult with a tax advisor for advice about their own situation.

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS Sample case study NOT FOR CONSUMER USE. 13 Life insurance policies contain fees and expenses, including cost of insurance, administrative fees, premium loads, surrender charges, and other charges or fees that will impact policy values. Variable universal life insurance policies also have additional charges and fund operating expenses. A current prospectus should be given to clients. Guarantees are based on the claims-paying ability of the issuing company.

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS Jeff — 50 years old and healthy  Married, with two children  Successful corporate executive with high six-figure income throughout his career  Maximizing qualified plans  Desires additional life insurance to address loss of group insurance at retirement and some legacy planning goals  Is concerned about a chronic or terminal illness later on derailing his finances. 14 NOT FOR CONSUMER USE. Hypothetical Client Example

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 15 NOT FOR CONSUMER USE.  If Jeff collects Social Security at age 64, he may receive $36K a year.  If he postpones collecting until age 70, he may receive $66K a year. Jeff’s options Reduced BenefitFRAIncreased Benefit Reduction/Increase70%75%80%87%93%100%108%116%124% Annual Benefit taken at: For a 50-year-old High wage earner $30,070$33,120$36,318$40,445$44,777$49,318$54,754$60,457$66,436

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS NOT FOR CONSUMER USE. 16 If cash contribution exceeds certain limits and the policy becomes a “Modified Endowment Contract” (MEC), as determined by the IRS, different tax rules and, in some cases, penalties apply for lifetime distributions, such as loans, withdrawals and assignments (including distributions made in the two years prior to becoming a MEC). A MEC can result from premium payments or from a reduction in coverage. Life Insurance 1 GENERALLY INCOME-TAX FREE DEATH BENEFIT + 2 TAX-DEFERRED CASH VALUE ACCUMULATION + 3 TAX-ADVANTAGED DISTRIBUTIONS

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 17 NOT FOR CONSUMER USE. Life Insurance in Retirement Planning (LIRP)

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS Build it Backward 18 NOT FOR CONSUMER USE. Life Insurance in Retirement Planning (LIRP)

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 19 NOT FOR CONSUMER USE. Jeff  Age 50, Preferred Non-Tobacco.  $300,000 PruLife ® Custom Premier II policy. – $11,000/year through age 63. – Takes loans/withdrawals of $36,000 from age 64. Age Pay PremiumIncome Social Security Death Benefit ($154K) 64 $36K $364K 65 $36K $309K 66 $36K $265K 67 $36K $229K 68 $36K $193K 69 $36K $156K 70 $66K$156K Illustration uses a fixed death benefit, assumes a 7.5% rate, and uses the Cash Value Accumulation Test. Using the cash value from life insurance

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 20 NOT FOR CONSUMER USE. Jeff  Age 50, Preferred Non-Tobacco.  $300,000 PruLife ® Custom Premier II policy with the BenefitAccess Rider. – $11,000/year through age 63. – Takes loans/withdrawals of $36,000 from age 64. Age Pay PremiumIncome Social Security Death Benefit ($168K) 64 $36K $407K 65 $36K $353K 66 $36K $299K 67 $36K $263K 68 $36K $227K 69 $36K $191K 70 $66K$156K Illustration uses a fixed death benefit, assumes a 7.5% rate, and uses the Cash Value Accumulation Test. Addressing the chronic illness concern

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS Age Annual Premium Annual Distributions Ages Net Cash Value IRR on Net Cash Value Net Death Benefit IRR on Net Death Benefit 5011,00002, %300,000N/A 6311, , %419, % Total154, , %364, % 69036,00050, %156, % , %156, % %146, % Total154,000216, NOT FOR CONSUMER USE. Male, age 50, Preferred Non-Tobacco, non-MEC face amount, Option A, Cash Value Accumulation Test. Hypothetical example, for illustrative purposes only. Actual results will vary. More on using PruLife ® Custom Premier II 7.5% hypothetical rate of return (6.82% net)

