AS FILED WITH THE SEC ON ___________________. REGISTRATION NO. 2-89780
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-6
POST-EFFECTIVE AMENDMENT NO. 26
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2
----------
PRUCO LIFE OF NEW JERSEY
VARIABLE APPRECIABLE ACCOUNT
(Exact Name of Trust)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(Name of Depositor)
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(800) 437-4016, EXT. 46
(Address and telephone number of principal executive offices)
----------
THOMAS C. CASTANO
ASSISTANT SECRETARY
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(Name and address of agent for service)
Copy to:
JEFFREY C. MARTIN
SHEA & GARDNER
1800 MASSACHUSETTS AVENUE, N.W.
WASHINGTON, D.C. 20036
----------
Variable Appreciable Life Insurance Contracts--The Registrant has registered an
indefinite amount of securities pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Rule 24f-2 notice for fiscal year 1996 was filed on
February 28, 1997.
It is proposed that this filing will become effective (check appropriate space):
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/x/ on May 1, 1997 pursuant to paragraph (b) of Rule 485
-----------
(date)
/ / 60 days after filing pursuant to paragraph (a) of Rule 485
/ / on _____________________ pursuant to paragraph (a) of Rule 485
(date)
================================================================================
<PAGE>
CROSS REFERENCE SHEET
(AS REQUIRED BY FORM N-B-2)
N-B-2 ITEM NUMBER LOCATION
- ----------------- --------
1. Cover Page
2. Cover Page
3. Not Applicable
4. Sale of the Contracts and Sales Commissions
5. Pruco Life of New Jersey Variable Appreciable
Account
6. Pruco Life of New Jersey Variable Appreciable
Account
7. Not Applicable
8. Not Applicable
9. Litigation
10. Brief Description of the Contract; Short-Term
Cancellation Right, or "Free Look"; Contract Forms;
Transfers; How a Contract's Cash Surrender Value
Will Vary; How a Contract's Death Benefit Will
Vary; Surrender of a Contract; Withdrawal of Excess
Cash Surrender Value; When Proceeds are Paid;
Contract Loans; Lapse and Reinstatement; Options on
Lapse; Right to Exchange a Contract for a
Fixed-Benefit Insurance Policy; Contracts Issued in
Connection With Tax-Qualified Pension Plans; The
Fixed-Rate Option; Voting Rights; Substitution of
Series Fund Shares; Increases in Face Amount;
Decreases in Face Amount
11. Brief Description of the Contract; Pruco Life of
New Jersey Variable Appreciable Account
12. Cover Page; Brief Description of the Contract; The
Prudential Series Fund, Inc.; Sale of the Contract
and Sales Commissions
13. Brief Description of the Contract; The Prudential
Series Fund, Inc.; Premiums; Allocation of
Premiums; Charges and Expenses; Reduction of
Charges for Concurrent Sales to Several
Individuals; Sale of the Contract and Sales
Commissions
14. Brief Description of the Contract; Detailed
Information for Prospective Contract Owners
15. Brief Description of the Contract; Premiums;
Allocation of Premiums; Transfers; The Fixed Rate
Option
16. Brief Description of the Contract; Detailed
Information for Prospective Contract Owners
17. Surrender of a Contract; Withdrawal of Excess Cash
Surrender Value; When Proceeds are Paid
18. Pruco Life of New Jersey Variable Appreciable
Account; How a Contract's Cash Surrender Value Will
Vary
19. Reports to Contract Owners
20. Not Applicable
<PAGE>
N-B-2 ITEM NUMBER LOCATION
- ----------------- --------
21. Contract Loans
22. Not Applicable
23. Not Applicable
24. Other General Contract Provisions; The Prudential
Series Fund, Inc.
25. Pruco Life Insurance Company of New Jersey
26. Brief Description of the Contract; The Prudential
Series Fund, Inc.; Charges and Expenses
27. Pruco Life Insurance Company of New Jersey; The
Prudential Series Fund, Inc.
28. Pruco Life Insurance Company of New Jersey;
Directors and Officers
29. Pruco Life Insurance Company of New Jersey
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
35. Pruco Life Insurance Company of New Jersey
36. Not Applicable
37. Not Applicable
38. Sale of the Contract and Sales Commissions
39. Sale of the Contract and Sales Commissions
40. Not Applicable
41. Sale of the Contract and Sales Commissions
42. Not Applicable
43. Not Applicable
44. Brief Description of the Contract; The Prudential
Series Fund, Inc.; How a Contract's Cash Surrender
Value Will Vary; How a Contract's Death Benefit
Will Vary
45. Not Applicable
46. Brief Description of the Contract; Pruco Life of
New Jersey Variable Appreciable Account; The
Prudential Series Fund, Inc.
47. Pruco Life of New Jersey Variable Appreciable
Account
48. Not Applicable
49. Not Applicable
50. Not Applicable
51. Not Applicable
52. Substitution of Series Fund Shares
<PAGE>
N-B-2 ITEM NUMBER LOCATION
- ----------------- --------
53. Tax Treatment of Contract Benefits
54. Not Applicable
55. Not Applicable
56. Not Applicable
57. Not Applicable
58. Not Applicable
59. Financial Statements; Financial Statements of Pruco
Life of New Jersey Variable Appreciable Account;
Financial Statements of Pruco Life Insurance
Company of New Jersey
<PAGE>
PART I
INFORMATION REQUIRED IN PROSPECTUS
<PAGE>
PROSPECTUS
MAY 1, 1997
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
VARIABLE APPRECIABLE ACCOUNT
VARIABLE
APPRECIABLE
LIFE(R)
INSURANCE CONTRACTS
This prospectus describes certain variable life insurance contracts issued by
Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey"), a stock
life insurance company that is an indirect wholly-owned subsidiary of The
Prudential Insurance Company of America ("Prudential"). Pruco Life of New Jersey
calls these contracts its VARIABLE APPRECIABLE LIFE(R) Insurance Contracts* (the
"Contract"). As of May 1, 1992, these Contracts are no longer available for
sale. These Contracts provide whole-life insurance protection. That is, they
provide lifetime insurance coverage, as long as scheduled premiums are paid or
charges are provided for by favorable investment experience. They also generally
provide a cash surrender value for the owner if the Contract is terminated
during the insured's lifetime. A purchaser may choose one form of this Contract
which provides a death benefit that remains fixed in the amount initially
selected (unless it is increased by Pruco Life of New Jersey to ensure that the
Contract maintains its status as life insurance under the Internal Revenue Code)
or a second form which provides a death benefit that varies daily with the
investment performance of the subaccounts of the Pruco Life of New Jersey
Variable Appreciable Account (the "Account") to which the owner allocates the
invested portion of the premiums. Even under the second form of Contract,
however, investment performance cannot cause the death benefit to be less than a
guaranteed minimum amount (the face amount specified in the Contract). The cash
surrender value of a Contract generally increases with the payment of each
premium, and it also varies daily with investment performance. The cash
surrender value also decreases to reflect the imposition of charges. There is no
guaranteed minimum cash surrender value.
A portion of a Contract's premiums and the earnings on those premiums will be
held in one or more of the following ways. They can be invested in one or more
of the thirteen current subaccounts of the Account. They can be allocated to a
FIXED-RATE OPTION. Or, they can be invested in the Pruco Life of New Jersey
Variable Contract Real Property Account (the "REAL PROPERTY ACCOUNT") which is
described in a prospectus that is attached to this one. If one or more of the
subaccounts is chosen, the assets of each subaccount will be invested in a
corresponding portfolio of The Prudential Series Fund, Inc. (the "Series Fund").
The attached prospectus for the Series Fund and its statement of additional
information describe the investment objectives of and the risks of investing in
the thirteen portfolios of the Series Fund currently available to Contract
owners: the MONEY MARKET PORTFOLIO, the DIVERSIFIED BOND PORTFOLIO, the
GOVERNMENT INCOME PORTFOLIO, the CONSERVATIVE BALANCED PORTFOLIO, the FLEXIBLE
MANAGED PORTFOLIO, the HIGH YIELD BOND PORTFOLIO, the STOCK INDEX PORTFOLIO, the
EQUITY INCOME PORTFOLIO, the EQUITY PORTFOLIO, the PRUDENTIAL JENNISON
PORTFOLIO, the SMALL CAPITALIZATION STOCK PORTFOLIO, the GLOBAL PORTFOLIO, and
the NATURAL RESOURCES PORTFOLIO. Other subaccounts and portfolios may be added
in the future. Interest is credited daily upon any portion of the premium
payment allocated to the fixed-rate option at rates periodically declared by
Pruco Life of New Jersey in its sole discretion but never less than 4%. This
prospectus generally describes only the portion of the contract involving the
Pruco Life of New Jersey Variable Appreciable Account.
THE REPLACEMENT OF LIFE INSURANCE IS GENERALLY NOT IN THE INTEREST OF THE
CUSTOMER. IN MOST CASES, WHEN A CUSTOMER REQUIRES ADDITIONAL COVERAGE, A NEW
POLICY SUPPLEMENTING THE EXISTING POLICY SHOULD BE REQUESTED, THEREBY PROTECTING
THE BENEFITS OF THE ORIGINAL POLICY. IF YOU ARE CONSIDERING REPLACING A POLICY,
YOU SHOULD COMPARE THE BENEFITS AND COSTS OF SUPPLEMENTING YOUR EXISTING POLICY
WITH THE BENEFITS AND COSTS OF PURCHASING THE CONTRACT DESCRIBED IN THIS
PROSPECTUS AND YOU SHOULD CONSULT WITH A QUALIFIED TAX ADVISOR.
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT IS ATTACHED TO
A CURRENT PROSPECTUS FOR THE PRUDENTIAL SERIES FUND, INC. AND A CURRENT
PROSPECTUS FOR THE PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY
ACCOUNT.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 Washington Street
Newark, New Jersey 07102-2992
Telephone: (800) 437-4016, Ext. 46
*APPRECIABLE LIFE is a registered mark of Prudential.
VAL-2 Ed 5-97
Catalog #64696FY
<PAGE>
PROSPECTUS CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
BRIEF DESCRIPTION OF THE CONTRACT .............................................................................. 1
GENERAL INFORMATION ABOUT PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY, PRUCO LIFE OF
NEW JERSEY VARIABLE APPRECIABLE ACCOUNT, AND THE VARIABLE INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT ... 4
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY .................................................................. 4
PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT ....................................................... 4
THE PRUDENTIAL SERIES FUND, INC. ............................................................................ 4
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT ............................................ 5
WHICH INVESTMENT OPTION SHOULD BE SELECTED .................................................................. 5
DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS ........................................................... 6
REQUIREMENTS FOR ISSUANCE OF A CONTRACT ..................................................................... 6
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK" ................................................................ 6
CONTRACT FORMS .............................................................................................. 6
PREMIUMS .................................................................................................... 7
CONTRACT DATE ............................................................................................... 9
ALLOCATION OF PREMIUMS ...................................................................................... 9
TRANSFERS ................................................................................................... 10
CHARGES AND EXPENSES ........................................................................................ 11
REDUCTION OF CHARGES FOR CONCURRENT SALES TO SEVERAL INDIVIDUALS ............................................ 15
HOW A CONTRACT'S CASH SURRENDER VALUE WILL VARY ............................................................. 15
HOW A CONTRACT'S DEATH BENEFIT WILL VARY .................................................................... 16
WHEN A CONTRACT BECOMES PAID-UP ............................................................................. 17
FLEXIBILITY AS TO PAYMENT OF PREMIUMS ....................................................................... 17
SURRENDER OF A CONTRACT ..................................................................................... 18
WITHDRAWAL OF EXCESS CASH SURRENDER VALUE ................................................................... 18
INCREASES IN FACE AMOUNT .................................................................................... 19
DECREASES IN FACE AMOUNT .................................................................................... 20
LAPSE AND REINSTATEMENT ..................................................................................... 20
WHEN PROCEEDS ARE PAID ...................................................................................... 21
LIVING NEEDS BENEFIT ........................................................................................ 21
ILLUSTRATIONS OF CASH SURRENDER VALUES, DEATH BENEFITS, AND ACCUMULATED PREMIUMS ............................ 22
CONTRACT LOANS .............................................................................................. 24
REPORTS TO CONTRACT OWNERS .................................................................................. 25
OPTIONS ON LAPSE ............................................................................................ 25
RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY ........................................... 26
SALE OF THE CONTRACT AND SALES COMMISSIONS .................................................................. 26
TAX TREATMENT OF CONTRACT BENEFITS .......................................................................... 26
WITHHOLDING ................................................................................................. 28
CONTRACTS ISSUED IN CONNECTION WITH TAX-QUALIFIED PENSION PLANS ............................................. 28
THE FIXED-RATE OPTION ....................................................................................... 28
LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT PREMIUMS AND BENEFITS ......................................... 29
OTHER GENERAL CONTRACT PROVISIONS ........................................................................... 29
RIDERS ...................................................................................................... 30
VOTING RIGHTS ............................................................................................... 30
SUBSTITUTION OF SERIES FUND SHARES .......................................................................... 31
STATE REGULATION ............................................................................................ 31
EXPERTS ..................................................................................................... 31
LITIGATION .................................................................................................. 31
ADDITIONAL INFORMATION ...................................................................................... 31
FINANCIAL STATEMENTS ........................................................................................ 32
DIRECTORS AND OFFICERS ......................................................................................... 33
<PAGE>
<CAPTION>
PAGE
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FINANCIAL STATEMENTS OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT .................................. A1
FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY ............................................. B1
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR THE
SERIES FUND, AND THE PROSPECTUS FOR THE REAL PROPERTY ACCOUNT.
<PAGE>
BRIEF DESCRIPTION OF THE CONTRACT
The Variable APPRECIABLE LIFE Insurance Contracts (the "Contract") described in
this prospectus are in many respects similar to conventional "fixed-benefit"
whole-life insurance. Like conventional whole-life insurance, the Contracts
provide a guaranteed death benefit for the insured's lifetime if scheduled
premiums are paid; due to the pooling of mortality risks, this death benefit is
many times the scheduled annual premium. The Contracts also have similarities to
what have become generally known as "universal life" insurance policies. Like
universal life insurance policies, the Contracts permit an owner considerable
flexibility in paying premiums and adjusting the face amount of insurance. To a
significant extent the Contracts provide features and choices for the Contract
owner that differ from those provided by either of those types of life insurance
policies. As of May 1, 1992, these Contracts are no longer available for sale.
The Contracts are first and foremost life insurance. They provide insurance
protection for the entire lifetime of the insured. But the Contracts also have
significant and useful investment features. The Contract owner decides in which
investment option[s] the amounts held under the Contract--derived from the
payment of premiums and the earnings thereon--will be invested, and the cash
surrender value of the Contract will increase with favorable investment
experience and decrease with unfavorable investment experience. The cash
surrender value of a Contract also reflects the imposition of the various
Contract charges. The Contract owner will be able, from time to time, to
reallocate and transfer amounts invested under the Contract among the various
subaccounts, the fixed-rate option, and the Real Property Account.
The owner may choose either of two Contract Forms. Under Contract Form A, the
death benefit remains fixed in amount (unless the Contract becomes paid-up or,
under a newer version of the Contract that first began to be sold in most
jurisdictions in September of 1986, unless the death benefit is increased to
ensure that the Contract continues to satisfy the Internal Revenue Code's
definition of life insurance) and only the cash surrender value will vary with
investment experience. Under Contract Form B, both the death benefit and the
cash surrender value will vary with investment experience, but the death benefit
will never be less than the face amount regardless of investment experience.
There is no minimum cash surrender value under either form of the Contract.
(Throughout this prospectus, unless we specifically state otherwise, all
descriptions of and references to the "Contract" apply to both old and new Form
A and Form B Contracts.)
There is a special feature applicable to Contracts issued on insureds who are 14
years of age or less. Under such Contracts, the face amount increases to 150% of
the initial face amount on the first Contract anniversary after the insured
reaches the age of 21, provided the Contract is not then in default. This new
face amount becomes the new guaranteed minimum death benefit. In addition, in
those states where it is approved, a Contract owner may have the right under
certain conditions to increase or decrease the face amount of insurance. In the
case of an increase in face amount, one of the conditions is the provision of
evidence of insurability satisfactory to Pruco Life Insurance Company of New
Jersey ("Pruco Life of New Jersey"). See INCREASES IN FACE AMOUNT, page 19 and
DECREASES IN FACE AMOUNT, page 20.
One significant feature of the Contract is the flexibility it provides the
Contract owner with respect to the payment of premiums. Each Contract has a
scheduled premium payable annually, semi-annually, quarterly or monthly. But the
Contract owner is generally permitted, within very broad limits, to pay greater
than scheduled premiums and the net portion of such payments will promptly be
invested in the manner previously selected by the owner. Cash surrender values
will generally be increased whenever premiums are paid; and unless earlier
unfavorable investment experience must first be offset, the amount payable upon
death under Contract Form B will also generally be increased by the payment of
premiums. Subsequent values under the Contract will increase or decrease with
subsequent investment experience to reflect the amounts invested under the
Contract.
As long as scheduled premiums are paid on or before the due dates (or within a
61-day grace period after the scheduled due date) and missed premiums are made
up later with interest, the Contract will not lapse, even if investment
experience is unfavorable. Thus, the payment of scheduled premiums guarantees
insurance protection at least equal to the face amount of the Contract.
However, the failure to pay a minimum scheduled premium will not necessarily
result in lapse of the Contract. If the net investment experience of the
selected subaccounts has been greater than the 4% assumed net rate of return
used by Pruco Life of New Jersey's actuaries in designing this Contract, with a
consequent increase in the amount invested under the Contract, and the Contract
owner then fails to pay premiums when due, Pruco Life of New Jersey will use the
"excess" amount to pay the charges due under the Contract and thus keep the
Contract in force. See LAPSE AND REINSTATEMENT, page 20. In this case, so long
as the excess amount is sufficient, the Contract will not lapse despite the
owner's failure to pay scheduled premiums.
1
<PAGE>
The amount of the scheduled premium, for a specific face amount of insurance,
depends upon the insured's sex, age at issue, and risk classification. The
scheduled premium cannot be increased until the Contract anniversary after the
insured's 65th birthday or, if later, 10 years from the date the Contract is
issued. A new, higher scheduled premium, called the "second premium amount," is
payable after this period. The second premium amount will be stated in each
Contract. It is calculated on the assumptions that only scheduled premiums have
been paid, and they have been paid when due, that maximum mortality charges
(covering the cost of insurance for the period in question) and expense charges
have been deducted, and that the net investment return upon the amount invested
under the Contract has been equal to the 4% assumed net rate of return. If the
amount invested under the Contract is higher than would be the case if the above
conservative assumptions are borne out by experience, which currently appears to
be a reasonable expectation, premiums after the insured's 65th birthday (or at
10 years after the issue date, if later) will be lower than the second premium
amount stated in the Contract (and may or may not be higher than the initial
scheduled premium).
In some cases the payment of greater than scheduled premiums or favorable
investment experience may result in the Contract becoming paid-up so that no
further premium payments will be necessary. If this happens, Pruco Life of New
Jersey may refuse to accept any further premium payments. If a Contract becomes
paid-up, the death benefit then in force becomes the guaranteed minimum death
benefit; apart from this guarantee, the death benefit and the cash surrender
value of the paid-up Contract will thereafter vary daily to reflect the
investment experience of amounts invested under the Contract. Contracts sold
beginning in September of 1986 in jurisdictions where all necessary approvals
have been obtained will no longer become paid-up. Instead, the death benefit
will be increased so that it is always at least as great as the Contract fund
divided by the net single premium for the insured's attained age at such time.
See HOW A CONTRACT'S DEATH BENEFIT WILL VARY, page 16. The term "Contract fund"
refers generally to the amount invested under the Contract and is defined under
CHARGES AND EXPENSES on page 11. The term "net single premium," the factor which
determines how much the death benefit will increase for a given increase in the
Contract fund, is defined and illustrated under item 2 of HOW A CONTRACT'S DEATH
BENEFIT WILL VARY ON PAGE 16. Whenever the death benefit is determined in this
way, Pruco Life of New Jersey reserves the right to refuse to accept further
premium payments, although in practice the payment of the lesser of 2 years'
scheduled premiums or the average of all premiums paid over the last 5 years
will generally be allowed.
There are circumstances, such as the payment of premiums substantially in excess
of scheduled premiums, under which the Contract may become a Modified Endowment
Contract under federal tax law. If it does, loans and other pre-death
distributions are includible in gross income on an income-first basis. A 10%
penalty tax may be imposed on income distributed before the insured attains age
59 1/2. Prospective purchasers and Contract owners are advised to consult a
qualified tax advisor before taking steps that may affect whether the Contract
becomes a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS,
page 26.
The owner of a Contract chooses the investment subaccount[s] of Pruco Life of
New Jersey's Variable Appreciable Account (the "Account") in which the assets
related to the Contract will be held. At present there are thirteen subaccounts.
Each is currently invested in a corresponding portfolio of The Prudential Series
Fund, Inc. (the "Series Fund"), a series mutual fund to which The Prudential
Insurance Company of America ("Prudential") acts as investment advisor. The
MONEY MARKET PORTFOLIO is invested in short-term debt obligations similar to
those purchased by money market funds; the DIVERSIFIED BOND PORTFOLIO is
invested primarily in high quality medium-term corporate and government debt
securities; the GOVERNMENT INCOME PORTFOLIO is invested primarily in U.S.
Government securities including intermediate and long-term U.S. Treasury
securities and debt obligations issued by agencies of or instrumentalities
established, sponsored or guaranteed by the U.S. Government; the CONSERVATIVE
BALANCED PORTFOLIO is invested in a mix of money market instruments, fixed
income securities, and common stocks, in proportions believed by the investment
manager to be appropriate for an investor who desires diversification of
investment who prefers a relatively lower risk of loss and a correspondingly
reduced chance of high appreciation; the FLEXIBLE MANAGED PORTFOLIO is invested
in a mix of money market instruments, fixed income securities, and common
stocks, in proportions believed by the investment manager to be appropriate for
an investor desiring diversification of investment who is willing to accept a
relatively high level of loss in an effort to achieve greater appreciation; the
HIGH YIELD BOND PORTFOLIO is invested primarily in high yield fixed income
securities of medium to lower quality, also known as high risk bonds; the STOCK
INDEX PORTFOLIO is invested in common stocks selected to duplicate the price and
yield performance of the Standard & Poor's 500 Composite Stock Price Index; the
EQUITY INCOME PORTFOLIO is invested primarily in common stocks and convertible
securities that provide favorable prospects for investment income returns above
those of the Standard & Poor's 500 Stock Index or the NYSE Composite Index; the
EQUITY PORTFOLIO is invested primarily in common stocks; the PRUDENTIAL JENNISON
PORTFOLIO is invested primarily in equity securities of established companies
with above-average prospects; the SMALL CAPITALIZATION STOCK PORTFOLIO is
invested primarily in equity securities of publicly-traded companies with small
market capitalization; the GLOBAL PORTFOLIO is invested in common stocks and
common stock equivalents (such as convertible debt securities) of foreign and
domestic issuers; the NATURAL RESOURCES PORTFOLIO is invested primarily in
common stocks and convertible securities of natural resource companies, and in
securities (typically debt securities or preferred stock)
2
<PAGE>
the terms of which are related to the market value of a natural resource.
Further information about the Series Fund portfolios can be found under THE
PRUDENTIAL SERIES FUND, INC. on page 4.
The Contract owner may also choose to invest part of his or her net premiums in
the Pruco Life of New Jersey Variable Contract Real Property Account (the "Real
Property Account"), which, through a partnership, invests primarily in
income-producing real property. If a Contract owner elects to invest a portion
of his or her net premiums in the Real Property Account, the assets will be
maintained in a subaccount of the Real Property Account related to the Contract
that provides the mechanism and maintains the records whereby the various
Contract charges are made. The investment objectives of the Real Property
Account and the partnership are described briefly under PRUCO LIFE OF NEW JERSEY
VARIABLE CONTRACT REAL PROPERTY ACCOUNT on page 5.
Because the assets that relate to the Contract are invested in these ways, the
Contract offers an opportunity for the cash surrender value to appreciate more
rapidly than it would under comparable fixed-benefit whole-life insurance. But
the owner must accept the risk that if investment performance of the chosen
option[s] is unfavorable the cash surrender value may not appreciate as rapidly
and, indeed, may decrease in value. Contract owners who prefer at any time to
accept a periodically declared fixed rate of return and avoid this risk may
choose a fixed-rate option. See THE FIXED-RATE OPTION, page 28.
Pruco Life of New Jersey deducts certain charges from each premium payment and
from the amounts held in the designated investment options. In addition, Pruco
Life of New Jersey makes certain additional charges if a Contract lapses or is
surrendered during the first 10 Contract years. All these charges, which are
largely designed to cover insurance costs and sales and administrative expenses,
are fully described under CHARGES AND EXPENSES on page 11. In brief, and subject
to that fuller description, the following charges may be made: (1) $2 is
deducted from each premium payment to cover premium collection and processing
costs; (2) a sales charge is deducted from each premium received in an amount up
to 5% of the portion of the premium remaining after the $2 processing charge has
been deducted (on a non-guaranteed basis, this charge is waived for premiums
paid after total premiums paid under the Contract exceed 5 years of scheduled
premiums on an annual basis); in addition, if the Contract lapses or is
surrendered during the first 10 years, a deferred sales charge is assessed; the
maximum deferred sales charge is 25% of the first year's scheduled premium and
5% of the scheduled premiums for the next 4 Contract years; beginning in the
eighth month of year 6 this charge is reduced monthly until it disappears after
year 10; (3) a premium tax charge (equal to 2.5% of the premium remaining after
the $2 processing charge has been deducted) is deducted from each premium
payment; (4) each month, the Contract fund is reduced by an administrative
charge of $2.50 per Contract and up to $0.02 per $1,000 of face amount of
insurance; (5) each month, the Contract fund is reduced by a guaranteed minimum
death benefit risk charge of not more than $0.01 per $1,000 of face amount of
insurance; (6) each month, a charge for anticipated mortality is deducted, with
the maximum charge based on the 1980 Commissioners Standard Ordinary Mortality
Table ("1980 CSO Table"); (7) a daily charge equivalent to an annual rate of
0.6% is deducted from the assets of the subaccounts for mortality and expense
risks; (8) if a Contract lapses or is surrendered during the first 10 years, a
contingent deferred administrative charge is assessed; during the first 5 years,
this charge equals $5 per $1,000 of face amount, and it begins to decline
monthly after the fifth Contract year, so that it disappears on the tenth
Contract anniversary; (9) an administrative processing charge equal to the
lesser of $15 or 2% of the amount withdrawn will be made in connection with each
withdrawal of excess cash surrender value; (10) if the Contract includes riders,
a monthly deduction from the Contract fund will be made for charges applicable
to those riders; a deduction will also be made if the rating class of the
insured results in an extra charge; and (11) certain fees and expenses are
deducted from the assets of the Series Fund and Real Property Account. Because
of these charges, and in particular because of the significant charges deducted
upon early surrender or lapse, prospective purchasers should purchase a Contract
only if they intend and have the financial capability to keep it in force for a
substantial period.