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 22 NOT FOR CONSUMER USE. Total disbursements ages 64 to 69 (436K X 6 years) $216,000 Net death benefit at age 84$146,000 Total benefits assuming death at age 84$362,000 Total premiums paid by age 63 ($11K x 14 years) $154,000 Cost-Benefit Analysis *The IRR on the net death benefit takes into account any prior distributions. Values above are based on the prior slide’s assumptions. Hypothetical example, for illustrative purposes only. Actual results will vary. Example using Custom Premier II

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 23 NOT FOR CONSUMER USE. Collect Social Security at age 64$1,019,000 Use CV and collect Social Security at 70$1,433,680 Increase by delaying benefit$414,680 Values above are based on the prior slide’s assumptions and 2.8% COLA. Hypothetical example, for illustrative purposes only. Actual results will vary. Example using Custom Premier II Total received age 64 to 84 Cash Value$36K x 6 years = $216K Social Security$66K x 14 years = $1.2M

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS For Jeff (projected) 24 NOT FOR CONSUMER USE. *Assuming sufficient premiums paid and/or policy performance. If Jeff dies at age 69 Outlay$154,000 CV income$180,000 SS income>$185,000 Gain$26,000 Social Security No outlay For his beneficiary and wife Death benefit $156,000* Surviving spouse could receive an increase in the survivor’s spousal benefit.

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 25 NOT FOR CONSUMER USE. Not recommended for clients who:  Feel they have a short life expectancy.  Are rated.  Could not correct after a period of poor policy performance.  Feel they have no need for any additional death benefit. When this strategy does not work

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 26 NOT FOR CONSUMER USE. Age Annual Premium for 14 Years Annual Distributions Ages Net Cash Value IRR on Net Cash Value Net Death Benefit IRR on Net Death Benefit 5011,00001, %300,000N/A 5311,000022, %300,000N/A 6311, %300, % 64036,00046, %264, % 65036,0005, %228, % 6605,507END Total154,00077,532 0% hypothetical rate of return (-0.68% net) and Maximum Charges Values above are based on the prior slide’s assumptions. Hypothetical example, for illustrative purposes only. Actual results will vary. 0% rate of return will not support this strategy

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS In summary, life insurance can provide: 27 NOT FOR CONSUMER USE. *Assuming premiums paid and/or policy performance are sufficient. Life Insurance in Retirement Planning A death benefit to meet protection needs.* Tax-deferred cash accumulation potential. Generally tax-free income potential. Access, use, and control pre- 59½ and post-70½. Potentially higher survivor benefit. Optional riders like the BenefitAccess Rider.

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 28 NOT FOR CONSUMER USE. Thank You Questions?

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS  Financial and medical underwriting will apply and sufficient premiums must be paid over time.  Loans and withdrawals reduce policy cash value and the death benefit and may have tax consequences.  For loans to remain income tax-free, the policy must stay in force until death and with a non-MEC status.  If the policy is classified as a MEC, policy distributions including loans are taxable to the extent of gain on a LIFO basis (10% penalty rules may apply before age 59½).  Withdrawals in the first 15 policy years may have adverse tax consequences.*  There is exposure to market volatility if a variable life insurance policy is used.  All guarantees within the policy are based on the claims-paying ability of the issuing company and do not apply to the underlying investment options. 29 NOT FOR CONSUMER USE. *IRC Section 7702(F)(2) (B-C) retests life insurance contract withdrawals and face reductions and may cause adverse income tax consequences. Important Considerations