For a limited time, a Contract may be returned for a refund in accordance with
the terms of its "free look" provision. See SHORT-TERM CANCELLATION RIGHT OR
"FREE LOOK," page 6.
This Summary is intended to provide only a brief overview of the more
significant aspects of the Contract. Further detail is provided in this
prospectus and in the Contract document. That document, together with the
application attached to it, constitutes the entire agreement between the owner
and Pruco Life of New Jersey and should be retained.
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GENERAL INFORMATION ABOUT PRUCO LIFE
INSURANCE COMPANY OF NEW JERSEY, PRUCO
LIFE OF NEW JERSEY VARIABLE APPRECIABLE
ACCOUNT, AND THE VARIABLE INVESTMENT
OPTIONS AVAILABLE UNDER THE CONTRACT
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey") is a
stock life insurance company, organized in 1982 under the laws of the State of
New Jersey. It is licensed to sell life insurance and annuities only in the
States of New Jersey and New York.
Pruco Life of New Jersey is a wholly-owned subsidiary of Pruco Life Insurance
Company, which in turn is a wholly-owned subsidiary of Prudential, a mutual
insurance company founded in 1875 under the laws of the State of New Jersey. As
of December 31, 1996, it has invested $127 million in Pruco Life of New Jersey
through its subsidiary Pruco Life Insurance Company in connection with Pruco
Life of New Jersey's organization and operation. Prudential intends from time to
time to make additional capital contributions to Pruco Life of New Jersey as
needed to enable it to meet its reserve requirements and expenses in connection
with its business. However, Prudential is under no obligation to make such
contributions and its assets do not back the benefits payable under the
Contract. Pruco Life of New Jersey's financial statements begin on page B1 and
should be considered only as bearing upon Pruco Life of New Jersey's ability to
meet its obligations under the Contracts.
PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
The Pruco Life of New Jersey Variable Appreciable Account (the "Account") was
established on January 13, 1984 under New Jersey law as a separate investment
account. The Account meets the definition of a "separate account" under the
federal securities laws. The Account holds assets that are segregated from all
of Pruco Life of New Jersey's other assets.
The obligations to Contract owners and beneficiaries arising under the Contracts
are general corporate obligations of Pruco Life of New Jersey. Pruco Life of New
Jersey is also the legal owner of the assets in the Account. Pruco Life of New
Jersey will maintain assets in the Account with a total market value at least
equal to the reserve and other liabilities relating to the variable benefits
attributable to the Account. These assets may not be charged with liabilities
which arise from any other business Pruco Life of New Jersey conducts. In
addition to these assets, the Account's assets may include funds contributed by
Pruco Life of New Jersey to commence operation of the Account and may include
accumulations of the charges Pruco Life of New Jersey makes against the Account.
From time to time these additional assets will be transferred to Pruco Life of
New Jersey's general account. Before making any such transfer, Pruco Life of New
Jersey will consider any possible adverse impact the transfer might have on the
Account.
The Account is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("1940 Act") as a unit investment
trust, which is a type of investment company. This does not involve any
supervision by the SEC of the management or investment policies or practices of
the Account. For state law purposes, the Account is treated as a part or
division of Pruco Life of New Jersey. There are currently thirteen subaccounts
within the Account, each of which invests only in a single corresponding
portfolio of the Series Fund. Additional subaccounts may be added in the future.
The Account's financial statements begin on page A1.
THE PRUDENTIAL SERIES FUND, INC.
The Prudential Series Fund, Inc. (the "Series Fund") is registered under the
1940 Act as an open-end diversified management investment company. Its shares
are currently sold only to separate accounts of Prudential and certain other
insurers that offer variable life insurance and variable annuity contracts. On
October 31, 1986, the Pruco Life Series Fund, Inc., an open-end diversified
management investment company which sold its shares only to separate accounts of
Pruco Life of New Jersey and Pruco Life Insurance Company, was merged into the
Series Fund. Prior to that date, the Account invested only in shares of Pruco
Life Series Fund, Inc. The Account will purchase and redeem shares from the
Series Fund at net asset value. Shares will be redeemed to the extent necessary
for Pruco Life of New Jersey to provide benefits under the Contracts and to
transfer assets from one subaccount to another, as requested by Contract owners.
Any dividend or capital gain distribution received from a portfolio of the
Series Fund will be reinvested immediately at net asset value in shares of that
portfolio and retained as assets of the corresponding subaccount.
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Prudential is the investment advisor for the assets of each of the portfolios of
the Series Fund. Prudential's principal business address is Prudential Plaza,
Newark, New Jersey 07102-3777. Prudential has a Service Agreement with its
wholly-owned subsidiary The Prudential Investment Corporation ("PIC"), which
provides that, subject to Prudential's supervision, PIC will furnish investment
advisory services in connection with the management of the Series Fund. In
addition, Prudential has entered into a Subadvisory Agreement with its
wholly-owned subsidiary Jennison Associates Capital Corporation ("Jennison"),
under which Jennison furnishes investment advisory services in connection with
the management of the Prudential Jennison Portfolio. Further detail is provided
in the prospectus and statement of additional information for the Series Fund.
Prudential, PIC, and Jennison are registered as investment advisors under the
Investment Advisers Act of 1940.
As an investment advisor, Prudential charges the Series Fund a daily investment
management fee as compensation for its services. In addition to the investment
management fee, each portfolio incurs certain expenses, such as accounting and
custodian fees. See CHARGES AND EXPENSES, page 11.
It is conceivable that in the future it may become disadvantageous for both
variable life insurance and variable annuity contract separate accounts to
invest in the same underlying mutual fund. Although neither the companies which
invest in the Series Fund, nor the Series Fund currently foresees any such
disadvantage, the Series Fund's Board of Directors intends to monitor events in
order to identify any material conflict between variable life insurance and
variable annuity contract owners and to determine what action, if any, should be
taken in response thereto. Material conflicts could result from such things as:
(1) changes in state insurance law; (2) changes in federal income tax law; (3)
changes in the investment management of any portfolio of the Series Fund; or (4)
differences between voting instructions given by variable life insurance and
variable annuity contract owners.
A FULL DESCRIPTION OF THE SERIES FUND, ITS INVESTMENT OBJECTIVES, MANAGEMENT,
POLICIES, AND RESTRICTIONS, ITS EXPENSES, THE RISKS ATTENDANT TO INVESTMENT
THEREIN--INCLUDING ANY RISKS ASSOCIATED WITH INVESTMENT IN THE HIGH YIELD BOND
PORTFOLIO, AND ALL OTHER ASPECTS OF ITS OPERATION IS CONTAINED IN THE ATTACHED
PROSPECTUS FOR THE SERIES FUND AND IN ITS STATEMENT OF ADDITIONAL INFORMATION,
WHICH SHOULD BE READ IN CONJUNCTION WITH THIS PROSPECTUS. THERE IS NO ASSURANCE
THAT THE INVESTMENT OBJECTIVES WILL BE MET.
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
The Pruco Life of New Jersey Variable Contract Real Property Account (the "Real
Property Account") is a separate account of Pruco Life of New Jersey that,
through a general partnership formed by Prudential and two of its subsidiaries,
invests primarily in income-producing real property such as office buildings,
shopping centers, agricultural land, hotels, apartments or industrial
properties. It also invests in mortgage loans and other real estate-related
investments, including sale-leaseback transactions. The objectives of the Real
Property Account and the partnership are to preserve and protect capital,
provide for compounding of income as a result of reinvestment of cash flow from
investments, and provide for increases over time in the amount of such income
through appreciation in the value of assets.
The partnership has entered into an investment management agreement with
Prudential, under which Prudential selects the properties and other investments
held by the partnership. Prudential charges the partnership a daily fee for
investment management which amounts to 1.25% per year of the average daily gross
assets of the partnership.
A FULL DESCRIPTION OF THE REAL PROPERTY ACCOUNT, ITS MANAGEMENT POLICIES, AND
RESTRICTIONS, ITS CHARGES AND EXPENSES, THE RISKS ATTENDANT TO INVESTMENT
THEREIN, THE PARTNERSHIP'S INVESTMENT OBJECTIVES, AND ALL OTHER ASPECTS OF THE
REAL PROPERTY ACCOUNT'S AND THE PARTNERSHIP'S OPERATIONS IS CONTAINED IN THE
ATTACHED PROSPECTUS FOR THE REAL PROPERTY ACCOUNT, WHICH SHOULD BE READ TOGETHER
WITH THIS PROSPECTUS BY ANY CONTRACT OWNER CONSIDERING THE REAL ESTATE
INVESTMENT OPTION. THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES WILL BE
MET.
WHICH INVESTMENT OPTION SHOULD BE SELECTED
A broad objective of the Contract is to provide benefits that will increase in
value if favorable investment results are achieved. Contract owners have a large
number of options as to how the amounts credited to their Contracts will be
invested. Historically, for investments held over relatively long periods, the
investment performance of common stocks has generally been superior to that of
short or long-term debt securities, even though common stocks have been subject
to much more dramatic changes in value over short periods of time. Accordingly,
the Stock Index, Equity Income, Equity, Prudential Jennison, Small
Capitalization Stock, Global, or Natural Resources Portfolios may be desirable
options for Contract owners who are willing to accept such volatility in their
Contract values. Each of these equity portfolios involves somewhat different
investment risks, policies, and programs.
Some Contract owners may prefer the somewhat greater protection against loss of
principal (and reduced chance of high total return) provided by the Government
Income or Diversified Bond Portfolios, while others, who desire
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even greater safety of principal, may prefer the Money Market Portfolio or the
fixed-rate option, recognizing that the level of short-term rates may change
rather rapidly. Contract owners not interested in common stocks but willing to
take risks and seeking the possibility of a high total return may prefer the
High Yield Bond Portfolio, recognizing that with higher yielding, lower quality
bonds the risks are greater. Some Contract owners may wish to divide their funds
among two or more of the portfolios. Some may wish to obtain diversification by
relying on Prudential's judgment for an appropriate asset mix by choosing one of
the Balanced Portfolios. The Real Property Account permits a Contract owner to
diversify his or her investment under the Contract to include an interest in a
pool of income-producing real property, and real estate is often considered to
be a hedge against inflation.
Each Contract owner must make his or her own choice that takes into account how
willing he or she is to accept investment risks, the manner in which his or her
other assets are invested, and his or her own predictions about what investment
results are likely to be in the future. Prudential recommends against frequent
transfers among the several options as experience generally indicates that
"market timing" investing, particularly by non-professional investors, is likely
to prove unsuccessful.
DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS
REQUIREMENTS FOR ISSUANCE OF A CONTRACT
As of May 1, 1992, these Contracts are no longer available for sale. Generally,
the minimum initial guaranteed death benefit that can be applied for is $60,000,
however higher minimums apply to insureds over the age of 75. Insureds 14 years
of age or less may apply for a minimum initial guaranteed death benefit of
$40,000. The Contract may generally be issued on insureds below the age of 81.
Before issuing any Contract, Pruco Life of New Jersey requires evidence of
insurability which may include a medical examination. Non-smokers who meet
preferred underwriting requirements are offered the most favorable premium rate.
A higher premium is charged if an extra mortality risk is involved. Certain
classes of Contracts, for example a Contract issued in connection with a
tax-qualified pension plan, may be issued on a "guaranteed issue" basis and may
have a lower minimum initial death benefit than a Contract which is individually
underwritten. These are the current underwriting requirements. The Company
reserves the right to change them on a non-discriminatory basis.
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK"
Generally, a Contract may be returned for a refund within 10 days after it is
received by the Contract owner, within 45 days after Part I of the application
for insurance is signed or within 10 days after Pruco Life of New Jersey mails
or delivers a Notice of Withdrawal Right, whichever is latest. Some states allow
a longer period of time during which a Contract may be returned for a refund. A
refund can be requested by mailing or delivering the Contract to the
representative who sold it or to the Home Office specified in the Contract. A
Contract returned according to this provision shall be deemed void from the
beginning. The Contract owner will then receive a refund of all premium payments
made, plus or minus any change due to investment experience. However, if
applicable law so requires, the Contract owner who exercises his or her
short-term cancellation right will receive a refund of all premium payments
made, with no adjustment for investment experience.
CONTRACT FORMS
A purchaser may select either of two forms of the Contract. The scheduled
premium for the Contract will be the same for a given insured, regardless of
which Contract Form is chosen. Contract Form A has a death benefit equal to the
initial face amount of insurance. The death benefit of a Form A Contract does
not vary with the investment performance of the subaccount[s] selected by the
owner, unless the Contract becomes paid-up or, under a revised version of the
Contract, unless the death benefit is increased to ensure that the Contract
meets the Internal Revenue Code's definition of life insurance. See HOW A
CONTRACT'S DEATH BENEFIT WILL VARY, page 16. Favorable investment results on the
assets related to the Contract and greater than scheduled premiums will
generally result in increases in the cash surrender value. See HOW A CONTRACT'S
CASH SURRENDER VALUE WILL VARY, page 15.
Contract Form B also has an initial face amount of insurance but favorable
investment performance and greater than scheduled premiums generally result in
an increase in the death benefit and, over time, in a lesser increase in the
cash surrender value than under the Form A Contract. See HOW A CONTRACT'S CASH
SURRENDER VALUE WILL VARY, page 15 and HOW A CONTRACT'S DEATH BENEFIT WILL VARY,
page 16. Unfavorable investment performance will result in decreases in the
death benefit (but never below the face amount stated in the Contract) and in
the cash surrender value.
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Both Form A and Form B Contracts covering insureds of 14 years of age or less
contain a special provision providing that the face amount of insurance will
automatically be increased, on the Contract anniversary after the insured's 21st
birthday, to 150% of the initial face amount, so long as the Contract is not
then in default. The death benefit will also usually increase, at the same time,
by the same dollar amount. In certain circumstances, however, it may increase by
a smaller amount. See WHEN A CONTRACT BECOMES PAID-UP, page 17 and HOW A
CONTRACT'S DEATH BENEFIT WILL VARY, page 16. This increase in death benefit will
also generally increase the net amount at risk under the Contract, thus
increasing the mortality charge deducted each month from amounts invested under
the Contract. See item 6 under CHARGES AND EXPENSES, page 11. The automatic
increase in the face amount of insurance may affect future premium payments if
the Contract owner wants to avoid the Contract being classified as a Modified
Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 26. A Contract
owner should consult his or her own tax advisor and Pruco Life of New Jersey
representative before making unscheduled premium payments.
Purchasers should select the Contract Form that best meets their needs and
objectives. All whole-life insurance provides both protection for beneficiaries
in the event of early death and the opportunity to accumulate savings for
possible use in later years--for such things as college tuition or supplementary
retirement income--when the need for insurance protection may be reduced. Pruco
Life of New Jersey's Variable APPRECIABLE LIFE Contract provides more flexible
investment opportunities than do more conventional life insurance policies
because it permits the owner to decide how the assets held under the Contract
will be invested, because it permits considerable flexibility in determining the
amount and timing of premium payments, because it permits adjustment of the face
amount of insurance (subject, in the case of an increase, to evidence of
insurability), and because favorable investment returns result in an increase in
Contract values. Purchasers who prefer to have favorable investment results and
greater than scheduled premiums emerge partly in the form of an increased death
benefit should choose Contract Form B. Purchasers who are satisfied with the
amount of their insurance coverage and wish to have favorable investment results
and additional premiums reflected to the maximum extent in increasing cash
surrender values should choose Contract Form A. See HOW A CONTRACT'S CASH
SURRENDER VALUE WILL VARY, page 15.
In choosing a Contract Form, purchasers should also consider whether they intend
to use the withdrawal feature. Purchasers of Form A Contracts should note that a
withdrawal may result in a portion of the surrender charge being deducted from
the Contract fund. Furthermore, a purchaser of a minimum face amount Form A
Contract cannot make withdrawals. Purchasers of Form B Contracts will not incur
a surrender charge for a withdrawal and are not restricted if they purchase a
minimum size Contract. See WITHDRAWAL OF EXCESS CASH SURRENDER VALUE, page 18.
Under the original versions of these Contracts, there are other distinctions
between the Contract Forms that may influence a purchaser's selection. Thus,
Contract Form A will become paid-up more rapidly than a comparable Form B
Contract. But owners of Form A Contracts should be aware that since premium
payments and favorable investment experience do not increase the death benefit
unless the Contract has become paid-up, the beneficiary will not benefit from
the possibility that the Contract will have a large cash surrender value at the
time of the insured's death.
Under a revised version of the Contract that was made available beginning in
September of 1986 in jurisdictions where it is approved, the Contract will never
become paid-up. Instead, the death benefit under these revised Contracts is
always at least as great as the Contract fund divided by the net single premium.
See HOW A CONTRACT'S DEATH BENEFIT WILL VARY, page 16. Thus instead of becoming
paid-up, the Contract's death benefit will always be large enough to meet the
Internal Revenue Code's definition of life insurance. Whenever the death benefit
is determined in this way, Pruco Life of New Jersey reserves the right to refuse
to accept further premium payments, although in practice the payment of at least
scheduled premiums will be allowed.
PREMIUMS
Scheduled premiums on the Contract are payable during the insured's lifetime on
an annual, semi-annual, quarterly or monthly basis on due dates set forth in the
Contract. If paid more often than annually, the aggregate annual premium will be
higher to compensate Pruco Life of New Jersey both for the additional processing
costs (see item 1 under CHARGES AND EXPENSES, page 11) and for the loss of
interest (computed generally at an annual rate of 8%) incurred because premiums
are paid throughout rather than at the beginning of each Contract year. The
premium amount depends on the Contract's initial death benefit and the insured's
age at issue, sex (except where unisex rates apply), and risk classification.
Contract owners who pay premiums other than on a monthly basis will be notified,
about 3 weeks before each due date, that a premium is due. Contract owners who
pay premiums monthly will receive each year a book with twelve coupons that will
serve as a reminder. With Pruco Life of New Jersey's consent, an owner may
change the frequency of premium payments.
A Contract owner may elect to have monthly premiums paid automatically under the
"Pru-Matic Premium Plan" by pre-authorized transfers from a bank checking
account. Currently, Contract owners selecting the Pru-Matic
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Premium Plan on Contracts issued after June 1, 1987 will have reduced current
monthly expense charges. See item 4 under CHARGES AND EXPENSES, page 11. Some
Contract owners may also be eligible to have monthly premiums paid by
pre-authorized deductions from an employer's payroll.
Each Contract sets forth two premium amounts. The initial premium amount is
payable on the Contract date (the date the Contract is issued, as noted in each
individual Contract) and on each subsequent due date until the Contract's
anniversary immediately following the insured's 65th birthday (or until the
Contract's tenth anniversary, if that is later). The second and higher premium
amount set forth in the Contract is payable on and after that anniversary (the
"premium change date"). However, if the amount invested under the Contract, net
of any excess premiums, is higher than it would have been had only scheduled
premiums been paid, had maximum contractual charges been deducted, and had only
an average net rate of return of 4% been earned, then the second premium amount
will be lower than the maximum amount stated in the Contract. Indeed, under the
original versions of these Contracts, if investment experience has been
favorable enough, the Contract may become paid-up before or by the premium
change date. Pruco Life of New Jersey reserves the right not to accept any
further premium payments on a paid-up Contract. Contract owners will be told
what the amount of the second premium will be.
Pruco Life of New Jersey designed the Contracts to include a premium change
date, with scheduled premiums potentially increasing after that date to a second
premium amount, in order to provide Contract owners with both the flexibility to
pay lower initial scheduled premiums and a guarantee of lifetime insurance
coverage if all scheduled premiums are paid. The tables on pages T1 through T4
show how the second premium amount compares with the first premium amount under
Contracts and for different hypothetical investment results.
The following table shows, for two face amounts, representative initial
preferred rating and standard rating annual premium amounts under either Form A
or Form B Contracts issued on insureds who are not substandard risks:
- --------------------------------------------------------------------------------
$60,000 FACE AMOUNT $100,000 FACE AMOUNT
-------------------------------------------------------------
PREFERRED STANDARD PREFERRED STANDARD
- -------------------------------------------------------------------------------
MALE, AGE 35 $ 554.80 $ 669.40 $ 902.00 $1,093.00
AT ISSUE
- -------------------------------------------------------------------------------
FEMALE, AGE 45 $ 698.80 $ 787.60 $1,142.00 $1,290.00
AT ISSUE
- -------------------------------------------------------------------------------
MALE, AGE 55 $1,556.20 $1,832.20 $2,571.00 $3,031.00
AT ISSUE
- -------------------------------------------------------------------------------
The following table compares annual and monthly premiums for insureds who are in
the preferred rating class. Note that in these examples the sum of 12 monthly
premiums for a particular Contract is approximately 105% to 109% of the annual
premium for that Contract.
- --------------------------------------------------------------------------------
$60,000 FACE AMOUNT $100,000 FACE AMOUNT
-------------------------------------------------------------
MONTHLY ANNUAL MONTHLY ANNUAL
- --------------------------------------------------------------------------------
MALE, AGE 35 $ 50.00 $ 554.80 $ 80.00 $ 902.00
AT ISSUE
- --------------------------------------------------------------------------------
FEMALE, AGE 45 $ 62.60 $ 698.80 $ 101.00 $1,142.00
AT ISSUE
- --------------------------------------------------------------------------------
MALE, AGE 55 $136.40 $1,556.20 $224.00 $2,571.00
AT ISSUE
- --------------------------------------------------------------------------------
If a Contract owner wishes, he or she may select a higher contemplated premium
than the scheduled premium. Pruco Life of New Jersey will bill the owner for the
chosen premium. In general, the regular payment of higher
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premiums will result in higher cash surrender values and, at least under Form B,
in higher death benefits. Under the original versions of the Contracts, such
payments may also provide a means of obtaining a paid-up Contract earlier than
if only scheduled premiums are paid.
The payment of premiums substantially in excess of scheduled premiums may cause
the Contract to be classified as a Modified Endowment Contract for federal tax
purposes. See TAX TREATMENT OF CONTRACT BENEFITS, page 26.
CONTRACT DATE
When the first premium payment is paid with the application for a Contract, the
Contract date will ordinarily be the later of the date of the application or the
date of any medical examination. In most cases no medical examination will be
necessary. If the first premium is not paid with the application, the Contract
date will ordinarily be 2 or 3 days after the application is approved by Pruco
Life of New Jersey so that it will coincide with or be shortly prior to the date
on which the first premium is paid. However, Pruco Life of New Jersey will under
certain circumstances permit a Contract to be back-dated but only to a date not
earlier than six months prior to the date of the application. It may be
advantageous for a Contract owner to have an earlier Contract date if that will
result in the use by Pruco Life of New Jersey of a lower attained age in
determining the amount of the scheduled premium. Pruco Life of New Jersey will
require the payment of all premiums that would have been due had the application
date coincided with the back-dated Contract date. The death benefit and cash
surrender value under the Contract will be equal to what they would have been
had the Contract been issued on the Contract date, all scheduled premiums been
received on their due dates, and all Contract charges been made. See CHARGES AND
EXPENSES, page 11.
ALLOCATION OF PREMIUMS
On the Contract date, a $2 processing charge is deducted from the initial
premium and up to 7.5% of the amount remaining is deducted to cover certain
charges (described in detail below), and the first monthly deductions are made
(also described below). The remainder of the initial scheduled premium will be
allocated among the subaccounts, the fixed-rate option or the Real Property
Account on the Contract date according to the desired allocation specified in
the application form. The invested portion of any part of the first premium in
excess of the scheduled initial premium, as well as the invested portion of all
subsequent premiums, are placed in the selected investment option[s] on the date
of receipt at a Home Office, but not earlier than the Contract date. Thus, to
the extent that the receipt of the first premium precedes the Contract date,
there will be a period during which the Contract owner's initial premium will
not be invested. The $2 per payment charge and up to 7.5% deduction also apply
to all subsequent premium payments; the remainder will be invested as of the end
of the valuation period in which it is received at a Home Office in accordance
with the allocation previously designated by the Contract owner. The "valuation
period" means the period of time from one determination of the value of the
amount invested in a subaccount to the next. Such determinations are made when
the net asset values of the portfolios of the Series Fund are calculated, which
is generally at 4:15 p.m. New York City time on each day during which the New
York Stock Exchange is open. Provided the Contract is not in default, the
Contract owner may change the way in which subsequent premiums are allocated by
giving written notice to a Home Office or by telephoning that Home Office,
provided the Contract owner is enrolled to use the Telephone Transfer System.
There is no charge for reallocating future premiums among investment options. If
any portion of a premium is allocated to a particular subaccount, to the
fixed-rate option or to the Real Property Account, that portion must be at least
10% on the date the allocation takes effect. All percentage allocations must be
in whole numbers. For example, 33% can be selected but 33_% cannot. Of course,
the total allocation of all selected investment options must equal 100%.
Additionally, a feature called Dollar Cost Averaging ("DCA") is available to
Contract owners. Under this feature, premiums may be allocated to the portion of
the Money Market subaccount used for this feature (the "DCA account"), and
designated dollar amounts will be transferred monthly from the DCA account to
other investment options available under the Contract, excluding the Money
Market subaccount and the fixed-rate option, but including the Real Property
Account. Automatic monthly transfers must be at least 3% of the amount allocated
to the DCA account (that is, if $5,000 is designated, the minimum monthly
transfer is $150), with a minimum of $20 transferred into any one investment
option. These amounts are subject to change at Pruco Life of New Jersey's
discretion. The minimum transfer amount will only be recalculated if the amount
designated for transfer is increased.
Currently, the amount initially designated to DCA must be at least $2,000. This
minimum is subject to change at Pruco Life of New Jersey's discretion. After DCA
has been established and as long as the DCA account has a positive balance,
Contract owners may allocate or transfer amounts to the DCA account, subject to
the limitations on premium payments and transfers generally. In addition, if
premiums are paid on an annual or semi-annual basis,
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and the Contract owner has already established DCA, the premium allocation
instructions may include an allocation of all or a portion of all your premium
payments to the DCA account.
Each automatic monthly transfer will take effect as of the end of the valuation
period on the Monthly Date (i.e. the Contract Date and the same date in each
subsequent month), provided the New York Stock Exchange ("NYSE") is open on that
date. If the NYSE is not open on the Monthly Date, the transfer will take effect
as of the end of the valuation period on the next day that the NYSE is open. If
the Monthly Date does not occur in a particular month (e.g., February 30), the
transfer will take effect as of the end of the valuation period on the last day
of that month that the NYSE is open. Automatic monthly transfers will continue
until the balance in the DCA account reaches zero, or until the Contract owner
gives notification of a change in allocation or cancellation of the feature. If
the Contract has outstanding premium allocation to the DCA account, but the DCA
option has previously been canceled, premiums allocated to the DCA account will
be allocated to the Money Market subaccount. Currently, there is no charge for
using the DCA feature.
TRANSFERS
Provided the Contract is not in default or is in force as variable reduced
paid-up insurance (see OPTIONS ON LAPSE, page 25), the owner may, up to four
times in each Contract year, transfer amounts from one subaccount to another
subaccount, to the fixed-rate option or to the Real Property Account. Currently,
you may make additional transfers with our consent. There is no charge. All or a
portion of the amount credited to a subaccount may be transferred.
In addition, the entire amount of the Contract fund (described in detail below)
may be transferred to the fixed-rate option at any time during the first 2
Contract years. A Contract owner who wishes to convert his or her variable
Contract to a fixed-benefit Contract in this manner must request a complete
transfer of funds to the fixed-rate option and should also change his or her
allocation instructions regarding any future premiums.
Transfers among subaccounts will take effect as of the end of the valuation
period in which a proper transfer request is received at a Home Office. The
request may be in terms of dollars, such as a request to transfer $10,000 from
one subaccount to another, or may be in terms of a percentage reallocation among
subaccounts. In the latter case, as with premium reallocations, the percentages
must be in whole numbers. The Contract owner may transfer amounts by proper
written notice to a Home Office or by telephone, provided the Contract owner is
enrolled to use the Telephone Transfer System. A Contract owner will
automatically be enrolled to use the Telephone Transfer System unless the
Contract is jointly owned or the Contract owner elects not to have this
privilege. Telephone transfers may not be available on policies that are
assigned, see ASSIGNMENT, page 29, depending on the terms of the assignment.
Pruco Life of New Jersey has adopted procedures designed to ensure that requests
by telephone are genuine. Pruco Life of New Jersey will not be held liable for
following telephone instructions that it reasonably believes to be genuine.
Pruco Life of New Jersey cannot guarantee that owners will be able to get
through to complete a telephone transfer during peak periods such as periods of
drastic economic or market change.
Transfers from the fixed-rate option to other investment options are currently
permitted once each Contract year and only during the 30-day period beginning on
the Contract anniversary. The maximum amount which may currently be transferred
out of the fixed-rate option each year is the greater of: (a) 25% of the amount
in the fixed-rate option, or (b) $2,000. Such transfer requests received prior
to the Contract anniversary will be effected on the Contract anniversary.
Transfer requests received within the 30-day period beginning on the Contract
anniversary will be effected as of the end of the valuation period in which a
proper transfer request is received at a Home Office. These limits are subject
to change in the future. Transfers to and from the Real Property Account are
subject to restrictions described in the attached prospectus for the Real
Property Account.
Pruco Life may, on a non-discriminatory basis, permit the owner of an
APPRECIABLE LIFE insurance policy issued by Pruco Life of New Jersey (this
fixed-benefit policy is briefly described under RIGHT TO EXCHANGE A CONTRACT FOR
A FIXED-BENEFIT INSURANCE POLICY on page 26) to exchange his or her policy for a
comparable Variable APPRECIABLE LIFE Contract with the same Contract date,
scheduled premiums, and Contract fund. No charge will be made for the exchange.
There is no new "free look" right when an APPRECIABLE LIFE contract owner elects
to exchange his or her policy for a comparable Variable APPRECIABLE LIFE
Contract.
Although Pruco Life of New Jersey does not give tax advice, Pruco Life of New
Jersey does believe, based on its understanding of federal income tax laws as
currently interpreted, that the original date exchange of an APPRECIABLE LIFE
contract for a Variable APPRECIABLE LIFE Contract should be considered to be a
tax-free exchange under the Internal Revenue Code of 1986, as amended. It should
be noted, however, that the exchange of an APPRECIABLE LIFE contract for a
Variable APPRECIABLE LIFE Contract may impact the status of the Contract as a
Modified
10
<PAGE>
Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 26. A contract
owner should consult with his or her tax advisor and Pruco Life of New Jersey
representative before making an exchange.
CHARGES AND EXPENSES
The amount relating to the Contract held in the Account is determined by the
amount of premium payments, charges deducted from premiums before they are
placed in the Account, deductions made from the Account, including any
deductions made for a Contract loan (see CONTRACT LOANS, page 24), and the
investment results of the selected subaccount[s]. The total amount invested
under the Contract (the "Contract fund") consists of the amount related to the
Contract held in the Account, any amount allocated to the fixed-rate option, any
amount invested in the Real Property Account, and the principal amount of any
Contract loan and interest credited thereon.
All of the charges made by Pruco Life of New Jersey, whether deducted from
premiums or from the Contract fund, are set forth below.
1. A charge of $2 is deducted from each premium payment to cover the cost of
collecting and processing premiums. Thus, Contract owners who pay premiums
annually will incur lower aggregate processing charges than those who pay
premiums more frequently. During 1996, 1995 and 1994, Pruco Life of New
Jersey received a total of approximately $949,000, $1,010,000 and
$1,077,000, respectively, in processing charges.
2. There is a charge to compensate Pruco Life of New Jersey for the cost of
selling the Contract. This cost includes sales commissions, advertising,
and the printing of the prospectuses and sales literature. This charge is
called the "sales load." The maximum sales load that will be charged will
be 30% of the first year's scheduled premium, 10% of the scheduled premium
for the second, third, fourth, and fifth years and 5% of each additional
premium, whether scheduled or unscheduled. Part of this sales load will be
deducted from each premium received in an amount up to 5% of the portion of
the premium remaining after the $2 processing charge has been deducted. The
remainder of the sales load will be deducted only if the Contract is
surrendered or stays in default past its days of grace. This second part is
called the deferred sales charge. The deferred sales charge will not be
deducted at all, however, for Contracts that lapse or are surrendered on or
after the Contract's tenth anniversary and it will be reduced for Contracts
that lapse or are surrendered sometime between the eighth month of year 6
and the tenth anniversary. No deferred sales charge is applicable to the
death benefit, no matter when that may become payable.
For Contracts under which premiums are payable annually, the maximum
deferred sales charge (equal to 25% of the scheduled premium for the first
Contract year and 5% of the scheduled premium for the next 4 Contract
years) will be made under Contracts that lapse or are surrendered during
the fifth Contract year and the first 7 months of the sixth Contract year.
Thereafter the sales charge will be the maximum charge reduced uniformly
until it becomes zero at the end of the tenth Contract year. More
precisely, the deferred sales charge will be the maximum charge reduced by
a factor equal to the number of complete months that have elapsed between
the end of the sixth month in the Contract's sixth year and the date of
surrender or lapse, divided by 54 (since there are 54 months between that
date and the Contract's tenth anniversary). The following table shows
illustrative deferred sales load charges that will be made when such
Contracts are surrendered or lapse.
11
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
FOR CONTRACTS THE DEFERRED SALES CHARGE WILL WHICH IS EQUAL TO THE FOLLOWING
SURRENDERED DURING BE THE FOLLOWING PERCENTAGE PERCENTAGE OF THE SCHEDULED
OF ONE SCHEDULED ANNUAL PREMIUM PREMIUMS DUE TO DATE OF SURRENDER
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Entire Year 1 25% 25.00%
Entire Year 2 30% 15.00%
Entire Year 3 35% 11.67%
Entire Year 4 40% 10.00%
Entire Year 5 45% 9.00%
First 7 Months of Year 6 45% 7.50%
First Month of Year 7 40% 5.71%
First Month of Year 8 30% 3.75%
First Month of Year 9 20% 2.22%
First Month of Year 10 10% 1.00%
First Month of Year 11
and Thereafter 0% 0.00%
------------------------------------------------------------------------------------------------------------
</TABLE>
For Contracts under which premiums are payable more frequently than
annually, the deferred sales charge will be 25% of the first year's
scheduled premiums due on or before the date of surrender or lapse and 5%
of the scheduled premiums for the second through fifth Contract years due
on or before the date of surrender or lapse. Thus, for such Contracts the
maximum deferred sales charge will also be equal to 9% of the total
scheduled premiums for the first 5 Contract years. This amount will be
higher in dollar amount than it would have been had premiums been paid
annually because the total of the scheduled premiums is higher. See
PREMIUMS, page 7. To compensate for this, the reduction in the deferred
sales charge will start slightly earlier for Contracts under which premiums
are paid semi-annually, still earlier if premiums are paid quarterly and
even earlier if premiums are paid monthly. The reductions are graded
smoothly so that the dollar amount of the deferred sales charge for two
persons of the same age, sex, contract size, and Contract date will be
identical beginning in the seventh month of the sixth Contract year without
regard to the frequency at which premiums were paid.
For purposes of determining the deferred sales charge, the scheduled
premium is the premium payable for an insured in the preferred rating
class, even if the insured is in a higher rated risk class. Moreover, if
premiums have been paid in excess of the scheduled premiums, the charge is
based upon the scheduled premiums. If a Contract is surrendered when less
than the aggregate amount of the scheduled premiums due on or before the
date of surrender has been paid, the deferred sales charge percentages
(25%for the first year and 5% for years 2 through 5) will be applied to the
premium payments due on or before the fifth anniversary date that were
actually paid, whether timely or not, before surrender. During 1996, 1995
and 1994, Pruco Life of New Jersey received a total of approximately
$63,000, $143,000 and $271,000, respectively, in sales load charges.
Pruco Life of New Jersey has determined to waive the portion of the sales
load deducted from each premium (5% of the portion of the premium remaining
after the $2 processing charge has been deducted) for premiums paid after
total premiums paid under the Contract exceed 5 years of scheduled premiums
on an annual basis. Thus, with respect to a premium paid after that total
is reached, only the 2.5% premium tax charge and the $2 processing charge
is deducted before the premium is allocated to the Account, fixed-rate
option or the Real Property Account, according to the owner's instructions.
This concession is not contractually guaranteed and may be withdrawn or
modified by Pruco Life of New Jersey on a uniform basis, although it does
not currently intend to do so. If an owner elects to increase the face
amount of his or her Contract, the rules governing the non-guaranteed
waiver of the 5% front-end sales load will apply separately to the base
Contract and the increase, as explained under INCREASES IN FACE AMOUNT on
page 19.
3. There is a premium tax charge equal to 2.5% of the premium remaining after
the $2 processing charge has been deducted. (The 7.5% deduction referred to
on page 9 is made up of the 5% sales load charge and the 2.5% premium tax
charge). Pruco Life of New Jersey may collect more for this charge than it
actually pays for premium taxes. During 1996, 1995 and 1994, Pruco Life of
New Jersey received a total of approximately $1,303,000, $1,621,000 and
$1,746,000, respectively, in charges for payment of state premium taxes.
4. On each Monthly date, the Contract fund is reduced by an expense charge of
$2.50 per Contract and up to $0.02 per $1,000 of face amount (excluding the
automatic increase under Contracts issued on insureds of
12
<PAGE>
14 years of age or less), except that currently this $0.02 per $1,000
charge will not be greater than $2 per month and for Contracts issued after
June 1, 1987 on a Pru-Matic Plan basis, this $0.02 per $1,000 charge will
currently be waived. Thus, for a Contract with the minimum face amount of
$60,000, not issued on a Pru-Matic Plan basis, the aggregate amount
deducted each year will be $44.40. This charge is to compensate Pruco Life
of New Jersey for administrative expenses incurred, among other things, for
processing claims, paying cash surrender values, making Contract changes,
keeping records, and communicating with Contract owners. This charge will
not be made if the Contract has become paid-up or has been continued in
force, after lapse, as variable reduced paid-up insurance. During 1996,
1995 and 1994, Pruco Life of New Jersey received a total of approximately
$2,980,000, $3,249,000 and $3,429,000, respectively, in monthly
administrative charges.
5. On each Monthly date, the Contract fund is reduced by a charge of $0.01 per
$1,000 of face amount (excluding the automatic increase under Contracts
issued on insureds of 14 years of age or less) to compensate Pruco Life of
New Jersey for the risk it assumes by guaranteeing that, no matter how
unfavorable investment experience may be, the death benefit will never be
less than the face amount; provided scheduled premiums are paid on or
before the due date or during the grace period. This charge is not made
after a Contract becomes paid-up or has been continued in force, after
lapse, as variable reduced paid-up insurance. During 1996, 1995 and 1994,
Pruco Life of New Jersey received a total of approximately $578,000,
$624,000 and $648,000, respectively, for this risk charge.
6. Pruco Life of New Jersey deducts a mortality charge from the Contract fund
on each Monthly date to cover anticipated mortality costs. When an insured
dies, the amount paid to the beneficiary is larger than the Contract fund
and significantly larger if the insured dies in the early years of a
Contract. The mortality charges are designed to enable Pruco Life of New
Jersey to pay this larger death benefit. The charge is determined by
multiplying the "net amount at risk" under a Contract (the amount by which
the Contract's death benefit, computed as if there were neither riders nor
Contract debt, exceeds the Contract fund) by a rate based upon the
insured's sex (except where unisex rates apply) and current attained age,
and the anticipated mortality for that class of persons. The maximum rate
that Pruco Life of New Jersey may charge is based upon the 1980 CSO Table.
Pruco Life of New Jersey may determine that a lesser amount than that
called for by these mortality tables will be adequate to defray anticipated
mortality costs for insureds of particular ages and may thus make a lower
mortality charge for such persons. Pruco Life of New Jersey, however,
reserves the right to charge full mortality charges based on the applicable
1980 CSO Table, and any lower current mortality charges are not applicable
to Contracts in force pursuant to an option on lapse. See OPTIONS ON LAPSE,
page 25. In addition, if a Contract has a face amount of at least $100,000
and the insured under the Contract has met strict underwriting requirements
so that the Contract is in force on a "Select Rating" basis for the
particular risk classification, current mortality charges for all ages may
be lower still.
Certain Contracts, for example Contracts issued in connection with
tax-qualified pension plans, may be issued on a "guaranteed issue" basis
and may have current mortality charges which are different from those
mortality charges for Contracts which are individually underwritten. These
Contracts with different current mortality charges may be offered to
categories of individuals meeting eligibility guidelines determined by
Pruco Life of New Jersey.
7. A charge is made to compensate Pruco Life of New Jersey for assuming
mortality and expense risks. This is done by deducting daily, from the
assets of each of the subaccounts of the Account and/or from the subaccount
of the Real Property Account relating to this Contract, a percentage of
those assets equivalent to an effective annual rate of 0.6% (this amounts
to a daily charge of approximately 0.001639%). The mortality risk assumed
is that insureds may live for a shorter period of time than Pruco Life of
New Jersey estimated. The expense risk assumed is that expenses incurred in
issuing and administering the Contract will be greater than Pruco Life of
New Jersey estimated. During 1996, 1995 and 1994, Pruco Life of New Jersey
received a total of approximately $3,660,000, $3,123,000 and $2,758,000,
respectively, in mortality and expense risk charges. This charge is not
assessed against amounts allocated to the fixed-rate option.
8. There is an administrative charge of $5 for each $1,000 of face amount of
insurance (excluding the automatic increase under Contracts issued on
insureds of 14 years of age or less) to compensate Pruco Life of New Jersey
for expenses incurred in connection with the issuance of the Contract,
other than sales expenses. This charge is made to cover the costs of
processing applications, conducting medical examinations, determining
insurability and the insured's risk class, and establishing records
relating to the Contract. However, this charge will not be assessed upon
issuance of the Contract, nor will it ever be deducted from any death
benefit payable under the Contract. Rather, it will be deducted only if the
Contract is surrendered or lapses when it is in default past its days of
grace, and even then it will not be deducted at all for Contracts
13
<PAGE>
that stay in force through the end of the Contract's tenth year. And the
charge will be reduced for Contracts that lapse or are surrendered before
then but after the Contract's fifth anniversary. Specifically, the charge
of $5 per $1,000 will be assessed upon surrenders or lapses occurring on or
before the Contract's fifth anniversary. For each additional full month
that the Contract stays in force on a premium paying basis, this charge is
reduced by $0.0833 per $1,000 of initial face amount, so that it disappears
on the tenth anniversary. During 1996, 1995 and 1994, Pruco Life of New
Jersey received a total of approximately $441,000, $978,000 and $1,834,000,
respectively, from surrendered or lapsed Contracts. Additionally, if a
Contract has a face amount of at least $100,000 and was issued on other
than a Select Rating basis (see item 6, above), the owner may request that
the Contract be reclassified to a Select Rating basis. Requests for
reclassification to a Select Rating basis may be subject to an underwriting
fee of up to $250, but Pruco Life of New Jersey currently intends to waive
that charge if the reclassification is effected concurrently with an
increase in face amount.
9. A charge of $15 will be made in connection with each partial withdrawal of
the cash surrender value of a Contract. See WITHDRAWAL OF EXCESS CASH
SURRENDER VALUE, page 18.
10. If the Contract includes riders, a monthly deduction from the Contract fund
will be made for charges applicable to those riders. A deduction will also
be made if the rating class of the insured results in an extra charge.
11. An investment advisory fee is deducted daily from each portfolio at a rate,
on an annualized basis, from 0.35% for the Stock Index Portfolio to 0.75%
for the Global Portfolio. The expenses incurred in conducting the
investment operations of the portfolios (such as custodian fees and
preparation and distribution of annual reports) are paid out of the
portfolio's income. These expenses also vary from portfolio to portfolio.
The total expenses of each portfolio for the year 1996 expressed as a
percentage of the average assets during the year are shown below:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
OTHER EXPENSES
PORTFOLIO INVESTMENT ADVISORY (after expense TOTAL EXPENSES (after
FEE reimbursement)* expense reimbursement)*
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MONEY MARKET 0.40% 0.00%* 0.40%*
DIVERSIFIED BOND 0.40% 0.00%* 0.40%*
GOVERNMENT INCOME 0.40% 0.06% 0.46%
CONSERVATIVE BALANCED 0.55% 0.00%* 0.40%*
FLEXIBLE MANAGED 0.60% 0.00%* 0.40%*
HIGH YIELD BOND 0.55% 0.08% 0.63%
STOCK INDEX 0.35% 0.05% 0.40%
EQUITY INCOME 0.40% 0.05% 0.45%
EQUITY 0.45% 0.00%* 0.40%*
PRUDENTIAL JENNISON 0.60% 0.06% 0.66%
SMALL CAPITALIZATION STOCK 0.40% 0.16% 0.56%
GLOBAL 0.75% 0.17% 0.92%
NATURAL RESOURCES 0.45% 0.07% 0.52%
-----------------------------------------------------------------------------------------------------
</TABLE>
* Some investment management fees and expenses charged to the Series Fund may
be higher than those that were previously charged to the Pruco Life Series
Fund, Inc. (0.4%), in which the Account previously invested. For the Money
Market, Diversified Bond, Equity, Conservative Balanced, and Flexible
Managed Portfolios, Pruco Life of New Jersey will make daily adjustments
that will offset the effect on Contract owners of any higher investment
management fees and expenses charged against the Series Fund. Without such
adjustments the portfolio expenses indirectly borne by a Contract owner,
expressed as a percentage of the average daily net assets by portfolio,
would have been 0.44% for the Money Market Portfolio, 0.45% for the
Diversified Bond Portfolio, 0.59% for the Conservative Balanced Portfolio,
0.64% for the Flexible Managed Portfolio and 0.50% for the Equity
Portfolio. No such offset will be made with respect to the remaining
portfolios, which had no counterparts in the Pruco Life Series Fund, Inc.
In several instances Pruco Life of New Jersey uses the terms "maximum charge"
and "current charge." The "maximum charge," in each instance, is the highest
charge that Pruco Life of New Jersey is entitled to make under the Contract. The
"current charge" is the lower amount that Pruco Life of New Jersey is now
charging. However,
14
<PAGE>
if circumstances change, Pruco Life of New Jersey reserves the right to increase
each current charge, up to but to no more than the maximum charge, without
giving any advance notice.
The earnings of the Account are taxed as part of the operations of Pruco Life of
New Jersey. No charge is being made currently to the Account for Company federal
income taxes. Pruco Life of New Jersey will review the question of a charge to
the Account for Company federal income taxes periodically. Such a charge may be
made in future years for any federal income taxes that would be attributable to
the Contracts.
Under current laws Pruco Life of New Jersey may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are not
significant and they are not charged against the Contracts or the Account. If
there is a material change in applicable state or local tax laws, the imposition
of any such taxes upon Pruco Life of New Jersey that are attributable to the
Account may result in a corresponding charge against the Account.
The investment management fee and other expenses charged against the Real
Property Account are described in the attached prospectus for that investment
option.
REDUCTION OF CHARGES FOR CONCURRENT SALES TO SEVERAL INDIVIDUALS
Pruco Life of New Jersey may reduce the sales charges and/or other charges on
individual Contracts sold to members of a class of associated individuals, or to
a trustee, employer or other entity representing a class, where it is expected
that such multiple sales will result in savings of sales or administrative
expenses. Pruco Life of New Jersey determines both the eligibility for such
reduced charges, as well as the amount of such reductions, by considering the
following factors: (1) the number of individuals; (2) the total amount of
premium payments expected to be received from these Contracts; (3) the nature of
the association between these individuals, and the expected persistency of the
individual Contracts; (4) the purpose for which the individual Contracts are
purchased and whether that purpose makes it likely that expenses will be
reduced; and (5) any other circumstances which Pruco Life of New Jersey believes
to be relevant in determining whether reduced sales or administrative expenses
may be expected. Some of the reductions in charges for these sales may be
contractually guaranteed; other reductions may be withdrawn or modified by Pruco
Life of New Jersey on a uniform basis. Pruco Life of New Jersey's reductions in
charges for these sales will not be unfairly discriminatory to the interests of
any individual Contract owners.
HOW A CONTRACT'S CASH SURRENDER VALUE WILL VARY
A Contract has a cash surrender value which the owner may get while the insured
is living by surrender of the Contract. Unlike traditional fixed-benefit
whole-life insurance, however, a Contract's cash surrender value is not known in
advance, even if it is assumed that only scheduled premiums will be paid,
because it varies daily with the investment performance of the subaccount[s]
and/or Real Property Account in which the Contract participates.
On the Contract date, the Contract fund value is the invested portion of the
initial premium less the first monthly deductions. This amount is placed in the
investment option[s] as designated by the owner. Thereafter the Contract fund
value changes daily, reflecting increases or decreases in the value of the
securities in which the assets of the subaccount have been invested, the
investment performance of the Real Property Account if that option has been
selected, interest credited on amounts allocated to the fixed-rate option, as
well as the daily asset charge for mortality and expense risk equal to 0.001639%
of the assets of the subaccount[s] of the Account and the subaccount of the Real
Property Account relating to this Contract. The Contract fund value also changes
to reflect the receipt of additional premium payments and the monthly deductions
described in the preceding section.
A Contract's cash surrender value on any date will be the Contract fund value
reduced by the deferred sales and administrative charges, if any, and any
Contract debt. Upon request, Pruco Life of New Jersey will tell a Contract owner
the cash surrender value of his or her Contract. It is possible that the cash
surrender value of a Contract could decline to zero because of unfavorable
investment experience, even if a Contract owner continues to pay scheduled
premiums when due.
If the net investment return in the selected investment option[s] is greater
than 4%, the Contract fund and cash surrender value for a Form B Contract can be
expected to be less than the Contract fund and cash surrender value for a Form A
Contract with identical premiums and investment experience. This is because the
monthly mortality charges under the Form B Contract will be higher to compensate
for the higher amount of insurance.
The tables on pages T1 through T4 of this prospectus illustrate what the cash
surrender values would be for representative Contracts, assuming uniform
hypothetical investment results in the selected Series Fund portfolio[s], and
also provide information about the aggregate scheduled premiums payable under
those Contracts. Illustrated also is what the death benefit would be under Form
B Contracts given the stated assumptions. The tables also
15
<PAGE>
show the premium amount that would be required on the premium change date to
guarantee the Contract against lapse regardless of investment performance for
each illustrated Contract under each of the assumed investment returns.
HOW A CONTRACT'S DEATH BENEFIT WILL VARY
As noted above, there are two forms of the Contract, Form A and Form B.
Moreover, in September 1986 Pruco Life of New Jersey began issuing revised
versions of both Form A and Form B Contracts. The primary difference between the
original Contract and the revised Contract is that the original Contract may
become paid-up, while the death benefit under the revised Contract operates
differently and accordingly such Contract will not become paid-up.
1. ORIGINAL CONTRACTS. If a Form A Contract is chosen, the death benefit will
not vary (except for Contracts issued on insureds of age 14 or less, see
REQUIREMENTS FOR ISSUANCE OF A CONTRACT on page 6) regardless of the payment of
additional premiums or the investment results of the designated subaccounts,
unless the Contract becomes paid-up. See WHEN A CONTRACT BECOMES PAID-UP, page
17. The death benefit does reflect a deduction for the amount of any Contract
debt. See CONTRACT LOANS, page 24.
If a Form B Contract is chosen, the death benefit will vary with investment
experience and premium payments. Assuming no Contract debt, the death benefit
under a Form B Contract will, on any day, be equal to the face amount of
insurance plus the amount (if any) by which the Contract fund value exceeds the
applicable "tabular Contract fund value" for the Contract. The "tabular Contract
fund value" for each Contract year is an amount that is slightly less than the
Contract fund value that would result as of the end of such year if only
scheduled premiums were paid, they were paid when due, the selected investment
options earned a net return at a uniform rate of 4% per year, full mortality
charges based upon the 1980 CSO Table were deducted, maximum sales load and
expense charges were deducted, and there was no Contract debt. Each Contract
contains a table that sets forth the tabular Contract fund value as of the end
of each of the first 20 years of the Contract. Tabular Contract fund values
between Contract anniversaries are determined by interpolation.
Thus, under a Form B Contract, with no Contract debt, the death benefit will
equal the face amount if the Contract fund equals the tabular Contract fund
value. If, due to investment results greater than a net return of 4%, or to
greater than scheduled premiums, or to smaller than maximum charges, the
Contract fund value is a given amount greater than the tabular Contract fund
value, the death benefit will be the face amount plus that excess amount. If,
due to investment results less favorable than a net return of 4%, the Contract
fund value is less than the tabular Contract fund value, and the Contract
nevertheless remains in force because scheduled premiums have been paid, the
death benefit will not fall below the initial face amount stated in the
Contract; however, this unfavorable investment experience must subsequently be
offset before favorable investment results or greater than scheduled premiums
will increase the death benefit. The death benefit will also reflect a deduction
for the amount of any Contract debt. See CONTRACT LOANS, page 24.
A Contract owner may also increase or decrease the face amount of his or her
Contract, subject to certain conditions. See INCREASES IN FACE AMOUNT, page 19
and DECREASES IN FACE AMOUNT, page 20.
2. REVISED CONTRACTS. Under the revised Contracts issued since September of
1986, the death benefit will be calculated as follows. Under a Form A Contract,
the death benefit will be the greater of (1) the face amount; or (2) the
Contract fund divided by the net single premium per $1 of death benefit at the
insured's attained age on that date. In other words, the second alternative
ensures that the death benefit will not be less than the amount of life
insurance that could be provided for an invested single premium amount equal to
the amount of the Contract fund. Under a Form B Contract, the death benefit will
be the greater of (1) the face amount plus the excess, if any, of the Contract
fund over the tabular Contract fund value; or (2) the Contract fund divided by
the net single premium per $1 of death benefit at the insured's attained age on
that date. Thus, under the revised Contracts, the death benefit may be increased
based on the size of the Contract fund and the insured's attained age and sex.
This ensures that the Contract will satisfy the Internal Revenue Code's
definition of life insurance. The net single premium is used only in the
calculation of the death benefit, not for premium payment purposes. The
following is a table of illustrative net single premiums for $1 of death
benefit.
16
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------- ----------------------------------------------------------
MALE ATTAINED NET SINGLE INCREASE IN INSURANCE FEMALE NET SINGLE INCREASE IN INSURANCE
AGE PREMIUM AMOUNT PER $1 INCREASE ATTAINED AGE PREMIUM AMOUNT PER $1 INCREASE
IN CONTRACT FUND IN CONTRACT FUND
- ------------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5 .09884 $10.12 5 .08198 $12.20
25 .18455 $ 5.42 25 .15687 $ 6.37
35 .25596 $ 3.91 35 .21874 $ 4.57
55 .47352 $ 2.11 55 .40746 $ 2.45
65 .60986 $ 1.64 65 .54017 $ 1.85
- ------------------------------------------------------------- ----------------------------------------------------------
</TABLE>
Whenever the death benefit is determined in this way, Pruco Life of New Jersey
reserves the right to refuse to accept further premium payments, although in
practice the payment of the lesser of 2 years' scheduled premiums or the average
of all premiums paid over the last 5 years will generally be allowed.
A Contract owner may also increase or decrease the face amount of his or her
Contract, subject to certain conditions. See INCREASES IN FACE AMOUNT, page 19
and DECREASES IN FACE AMOUNT, page 20.
WHEN A CONTRACT BECOMES PAID-UP
Under the original Contracts, it is possible that favorable investment
experience, either alone or in conjunction with greater than scheduled premium
payments, will cause the Contract fund to increase to the point where no further
payment of premiums is necessary to provide for the then existing death benefit
for the remaining life of the insured. If this should occur, Pruco Life of New
Jersey will notify the owner that no further premium payments need be paid.
Pruco Life of New Jersey reserves the right to refuse to accept further premiums
after the Contract becomes paid-up. The purchase of an additional fixed benefit
rider may, in some cases, affect the point at which the Contract becomes
paid-up. See RIDERS, page 30. The revised Contracts will not become paid-up.
Once a Contract becomes paid-up, Pruco Life of New Jersey guarantees that the
death benefit then in force will not be reduced by the investment experience of
the subaccount[s] in which the Contract participates. The cash surrender value
of a paid-up Contract continues to vary daily to reflect investment experience
and monthly to reflect continuing mortality charges, but the other monthly
deductions (see items 4 and 5 under CHARGES AND EXPENSES, page 11) will not be
made. The death benefit of a paid-up Contract on any day (whether the Contract
originally was Form A or Form B) will be equal to the amount of paid-up
insurance that can be purchased with the Contract fund on that day, but never
less than the guaranteed minimum amount.
As noted earlier, Contracts issued on insureds of 14 years of age or less
include a special provision under which the face amount of insurance increases
automatically to 150% of the initial face amount on the Contract anniversary
after the insured reaches the age of 21. If a Contract would have been paid-up
prior to that anniversary, Pruco Life of New Jersey, in anticipation of the
increase in the face amount to 150% of the initial face amount, will, instead of
declaring the Contract to be paid-up, increase the death benefit by the amount
necessary to keep the Contract in force as a premium paying Contract. If this
should occur, the increase in the death benefit on the Contract anniversary
after the insured reaches the age of 21 will be smaller, in dollar amount, than
the increase in the face amount of insurance.
FLEXIBILITY AS TO PAYMENT OF PREMIUMS
A significant feature of this Contract is that it permits the owner to pay
greater than scheduled premiums. Conversely, payment of a scheduled premium need
not be made if the Contract fund is sufficiently large to enable the charges due
under the Contract to be made without causing the Contract to lapse. See LAPSE
AND REINSTATEMENT, page 20. In general, Pruco Life of New Jersey will accept any
premium payment if the payment is at least $25. Pruco Life of New Jersey does
reserve the right, however, to limit unscheduled premiums to a total of $10,000
in any Contract year; to refuse to accept premiums once a Contract becomes
paid-up; and to refuse to accept premiums that would immediately result in more
than a dollar-for-dollar increase in the death benefit. The flexibility of
premium payments provides Contract owners with different opportunities under the
two forms of Contract. Greater than scheduled payments under an original version
Form A Contract increases the Contract fund and makes it more likely that the
Contract will become paid-up. Greater than scheduled payments under an original
version Form B Contract increase both the Contract fund and the death benefit,
but it is less likely to become paid-up than a Form A Contract on which the same
premiums are paid. For all Contracts, the privilege of making large or
additional premium payments offers a way of investing amounts which accumulate
without current income taxation. There may, however, be a disadvantage if
substantial premiums are made. The federal
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income tax laws, discussed more fully under TAX TREATMENT OF CONTRACT BENEFITS,
page 26, may impose an income tax, as well as a penalty tax, upon distributions
to contract owners under life insurance contracts that are classified as
Modified Endowment Contracts. This Contract should not be so classified if the
initial scheduled premiums are paid or even if additional premiums are paid that
are not substantially higher, assuming no changes in benefits under the
Contract. It is possible, however, to make premium payments that are high enough
to cause the Contract to fall into that classification. A Contract owner should
consult with his or her own tax advisor and Pruco Life of New Jersey
representative before making a large premium payment.
SURRENDER OF A CONTRACT
A Contract may be surrendered in whole or in part for its cash surrender value
while the insured is living. Partial surrender involves splitting the Contract
into two Contracts. One is surrendered for its cash surrender value; the other
is continued in force on the same terms as the original Contract except that
premiums and cash surrender values will be proportionately reduced based upon
the reduction in the face amount of insurance. The Contract continued must have
a face amount of insurance at least equal to the minimum face amount applicable
to the insured's Contract. See REQUIREMENTS FOR ISSUANCE OF A CONTRACT, page 6.
For paid-up Contracts, both the death benefit and the guaranteed minimum death
benefit will be reduced. The death benefit immediately after the partial
withdrawal must be at least equal to the minimum face amount applicable to the
insured's Contract.
To surrender a Contract in whole or in part, the owner must deliver or mail it,
together with a written request in a form that meets Pruco Life of New Jersey's
needs, to a Home Office. The cash surrender value of a surrendered or partially
surrendered Contract (taking into account the deferred sales and administrative
charges, if any) will be determined as of the date such request is received in a
Home Office. Surrender of all or part of a Contract may have tax consequences.
See TAX TREATMENT OF CONTRACT BENEFITS, page 26.
WITHDRAWAL OF EXCESS CASH SURRENDER VALUE
An alternative to surrender or partial surrender of a Contract, available only
before such Contracts become paid up, is a partial withdrawal of cash surrender
value without splitting the Contract into two Contracts. A partial withdrawal
may be made only if the following conditions are satisfied. The basic limiting
condition is that a withdrawal may be made only to the extent that the cash
surrender value plus any Contract loan exceeds the applicable tabular cash
surrender value. (The "tabular cash surrender value" refers to the tabular
Contract fund value minus any applicable surrender charges.) But because this
excess over the applicable tabular cash surrender value may be made up in part
by an outstanding Contract loan, there is a further condition that the amount
withdrawn may not be larger than an amount sufficient to reduce the cash
surrender value to zero. The amount withdrawn must be at least $2,000 under a
Form A Contract and at least $500 under a Form B Contract. An owner may make no
more than four such withdrawals in a Contract year, and there is a fee of $15
for each such withdrawal. An amount withdrawn may not be repaid except as a
scheduled or unscheduled premium subject to the Contract charges. Upon request,
Pruco Life of New Jersey will tell a Contract owner how much he or she may
withdraw. Withdrawal of part of the cash surrender value may have tax
consequences. See TAX TREATMENT OF CONTRACT BENEFITS, page 26.
Whenever a partial withdrawal is made, the death benefit payable will
immediately be reduced, generally by the amount of the withdrawal. This will not
change the guaranteed minimum amount of insurance under a Form B Contract (i.e.,
the face amount) or the amount of the scheduled premium that will be payable
thereafter on such a Contract. Under a Form A Contract, however, the guaranteed
minimum amount of insurance will be reduced by the amount of the partial
withdrawal, and no partial withdrawal will be permitted under a Form A Contract
if it would result in a new face amount of less than the minimum face amount
applicable to the insured's Contract. See REQUIREMENTS FOR ISSUANCE OF A
CONTRACT, page 6. It is important to note, however, that if the face amount is
decreased at any time during the first 7 Contract years, there is a danger that
the Contract might be classified as a Modified Endowment Contract. See TAX
TREATMENT OF CONTRACT BENEFITS, page 26. Before making any withdrawal which
causes a decrease in face amount, a Contract owner should consult with his or
her own tax advisor and Pruco Life of New Jersey representative. In addition,
the amount of the scheduled premiums due thereafter under a Form A Contract will
be reduced to reflect the lower face amount of insurance. Since a withdrawal
under a Form A Contract results in a decrease in the face amount of insurance,
the Contract fund may be reduced, not only by the amount withdrawn but also by a
proportionate part of any surrender charges then applicable, based upon the
percentage reduction in face amount. Contract owners of a Form A Contract who
make a partial withdrawal will be sent replacement Contract pages showing the
new face amount, new tabular values and, if applicable, a new table of surrender
charges.
Withdrawal of part of the cash surrender value increases the risk that the
Contract fund may be insufficient to provide for benefits under the Contract. If
such a withdrawal is followed by unfavorable investment experience,
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the Contract may lapse even if scheduled premiums continue to be paid when due.
This is because, for purposes of determining whether a lapse has occurred, Pruco
Life of New Jersey treats withdrawals as a return of premium.
INCREASES IN FACE AMOUNT
An attractive feature of this Contract is that an owner who wishes to increase
the amount of his or her insurance may do so by increasing the face amount of
the Contract (which is also the guaranteed minimum death benefit), subject to
state approval and underwriting requirements determined by Pruco Life of New
Jersey. An increase in face amount is in many ways similar to the purchase of a
second Contract, but it differs in the following respects: the minimum
permissible increase is $25,000, while the minimum for a new Contract is
$60,000; monthly fees are lower because only a single $2.50 per month
administrative charge is made rather than two; a combined premium payment
results in deduction of a single $2 per premium processing charge while separate
premium payments for separate Contracts would involve two charges; the monthly
expense charge of $0.02 per $1,000 of face amount may be lower if the increase
is to a face amount greater than $100,000; and, the Contract will lapse or
become paid-up as a unit, unlike the case if two separate Contracts are
purchased. These differences aside, the decision to increase face amount is
comparable to the purchase of a second Contract in that it involves a commitment
to higher scheduled premiums in exchange for greater insurance benefits.
A Contract owner may elect to increase the face amount of his or her Contract no
earlier than the first anniversary of the Contract. The following conditions
must be met: (1) The owner must ask for the increase in writing on an
appropriate form meeting Pruco Life of New Jersey's needs. (2) The amount of the
increase in face amount must be at least $25,000. (3) The insured must supply
evidence of insurability for the increase satisfactory to Pruco Life of New
Jersey. (4) If Pruco Life of New Jersey requests, the owner must send in the
Contract to be suitably endorsed. (5) The Contract must be neither paid up nor
in default on the date the increase takes effect. (6) The owner must pay an
appropriate premium at the time of the increase. (7) Pruco Life of New Jersey
has the right to deny more than one increase in a Contract year. (8) If Pruco
Life of New Jersey has, between the Contract date and the date that any
requested increase in face amount will take effect, changed any of the bases on
which benefits and charges are calculated under newly issued Contracts, Pruco
Life of New Jersey has the right to deny the increase. An increase in face
amount resulting in a total face amount under the Contract of at least $100,000
may, subject to strict underwriting requirements, render the Contract eligible
for a Select Rating basis, which provides lower current cost of insurance rates.
Upon an increase in face amount, Pruco Life of New Jersey will recompute the
Contract's scheduled premiums, deferred sales and administrative charges,
tabular values, and monthly deductions from the Contract fund. The Contract
owner has a choice, limited only by applicable state law, as to whether the
recomputation will be made as of the prior or next Contract anniversary. There
will be a payment required on the date of increase; the amount of the payment
will depend, in part, on which Contract anniversary the Contract owner selects
for the recomputation. Pruco Life of New Jersey will tell the owner the amount
of the required payment. It should also be noted that an increase in face amount
may impact the status of the Contract as a Modified Endowment Contract. See TAX
TREATMENT OF CONTRACT BENEFITS, page 26. Therefore, before increasing the face
amount, a Contract owner should consult with his or her own tax advisor and
Pruco Life of New Jersey representative.
Provided the increase is approved, the new insurance will take effect once the
proper forms, any medical evidence necessary to underwrite the additional
insurance and any amount needed by the company have been received.
Pruco Life of New Jersey will supply the Contract owner with pages which show
the increased face amount, the effective date of the increase, and the
recomputed items described two paragraphs above. The pages will also describe
how the increase in face amount affects the various provisions of the Contract,
including a statement that, for the amount of the increase in face amount, the
period stated in the Incontestability and Suicide provisions (see OTHER GENERAL
CONTRACT PROVISIONS, page 29) will run from the effective date of the increase.
There will be assessed upon lapse or surrender following an increase in face
amount the sum of (a) the deferred sales and administrative charges that would
have been assessed if the initial base Contract had not been amended and had
lapsed or been surrendered; and (b) the deferred sales and administrative
charges that would have been assessed if the increase in death benefit had been
achieved by the issuance of a new Contract, and that Contract had lapsed or been
surrendered. All premiums paid after the increase will, for purposes of
determining the deferred sales charge applicable in the event of surrender or
lapse, be deemed to have been made partially under the base Contract, and
partially in payment of the increase, in the same proportion as that of the
original scheduled premium and the increase in scheduled premiums. Because an
increase in face amount triggers new contingent deferred sales and
administrative charges, a Contract owner contemplating a total or partial
surrender or a decrease in the face amount of insurance should not elect to
increase the face amount of his or her Contract.
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An increase in face amount will be treated comparably to the issuance of a new
Contract for purposes of the non-guaranteed waiver of the 5% front-end sales
load described under item 2 of CHARGES AND EXPENSES on page 11. Thus, premiums
paid after the increase will, for purposes of determining whether the 5%
front-end sales load will be waived, be allocated to the base Contract and to
the increase based on the proportional premium allocation rule just described.
The waiver will apply with respect to the premiums paid after the increase only
after the premiums so allocated exceed five scheduled annual premiums for the
increase. Thus, an owner considering an increase in face amount should be aware
that such an increase will entail sales charges comparable to the purchase of a
new Contract.
Each Contract owner who elects to increase the face amount of his or her
Contract will receive a "free-look" right and a right to convert to a
fixed-benefit contract, which rights will apply only to the increase in face
amount, not the entire Contract. These rights are comparable to the rights
afforded to a purchaser of a new Contract. See SHORT-TERM CANCELLATION RIGHT OR
"FREE LOOK", page 6 and RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT
INSURANCE POLICY, page 26. The "free-look" right would have to be exercised no
later than 45 days after execution of the application for the increase or, if
later, within 10 days after either receipt of the Contract as increased or
receipt of the notice of the Right of Withdrawal by the owner. Upon exercise of
the "free-look" right, the owner will receive a refund in the amount of the
aggregate premiums paid since the increase was requested and attributable to the
increase, not the base Contract, as determined pursuant to the proportional
premium allocation rule described above. There will be no adjustment for
investment experience. Moreover, charges deducted since the increase will be
recomputed as though no increase had been effected. The right to convert the
increase in face amount to a fixed-benefit policy will exist for 24 months after
the increase is issued and the form of exchange right will be the same as that
available under the base Contract purchased. There may be a cash payment
required upon the exchange. See RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT
INSURANCE POLICY, page 26.
DECREASES IN FACE AMOUNT
As explained earlier, a Contract owner may effect a partial surrender of a
Contract (see SURRENDER OF A CONTRACT, page 18) or a partial withdrawal of
excess cash surrender value (see WITHDRAWAL OF EXCESS CASH SURRENDER VALUE, page
18). A Contract owner also has the additional option of decreasing the face
amount (which is also the guaranteed minimum death benefit) of his or her
Contract without withdrawing any cash value. Contract owners who conclude that,
because of changed circumstances, the amount of insurance is greater than needed
will thus be able to decrease their amount of insurance protection without
decreasing their current cash surrender value. This will result in a decrease in
the amount of future scheduled premiums and in the monthly deductions for the
cost of insurance. The cash surrender value of the Contract on the date of the
decrease will not change, except that an administrative processing fee of $15
may be deducted from that value (unless that fee is separately paid at the time
the decrease in face amount is requested). The Contract's Contract fund value,
however, will be reduced by deduction of a proportionate part of the then
applicable contingent deferred sales and administrative charges, if any.
Scheduled premiums for the Contract will also be proportionately reduced. The
Contracts of owners who exercise the right to reduce face amount will be amended
to show the new face amount, tabular values, scheduled premiums, monthly
charges, and if applicable, the remaining contingent deferred sales and
administrative charges.
The minimum permissible decrease is $10,000. No decrease will be permitted that
causes the face amount of the Contract to drop below the minimum face amount
applicable to the insured's Contract. See REQUIREMENTS FOR ISSUANCE OF A
CONTRACT, page 6. No reduction will be permitted to the extent that it would
cause the Contract to fail to qualify as "life insurance" for purposes of
section 7702 of the Internal Revenue Code. If the face amount of a Contract in
force on a Select Rating basis is reduced below $100,000, it is no longer
eligible for the Select Rating.
It is important to note, however, that if the face amount is decreased at any
time during the first 7 Contract years, there is a danger that the Contract
might be classified as a Modified Endowment Contract. See TAX TREATMENT OF
CONTRACT BENEFITS, page 26. Before requesting any decreases in face amount, a
Contract owner should consult with his or her Pruco Life of New Jersey
representative.
LAPSE AND REINSTATEMENT
The Contract has an advantageous feature that is not typically found in similar
types of life insurance contracts. If scheduled premiums are paid on or before
each due date, or within the grace period after each due date, (or missed
premiums are paid later with interest) and there are no withdrawals, a Contract
will remain in force even if the investment results of that Contract's variable
investment option[s] have been so unfavorable that the Contract fund has
decreased to zero or less. Therefore, unlike most similar types of life
insurance contracts that lapse when the cash surrender value decreases to zero
even if premiums are paid, this Contract ensures that as long as scheduled
premiums are paid, insurance protection remains in effect.
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In fact, even if a scheduled premium is not paid, the Contract will remain in
force as long as the Contract fund on any Monthly date is equal to or greater
than the tabular Contract fund value on the next Monthly date. This could occur
because of such factors as favorable investment experience, deduction of less
than the maximum permissible charges, or the previous payment of greater than
scheduled premiums.
However, if a scheduled premium is not paid, and the Contract fund is
insufficient to keep the Contract in force, the Contract will go into default.
Should this happen, Pruco Life of New Jersey will send the Contract owner a
notice of default setting forth the payment necessary to keep the Contract in
force on a premium paying basis. This payment must be received at a Home Office
within the 61 day grace period after the notice of default is mailed or the
Contract will lapse. A Contract that lapses with an outstanding Contract loan
may have tax consequences. See TAX TREATMENT OF CONTRACT BENEFITS on page 26.
A Contract that has lapsed may be reinstated within 3 years after the date of
default unless the Contract has been surrendered for its cash surrender value.
To reinstate a lapsed Contract, Pruco Life of New Jersey requires renewed
evidence of insurability, and submission of certain payments due under the
Contract.
If a Contract does lapse, it may still provide some benefits. Those benefits are
described under OPTIONS ON LAPSE, page 25.
WHEN PROCEEDS ARE PAID
Pruco Life of New Jersey will generally pay any death benefit, cash surrender
value, loan proceeds or partial withdrawal within 7 days after receipt at a Home
Office of all the documents required for such a payment. Other than the death
benefit, which is determined as of the date of death, the amount will be
determined as of the end of the valuation period in which the necessary
documents are received at a Home Office. However, Pruco Life of New Jersey may
delay payment of proceeds from the subaccount[s] and the variable portion of the
death benefit due under the Contract if the disposal or valuation of the
Account's assets is not reasonably practicable because the New York Stock
Exchange is closed for other than a regular holiday or weekend, trading is
restricted by the SEC or the SEC declares that an emergency exists.
With respect to the amount of any cash surrender value allocated to the
fixed-rate option, and with respect to a Contract in force as extended term
insurance, Pruco Life of New Jersey expects to pay the cash surrender value
promptly upon request. However, Pruco Life of New Jersey has the right to delay
payment of such cash surrender value for up to 6 months (or a shorter period if
required by applicable law). Pruco Life of New Jersey will pay interest of at
least 3% a year if it delays such a payment for more than 30 days (or a shorter
period if required by applicable law).
LIVING NEEDS BENEFIT
Contract applicants may elect to add the LIVING NEEDS BENEFIT(SM) to their
Contracts at issue. The benefit may vary state-by-state. It can generally be
added only to Contracts of $50,000 or more.
Subject to state regulatory approval, the LIVING NEEDS BENEFIT allows the
Contract owner to elect to receive an accelerated payment of all or part of the
Contract's death benefit, adjusted to reflect current value, at a time when
certain special needs exist. The adjusted death benefit will always be less than
the death benefit, but will generally be greater than the Contract's cash
surrender value. One or both of the following options may be available. A Pruco
Life of New Jersey representative should be consulted as to whether additional
options may be available.
TERMINAL ILLNESS OPTION. This option is available if the insured is diagnosed as
terminally ill with a life expectancy of 6 months or less. When satisfactory
evidence is provided, Pruco Life of New Jersey will provide an accelerated
payment of the portion of the death benefit selected by the Contract owner as a
LIVING NEEDS BENEFIT. The Contract owner may (1) elect to receive the benefit in
a single sum or (2) receive equal monthly payments for 6 months. If the insured
dies before all of the payments have been made, the present value of the
remaining payments will be paid to the beneficiary designated in the LIVING
NEEDS BENEFIT claim form in a single sum.
NURSING HOME OPTION. This option is available after the insured has been
confined to an eligible nursing home for 6 months or more. When satisfactory
evidence is provided, including certification by a licensed physician, that the
insured is expected to remain in the nursing home until death, Pruco Life of New
Jersey will provide an accelerated payment of the portion of the death benefit
selected by the Contract owner as a LIVING NEEDS BENEFIT. The Contract owner may
(1) elect to receive the benefit in a single sum or (2) receive equal monthly
payments for a specified number of years (not more than 10 nor less than 2),
depending upon the age of the insured. If the insured dies before all of the
payments have been made, the present value of the remaining payments will be
paid to the beneficiary designated in the LIVING NEEDS BENEFIT claim form in a
single sum.
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All or part of the Contract's death benefit may be accelerated under the LIVING
NEEDS BENEFIT. If the benefit is only partially accelerated, a death benefit of
at least $25,000 must remain under the Contract. Pruco Life of New Jersey
reserves the right to determine the minimum amount that may be accelerated.
The LIVING NEEDS BENEFIT is available only to the extent regulatory approval has
been obtained. If desired by a Contract owner, the benefit must be requested on
the Contract's application. There is no charge for adding the benefit to the
Contract. However, an administrative charge (not to exceed $150) will be made at
the time the LIVING NEEDS BENEFIT is paid.
No benefit will be payable if the Contract owner is required to elect it in
order to meet the claims of creditors or to obtain a government benefit. Pruco
Life of New Jersey can furnish details about the amount of LIVING NEEDS BENEFIT
that is available to an eligible Contract owner under a particular Contract, and
the adjusted premium payments that would be in effect if less than the entire
death benefit is accelerated.
The Contract owner should consider whether adding this settlement option is
appropriate in his or her given situation. Adding the LIVING NEEDS BENEFIT to
the Contract has no adverse consequences; however, electing to use it could.
With the exception of certain business-related policies, the recently enacted
Health Insurance Portability and Accountability Act of 1996 excludes from income
the LIVING NEEDS BENEFIT if the insured is terminally ill or chronically ill as
defined in the tax law (although the exclusion in the latter case may be
limited). Contract owners should consult a qualified tax advisor before electing
to receive this benefit. Receipt of a LIVING NEEDS BENEFIT payment may also
affect a Contract owner's eligibility for certain government benefits or
entitlements.
ILLUSTRATIONS OF CASH SURRENDER VALUES, DEATH BENEFITS, AND ACCUMULATED PREMIUMS
The following tables have been prepared to help show how values under the
Contract change with investment performance of the Account. The tables assume
that no portion of the Contract fund is allocated to the fixed-rate option or
the Real Property Account. The tables illustrate how cash surrender values
(reflecting the deduction of deferred sales load and administrative charges, if
any) and death benefits of Contracts with the minimum scheduled premium issued
on an insured of a given age would vary over time if the return on the assets
held in the selected Series Fund portfolios were a uniform, gross, after tax,
annual rate of 0%, 4%, 8% and 12%. The death benefits and cash surrender values
would be different from those shown if the returns averaged 0%, 4%, 8% and 12%
but fluctuated over and under those averages throughout the years. The tables
also provide information about the premiums payable on and after the premium
change date. These tables reflect values under the revised Contracts. These
values are also applicable to the original Contracts except where the death
benefit has been increased to the Contract fund divided by the net single
premium, in which case the cash surrender value and death benefit figures shown
on the table are not applicable to the original Contracts. Footnotes to the
tables indicate when the values cease to be applicable to the original Contracts
and when the original Contracts would become paid-up for a given return.
The death benefits and cash surrender values shown in the first two tables on
pages T1 and T2 reflect Pruco Life of New Jersey's current charges. As explained
earlier, Pruco Life of New Jersey makes monthly mortality charges that are
generally lower than those based on the 1980 CSO Table. The values shown in the
tables are calculated upon the assumption that Pruco Life of New Jersey will
continue to use the mortality rates that it is currently using, even though it
is permitted under the Contract to use the higher mortality charges specified in
the 1980 CSO Table. Moreover, those tables reflect Pruco Life of New Jersey's
current practice of waiving the front-end sales load of 5% after total premiums
paid exceeds five scheduled annual premiums. See item 2 under CHARGES AND
EXPENSES, page 11. The tables also reflect Pruco Life of New Jersey's current
practice of increasing the Contract fund on a percentage basis based on the
attained age of the insured. While Pruco Life of New Jersey does not currently
intend to withdraw or modify these reductions in charges or additions to the
Contract fund, it reserves the right to do so. These tables are not applicable
to Contracts issued on a guaranteed issue basis or to Contracts where the risk
classification is on a multiple life basis.
The death benefits and cash surrender values shown in the next two tables on
pages T3 through T4 are calculated upon the assumption that the maximum
mortality charges specified by the 1980 CSO Table are made throughout the life
of the Contract, and reflect neither the waiver of the front-end sales load nor
the monthly additions to the Contract fund that further reduce the cost of
insurance charge.
The amounts shown for the death benefit and cash surrender value as of each
Contract year reflect the fact that the net investment return on the assets held
in the subaccounts is lower than the gross return of the portfolios. This is
because the tables assume a total Series Fund expense ratio of 0.51% (taking
into account the offsets described on page 5), and also reflect a daily
mortality and expense risk charge to the Account, equal to an effective annual
charge of 0.6%. The actual fees and expenses of the portfolios associated with a
particular
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Contract may be more or less than 0.51% and will depend on which
subaccounts are selected. Based on the above assumptions, gross annual rates of
return of 0%, 4%, 8% and 12% thus correspond to approximate net annual rates of
return of -1.11%, 2.89%, 6.89% and 10.89% and this fact is reflected in the
column headings. The tables also reflect the fact that no charges for federal or
state income taxes are currently made against the Account. If such a charge is
made in the future, it will take a higher gross rate of return to produce net
after-tax returns of -1.11%, 2.89%, 6.89% or 10.89% than it does now.
Upon request, Pruco Life of New Jersey will furnish a comparable illustration
based on the proposed insured's age and sex (except where unisex rates apply)
and on the guaranteed minimum death benefit or premium amount requested. Such an
illustration will assume that the insured is in the preferred rating class (or,
on request, a different rating class) and that the premium will be paid at the
frequency chosen.
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<TABLE>
<CAPTION>
ILLUSTRATIONS
-------------
VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
FORM A -- FIXED DEATH BENEFIT
MALE PREFERRED ISSUE AGE 35
$60,000 GUARANTEED DEATH BENEFIT
$554.80 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3)
USING CURRENT SCHEDULE OF CHARGES
DEATH BENEFIT (2) CASH SURRENDER VALUE (2)
---------------------------------------------------- ---------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET) ASSUMING HYPOTHETICAL GROSS (AND NET)
PREMIUMS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
END OF ACCUMULATED ---------------------------------------------------- ---------------------------------------------------
POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR PER YEAR (3) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 577 $60,000 $60,000 $ 60,000 $ 60,000 $ 0 $ 0 $ 0 $ 0
2 $ 1,177 $60,000 $60,000 $ 60,000 $ 60,000 $ 187 $ 234 $ 282 $ 331
3 $ 1,801 $60,000 $60,000 $ 60,000 $ 60,000 $ 469 $ 559 $ 654 $ 755
4 $ 2,450 $60,000 $60,000 $ 60,000 $ 60,000 $ 740 $ 887 $ 1,047 $ 1,221
5 $ 3,125 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,000 $ 1,218 $ 1,461 $ 1,733
6 $ 3,827 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,387 $ 1,690 $ 2,039 $ 2,438
7 $ 4,557 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,788 $ 2,191 $ 2,667 $ 3,228
8 $ 5,317 $60,000 $60,000 $ 60,000 $ 60,000 $ 2,176 $ 2,694 $ 3,322 $ 4,083
9 $ 6,106 $60,000 $60,000 $ 60,000 $ 60,000 $ 2,551 $ 3,198 $ 4,005 $ 5,010
10 $ 6,927 $60,000 $60,000 $ 60,000 $ 60,000 $ 2,913 $ 3,704 $ 4,719 $ 6,019
15 $ 11,553 $60,000 $60,000 $ 60,000 $ 60,000 $ 4,078 $ 5,876 $ 8,545 $ 12,509
20 $ 17,182 $60,000 $60,000 $ 60,000 $ 60,000 $ 4,750 $ 8,015 $13,691 $ 23,575
25 $ 24,029 $60,000 $60,000 $ 60,000 $ 78,859 $ 4,629 $ 9,846 $20,636 $ 42,620
30 (AGE 65) $ 32,361 $60,000 $60,000 $ 60,000 $121,544 $ 3,245 $10,918 $30,238 $ 74,125
35 $ 52,358 $60,000 $60,000 $ 64,863 $184,915 $14,711 $20,504 $44,027 $125,513
40 $ 76,687 $60,000 $60,000 $ 84,378 $279,942 $24,836 $30,978 $62,794 $208,333
45 $106,288 $60,000 $60,000 $109,077 $424,399 $33,551 $43,231 $87,407 $340,088
</TABLE>
(1) IF PREMIUMS ARE PAID MORE FREQUENTLY THAN ANNUALLY, THE INITIAL PAYMENTS
WOULD BE $284.80 SEMI-ANNUALLY, $145.40 QUARTERLY OR $50 MONTHLY. THE
ULTIMATE PAYMENTS WOULD BE $1,775.20 SEMI-ANNUALLY, $897.80 QUARTERLY OR
$302.60 MONTHLY. THE DEATH BENEFITS AND CASH SURRENDER VALUES WOULD BE
SLIGHTLY DIFFERENT FOR A CONTRACT WITH MORE FREQUENT PREMIUM PAYMENTS.
(2) ASSUMES NO CONTRACT LOAN HAS BEEN MADE.
(3) VALUES SHOWN IN THE TABLE ARE APPLICABLE TO BOTH THE ORIGINAL CONTRACTS
(THE "1984 CONTRACTS") AND THE REVISED CONTRACTS THAT FIRST BEGAN TO BE
ISSUED IN SEPTEMBER OF 1986 (THE "1986 CONTRACTS"), EXCEPT WHERE THE DEATH
BENEFIT HAS BEEN INCREASED TO THE CONTRACT FUND DIVIDED BY THE NET SINGLE
PREMIUM, IN WHICH CASE THE CASH SURRENDER VALUE AND DEATH BENEFIT FIGURES
SHOWN ARE APPLICABLE ONLY TO THE 1986 CONTRACTS. THIS FIRST OCCURS AT THE
TIME WHEN THE 1984 CONTRACTS WOULD BECOME PAID-UP. FOR A HYPOTHETICAL GROSS
INVESTMENT RETURN OF 0%, THE SECOND SCHEDULED PREMIUM WILL BE $3,477.40.
FOR A GROSS RETURN OF 4%, THE SECOND SCHEDULED PREMIUM WILL BE $2,305.36.
FOR A GROSS RETURN OF 8%, THE SECOND SCHEDULED PREMIUM WILL BE $554.80. FOR
A GROSS RETURN OF 12%, THE SECOND SCHEDULED PREMIUM WILL BE $554.80. THE
PREMIUMS ACCUMULATED AT 4% INTEREST IN COLUMN 2 ARE THOSE PAYABLE IF THE
GROSS INVESTMENT RETURN IS 4%. FOR AN EXPLANATION OF WHY THE SCHEDULED
PREMIUM MAY INCREASE ON THE PREMIUM CHANGE DATE, SEE PREMIUMS.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF
INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%,
AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES
FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OF
NEW JERSEY OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
T1
<PAGE>
<TABLE>
<CAPTION>
VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
FORM B -- VARIABLE DEATH BENEFIT
MALE PREFERRED ISSUE AGE 35
$60,000 GUARANTEED DEATH BENEFIT
$554.80 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3)
USING CURRENT SCHEDULE OF CHARGES
DEATH BENEFIT (2) CASH SURRENDER VALUE (2)
---------------------------------------------------- ---------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET) ASSUMING HYPOTHETICAL GROSS (AND NET)
PREMIUMS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
END OF ACCUMULATED ---------------------------------------------------- ---------------------------------------------------
POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR PER YEAR (3) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 577 $60,000 $60,000 $60,013 $ 60,030 $ 0 $ 0 $ 0 $ 0
2 $ 1,177 $60,000 $60,000 $60,039 $ 60,088 $ 186 $ 233 $ 280 $ 330
3 $ 1,801 $60,000 $60,000 $60,081 $ 60,181 $ 467 $ 557 $ 652 $ 753
4 $ 2,450 $60,000 $60,000 $60,139 $ 60,312 $ 738 $ 884 $ 1,044 $ 1,217
5 $ 3,125 $60,000 $60,000 $60,215 $ 60,486 $ 998 $ 1,214 $ 1,456 $ 1,727
6 $ 3,827 $60,000 $60,000 $60,342 $ 60,738 $ 1,385 $ 1,686 $ 2,032 $ 2,428
7 $ 4,557 $60,000 $60,021 $60,493 $ 61,048 $ 1,786 $ 2,186 $ 2,658 $ 3,213
8 $ 5,317 $60,000 $60,050 $60,671 $ 61,423 $ 2,174 $ 2,687 $ 3,309 $ 4,061
9 $ 6,106 $60,000 $60,082 $60,879 $ 61,871 $ 2,549 $ 3,190 $ 3,987 $ 4,979
10 $ 6,927 $60,000 $60,120 $61,120 $ 62,400 $ 2,911 $ 3,694 $ 4,695 $ 5,975
15 $ 11,553 $60,000 $60,632 $63,244 $ 67,111 $ 4,092 $ 5,873 $ 8,484 $ 12,352
20 $ 17,182 $60,000 $61,542 $67,006 $ 76,468 $ 4,786 $ 8,003 $13,466 $ 22,929
25 $ 24,029 $60,000 $63,158 $73,240 $ 93,886 $ 4,689 $ 9,747 $19,829 $ 40,475
30 (AGE 65) $ 32,361 $60,000 $65,984 $83,112 $125,087 $ 3,329 $10,484 $27,612 $ 69,587
35 $ 53,919 $60,380 $66,429 $82,756 $174,099 $14,682 $20,731 $37,058 $118,171
40 $ 80,147 $60,850 $67,877 $85,470 $265,002 $24,460 $31,487 $49,080 $197,215
45 $112,058 $60,701 $70,840 $92,798 $403,763 $32,439 $42,579 $64,537 $323,552
</TABLE>
(1) IF PREMIUMS ARE PAID MORE FREQUENTLY THAN ANNUALLY, THE INITIAL PAYMENTS
WOULD BE $284.80 SEMI-ANNUALLY, $145.40 QUARTERLY OR $50 MONTHLY. THE
ULTIMATE PAYMENTS WOULD BE $1,775.20 SEMI-ANNUALLY, $897.80 QUARTERLY OR
$302.60 MONTHLY. THE DEATH BENEFITS AND CASH SURRENDER VALUES WOULD BE
SLIGHTLY DIFFERENT FOR A CONTRACT WITH MORE FREQUENT PREMIUM PAYMENTS.
(2) ASSUMES NO CONTRACT LOAN HAS BEEN MADE.
(3) VALUES SHOWN IN THE TABLE ARE APPLICABLE TO BOTH THE ORIGINAL CONTRACTS
(THE "1984 CONTRACTS") AND THE REVISED CONTRACTS THAT FIRST BEGAN TO BE
ISSUED IN SEPTEMBER OF 1986 (THE "1986 CONTRACTS"), EXCEPT WHERE THE DEATH
BENEFIT HAS BEEN INCREASED TO THE CONTRACT FUND DIVIDED BY THE NET SINGLE
PREMIUM, IN WHICH CASE THE CASH SURRENDER VALUE AND DEATH BENEFIT FIGURES
SHOWN ARE APPLICABLE ONLY TO THE 1986 CONTRACTS. THIS FIRST OCCURS AT THE
TIME WHEN THE 1984 CONTRACTS WOULD BECOME PAID-UP. FOR A HYPOTHETICAL GROSS
INVESTMENT RETURN OF 0%, THE SECOND SCHEDULED PREMIUM WILL BE $3,477.40.
FOR A GROSS RETURN OF 4%, THE SECOND SCHEDULED PREMIUM WILL BE $2,582.48.
FOR A GROSS RETURN OF 8%, THE SECOND SCHEDULED PREMIUM WILL BE $554.80. FOR
A GROSS RETURN OF 12%, THE SECOND SCHEDULED PREMIUM WILL BE $554.80. THE
PREMIUMS ACCUMULATED AT 4% INTEREST IN COLUMN 2 ARE THOSE PAYABLE IF THE
GROSS INVESTMENT RETURN IS 4%. FOR AN EXPLANATION OF WHY THE SCHEDULED
PREMIUM MAY INCREASE ON THE PREMIUM CHANGE DATE, SEE PREMIUMS.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF
INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%,
AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES
FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OF
NEW JERSEY OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
T2
<PAGE>
<TABLE>
<CAPTION>
VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
FORM A -- FIXED DEATH BENEFIT
MALE PREFERRED ISSUE AGE 35
$60,000 GUARANTEED DEATH BENEFIT
$554.80 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3)
USING MAXIMUM CONTRACTUAL CHARGES
DEATH BENEFIT (2) CASH SURRENDER VALUE (2)
---------------------------------------------------- ----------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET) ASSUMING HYPOTHETICAL GROSS (AND NET)
PREMIUMS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
END OF ACCUMULATED ---------------------------------------------------- ----------------------------------------------------
POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR PER YEAR (3) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 577 $60,000 $60,000 $60,000 $ 60,000 $ 0 $ 0 $ 0 $ 0
2 $ 1,177 $60,000 $60,000 $60,000 $ 60,000 $ 184 $ 231 $ 279 $ 328
3 $ 1,801 $60,000 $60,000 $60,000 $ 60,000 $ 460 $ 550 $ 645 $ 746
4 $ 2,450 $60,000 $60,000 $60,000 $ 60,000 $ 722 $ 868 $ 1,028 $ 1,201
5 $ 3,125 $60,000 $60,000 $60,000 $ 60,000 $ 969 $ 1,185 $ 1,426 $ 1,696
6 $ 3,827 $60,000 $60,000 $60,000 $ 60,000 $1,311 $ 1,610 $ 1,953 $ 2,348
7 $ 4,557 $60,000 $60,000 $60,000 $ 60,000 $1,662 $ 2,056 $ 2,522 $ 3,072
8 $ 5,317 $60,000 $60,000 $60,000 $ 60,000 $1,993 $ 2,495 $ 3,106 $ 3,848
9 $ 6,106 $60,000 $60,000 $60,000 $ 60,000 $2,306 $ 2,927 $ 3,706 $ 4,680
10 $ 6,927 $60,000 $60,000 $60,000 $ 60,000 $2,598 $ 3,351 $ 4,323 $ 5,575
15 $ 11,553 $60,000 $60,000 $60,000 $ 60,000 $3,144 $ 4,719 $ 7,094 $ 10,668
20 $ 17,182 $60,000 $60,000 $60,000 $ 60,000 $2,876 $ 5,497 $10,203 $ 18,603
25 $ 24,029 $60,000 $60,000 $60,000 $ 60,000 $1,271 $ 5,039 $13,372 $ 31,372
30 (AGE 65) $ 32,361 $60,000 $60,000 $60,000 $ 85,015 $ 0 $ 2,248 $16,125 $ 51,847
35 $ 58,960 $60,000 $60,000 $60,000 $121,748 $3,939 $11,074 $27,931 $ 82,638
40 $ 91,322 $60,000 $60,000 $60,000 $172,197 $6,073 $18,359 $44,501 $128,149
45 $130,695 $60,000 $60,000 $83,237 $242,075 $ 0 $22,278 $66,701 $193,984
</TABLE>
(1) IF PREMIUMS ARE PAID MORE FREQUENTLY THAN ANNUALLY, THE PAYMENTS WOULD BE
$284.80 SEMI-ANNUALLY, $145.40 QUARTERLY OR $50 MONTHLY. THE DEATH BENEFITS
AND CASH SURRENDER VALUES WOULD BE SLIGHTLY DIFFERENT FOR A CONTRACT WITH
MORE FREQUENT PREMIUM PAYMENTS.
(2) ASSUMES NO CONTRACT LOAN HAS BEEN MADE.
(3) VALUES SHOWN IN THE TABLE ARE APPLICABLE TO BOTH THE ORIGINAL CONTRACTS
(THE "1984 CONTRACTS") AND THE REVISED CONTRACTS THAT FIRST BEGAN TO BE
ISSUED IN SEPTEMBER OF 1986 (THE "1986 CONTRACTS"), EXCEPT WHERE THE DEATH
BENEFIT HAS BEEN INCREASED TO THE CONTRACT FUND DIVIDED BY THE NET SINGLE
PREMIUM, IN WHICH CASE THE CASH SURRENDER VALUE AND DEATH BENEFIT FIGURES
SHOWN ARE APPLICABLE ONLY TO THE 1986 CONTRACTS. THIS FIRST OCCURS AT THE
TIME WHEN THE 1984 CONTRACTS WOULD BECOME PAID-UP. FOR A HYPOTHETICAL GROSS
INVESTMENT RETURN OF 0%, THE PREMIUM AFTER AGE 65 WILL BE $3,477.40; FOR A
GROSS RETURN OF 4% THE PREMIUM AFTER AGE 65 WILL BE $3,477.40; FOR A GROSS
RETURN OF 8% THE PREMIUM AFTER AGE 65 WILL BE $2,238.49; FOR A GROSS RETURN
OF 12% THE PREMIUM AFTER AGE 65 WILL BE $554.80. THE PREMIUMS ACCUMULATED
AT 4% INTEREST IN COLUMN 2 ARE THOSE PAYABLE IF THE GROSS INVESTMENT RETURN
IS 4%. FOR AN EXPLANATION OF WHY THE SCHEDULED PREMIUM MAY INCREASE ON THE
PREMIUM CHANGE DATE, SEE PREMIUMS.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF
INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%,
AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES
FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OF
NEW JERSEY OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
T3
<PAGE>
<TABLE>
<CAPTION>
VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
FORM B -- VARIABLE DEATH BENEFIT
MALE PREFERRED ISSUE AGE 35
$60,000 GUARANTEED DEATH BENEFIT
$554.80 MINIMUM INITIAL SCHEDULED PREMIUM (1) (3)
USING MAXIMUM CONTRACTUAL CHARGES
DEATH BENEFIT (2) CASH SURRENDER VALUE (2)
---------------------------------------------------- ----------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET) ASSUMING HYPOTHETICAL GROSS (AND NET)
PREMIUMS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
END OF ACCUMULATED ---------------------------------------------------- ----------------------------------------------------
POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR PER YEAR (3) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET) (-1.11% NET) (2.89% NET) (6.89% NET) (10.89% NET)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 577 $60,000 $60,000 $60,013 $ 60,030 $ 0 $ 0 $ 0 $ 0
2 $ 1,177 $60,000 $60,000 $60,036 $ 60,085 $ 183 $ 230 $ 277 $ 327
3 $ 1,801 $60,000 $60,000 $60,071 $ 60,171 $ 458 $ 548 $ 643 $ 743
4 $ 2,450 $60,000 $60,000 $60,119 $ 60,291 $ 720 $ 866 $ 1,024 $ 1,196
5 $ 3,125 $60,000 $60,000 $60,180 $ 60,448 $ 966 $ 1,181 $ 1,421 $ 1,689
6 $ 3,827 $60,000 $60,000 $60,256 $ 60,647 $1,309 $ 1,605 $ 1,946 $ 2,337
7 $ 4,557 $60,000 $60,000 $60,347 $ 60,892 $1,659 $ 2,051 $ 2,512 $ 3,057
8 $ 5,317 $60,000 $60,000 $60,455 $ 61,188 $1,991 $ 2,489 $ 3,093 $ 3,826
9 $ 6,106 $60,000 $60,000 $60,581 $ 61,541 $2,304 $ 2,921 $ 3,689 $ 4,649
10 $ 6,927 $60,000 $60,000 $60,726 $ 61,956 $2,595 $ 3,344 $ 4,300 $ 5,531
15 $ 11,553 $60,000 $60,000 $61,772 $ 65,219 $3,141 $ 4,709 $ 7,013 $ 10,460
20 $ 17,182 $60,000 $60,000 $63,481 $ 71,327 $2,874 $ 5,486 $ 9,942 $ 17,788
25 $ 24,029 $60,000 $60,000 $66,003 $ 81,907 $1,269 $ 5,025 $12,591 $ 28,496
30 (AGE 65) $ 32,361 $60,000 $60,000 $69,428 $ 99,366 $ 0 $ 2,230 $13,928 $ 43,866
35 $ 58,960 $60,000 $60,000 $72,084 $116,649 $3,936 $11,033 $26,386 $ 70,951
40 $ 91,322 $60,000 $60,000 $77,517 $152,335 $6,070 $18,299 $41,127 $113,368
45 $130,695 $60,000 $60,000 $86,835 $219,961 $ 0 $22,174 $58,574 $176,263
</TABLE>
(1) IF PREMIUMS ARE PAID MORE FREQUENTLY THAN ANNUALLY, THE PAYMENTS WOULD BE
$284.80 SEMI-ANNUALLY, $145.40 QUARTERLY OR $50 MONTHLY. THE DEATH BENEFITS
AND CASH SURRENDER VALUES WOULD BE SLIGHTLY DIFFERENT FOR A CONTRACT WITH
MORE FREQUENT PREMIUM PAYMENTS.
(2) ASSUMES NO CONTRACT LOAN HAS BEEN MADE.
(3) VALUES SHOWN IN THE TABLE ARE APPLICABLE TO BOTH THE ORIGINAL CONTRACTS
(THE "1984 CONTRACTS") AND THE REVISED CONTRACTS THAT FIRST BEGAN TO BE
ISSUED IN SEPTEMBER OF 1986 (THE "1986 CONTRACTS"), EXCEPT WHERE THE DEATH
BENEFIT HAS BEEN INCREASED TO THE CONTRACT FUND DIVIDED BY THE NET SINGLE
PREMIUM, IN WHICH CASE THE CASH SURRENDER VALUE AND DEATH BENEFIT FIGURES
SHOWN ARE APPLICABLE ONLY TO THE 1986 CONTRACTS. THIS FIRST OCCURS AT THE
TIME WHEN THE 1984 CONTRACTS WOULD BECOME PAID-UP. FOR A HYPOTHETICAL GROSS
INVESTMENT RETURN OF 0%, THE PREMIUM AFTER AGE 65 WILL BE $3,477.40; FOR A
GROSS RETURN OF 4% THE PREMIUM AFTER AGE 65 WILL BE $3,477.40; FOR A GROSS
RETURN OF 8% THE PREMIUM AFTER AGE 65 WILL BE $2,952.33; FOR A GROSS RETURN
OF 12% THE PREMIUM AFTER AGE 65 WILL BE $1,284.96. THE PREMIUMS ACCUMULATED
AT 4% INTEREST IN COLUMN 2 ARE THOSE PAYABLE IF THE GROSS INVESTMENT RETURN
IS 4%. FOR AN EXPLANATION OF WHY THE SCHEDULED PREMIUM MAY INCREASE ON THE
PREMIUM CHANGE DATE, SEE PREMIUMS.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING INTEREST RATES, AND RATES OF
INFLATION. THE DEATH BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%,
AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES
FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OF
NEW JERSEY OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
T4
<PAGE>
CONTRACT LOANS
The Contract owner may borrow from Pruco Life of New Jersey up to the "loan
value" of the Contract, using the Contract as the only security for the loan.
The loan value of a Contract is 90% of an amount equal to its Contract fund,
reduced by any charges due upon surrender. However, Pruco Life of New Jersey
will, on a non-contractual basis, increase the loan value by permitting a
Contract owner to borrow up to 100% of the portion of the Contract fund
attributable to the fixed-rate option (or any portion of the Contract fund
attributable to a prior loan supported by the fixed-rate option), reduced by any
charges due upon surrender. The minimum amount that may be borrowed at any one
time is $500 unless the loan is used to pay premiums on the Contract.
Under one of the loan provisions available under this Contract, interest charged
on a loan accrues daily at a fixed effective annual rate of 5.5%. However, if a
Contract owner so desires, and if Pruco Life of New Jersey has received any
required approvals from the regulatory officials in the state or other
jurisdiction in which the Contract is to be issued, the Contract owner may elect
at the time of issuance of the Contract to have a different loan provision in
the Contract under which the interest rate will vary from time to time.
If an owner elects the variable loan interest rate provision, interest charged
on any loan will accrue daily at an annual rate Pruco Life of New Jersey
determines at the start of each Contract year (instead of at the fixed 5.5%
rate). This interest rate will not exceed the greatest of (1) the "Published
Monthly Average" for the calendar month ending 2 months before the calendar
month of the Contract anniversary; (2) 5%; or (3) any rate required by law in
the state of issue of the Contract. The "Published Monthly Average" means
Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published
by Moody's Investors Service, Inc. or any successor to that service, or if that
average is no longer published, a substantially similar average established by
the insurance regulator where the Contract is issued. For example, the Published
Monthly Average in 1996 ranged from 7.10% to 8.00%.
Interest payments on any loan are due at the end of each Contract year. If
interest is not paid when due, it is added to the principal amount of the loan.
The term "Contract debt" means the amount of all outstanding loans plus any
interest accrued but not yet due. If at any time the Contract debt exceeds the
cash surrender value, Pruco Life of New Jersey will notify the Contract owner of
its intent to terminate the Contract in 61 days, within which time the owner may
repay all or enough of the loan to keep the Contract in force for a limited
time. If the Contract owner fails to keep the Contract in force, the amount of
unpaid Contract debt will be treated as a distribution which may be taxable. See
LAPSE AND REINSTATEMENT, page 20 and TAX TREATMENT OF CONTRACT BENEFITS -
PRE-DEATH DISTRIBUTIONS, page 27.
When a loan is made, an amount equal to the loan proceeds will be transferred
out of the applicable investment option[s]. The reduction will be made in the
same proportions as the value in each investment option bears to the total value
of the Contract. While a fixed-rate loan is outstanding, the amount that was so
transferred will continue to be treated as part of the Contract fund but it will
be credited with the assumed rate of return of 4% rather than with the actual
rate of return of the applicable investment option[s]. While a loan made
pursuant to the variable loan interest rate provision is outstanding, the amount
that was transferred out of the subaccount[s] is credited with a rate which is
less than the loan interest rate for the Contract year by no more than 1.5%,
rather than with the actual rate of return of the subaccount[s] the fixed-rate
option or the Real Property Account. Currently, Pruco Life of New Jersey credits
such amounts with a rate that is 1% less than the loan interest rate for the
Contract year. If a loan remains outstanding at a time when Pruco Life of New
Jersey fixes a new rate, the new interest rate will apply.
A loan will not affect the amount of the premiums due. Should the death benefit
become payable while a loan is outstanding, or should the Contract be
surrendered, any Contract debt will be deducted from the death benefit or the
cash surrender value otherwise payable. Loans from Modified Endowment Contracts
may be treated for tax purposes as distributions of income. See TAX TREATMENT OF
CONTRACT BENEFITS, page 26.
A loan will have a permanent effect on a Contract's cash surrender value and may
have a permanent effect on the death benefit because the investment results of
the selected investment options will apply only to the amount remaining in those
investment options. The longer the loan is outstanding, the greater the effect
is likely to be. The effect could be favorable or unfavorable. If investment
results are greater than the rate being credited upon the amount of the loan
while the loan is outstanding, Contract values will not increase as rapidly as
they would have if no loan had been made. If investment results are below that
rate, Contract values will be higher than they would have been had no loan been
made. A loan that is repaid will not have any effect upon the guaranteed minimum
death benefit.
Consider the Form A Contract issued on a 35 year old male insured illustrated in
the table on page T1 with an 8% gross investment return. Assume a $2,000 (5.5%)
fixed-rate loan was made under this Contract at the end of
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Contract year 8 and repaid at the end of Contract year 10 and loan interest was
paid when due. Upon repayment, the cash surrender value would be $4,581.76. This
amount is lower than the cash value shown on that page for the end of Contract
year 10 because the loan amount was credited with the 4% assumed rate of return
rather than the 6.89% net return for the designated subaccount[s] resulting from
the 8% gross return in the underlying Series Fund.
REPORTS TO CONTRACT OWNERS
Once each Contract year (except where the Contract is in force as fixed extended
term insurance), Contract owners will be sent statements that provide certain
information pertinent to their own Contract. These statements detail values and
transactions made and specific Contract data that apply only to each particular
Contract. On request, a Contract owner will be sent a current statement in a
form similar to that of the annual statement described above, but Pruco Life of
New Jersey may limit the number of such requests or impose a reasonable charge
if such requests are made too frequently.
Contract owners will also be sent annual and semi-annual reports of the Series
Fund showing the financial condition of the portfolios and the investments held
in each.
OPTIONS ON LAPSE
If a Contract lapses because the necessary premium has not been paid before the
end of the grace period, some life insurance coverage may continue in effect or
the owner may choose to surrender the Contract for its cash surrender value.
1. FIXED EXTENDED TERM INSURANCE. With two exceptions explained below, if the
owner does not communicate at all with Pruco Life of New Jersey, life insurance
coverage will continue for a length of time that depends on the cash surrender
value on the date of default (which reflects the deduction of the deferred sales
load and administrative charges, and Contract debt, if any), the amount of
insurance, and the age and sex (except where unisex rates apply) of the insured.
The insurance amount will be what it would have been on the date of default
taking into account any Contract debt on that date. The amount will not change
while the insurance stays in force. This benefit is known as extended term
insurance. If the owner requests, he or she will be told in writing how long the
insurance will be in effect. Extended term insurance has a cash surrender value,
but no loan value.
Contracts issued on the lives of certain insureds in high risk rating classes
and Contracts issued in connection with tax qualified pension plans will include
a statement that extended term insurance will not be provided. In those cases,
variable reduced paid-up insurance will be the automatic benefit provided on
lapse.
2. VARIABLE REDUCED PAID-UP INSURANCE. Variable reduced paid-up insurance
provides insurance coverage for the lifetime of the insured. The initial
insurance amount will depend upon the cash surrender value on the date of
default (which reflects the deduction of the deferred sales load and
administrative charges, and Contract debt, if any), and the age and sex of the
insured. This will be a new guaranteed minimum death benefit. Aside from this
guarantee, the cash surrender value and the amount of insurance will vary with
investment performance in the same manner as the paid-up Contract described
earlier. See WHEN A CONTRACT BECOMES PAID-UP, page 17. Variable reduced paid-up
insurance has a loan privilege identical to that available on premium paying
Contracts. See CONTRACT LOANS, page 24. Acquisition of reduced paid-up insurance
within the first 7 Contract years may result in the Contract becoming a Modified
Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 26.
As explained above, variable reduced paid-up insurance is the automatic benefit
on lapse for Contracts issued on certain insureds. Owners of other Contracts who
want variable reduced paid-up insurance must ask for it in writing, in a form
that meets Pruco Life of New Jersey's needs, within 3 months of the date of
default; it will be available to such owners only if the initial amount of
variable reduced paid-up insurance would be at least $5,000. This minimum is not
applicable to Contracts for which variable reduced paid-up insurance is the
automatic benefit upon lapse.
3. PAYMENT OF CASH SURRENDER VALUE. The owner can receive the cash surrender
value by surrendering the Contract and making a written request in a form that
meets Pruco Life of New Jersey's needs. If Pruco Life of New Jersey receives the
request after the 61-day grace period has expired, the cash surrender value will
be the net value of any extended term insurance then in force, or the net value
of any reduced paid-up insurance then in force, less any Contract debt.
Surrender of a Contract may have tax consequences. See TAX TREATMENT OF CONTRACT
BENEFITS, page 26.
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RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY
1. ORIGINAL CONTRACTS. At any time during the first 24 months after a Contract
is issued, so long as the Contract is not in default, the owner may exchange it
for an APPRECIABLE LIFE insurance policy on the insured's life issued by Pruco
Life of New Jersey. This is a general account, universal-life type policy with
guaranteed minimum values. No evidence of insurability will be required to make
an exchange. The new policy's premium and death benefit will be the same as the
original Contract's on the date of exchange. The new policy will also have the
same issue date and risk classification for the insured as the original
Contract. If the Contract fund value under the original Contract is greater than
the tabular Contract fund value under the new policy, the difference will be
credited to the Contract owner and carried over to the new policy. If the
Contract fund value under the original Contract is less than the tabular
Contract fund value under the new policy, a cash payment will be required from
the exchanging owner.
The exchange will be effective when Pruco Life of New Jersey receives a written
request in a form that meets its needs. Any outstanding Contract debt must be
repaid on or before the effective date of the exchange.
The Contract owner may also exchange the Contract for an APPRECIABLE LIFE policy
according to procedures meeting applicable state insurance law requirements if
the Series Fund or one of its portfolios has a material change in its investment
policy. The Company, in conjunction with the New Jersey Insurance Commissioner,
will determine if a change in investment policy is material. For New York
Contract owners, the Company will also consult the New York Superintendent of
Insurance. The Contract owner will be able to exchange within 60 days of receipt
of notice of such a material change or of the effective date of the change,
whichever is later.
2. REVISED CONTRACTS. Under the revised Contracts, the only right to exchange
the Contract for a fixed-benefit contract is provided by allowing Contract
owners to transfer their entire Contract fund to the fixed-rate option at any
time within the first 2 years from issue (or within 2 years of any increase in
face amount with respect to the amount of insurance) without regard to the
otherwise applicable limit of four transfers per year. See TRANSFERS, page 10.
This conversion right will also be provided if the Series Fund or one of its
portfolios has a material change in its investment policy, as explained above.
There is no right to exchange for an APPRECIABLE LIFE contract.
SALE OF THE CONTRACT AND SALES COMMISSIONS
Pruco Securities Corporation ("Prusec"), an indirect wholly-owned subsidiary of
Prudential, acts as the principal underwriter of the Contract. Prusec, organized
in 1971 under New Jersey law, is registered as a broker and dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. Prusec's principal business address is 213 Washington
Street, Newark, New Jersey 07102-2992. The Contract is sold by registered
representatives of Prusec who are also authorized by state insurance departments
to do so. The Contract may also be sold through other broker-dealers authorized
by Prusec and applicable law to do so. Registered representatives of such other
broker-dealers may be paid on a different basis than described below. Where the
insured is less than 60 years of age, the representative will generally receive
a commission of no more than 50% of the scheduled premiums for the first year,
no more than 12% of the scheduled premiums for the second, third, and fourth
years, no more than 3% of the scheduled premiums for the fifth through tenth
years, and no more than 2% of the scheduled premiums thereafter. For insureds
over 59 years of age, the commission will be lower. The representative may be
required to return all or part of the first year commission if the Contract is
not continued through the second year. Representatives with less than 3 years of
service may be paid on a different basis. Representatives who meet certain
productivity, profitability, and persistency standards with regard to the sale
of the Contract will be eligible for additional compensation.
Sales expenses in any year are not equal to the deduction for sales load in that
year. Pruco Life of New Jersey expects to recover its total sales expenses over
the periods the Contracts are in effect. To the extent that the sales charges
are insufficient to cover total sales expenses, the sales expenses will be
recovered from Pruco Life of New Jersey's surplus, which may include amounts
derived from the mortality and expense risk charge and the guaranteed minimum
death benefit risk charge described in items 5 and 7 under CHARGES AND EXPENSES,
page 11.
TAX TREATMENT OF CONTRACT BENEFITS
Each prospective purchaser is urged to consult a qualified tax advisor. The
following discussion is not intended as tax advice, and it is not a complete
statement of what the effect of federal income taxes will be under all
circumstances. Rather, it provides information about how Pruco Life of New
Jersey believes the tax laws apply in the most commonly occurring circumstances.
There is no guarantee, however, that the current federal income tax laws and
regulations or interpretations will not change.
TREATMENT AS LIFE INSURANCE. The Contract will be treated as "life insurance,"
as long as it satisfies certain definitional tests set forth in sections 7702 of
the Internal Revenue Code ("the Code") and as long as the
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underlying investments for the Contract satisfy diversification requirements
under section 817(h) of the Code. (For further detail on diversification
requirements, see DIVIDENDS, DISTRIBUTIONS, AND TAXES in the attached prospectus
for the Series Fund.)
Pruco Life of New Jersey believes that it has taken adequate steps to cause the
Contract to be treated as life insurance for tax purposes. This means that (1)
except as noted below, the Contract owner should not be taxed on any part of the
Contract fund, including additions attributable to interest, dividends or
appreciation until amounts are distributed under the Contract; and (2) the death
benefit should be excludible from the gross income of the beneficiary under
section 101(a) of the Code.
However, section 7702 of the Code, which defines life insurance for tax
purposes, gives the Secretary of the Treasury authority to prescribe regulations
to carry out the purposes of the section. In this regard, proposed regulations
governing mortality charges were issued in 1991, and proposed regulations
relating to the definition of life insurance were issued in 1992. None of these
proposed regulations has yet been finalized. Additional regulations under
section 7702 may also be promulgated in the future. Moreover, in connection with
the issuance of temporary regulations under section 817(h), the Treasury
Department announced that such regulations do not provide guidance concerning
the extent to which Contract owners may direct their investments to particular
divisions of a separate account. Such guidance will be included in regulations
or rulings under section 817(d) relating to the definition of a variable
contract.
Pruco Life of New Jersey intends to comply with final regulations issued under
sections 7702 and 817. Therefore, it reserves the right to make such changes as
it deems necessary to assure that the Contract continues to qualify as life
insurance for tax purposes. Any such changes will apply uniformly to affected
Contract owners and will be made only after advance written notice to affected
Contract owners.
PRE-DEATH DISTRIBUTIONS. The taxation of pre-death distributions depends on
whether the Contract is classified as a Modified Endowment Contract. The
following discussion first deals with distributions under Contracts not so
classified, and then with Modified Endowment Contracts.
1. A surrender or lapse of the Contract may have tax consequences. Upon
surrender, the owner will not be taxed on the cash surrender value except
for the amount, if any, that exceeds the gross premiums paid less the
untaxed portion of any prior withdrawals. The amount of any unpaid Contract
debt will, upon surrender or lapse, be added to the cash surrender value
and treated, for this purpose, as if it had been received. Any loss
incurred upon surrender is generally not deductible. The tax consequences
of a surrender may differ if the proceeds are received under any income
payment settlement option.
A withdrawal (or partial surrender) generally is not taxable unless it
exceeds total premiums paid to the date of withdrawal less the untaxed
portion of any prior withdrawals. However, under certain limited
circumstances, in the first 15 Contract years all or a portion of a
withdrawal or partial surrender may be taxable if the Contract fund exceeds
the total premiums paid less the untaxed portion of any prior withdrawals,
even if total withdrawals do not exceed total premiums paid to date.
Extra premiums for optional benefits and riders generally do not count in
computing gross premiums paid, which in turn determine the extent to which
a withdrawal might be taxed.
Loans received under the Contract will ordinarily be treated as
indebtedness of the owner and will not be considered to be distributions
subject to tax.
2. Some of the above rules are changed if the Contract is classified as a
Modified Endowment Contract under section 7702A of the Code. It is possible
for this Contract to be classified as a Modified Endowment Contract under
at least two circumstances: premiums in excess of scheduled premiums are
paid or a decrease in the face amount of insurance is made (or a rider
removed) during the first 7 Contract years. Moreover, the addition of a
rider or the increase in the face amount of insurance after the Contract
date may have an impact on the Contract's status as a Modified Endowment
Contract. Contract owners contemplating any of these steps should first
consult a qualified tax advisor and their Pruco Life of New Jersey
representative.
If the Contract is classified as a Modified Endowment Contract, then
pre-death distributions, including loans, withdrawals and partial
surrenders are includible in income to the extent that the Contract fund
exceeds the gross premiums paid for the Contract increased by the amount of
any loans previously includible in income and reduced by any untaxed
amounts previously received other than the amount of any loans excludible
from income. These rules may also apply to pre-death distributions,
including loans, made during the 2 year period prior to the Contract
becoming a Modified Endowment Contract.
In addition, pre-death distributions from such Contracts (including full
surrenders) will be subject to a penalty of 10% of the amount includible in
income unless the amount is distributed on or after age 59 1/2, on account
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of the taxpayer's disability or as a life annuity. It is presently unclear
how the penalty tax provisions apply to Contracts owned by nonnatural
persons such as corporations.
Under certain circumstances, the Code requires two or more Modified
Endowment Contracts issued during a calendar year period, to be treated as
a single contract for purposes of applying the above rules.
WITHHOLDING
The taxable portion of any amounts received under the Contract will be subject
to withholding to meet federal income tax obligations if the Contract owner
fails to elect that no taxes be withheld or in certain other circumstances.
Contract owners who do not provide a social security number or other taxpayer
identification number will not be permitted to elect out of withholding. All
recipients may be subject to penalties under the estimated tax payment rules if
withholding and estimated tax payments are not sufficient.
OTHER TAX CONSIDERATIONS. Transfer of the Contract to a new owner or assignment
of the Contract may have tax consequences depending on the circumstances. In the
case of a transfer of the Contract for a valuable consideration, the death
benefit may be subject to federal income taxes under section 101(a)(2) of the
Code. In addition, a transfer of the Contract to or the designation of a
beneficiary who is either 37 1/2 years younger than the Contract owner or a
grandchild of the Contract owner may have Generation Skipping Transfer tax
consequences under section 2601 of the Code.
In certain circumstances, deductions for interest paid or accrued on Contract
debt or on other loans incurred or continued to purchase or carry the Contract
may be denied under section 163 of the Code as personal interest or under
section 264 of the Code. Contract owners should consult a tax advisor regarding
the application of these provisions to their circumstances.
Business-owned life insurance is subject to additional rules. Section 264(a)(1)
of the Code generally precludes business Contract owners from deducting premium
payments. The recently enacted Health Insurance Portability and Accountability
Act of 1996 generally disallows tax deductions for interest on Contract debt on
a business-owned insurance policy effective (with certain transitional rules)
for interest paid or accrued after October 13, 1995. An exception permits the
deduction of interest on policy loans on Contracts for up to 20 key persons. The
interest deduction for Contract debt on such loans is limited to a prescribed
interest rate and a maximum aggregate loan amount of $50,000 per key insured
person. The Code also imposes an indirect tax upon additions to the Contract
fund or the receipt of death benefits under business-owned life insurance
policies under certain circumstances by way of the corporate alternative minimum
tax.
The individual situation of each Contract owner or beneficiary will determine
the federal estate taxes and the state and local estate, inheritance and other
taxes due if the owner or insured dies.
CONTRACTS ISSUED IN CONNECTION WITH TAX-QUALIFIED PENSION PLANS
The Contracts may be acquired in connection with the funding of retirement plans
satisfying the qualification requirements of section 401 of the Internal Revenue
Code. Such Contracts may be issued with a minimum face amount of $25,000, and
increases and decreases in face amount may be effected in minimum increments of
$10,000. The monthly charge for anticipated mortality costs and the scheduled
premiums under such Contracts will be the same for male and female insureds of a
particular age and underwriting classification. Illustrations reflecting such
premiums and charges will be given to purchasers of Contracts issued in
connection with qualified plans. Only certain of the riders normally available
with the Contracts are available to Contracts issued in connection with
qualified plans. See Riders, page 30. Moreover, variable reduced paid-up
insurance and payment of cash surrender value are the only options on lapse
available to Contracts issued in connection with qualified plans. See OPTIONS ON
LAPSE, page 25. Finally, Contracts issued in connection with qualified plans may
not invest in the Real Property Account.
Prior to purchase of a Contract in connection with a qualified plan, the
applicable tax rules relating to such plans and life insurance thereunder should
be examined in consultation with a qualified tax advisor.
THE FIXED-RATE OPTION
BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN THE FIXED-RATE
OPTION UNDER THE CONTRACT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND THE GENERAL ACCOUNT HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY
UNDER THE INVESTMENT COMPANY ACT OF 1940. ACCORDINGLY, INTERESTS IN THE
FIXED-RATE OPTION ARE NOT SUBJECT TO THE PROVISIONS OF THESE ACTS, AND PRUCO
LIFE OF NEW JERSEY HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND
EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURE IN THIS PROSPECTUS RELATING
TO THE FIXED-RATE OPTION. DISCLOSURE REGARDING THE FIXED-RATE OPTION MAY,
HOWEVER, BE SUBJECT TO CERTAIN GENERALLY APPLICABLE
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PROVISIONS OF FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND COMPLETENESS
OF STATEMENTS MADE IN PROSPECTUSES.
As explained earlier, a Contract owner may elect to allocate, either initially
or by transfer, all or part of the amount credited under the Contract to a
fixed-rate option, and the amount so allocated or transferred becomes part of
Pruco Life of New Jersey's general assets. Sometimes this is referred to as
Pruco Life of New Jersey's general account, which consists of all assets owned
by Pruco Life of New Jersey other than those in the Account and in other
separate accounts that have been or may be established by Pruco Life of New
Jersey. Subject to applicable law, Pruco Life of New Jersey has sole discretion
over the investment of the assets of the general account, and Contract owners do
not share in the investment experience of those assets. Instead, Pruco Life of
New Jersey guarantees that the part of the Contract fund allocated to the
fixed-rate option will accrue interest daily at an effective annual rate that
Pruco Life of New Jersey declares periodically, but not less than an effective
annual rate of 4%. Currently, declared interest rates remain in effect from the
date money is allocated to the fixed-rate option until the Monthly date in the
same month in the following year. Thereafter, a new crediting rate will be
declared each year and will remain in effect for the calendar year. Pruco Life
of New Jersey reserves the right to change this practice. Pruco Life of New
Jersey is not obligated to credit interest at a higher rate than 4%, although in
its sole discretion it may do so. Different crediting rates may be declared for
different portions of the Contract fund allocated to the fixed-rate option. On
request, a Contract owner will be advised of the interest rates that currently
apply to his or her Contract.
Transfers from the fixed-rate option are subject to strict limits. (See
TRANSFERS, page 10). The payment of any cash surrender value attributable to the
fixed-rate option may be delayed up to 6 months (see WHEN PROCEEDS ARE PAID,
page 21).
LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT PREMIUMS AND BENEFITS
The Contract generally employs mortality tables that distinguish between males
and females. Thus, premiums and benefits under Contracts issued on males and
females of the same age will generally differ. However, in those states that
have adopted regulations prohibiting sex-distinct insurance rates, premiums and
cost of insurance charges will be based on a blended unisex rate whether the
insured is male or female. In addition, employers and employee organizations
considering purchase of a Contract should consult their legal advisors to
determine whether purchase of a Contract based on sex-distinct actuarial tables
is consistent with Title VII of the Civil Rights Act of 1964 or other applicable
law. Pruco Life of New Jersey may offer the Contract with unisex mortality rates
to such prospective purchasers.
OTHER GENERAL CONTRACT PROVISIONS
BENEFICIARY. The beneficiary is designated and named in the application by the
Contract owner. Thereafter, the owner may change the beneficiary, provided it is
in accordance with the terms of the Contract. Should the insured die with no
surviving beneficiary, the insured's estate will become the beneficiary.
INCONTESTABILITY. After the Contract has been in force during the insured's
lifetime for 2 years from the Contract date or, with respect to any change in
the Contract that requires Pruco Life of New Jersey's approval and could
increase its liability, after the change has been in effect during the insured's
lifetime for 2 years from the effective date of the change, Pruco Life of New
Jersey will not contest its liability under the Contract in accordance with its
terms.
MISSTATEMENT OF AGE OR SEX. If the insured's stated age or sex (except where
unisex rates apply) or both are incorrect in the Contract, Pruco Life of New
Jersey will adjust the death benefits payable, as required by law, to reflect
the correct age and sex. Any death benefit will be based on what the most recent
charge for mortality would have provided at the correct age and sex.
SUICIDE EXCLUSION. Generally, if the insured, whether sane or insane, dies by
suicide within 2 years from the Contract date, Pruco Life of New Jersey will pay
no more under the Contract than the sum of the premiums paid.
If the insured, whether sane or insane, dies by suicide within 2 years from the
effective date of an increase in the face amount of insurance, Pruco Life of New
Jersey will pay, with respect to the amount of the increase, no more than the
sum of the scheduled premiums attributable to the increase.
ASSIGNMENT. This Contract may not be assigned if such assignment would violate
any federal, state or local law or regulation. Pruco Life of New Jersey assumes
no responsibility for the validity or sufficiency of any assignment, and it will
not be obligated to comply with any assignment unless it has received a copy at
one of its Home Offices.
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SETTLEMENT OPTIONS. The Contract grants to most owners, or to the beneficiary, a
variety of optional ways of receiving Contract proceeds, other than in a lump
sum. Any Pruco Life of New Jersey representative authorized to sell this
Contract can explain these options upon request.
RIDERS
Contract owners may be able to obtain extra fixed benefits which may require an
additional premium. These benefits will be described in what is known as a
"rider" to the Contract. Charges for riders will be taken out of the Contract's
Contract fund on each Monthly date. One rider pays an additional amount if the
insured dies in an accident. Others waive certain premiums if the insured is
disabled within the meaning of the provision (or, in the case of a Contract
issued on an insured under the age of 15, if the applicant dies or becomes
disabled within the meaning of the provision). Others pay an additional amount
if the insured dies within a stated number of years after issue; similar term
insurance riders may be available for the insured's spouse or child. The amounts
of these benefits are fully guaranteed at issue; they do not depend on the
performance of the Account. Certain restrictions may apply; they are clearly
described in the applicable rider. Any Pruco Life of New Jersey representative
authorized to sell the Contract can explain these riders further. Samples of the
provisions are available from Pruco Life of New Jersey upon written request.
Under one form of rider, which provides monthly renewable term life insurance,
the amount payable upon the death of the insured may be substantially increased.
If this rider is purchased, even the original Contract will not become paid-up,
although, if the Contract fund becomes sufficiently large, a time may come when
Pruco Life of New Jersey will have the right to refuse to accept further
premiums. See WHEN A CONTRACT BECOMES PAID-UP, page 17.
Under another form of rider that is purchased for a single premium, businesses
that own a Contract covering certain employees may be able to change the insured
person from one key employee to another if certain requirements are met.
VOTING RIGHTS
As stated above, all of the assets held in the subaccounts of the Account will
be invested in shares of the corresponding portfolios of the Series Fund. Pruco
Life of New Jersey is the legal owner of those shares and as such has the right
to vote on any matter voted on at Series Fund shareholders meetings. However,
Pruco Life of New Jersey will, as required by law, vote the shares of the Series
Fund at any regular and special shareholders meetings it is required to hold in
accordance with voting instructions received from Contract owners. The Series
Fund will not hold annual shareholders meetings when not required to do so under
Maryland law or the Investment Company Act of 1940. Series Fund shares for which
no timely instructions from Contract owners are received, and any shares
attributable to general account investments of Pruco Life of New Jersey will be
voted in the same proportion as shares in the respective portfolios for which
instructions are received. Should the applicable federal securities laws or
regulations, or their current interpretation, change so as to permit Pruco Life
of New Jersey to vote shares of the Series Fund in its own right, it may elect
to do so.
Matters on which Contract owners may give voting instructions include the
following: (1) election of the Board of Directors of the Series Fund; (2)
ratification of the independent accountant of the Series Fund; (3) approval of
the investment advisory agreement for a portfolio of the Series Fund
corresponding to the Contract owner's selected subaccount[s]; (4) any change in
the fundamental investment policy of a portfolio corresponding to the Contract
owner's selected subaccount[s]; and (5) any other matter requiring a vote of the
shareholders of the Series Fund. With respect to approval of the investment
advisory agreement or any change in a portfolio's fundamental investment policy,
Contract owners participating in such portfolios will vote separately on the
matter, pursuant to the requirements of Rule 18f-2 under the 1940 Act.
The number of Series Fund shares for which instructions may be given by a
Contract owner is determined by dividing the portion of the value of the
Contract derived from participation in a subaccount, by the value of one share
in the corresponding portfolio of the Series Fund. The number of votes for which
each Contract owner may give Pruco Life of New Jersey instructions will be
determined as of the record date chosen by the Board of Directors of the Series
Fund. Pruco Life of New Jersey will furnish Contract owners with proper forms
and proxies to enable them to give these instructions. Pruco Life of New Jersey
reserves the right to modify the manner in which the weight to be given voting
instructions is calculated where such a change is necessary to comply with
current federal regulations or interpretations of those regulations.
Pruco Life of New Jersey may, if required by state insurance regulations,
disregard voting instructions if such instructions would require shares to be
voted so as to cause a change in the sub-classification or investment objectives
of one or more of the Series Fund's portfolios, or to approve or disapprove an
investment advisory contract for the Series Fund. In addition, Pruco Life of New
Jersey itself may disregard voting instructions that would require changes in
the investment policy or investment advisor of one or more of the Series Fund's
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portfolios, provided that Pruco Life of New Jersey reasonably disapproves such
changes in accordance with applicable federal regulations. If Pruco Life of New
Jersey does disregard voting instructions, it will advise Contract owners of
that action and its reasons for such action in the next annual or semi-annual
report to Contract owners.
SUBSTITUTION OF SERIES FUND SHARES
Although Pruco Life of New Jersey believes it to be unlikely, it is possible
that in the judgment of its management, one or more of the portfolios of the
Series Fund may become unsuitable for investment by Contract owners because of
investment policy changes, tax law changes or the unavailability of shares for
investment. In that event, Pruco Life of New Jersey may seek to substitute the
shares of another portfolio or of an entirely different mutual fund. Before this
can be done, the approval of the SEC, and possibly one or more state insurance
departments, will be required.
Contract owners will be notified of such substitution.
STATE REGULATION
Pruco Life of New Jersey is subject to regulation and supervision by the
Department of Insurance of the State of New Jersey, which periodically examines
its operations and financial condition. It is also subject to the insurance laws
and regulations of all jurisdictions in which it is authorized to do business.
Pruco Life of New Jersey is required to submit annual statements of its
operations, including financial statements, to the insurance departments of the
various jurisdictions in which it does business to determine solvency and
compliance with local insurance laws and regulations.
In addition to the annual statements referred to above, Pruco Life of New Jersey
is required to file with New Jersey and other jurisdictions a separate statement
with respect to the operations of all its variable contract accounts, in a form
promulgated by the National Association of Insurance Commissioners.
EXPERTS
The financial statements included in this prospectus for the year ended December
31, 1996 have been audited by Price Waterhouse LLP, independent accountants, as
stated in their reports appearing herein, and are included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing. Price Waterhouse LLP's principal business address is 1177 Avenue of
the Americas, New York, New York 10036.
The financial statements included in this prospectus for years ended December
31, 1995 and December 31, 1994, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports appearing herein, and are
included in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing. Deloitte & Touche LLP's principal business
address is Two Hilton Court, Parsippany, New Jersey 07054- 0319.
On March 12, 1996, Deloitte & Touche LLP was dismissed as the independent
accountants of Pruco Life of New Jersey. There have been no disagreements with
Deloitte & Touche LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which, if not
resolved to the satisfaction of the accountant, would have caused them to make
reference to the matter in their reports.
Actuarial matters included in this prospectus have been examined by Pam A..
Schiz, FSA, MAAA, Actuarial Director of Prudential whose opinion is filed as an
exhibit to the registration statement.
LITIGATION
Several actions have been brought against Pruco Life of New Jersey alleging that
Pruco Life of New Jersey and its agents engaged in improper life insurance sales
practices. Prudential has agreed to indemnify Pruco Life of New Jersey for
losses, if any, resulting from such litigation. No other significant litigation
is being brought against Pruco Life of New Jersey that would have a material
effect on its financial position.
ADDITIONAL INFORMATION
A registration statement has been filed with the SEC under the Securities Act of
1933, relating to the offering described in this prospectus. This prospectus
does not include all the information set forth in the registration statement.
Certain portions have been omitted pursuant to the rules and regulations of the
SEC. The omitted information may, however, be obtained from the SEC's principal
office in Washington, D.C., upon payment of a prescribed fee.
Further information may also be obtained from Pruco Life of New Jersey's office.
The address and telephone number of which are set forth on the cover of this
prospectus.
31
<PAGE>
FINANCIAL STATEMENTS
The financial statements of Pruco Life of New Jersey included herein should be
distinguished from the financial statements of the Account, and should be
considered only as bearing upon the ability of Pruco Life of New Jersey to meet
its obligations under the Contracts.
32
<PAGE>
DIRECTORS AND OFFICERS
The directors and major officers of Pruco Life of New Jersey, listed with their
principal occupations during the past 5 years, are shown below.
DIRECTORS OF PRUCO LIFE OF NEW JERSEY
WILLIAM M. BETHKE, Director. -- President, Prudential Capital Markets Group
since 1992.
IRA J. KLEINMAN, Director. -- Executive Vice President, Prudential International
Insurance Group since 1997; 1995 to 1997: Chief Marketing and Product
Development Officer, Prudential Individual Insurance Group; 1993 to 1995:
President, Prudential Select; Prior to 1993: Senior Vice President of
Prudential.
MENDEL A. MELZER, Director. -- Chief Investment Officer, Mutual Funds and
Annuities, Prudential Investments since 1996; 1995 to 1996: Chief Financial
Officer of the Money Management Group of Prudential; 1993 to 1995: Senior Vice
President and Chief Financial Officer of Prudential Preferred Financial
Services; Prior to 1993: Managing Director, Prudential Investment Corporation.
ESTHER H. MILNES, President and Director. -- Vice President and Actuary,
Prudential Individual Insurance Group since 1996; 1993 to 1996: Senior Vice
President and Chief Actuary, Prudential Insurance and Financial Services; Prior
to 1993: Vice President and Associate Actuary of Prudential.
I. EDWARD PRICE, Vice Chairman and Director. -- Senior Vice President and
Actuary, Prudential Individual Insurance Group since 1995; 1994 to 1995: Chief
Executive Officer, Prudential International Insurance; 1993 to 1994: President,
Prudential International Insurance; Prior to 1993: Senior Vice President and
Company Actuary of Prudential.
WILLIAM F. YELVERTON, Chairman and Director. --Chief Executive Officer,
Prudential Individual Insurance Group since 1995; Prior to 1995: Chief Executive
Officer, New York Life Worldwide.
OFFICERS WHO ARE NOT DIRECTORS
SUSAN L. BLOUNT, Secretary.--Vice President and Secretary of Prudential since
1995; Prior to 1995: Assistant General Counsel for Prudential Residential
Services Company.
C. EDWARD CHAPLIN, Treasurer. -- Vice President and Treasurer of Prudential
since 1995; 1993 to 1995: Managing Director and Assistant Treasurer of
Prudential; 1992 to 1993: Vice President and Assistant Treasurer, Banking and
Cash Management for Prudential.
LINDA S. DOUGHERTY, Vice President, Comptroller and Chief Accounting Officer. --
Vice President and Comptroller, Prudential Individual Insurance Group since
1997; Prior to 1997: Vice President, Accounting, Prudential.
JAMES C. DROZANOWSKI, Senior Vice President. -- Vice President and Operations
Executive, Prudential Individual Insurance Group since 1996; 1995 to 1996:
President and Chief Executive Officer of Chase Manhattan Bank; 1993 to 1995:
Vice President, North America Customer Services, Chase Manhattan Bank; Prior to
1993: Operations Executive, Global Securities Services, Chase Manhattan Bank.
CLIFFORD E. KIRSCH, Chief Legal Officer. -- Chief Counsel, Variable Products,
Law Department of Prudential since 1995; 1994 to 1995: Associate General Counsel
with Paine Webber; Prior to 1994: Assistant Director in the Division of
Investment Management with the Securities and Exchange Commission.
FRANK P. MARINO, Senior Vice President. -- Vice President, Policyowner Relations
Department, Prudential Individual Insurance Group since 1996; Prior to 1996:
Senior Vice President, Prudential Mutual Fund Services.
MARIO A. MOSSE, Senior Vice President. -- Vice President, Annuity Services,
Prudential Investments since 1996; Prior to 1996: Vice President, Chase
Manhattan Bank.
SHIRLEY H. SHAO, Senior Vice President and Chief Actuary. -- Vice President and
Associate Actuary, Prudential.
KAREN L. SHAPIRO, Senior Vice President. -- Vice President, Prudential
Individual Insurance Group since 1996; Vice President and Associate General
Counsel, Prudential Securities Incorporated 1993 to 1996; Prior to 1993: Senior
Associate with Shaw, Pittman, Potts and Trowbridge.
The business address of all directors and officers of Pruco Life of New Jersey
is 213 Washington Street, Newark, New Jersey 07102-2992.
* SUBSIDIARY OF PRUDENTIAL
33
<PAGE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF NET ASSETS
December 31, 1996
<TABLE>
<CAPTION>
SUBACCOUNTS
------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc. Portfolios at net asset value [Note
3]............................................ $ 7,533,217 $ 22,924,378 $ 154,712,919 $ 332,374,136 $ 103,313,807
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners....................... $ 7,421,584 $ 22,863,510 $ 154,471,448 $ 332,222,571 $ 102,839,654
Equity of Pruco Life Insurance Company of New
Jersey........................................ 111,633 60,868 241,471 151,565 474,153
-------------- -------------- -------------- -------------- --------------
$ 7,533,217 $ 22,924,378 $ 154,712,919 $ 332,374,136 $ 103,313,807
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
</TABLE>
STATEMENTS OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<CAPTION>
SUBACCOUNTS
------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 363,402 $ 1,454,249 $ 3,521,308 $ 9,673,291 $ 4,036,315
EXPENSES
Charges to Contract owners for assuming
mortality risk and expense risk [Note 5A]..... 42,569 132,078 858,560 1,886,931 603,268
Reimbursement for excess expenses [Note 5D]..... (3,019) (10,852) (157,857) (768,611) (184,407)
-------------- -------------- -------------- -------------- --------------
NET EXPENSES...................................... 39,550 121,226 700,703 1,118,320 418,861
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 323,852 1,333,023 2,820,605 8,554,971 3,617,454
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 0 0 13,675,629 31,237,057 6,285,583
Realized gain on shares redeemed
[average cost basis].......................... 0 57,067 1,912,078 1,665,484 631,625
Net unrealized gain (loss) on investments....... 0 (466,074) 5,401,309 (2,307,005) 818,813
-------------- -------------- -------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS.................... 0 (409,007) 20,989,016 30,595,536 7,736,021
-------------- -------------- -------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 323,852 $ 924,016 $ 23,809,621 $ 39,150,507 $ 11,353,475
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14.
A1
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES GLOBAL
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc. Portfolios at net asset value [Note
3] $ 5,680,277 $ 9,838,393 $ 7,287,168 $ 12,902,193 $ 2,787,237
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners $ 5,683,327 $ 9,830,363 $ 7,267,961 $ 12,887,058 $ 2,779,454
Equity of Pruco Life Insurance Company of New
Jersey (3,050) 8,030 19,207 15,135 7,783
-------------- -------------- -------------- -------------- --------------
$ 5,680,277 $ 9,838,393 $ 7,287,168 $ 12,902,193 $ 2,787,237
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
<CAPTION>
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
INCOME JENNISON STOCK
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc. Portfolios at net asset value [Note
3] $ 1,075,088 $ 1,550,011 $ 1,005,294
-------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners $ 1,057,047 $ 1,500,416 $ 978,207
Equity of Pruco Life Insurance Company of New
Jersey 18,041 49,595 27,087
-------------- -------------- --------------
$ 1,075,088 $ 1,550,011 $ 1,005,294
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received $ 536,584 $ 157,666 $ 228,477 $ 78,273
EXPENSES
Charges to Contract owners for assuming
mortality risk and expense risk [Note 5A] 32,893 49,728 38,393 68,140
Reimbursement for excess expenses [Note 5D] 0 0 0 0
-------------- -------------- -------------- --------------
NET EXPENSES 32,893 49,728 38,393 68,140
-------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS) 503,691 107,938 190,084 10,133
-------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received 0 110,782 227,495 1,512,619
Realized gain on shares redeemed
[average cost basis] 19,307 36,129 32,033 62,697
Net unrealized gain (loss) on investments 35,230 1,396,067 799,443 1,281,691
-------------- -------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS 54,537 1,542,978 1,058,971 2,857,007
-------------- -------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 558,228 $ 1,650,916 $ 1,249,055 $ 2,867,140
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
<CAPTION>
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
GLOBAL INCOME JENNISON STOCK
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received $ 60,041 $ 68,050 $ 2,497 $ 5,334
EXPENSES
Charges to Contract owners for assuming
mortality risk and expense risk [Note 5A] 13,342 6,407 5,416 3,176
Reimbursement for excess expenses [Note 5D] 0 0 0 0
-------------- -------------- -------------- --------------
NET EXPENSES 13,342 6,407 5,416 3,176
-------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS) 46,699 61,643 (2,919) 2,158
-------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received 42,205 0 0 17,146
Realized gain on shares redeemed
[average cost basis] 12,503 4,623 3,547 475
Net unrealized gain (loss) on investments 291,245 (45,207) 125,105 74,217
-------------- -------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS 345,953 (40,584) 128,652 91,838
-------------- -------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 392,652 $ 21,059 $ 125,733 $ 93,996
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14.
A2
<PAGE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
SUBACCOUNTS
----------------------------------------------------------------------------------------------
MONEY DIVERSIFIED
MARKET BOND
---------------------------------------------- ----------------------------------------------
1996 1995 1994 1996 1995 1994
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)...... $ 323,852 $ 356,393 $ 231,113 $ 1,333,023 $ 1,240,421 $ 1,083,068
Capital gains distributions
received........................ 0 0 0 0 46,623 41,781
Realized gain on shares redeemed
[average cost basis]............ 0 0 0 57,067 20,406 (104)
Net unrealized gain (loss) on
investments..................... 0 0 0 (466,074) 2,276,752 (1,843,417)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS......... 323,852 356,393 231,113 924,016 3,584,202 (718,672)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[NOTE 7].......................... 72,004 (230,261) 346,388 710,146 (301,132) (516,748)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM EQUITY TRANSFERS
[NOTE 8].......................... 32,909 54,650 (14,326) 14,080 (64,049) 30,158
-------------- -------------- -------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS............................ 428,765 180,782 563,175 1,648,242 3,219,021 (1,205,262)
NET ASSETS:
Beginning of year................. 7,104,452 6,923,670 6,360,495 21,276,136 18,057,115 19,262,377
-------------- -------------- -------------- -------------- -------------- --------------
End of year....................... $ 7,533,217 $ 7,104,452 $ 6,923,670 $ 22,924,378 $ 21,276,136 $ 18,057,115
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14.
A3
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------
FLEXIBLE
EQUITY MANAGED
---------------------------------------------- --------------
1996 1995 1994 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 2,820,605 $ 1,989,741 $ 1,856,844 $ 8,554,971
Capital gains distributions
received 13,675,629 4,749,315 4,322,517 31,237,057
Realized gain on shares redeemed
[average cost basis] 1,912,078 544,107 515,498 1,665,484
Net unrealized gain (loss) on
investments 5,401,309 24,536,585 (4,328,575) (2,307,005)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS 23,809,621 31,819,748 2,366,284 39,150,507
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[NOTE 7] (4,594,683) (302,145) (624,287) (4,012,445)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM EQUITY TRANSFERS
[NOTE 8] 266,385 (82,656) (81,783) (30,235)
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS 19,481,323 31,434,947 1,660,214 35,107,827
NET ASSETS:
Beginning of year 135,231,596 103,796,649 102,136,435 297,266,309
-------------- -------------- -------------- --------------
End of year $ 154,712,919 $ 135,231,596 $ 103,796,649 $ 332,374,136
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
<CAPTION>
CONSERVATIVE
BALANCED
----------------------------------------------
1995 1994 1996 1995 1994
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 7,690,078 $ 5,619,063 $ 3,617,454 $ 3,339,301 $ 2,486,229
Capital gains distributions
received 12,349,890 6,536,164 6,285,583 3,199,302 863,296
Realized gain on shares redeemed
[average cost basis] 862,723 469,942 631,625 395,934 84,451
Net unrealized gain (loss) on
investments 35,084,463 (20,633,412) 818,813 6,759,491 (4,531,190)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS 55,987,154 (8,008,243) 11,353,475 13,694,028 (1,097,214)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[NOTE 7] 7,645,276 10,588,266 (2,779,707) (668,617) 1,744,736
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM EQUITY TRANSFERS
[NOTE 8] (84,390) 28,940 307,568 (183,597) 139,892
-------------- -------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS 63,548,040 2,608,963 8,881,336 12,841,814 787,414
NET ASSETS:
Beginning of year 233,718,269 231,109,306 94,432,471 81,590,657 80,803,243
-------------- -------------- -------------- -------------- --------------
End of year $ 297,266,309 $ 233,718,269 $ 103,313,807 $ 94,432,471 $ 81,590,657
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14.
A4
<PAGE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
SUBACCOUNTS
----------------------------------------------------------------------------------------------
HIGH
YIELD STOCK
BOND INDEX
---------------------------------------------- ----------------------------------------------
1996 1995 1994 1996 1995 1994
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 503,691 $ 501,590 $ 446,386 $ 107,938 $ 92,026 $ 80,268
Capital gains distributions
received....................... 0 0 0 110,782 48,903 6,533
Realized gain on shares redeemed
[average cost basis]........... 19,307 22,462 52,883 36,129 18,971 34,397
Net unrealized gain (loss) on
investments.................... 35,230 262,552 (661,387) 1,396,067 1,528,471 (106,816)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 558,228 786,604 (162,118) 1,650,916 1,688,371 14,382
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[NOTE 7]......................... (162,806) (172,703) (144,528) 1,266,103 794,158 64,430
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM EQUITY TRANSFERS
[NOTE 8]......................... (5,301) (11,093) (156,329) 8,647 (10,835) 3,553
-------------- -------------- -------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS........................... 390,121 602,808 (462,975) 2,925,666 2,471,694 82,365
NET ASSETS:
Beginning of year................ 5,290,156 4,687,348 5,150,323 6,912,727 4,441,033 4,358,668
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 5,680,277 $ 5,290,156 $ 4,687,348 $ 9,838,393 $ 6,912,727 $ 4,441,033
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14.
A5
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------
EQUITY NATURAL
INCOME RESOURCES
---------------------------------------------- --------------
1996 1995 1994 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 190,084 $ 170,557 $ 121,856 $ 10,133
Capital gains distributions
received 227,495 244,033 215,095 1,512,619
Realized gain on shares redeemed
[average cost basis] 32,033 9,122 30,957 62,697
Net unrealized gain (loss) on
investments 799,443 507,923 (353,186) 1,281,691
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS 1,249,055 931,635 14,722 2,867,140
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[NOTE 7] 230,617 697,170 1,011,765 555,951
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM EQUITY TRANSFERS
[NOTE 8] (10,223) (1,918) (6,373) 5,189
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS 1,469,449 1,626,887 1,020,114 3,428,280
NET ASSETS:
Beginning of year 5,817,719 4,190,832 3,170,718 9,473,913
-------------- -------------- -------------- --------------
End of year $ 7,287,168 $ 5,817,719 $ 4,190,832 $ 12,902,193
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
<CAPTION>
GLOBAL**
----------------------------------------------
1995 1994 1996 1995 1994
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 58,126 $ 28,372 $ 46,699 $ 15,181 $ (375)
Capital gains distributions
received 430,971 149,531 42,205 29,689 357
Realized gain on shares redeemed
[average cost basis] 10,519 12,569 12,503 6,264 1,151
Net unrealized gain (loss) on
investments 1,451,364 (556,096) 291,245 152,195 (60,675)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS 1,950,980 (365,624) 392,652 203,329 (59,542)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[NOTE 7] 203,566 372,914 728,542 323,710 1,200,810
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM EQUITY TRANSFERS
[NOTE 8] 13,079 (24,609) (18,517) (48,166) 64,419
-------------- -------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS 2,167,625 (17,319) 1,102,677 478,873 1,205,687
NET ASSETS:
Beginning of year 7,306,288 7,323,607 1,684,560 1,205,687 0
-------------- -------------- -------------- -------------- --------------
End of year $ 9,473,913 $ 7,306,288 $ 2,787,237 $ 1,684,560 $ 1,205,687
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
**Commenced
Business
on 5/1/94
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14.
A6
<PAGE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
SUBACCOUNTS
------------------------------------------------------------------------------
GOVERNMENT PRUDENTIAL
INCOME JENNISON*
---------------------------------------------- ------------------------------
1996 1995 1994 1996 1995
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)...... $ 61,643 $ 57,628 $ 53,371 $ (2,919) $ (632)
Capital gains distributions
received........................ 0 0 0 0 0
Realized gain on shares redeemed
[average cost basis]............ 4,623 3,821 1,445 3,547 0
Net unrealized gain (loss) on
investments..................... (45,207) 100,163 (114,096) 125,105 18,835
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS......... 21,059 161,612 (59,280) 125,733 18,203
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[NOTE 7].......................... 20,021 6,352 (91,023) 990,676 376,388
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM EQUITY TRANSFERS
[NOTE 8].......................... 16,385 (29,818) 16,688 35,740 3,271
-------------- -------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS............................ 57,465 138,146 (133,615) 1,152,149 397,862
NET ASSETS:
Beginning of year................. 1,017,623 879,477 1,013,092 397,862 0
-------------- -------------- -------------- -------------- --------------
End of year....................... $ 1,075,088 $ 1,017,623 $ 879,477 $ 1,550,011 $ 397,862
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
*Commenced
Business
on 5/1/95
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14.
A7
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------
SMALL
CAPITALIZATION
STOCK*
------------------------------
1996 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 2,158 $ 217
Capital gains distributions
received 17,146 1,651
Realized gain on shares redeemed
[average cost basis] 475 0
Net unrealized gain (loss) on
investments 74,217 9,905
-------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS 93,996 11,773
-------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[NOTE 7] 711,886 162,907
-------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM EQUITY TRANSFERS
[NOTE 8] 17,290 7,442
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS 823,172 182,122
NET ASSETS:
Beginning of year 182,122 0
-------------- --------------
End of year $ 1,005,294 $ 182,122
-------------- --------------
-------------- --------------
*Commenced
Business
on 5/1/95
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A14.
A8
<PAGE>
NOTES TO FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
FOR THE YEARS ENDED DECEMBER 31, 1996
NOTE 1: GENERAL
Pruco Life of New Jersey Variable Appreciable Account ("the Account") was
established on January 13, 1984 under New Jersey law as a separate investment
account of Pruco Life Insurance Company of New Jersey ("Pruco Life of New
Jersey") which is a wholly-owned subsidiary of Pruco Life Insurance Company (an
Arizona domiciled company) and is indirectly wholly-owned by The Prudential
Insurance Company of America ("Prudential"). The assets of the Account are
segregated from Pruco Life of New Jersey's other assets. The two products that
invest in the Account are Pruco Life of New Jersey Variable Appreciable Life
("VAL") and Pruco Life of New Jersey PRUvider Variable Appreciable Life
("PRUvider").
The Account is registered under the Investment Company Act of 1940, as amended,
as a unit investment trust. There are thirteen subaccounts within the Account,
each of which invests only in a corresponding portfolio of The Prudential Series
Fund, Inc. (the "Series Fund"). The Series Fund is a diversified open-end
management investment company, and is managed by Prudential.
New sales of the VAL product, which invests in the Account, were discontinued as
of May 1, 1992. However, premium payments made by current Contract owners will
continue to be received by the Account.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are prepared in conformity with generally
accepted accounting principles (GAAP). The preparation of the financial
statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
Investments--The investments in shares of the Series Fund are stated at the net
asset value of the respective portfolio.
Security Transactions--Realized gains and losses on security transactions are
reported on an average cost basis. Purchase and sale transactions are recorded
as of the trade date of the security being purchased or sold.
Distributions Received--Dividend and capital gain distributions received are
reinvested in additional shares of the Series Fund and are recorded on the
ex-dividend date.
Equity of Pruco Life Insurance Company of New Jersey--Pruco Life of New Jersey
maintains a position in the Account for the purpose of administering activity in
the Account. The activity includes unit transactions, fund share transactions,
and expense processing. Pruco Life of New Jersey monitors the balance daily and
transfers funds based upon anticipated activity. At times, Pruco Life of New
Jersey may owe an amount to the Account, which is reflected in Pruco Life of New
Jersey's equity as a negative balance. The position does not have an effect on
the Contract owner's account or the related unit value.
A9
<PAGE>
NOTE 3: INVESTMENT INFORMATION FOR THE PRUDENTIAL SERIES FUND, INC. PORTFOLIOS
The net asset value per share for each portfolio of the Series Fund, the number
of shares of each portfolio held by the subaccounts of the Account and the
aggregate cost of investments in such shares at December 31, 1996 were as
follows:
<TABLE>
<CAPTION>
PORTFOLIOS
----------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
------------- ------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Number of shares: 753,322 2,071,712 5,737,569 18,685,690 6,658,079
Net asset value
per share: $ 10.00000 $ 11.06543 $ 26.96489 $ 17.78763 $ 15.51706
Cost: $ 7,533,217 $ 22,043,245 $ 107,363,438 $ 290,510,240 $ 91,751,530
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Number of shares: 721,994 414,340 393,692 652,766
Net asset value per share: $ 7.86749 $ 23.74471 $ 18.50982 $ 19.76541
Cost: $ 5,365,337 $ 6,234,425 $ 6,004,924 $ 10,368,718
<CAPTION>
PORTFOLIOS (CONTINUED)
------------------------------------------------------------
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
GLOBAL INCOME JENNISON STOCK
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Number of shares: 156,106 95,810 108,217 72,890
Net asset value per share: $ 17.85474 $ 11.22109 $ 14.32319 $ 13.79187
Cost: $ 2,404,472 $ 1,066,537 $ 1,406,071 $ 921,172
</TABLE>
A10
<PAGE>
NOTE 4: CONTRACT OWNER UNIT INFORMATION
Outstanding Contract owner units, unit values and total value of Contract owner
equity for the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Contract Owner
Units Outstanding
(VAL):........... 4,230,558.478 8,671,094.946 28,922,687.765 87,958,937.501 30,989,074.232
Unit value
(VAL):.......... $ 1.75428 $ 2.63675 $ 5.34084 $ 3.68167 $ 3.09975
----------------- ----------------- ----------------- ----------------- -----------------
Contract Owner
Equity (VAL):... $ 7,421,584 $ 22,863,510 $ 154,471,448 $ 323,835,781 $ 96,058,382
----------------- ----------------- ----------------- ----------------- -----------------
Contract Owner
Units
Outstanding
(PRUvider):..... N/A N/A N/A 3,269,346.631 3,069,365.344
Unit value
(PRUvider):..... N/A N/A N/A $ 2.56528 $ 2.20934
----------------- ----------------- ----------------- ----------------- -----------------
Contract Owner
Equity
(PRUvider):..... N/A N/A N/A $ 8,386,790 $ 6,781,272
----------------- ----------------- ----------------- ----------------- -----------------
TOTAL CONTRACT
OWNER EQUITY:..... $ 7,421,584 $ 22,863,510 $ 154,471,448 $ 332,222,571 $ 102,839,654
----------------- ----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- ----------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Contract Owner Units
Outstanding (VAL):....... 2,612,771.278 3,201,342.703 2,274,856.382 4,310,744.791
Unit value (VAL):......... $ 2.17521 $ 3.07070 $ 3.19491 $ 2.98952
----------------- ----------------- ----------------- -----------------
Contract Owner Equity
(VAL):.................. $ 5,683,326 $ 9,830,363 $ 7,267,961 $ 12,887,058
----------------- ----------------- ----------------- -----------------
Contract Owner Units
Outstanding
(PRUvider):............. N/A N/A N/A N/A
Unit value (PRUvider):.... N/A N/A N/A N/A
----------------- ----------------- ----------------- -----------------
Contract Owner Equity
(PRUvider):............. N/A N/A N/A N/A
----------------- ----------------- ----------------- -----------------
TOTAL CONTRACT OWNER
EQUITY:................... $ 5,683,326 $ 9,830,363 $ 7,267,961 $ 12,887,058
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------------------
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
GLOBAL INCOME JENNISON STOCK
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Contract Owner Units
Outstanding (VAL):....... 2,092,379.586 581,706.193 1,053,440.724 687,778.798
Unit value (VAL):......... $ 1.32837 $ 1.81715 $ 1.42430 $ 1.42227
----------------- ----------------- ----------------- -----------------
Contract Owner Equity
(VAL):.................. $ 2,779,454 $ 1,057,047 $ 1,500,416 $ 978,207
----------------- ----------------- ----------------- -----------------
Contract Owner Units
Outstanding
(PRUvider):............. N/A N/A N/A N/A
Unit value (PRUvider):.... N/A N/A N/A N/A
----------------- ----------------- ----------------- -----------------
Contract Owner Equity
(PRUvider):............. N/A N/A N/A N/A
----------------- ----------------- ----------------- -----------------
TOTAL CONTRACT OWNER
EQUITY:................... $ 2,779,454 $ 1,057,047 $ 1,500,416 $ 978,207
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
</TABLE>
A11
<PAGE>
NOTE 5: CHARGES AND EXPENSES
A. Mortality Risk and Expense Risk Charges
The mortality risk and expense risk charges at an effective annual rate of
0.60% and 0.90% are applied daily against the net assets representing equity
of VAL and PRUvider Contract owners held in each subaccount, respectively.
Mortality risk is that Contract holders may not live as long as estimated
and expense risk is that the cost of issuing and administering the policies
may exceed the estimated expenses. For 1996, the amount of these charges
paid to Pruco Life of New Jersey was $3,627,280 for VAL and $113,587 for
PRUvider.
B. Deferred Sales Charge
Subsequent to a Contract owner redemption, a deferred sales charge is
imposed upon surrenders of certain variable life insurance contracts to
compensate Pruco Life of New Jersey for sales and other marketing expenses.
The amount of any sales charge will depend on the number of years that have
elapsed since the Contract was issued. No sales charge will be imposed after
the tenth year of the Contract. No sales charge will be imposed on death
benefits. For 1996, the amount of these charges paid to Pruco Life of New
Jersey was $436,237.
C. Partial Withdrawal Charge
A charge is imposed by Pruco Life of New Jersey on partial withdrawals of
the cash surrender value. For 1996, the amount of these charges paid to
Pruco Life of New Jersey was $12,860.
D. Expense Reimbursement
Pursuant to a prior merger agreement, the Account is reimbursed by Pruco
Life of New Jersey for expenses in excess of 0.40% of the VAL product's
average daily net assets incurred by the Money Market, Diversified Bond,
Equity, Flexible Managed, and the Conservative Balanced Portfolios of the
Series Fund. For 1996, the amount of these reimbursements totaled
$1,124,747.
E. Cost of Insurance Charges
Contract holder contributions are applied to the Account net of the
following charges: transaction costs, premium taxes, sales loads, monthly
administration charges, and death benefit risk charges. During 1996, Pruco
Life Insurance Company of New Jersey, received a total of $940,839,
$1,291,794, $62,458, $2,954,372, and $573,029 respectively, for these
charges.
NOTE 6: TAXES
Pruco Life of New Jersey is taxed as a "life insurance company" under the
Internal Revenue Code and the operations of the account form a part of and
are taxed with those of Pruco Life of New Jersey. Under current federal law,
no federal income taxes are payable by the Account. As such, no provision
for tax liability has been recorded.
A12
<PAGE>
NOTE 7: NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
Contract owner activity in the subaccounts of the Account, for the year ended
December 31, 1996, was as follows:
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
-------------- -------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Contract Owner
Contributions,
net: $ 3,188,087 $ 7,916,245 $ 29,207,675 $ 32,612,223 $ 15,200,979
Contract Owner
Redemptions: $ (3,484,089) $ (8,676,755) $ (34,129,547) $ (35,135,228) $ (16,449,929)
Net Transfers
from(to) other
subaccounts or
fixed rate
option: $ 367,106 $ 1,470,656 $ 327,189 $ (1,489,440) $ (1,530,757)
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES
-------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Contract Owner
Contributions, net: $ 834,540 $ 1,464,240 $ 1,250,064 $ 771,481
Contract Owner
Redemptions: $ (935,706) $ (1,636,270) $ (1,332,586) $ (806,501)
Net Transfers from(to)
other subaccounts or
fixed rate option: $ (61,640) $ 1,438,133 $ 313,139 $ 590,971
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------------------------------
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
GLOBAL INCOME JENNISON STOCK
-------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Contract Owner
Contributions, net: $ 559,468 $ 404,600 $ 273,459 $ 208,580
Contract Owner
Redemptions: $ (628,718) $ (435,544) $ (265,371) $ (167,975)
Net Transfers from(to)
other subaccounts or
fixed rate option: $ 797,792 $ 50,965 $ 982,588 $ 671,281
</TABLE>
NOTE 8: NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM EQUITY TRANSFERS
The increase (decrease) in net assets resulting from equity transfers represents
the net contributions (withdrawals) of Pruco Life of New Jersey to (from) the
Account.
A13
<PAGE>
NOTE 9: UNIT ACTIVITY
Transactions in units (including transfers among subaccounts), for the year
ended December 31, 1996, were as follows:
<TABLE>
<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 2,067,686.082 3,755,677.510 6,112,975.595 10,117,095.280 5,634,628.443
Contract Owner
Redemptions: (2,029,029.681) (3,461,752.426) (7,049,532.365) (10,999,911.624) (6,423,986.641)
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Contract Owner
Contributions: 403,244.799 1,047,108.655 553,465.912 491,356.339
Contract Owner
Redemptions: (482,427.994) (588,444.149) (471,164.465) (297,716.723)
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------------------
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
GLOBAL INCOME JENNISON STOCK
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Contract Owner
Contributions: 1,115,469.741 259,498.442 941,954.954 670,574.605
Contract Owner
Redemptions: (515,088.646) (246,632.070) (200,565.524) (127,177.545)
</TABLE>
NOTE 10: PURCHASES AND SALES OF INVESTMENTS
The aggregate costs of purchases and proceeds from sales of investments in the
Series Fund, Inc. were as follows:
<TABLE>
<CAPTION>
PORTFOLIOS
------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1996
Purchases......... $ 1,246,000 $ 1,787,000 $ 585,000 $ 3,974,000 $ 1,320,000
Sales............. $ (1,195,000) $ (1,184,000) $ (5,614,000) $ (9,135,000) $ (4,211,000)
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
--------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
For the year ended
December 31, 1996
Purchases......... $ 49,000 $ 1,311,000 $ 415,000 $ 752,000
Sales............. $ (250,000) $ (103,000) $ (233,000) $ (259,000)
<CAPTION>
PORTFOLIOS (CONTINUED)
--------------------------------------------------------------
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
GLOBAL INCOME JENNISON STOCK
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
For the year ended
December 31, 1996
Purchases......... $ 813,000 $ 176,000 $ 1,076,000 $ 747,000
Sales............. $ (121,000) $ (146,000) $ (55,000) $ (21,000)
</TABLE>
NOTE 11: RELATED PARTY TRANSACTIONS
Prudential has purchased multiple individual VAL contracts of the Account
insuring the lives of certain employees. Prudential is the owner and beneficiary
of the contracts. Net premium payments of approximately $2.9 million for the
year ended December 31, 1996 were directed to the Flexible Managed subaccount.
Equity of Contract owners in that subaccount at December 31, 1996 includes
approximately $119.4 million owned by Prudential.
A14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Contract Owners of
Pruco Life of New Jersey Variable Appreciable Account
and the Board of Directors of
Pruco Life Insurance Company of New Jersey
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets present fairly, in all
material respects, the financial position of Money Market Subaccount,
Diversified Bond Subaccount, Equity Subaccount, Flexible Managed Subaccount,
Conservative Balanced Subaccount, High Yield Bond Subaccount, Stock Index
Subaccount, Equity Income Subaccount, Natural Resources Subaccount, Global
Subaccount, Government Income Subaccount, Prudential Jennison Subaccount and
Small Capitalization Stock Subaccount of Pruco Life of New Jersey Variable
Appreciable Account at December 31, 1996, and the results of each of their
operations and the changes in each of their net assets for the year then ended,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of Pruco Life Insurance Company of New
Jersey's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of shares owned in The Prudential Series Fund, Inc. at December 31,
1996, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
New York, New York
March 31, 1997
A15
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Contract Owners of
Pruco Life of New Jersey Variable Appreciable
Account and the Board of Directors
of Pruco Life Insurance Company of New Jersey
Newark, New Jersey
We have audited the accompanying statements of changes in net assets of Pruco
Life of New Jersey Variable Appreciable Account of Pruco Life Insurance Company
of New Jersey (comprising, respectively, the Money Market, Diversified Bond,
Equity, Flexible Managed, Conservative Balanced, High Yield Bond, Stock Index,
Equity Income, Natural Resources, Global, Government Income, Prudential
Jennison, and Small Capitalization Stock subaccounts) for each of the periods
presented for each of the two years ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the changes in net assets of each of the respective subaccounts
constituting the Pruco Life of New Jersey Variable Appreciable Account for the
respective stated periods in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Parsippany, New Jersey
February 15, 1996
A16
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
STATEMENTS OF FINANCIAL POSITION
DECEMBER 31,
1996 1995
---------- ----------
(000'S)
ASSETS
Fixed maturities - Available for sale $ 555,898 $ 513,433
Policy loans 113,918 98,194
Short term investments 17,002 45,308
---------- ----------
Total invested assets 686,818 656,935
---------- ----------
Cash 3,928 --
Deferred policy acquisition costs 106,965 96,031
Premiums due 401 344
Accrued investment income 12,908 11,579
Receivable from affiliates -- 3,616
Federal income tax receivable -- 69
Other assets 1,335 281
Separate Account assets 883,261 789,427
---------- ----------
TOTAL ASSETS $1,695,616 $1,558,282
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Future policy benefits and other policyholders' $ 100,663 $ 92,045
liabilities
Policyholders' account balances 375,448 375,193
Federal income tax payable 1,970 --
Deferred federal income tax payable 24,175 23,809
Payable to affiliate 6,059 5,375
Other liabilities 11,990 6,279
Separate Account liabilities 880,065 787,566
---------- ----------
TOTAL LIABILITIES 1,400,370 1,290,267
---------- ----------
CONTINGENCIES - NOTE 9
STOCKHOLDER'S EQUITY
Common Stock, $5 par value;
400,000 shares,
authorized; issued and
outstanding at December 31, 1996 and 1995 2,000 2,000
Paid-in-capital 125,000 125,000
Net unrealized investment gains (less deferred income 2,032 6,588
tax)
Retained earnings 166,214 134,427
---------- ----------
TOTAL STOCKHOLDER'S EQUITY 295,246 268,015
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $1,695,616 $1,558,282
========== ==========
SEE NOTES TO THE FINANCIAL STATEMENTS
B-1
<PAGE>
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
STATEMENTS OF OPERATIONS
YEAR ENDED
DECEMBER 31,
1996 1995 1994
----------------------------
(000'S)
REVENUES
Premiums $ 1,345 $ 1,042 $ 1,869
Policy charges and fee income 58,571 59,515 55,021
Net investment income 43,784 43,530 42,357
Realized investment gains(losses) 1,221 3,592 (8,310)
Other income 4,047 3,900 3,201
----------------------------
TOTAL REVENUES 108,968 111,579 94,138
----------------------------
BENEFITS AND EXPENSES
Policyholders' benefits 28,653 26,331 22,788
Interest credited to policyholders' account 20,069 21,364 22,151
balances
Other operating costs and expenses 12,848 21,881 23,716
----------------------------
TOTAL BENEFITS AND EXPENSES 61,570 69,576 68,655
----------------------------
Income before income tax provision 47,398 42,003 25,483
Income tax provision 15,611 15,002 9,483
----------------------------
NET INCOME $ 31,787 $ 27,001 $ 16,000
============================
SEE NOTES TO THE FINANCIAL STATEMENTS
B-2
<PAGE>
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996 1995 1994
--------------------------------
(000'S)
<S> <C> <C> <C>
COMMON STOCK
Balance, beginning of year $ 2,000 $ 2,000 $ 2,000
Issued during year -- -- --
--------------------------------
Balance, end of year 2,000 2,000 2,000
--------------------------------
PAID IN CAPITAL
Balance, beginning of year 125,000 125,000 125,000
Paid in during year -- -- --
--------------------------------
Balance, end of year 125,000 125,000 125,000
--------------------------------
NET UNREALIZED INVESTMENT GAINS (LESS DEFERRED
INCOME TAX)
Balance, beginning of year 6,588 -- --
Adoption of SFAS 115 -- (11,189) --
Net change in unrealized investment gains(losses) (4,556) 17,777 --
--------------------------------
Balance, end of year 2,032 6,588 --
--------------------------------
RETAINED EARNINGS
Balance, beginning of year 134,427 107,426 91,426
Net income 31,787 27,001 16,000
--------------------------------
Balance, end of year 166,214 134,427 107,426
--------------------------------
TOTAL STOCKHOLDER'S EQUITY $ 295,246 $ 268,015 $234,426
================================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS
B-3
<PAGE>
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996 1995 1994
---------------------------------
(000'S)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 31,787 $ 27,001 $ 16,000
Adjustments to reconcile net income to net cash from
operating activities:
Increase in future policy benefits and other policyholders' 8,618 900 3,936
liabilities
General account policy fee income (9,963) (11,931) (7,744)
Interest credited to policyholders' account balances 20,069 21,364 22,151
Net decrease (increase) in Separate Accounts (1,335) 260 (310)
Net realized investment (gains)losses (1,221) (3,592) 8,310
Amortization and other non-cash items 8,908 (6,839) 3,778
Change in:
Accrued investment income (1,329) (317) (679)
Premiums due (57) 41 26
Receivable from affiliates 3,616 (1,789) (132)
Deferred policy acquisition costs (10,934) 9,074 4,727
Other assets (985) 1,287 2,759
Payable to affiliate 684 807 (3,798)
Federal income tax payable 1,970 8,328 (7,869)
Deferred federal income tax payable 366 3,460 (1,183)
Other liabilities 5,711 (304) 2,988
---------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES 55,905 47,750 42,960
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity of:
Fixed maturities:
Held to maturity -- -- 705,888
Available for sale 901,775 553,681 --
Payments for the purchase of:
Fixed maturities:
Held to maturity -- -- (658,008)
Available for sale (956,483) (522,757) --
Policy loans (15,724) (12,917) (15,511)
Net proceeds (payments) of short term investments 28,306 (3,613) (12,095)
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES (42,126) 14,394 20,274
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholders' account balances:
Deposits 16,754 18,348 22,336
Withdrawals (net of transfers to/from separate accounts) (26,605) (80,509) (85,590)
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES (9,851) (62,161) (63,254)
---------------------------------
Net increase(decrease) in Cash 3,928 (17) (20)
Cash, beginning of year -- 17 37
---------------------------------
CASH , END OF YEAR $ 3,928 $ 0 $ 17
=================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Income taxes paid $ 11,673 $ 7,900 $ 17,679
=================================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS
B-4
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRINCIPLES
A. GENERAL
Pruco Life Insurance Company of New Jersey (the Company), a stock life insurance
company domiciled in New Jersey, is an indirect subsidiary of The Prudential
Insurance Company of America (Prudential), a mutual life insurance company, and
a direct subsidiary of Pruco Life Insurance Company (Pruco Life), a stock life
insurance company domiciled in the state of Arizona. The Company markets
individual life insurance and annuities through Prudential's sales force.
B. BASIS OF PRESENTATION
The Financial Accounting Standards Board (FASB) issued Interpretation No. 40,
"Applicability of Generally Accepted Accounting Principles to Mutual Life
Insurance and Other Enterprises", as amended by Statement of Financial
Accounting Standards (SFAS) No. 120, "Accounting and Reporting by Mutual Life
Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration
Participating Contracts", effective for fiscal years beginning after December
15, 1995. Financial statements of mutual life insurance companies, and their
wholly owned stock life insurance subsidiaries, for periods beginning after
December 15, 1995 which are prepared on the basis of statutory accounting
practices will no longer be characterized as in conformity with generally
accepted accounting principles (GAAP). As a result, the Company has prepared its
1996 financial statements in accordance with all applicable GAAP pronouncements.
The 1995 and 1994 financial statements, which were previously prepared on the
statutory basis of accounting, have been restated in accordance with GAAP. The
cumulative effect of adopting GAAP as of January 1, 1994 was an increase in
retained earnings of $63.6 million. See Note 7 for a reconciliation of the
Company's surplus and net income determined in accordance with statutory
accounting practices with equity and net income determined on a GAAP basis.
On January 1, 1995, the Company adopted SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," which expanded the use of fair value
accounting for those securities that a company does not have positive intent and
ability to hold to maturity. Implementation of this statement decreased
stockholder's equity by $11.2 million net of deferred income tax benefit of $6.3
million. In 1994 prior to the adoption of SFAS 115, all fixed maturities were
carried at amortized cost.
C. INVESTMENTS
Fixed Maturities - Where the Company may not have the positive intent to hold
fixed maturities until maturity, the securities are classified as "Available for
Sale." These securities are reported at market value based principally on their
quoted market prices. The associated unrealized gains and losses, net of income
taxes and deferred policy acquisition costs, are included as a component of
equity or if deemed to be other than temporary, are included as a realized loss.
Policy Loans are stated primarily at unpaid principal balances.
Realized Investment Gains and Losses are reported based on specific
identification of the investments sold.
Short-term investments are fixed maturities that mature within one year, and are
reported at estimated fair value.
D. REVENUE RECOGNITION AND RELATED EXPENSES
Universal life contracts are long duration life insurance contracts that involve
significant mortality and morbidity risk with both fixed and guaranteed terms.
Investment contracts, such as deferred annuities, are long duration contracts
that do not subject the insurance enterprise to risks arising from policyholder
mortality or morbidity. Amounts received as payments for these contracts are
reported as deposits to policyholders' account balances. Revenues from these
contracts consist primarily of amounts assessed during the period against
policyholders' account balances for mortality charges, policy administration
fees and surrender charges. Policy benefits and claims that are charged to
expenses include benefit claims incurred in the period in excess of related
policyholders' account balances.
Premiums, policy benefits and claims from individual life policies and payout
annuities, generally are recognized in operations when due.
B-5
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
E. DEFERRED POLICY ACQUISITION COSTS
Acquisition costs consist of commissions and other costs which vary with and are
primarily related to the production or acquisition of new business. Acquisition
costs related to universal life products and investment-type contracts are
deferred and amortized in proportion to total estimated gross profits arising
principally from investment results, mortality, expense margins and surrender
charges based on historical and anticipated future experience. As required,
amortization expense also includes the impact of revised estimates to expected
gross profits, which is the basis for amortizing deferred policy acquisition
costs. Amortization of deferred policy acquisition costs, including the impact
of revised estimates of gross profits, was $(2.2) million, $8.9 million, and
$11.0 million for the years ended December 31, 1996, 1995, and 1994,
respectively. Deferred policy acquisition costs are analyzed to determine if
they are recoverable from future income, including investment income. If such
costs are determined to be unrecoverable, they are expensed at the time of
determination. The effect on the deferred policy acquisition asset that would
result from realization of unrealized investment gains(losses) is recognized
with an offset to unrealized investment gains(losses) in stockholder's equity.
F. FUTURE POLICY BENEFITS AND POLICYHOLDERS' ACCOUNT BALANCES
Benefit reserve liabilities for payout annuities such as matured deferred
annuities and supplementary contracts represent the present values of estimated
future benefits payments and related expenses. Present values for matured
deferred annuity contracts are computed using interest rates ranging from 6.5%
to 8.75%. The mortality assumption for these contracts is the 83 IAM tables.
Reserves for supplementary contracts are stated at interest rates that vary from
7.25% to 8.25% using mortality and morbidity assumptions either from company
experience or various actuarial tables.
When liabilities for future policy benefits plus the present value of expected
future gross deposits are insufficient to provide expected future policy
benefits and expenses, unrecoverable deferred policy acquisition costs are
written off and thereafter, if required, a premium deficiency reserve is
established as a charge to income.
Policyholders' account balances for universal life and investment-type contracts
are equal to the policy account values. The policy account values represent an
accumulation of gross deposits plus interest credited less expense and mortality
charges and withdrawals.
Interest crediting rates on life insurance products range from 3.4% to 6.6%.
G. SEPARATE ACCOUNTS
Separate Accounts represent funds for which investment income and investment
gains and losses accrue directly to, and investment risk is borne by, the
policyholders. All Separate Account assets are carried at market value. Deposits
to all Separate Accounts are reported as increases in Separate Account
liabilities, which equal the Separate Account policy account fund values.
Charges assessed against policyholders' account balances for mortality, policy
administration and surrender charges are included in policy charges and fee
income. Mortality and expense risk charges are applied against the
policyholders' account balance. The Separate Account assets are legally
segregated and are not subject to claims that arise out of any other business of
the Company.
H. ESTIMATES
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
B-6
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
2. FIXED MATURITIES
Gross unrealized gains and losses for securities, by major security type, are as
follows:
<TABLE>
<CAPTION>
DECEMBER, 31, 1996
- ------------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(000's) Cost Gains Losses Value
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE
U.S. Treasury securities and obligations
of U.S. government corporations and $ 29,386 $ 1 $ 174 $ 29,213
agencies
Foreign government bonds 38,853 420 52 39,221
Corporate securities 483,439 5,108 1,133 487,414
Mortgage-backed securities 50 -- -- 50
- ------------------------------------------------------------------------------------------------------
Total $551,728 $ 5,529 $1,359 $555,898
- ------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
(000's) Cost Gains Losses Value
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE
U.S. Treasury securities and obligations
of U.S. government corporations and $ 81,806 $ 1,287 $ -- $ 83,093
agencies
Foreign government bonds 25,849 1,128 -- 26,977
Corporate securities 353,514 11,130 340 364,304
Mortgage-backed securities 36,872 2,192 5 39,059
- ------------------------------------------------------------------------------------------------------
Total $498,041 $15,737 $ 345 $513,433
- ------------------------------------------------------------------------------------------------------
</TABLE>
B-7
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
The amortized cost and estimated fair value of fixed maturities at December 31,
1996, categorized by contractual maturity, are shown below. Actual maturities
will differ from contractual maturities because borrowers may prepay obligations
with or without call or prepayment penalties.
DECEMBER 31, 1996
- ---------------------------------------------------------------------------
Estimated
Amortized Fair
(000's) Cost Value
- ---------------------------------------------------------------------------
AVAILABLE FOR SALE
Due in one year or less $ 43,723 $ 43,951
Due after one year through five years 444,883 448,048
Due after five years through ten years 57,989 58,586
Due after ten years 5,083 5,263
Mortgage-backed securities 50 50
- ---------------------------------------------------------------------------
Total $551,728 $555,898
- ---------------------------------------------------------------------------
Proceeds from the sale of fixed maturities during 1996, 1995, and 1994 were
$869.6 million, $535.3 million, and $672.8 million, respectively. Gross gains of
$5.2 million, $6.8 million, and $3.3 million and gross losses of $4.0 million,
$3.2 million, and $11.6 million were realized on those sales during 1996, 1995,
and 1994, respectively.
B-8
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
<TABLE>
<CAPTION>
3. NET INVESTMENT INCOME
YEAR ENDED
DECEMBER 31,
Net investment income consists of: 1996 1995 1994
----------------------------------
Gross investment income (000'S)
<S> <C> <C> <C>
Fixed maturities $ 36,193 $ 36,861 $ 36,565
Policy loans 5,761 5,029 4,290
Short term investments 2,504 2,290 2,364
Other 28 51 44
----------------------------------
44,486 44,231 43,263
Investment expenses (702) (701) (906)
----------------------------------
Net investment income $ 43,784 $ 43,530 $ 42,357
==================================
4. INVESTMENT GAINS(LOSSES)
YEAR ENDED
DECEMBER 31,
1996 1995 1994
----------------------------------
(000'S)
Fixed maturities:
Realized investment gains $ 5,232 $ 6,785 $ 3,327
Realized investment losses (4,011) (3,193) (11,637)
----------------------------------
Realized investment gains(losses) $ 1,221 $ 3,592 ($ 8,310)
==================================
YEAR ENDED
DECEMBER 31,
1996 1995 1994
----------------------------------
(000'S)
<S> <C> <C> <C>
Net unrealized investment gains, beginning of period $ 6,588 $ -- $ --
Net unrealized investment gains(losses) on fixed maturities (11,222) 32,875 --
Deferred income tax benefit(provision) 4,040 (11,835) --
Deferred policy acquisition costs (net of deferred income 2,626 (3,263) --
taxes)
----------------------------------
Net change in unrealized investment gains(losses) (4,556) 17,777 --
Adoption of SFAS 115 -- (11,189) --
----------------------------------
Net unrealized investment gains, end of period $ 2,032 $ 6,588 $ --
==================================
</TABLE>
B-9
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
5. FAIR VALUE INFORMATION
The fair value amounts have been determined by the Company using available
information and reasonable valuation methodologies. Considerable judgment is
applied, as necessary, in interpreting data to develop the estimates of fair
value. Accordingly, the estimates presented may not be realized in a current
market exchange. The use of different market assumptions and/or estimation
methodologies could have a material effect on the estimated fair values.
The following methods and assumptions were used in calculating the fair values.
Fixed Maturities - Fair values for fixed maturities are based on quoted market
prices or estimates from independent pricing services.
Policy Loans - The estimated fair value is calculated using a discounted cash
flow model based upon current U.S. Treasury rates and historical loan repayment.
Policyholders' Account Balances - Fair values for policyholders' account
balances are equal to the policy account values.
Short-term Investments - Fair values for short-term investments are based on
quoted market prices or estimates from independent pricing services.
The following table discloses the carrying amounts and estimated fair values of
the Company's financial instruments at December 31, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE
-------------- ---------- -------------- ----------
(000'S)
<S> <C> <C> <C> <C>
Financial Assets:
Fixed maturities -- Available
for sale $555,898 $555,898 $513,433 $513,433
Policy loans 113,918 110,262 98,194 99,057
Short-term investments 17,002 17,002 45,308 45,308
Financial Liabilities:
Policyholders'
account balances $375,448 $375,448 $375,193 $375,193
</TABLE>
B-10
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
6. INCOME TAXES
The Company is a member of a group of affiliated companies which join in filing
a consolidated federal income tax return in addition to separate company state
and local tax returns. The Internal Revenue Code limits the amount of nonlife
insurance losses that may offset life insurance company taxable income.
Companies operating outside the United States are taxed under applicable foreign
statutes.
Pursuant to the tax allocation arrangement, total federal income tax expense is
determined on a separate company basis. Members with losses record tax benefits
to the extent such losses are recognized in the consolidated federal tax
provision.
Deferred income taxes are generally recognized when assets and liabilities have
different values for financial statement and tax reporting purposes.
The components of income taxes are as follows:
YEAR ENDED
DECEMBER 31,
1996 1995 1994
------------------------------
(000'S)
Current income tax provision:
Federal income tax $ 13,589 $ 13,868 $ 9,431
State and local income tax (907) 1,380 1,235
------------------------------
Total current income tax 12,682 15,248 10,666
Deferred income tax provision (benefit):
Federal income tax 2,848 (239) (1,150)
State and local income tax 81 (7) (33)
------------------------------
Total deferred income tax 2,929 (246) (1,183)
------------------------------
Total income tax provision $ 15,611 $ 15,002 $ 9,483
==============================
The income tax provision is different from the amount computed using the
expected federal income tax rate of 35% for the following reasons:
YEAR ENDED
DECEMBER 31,
1996 1995 1994
---