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS Before implementing this strategy Any investment purchased involves the planning and use of income or other assets. Clients should be certain to have sufficient liquid assets other than the asset or income they may be repositioning to support their current and future income and expenses before considering the purchase of a life insurance policy. Equity in the home should not be considered a liquid asset. We recommend that clients consult their tax and legal advisors to discuss their situation before implementing the strategy discussed here. About this concept This concept is intended to be used only for assets that will not be needed for living expenses for the expected lifetime of the insured. It is the client’s responsibility to estimate these needs and expenses, and it is recommended that they consider developing a comprehensive financial plan to take into account current and future income and expenses in conjunction with implementing the strategy discussed here. The accuracy of determining future needs and expenses is more critical for clients at older ages, who have less opportunity to replace assets used for the strategy. If your client’s financial or legacy planning situation changes If clients need to use the assets or income being repositioned for current or future income needs and they can no longer make premium payments, the life insurance policy may lapse and the results illustrated may not be achieved. If the asset or income being repositioned becomes fully exhausted, premiums may have to be paid using other assets or income to keep the life insurance policy in force. 30 NOT FOR CONSUMER USE. Important Considerations

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 31 NOT FOR CONSUMER USE. When this strategy may not be in your client’s best interest Depending on the client’s life span, it is possible that his or her beneficiary may receive more by just inheriting the assets being repositioned, rather than by receiving the death benefit of the life insurance policy that was purchased. Tax and other financial implications There may be tax and other financial implications as a result of liquidating assets within an investment portfolio. If contemplating such a strategy, it is important for clients to understand that life insurance is a long-term strategy to meeting particular needs. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of a life insurance product may have tax consequences, early withdrawal penalties, and/or other costs or penalties as a result of the sale or liquidation. About life insurance The death benefit protection offered by a life insurance policy can be a key component of a sound financial plan. It is important for clients to fully understand the terms and conditions of any financial product before purchasing it. Important Considerations, continued

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 32 Other notes Clients should consider that life insurance policies contain fees and expenses, including cost of insurance, administrative fees, premium loads, surrender charges, and other charges or fees that will impact policy values. If premiums and/or performance are insufficient over time, the policy could lapse, which would require additional out-of-pocket premiums to keep it in force. NOT FOR CONSUMER USE. Important Considerations, continued

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS The BenefitAccess Rider is available for an extra premium. Additional underwriting requirements and limits may also apply. Obtaining benefits under the terms of the rider will reduce and may eliminate the death benefit. Benefits paid under the BenefitAccess Rider are intended to be treated for federal tax purposes as accelerated life insurance death benefits under IRC §101(g)(1)(b). Tax laws related to the receipt of accelerated death benefits are complex and benefits may be taxable in certain circumstances. Receipt of benefits may affect eligibility for public assistance programs such as Medicaid. Accelerated benefits paid under the terms of the Terminal Illness portion of the rider are subject to a $150 processing fee ($100 in Florida). Clients should consult tax and legal advisors prior to initiating any claim. A licensed health care practitioner must certify that the insured is chronically or terminally ill to qualify for benefits. Chronic illness claims will require recertification by a licensed health care practitioner. Other terms and conditions may apply. This rider is not Long-Term Care (LTC) insurance and it is not intended to replace LTC. The rider may not cover all of the costs associated with chronic or terminal illness. The rider is a life insurance accelerated death benefit product, is generally not subject to health insurance requirements, and may not be available in all states. Access to policy withdrawals is restricted during periods in which BenefitAccess Chronic Illness benefit payments are being made. 33 Important Information about BAR

CREATED EXCLUSIVELY FOR FINANCIAL PROFESSIONALS 34 PruLife Custom Premier II is issued by Pruco Life Insurance Company in all states except New York, where it is issued by Pruco Life Insurance Company of New Jersey and offered through Pruco Securities, LLC (member SIPC). Both are Prudential Financial companies located in Newark, NJ. Each is solely responsible for its own financial condition and contractual obligations. Clients should consider the investment objectives, risks, and charges and expenses carefully before investing in the contract and/or underlying portfolios. This and other important information can be found in the prospectus and, if available, the summary prospectus. A copy of the prospectus may be obtained from Clients should read the prospectus carefully before investing. It is possible to lose money by investing in securities. NOT FOR CONSUMER USE. About PruLife ® Custom Premier II Life insurance policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities.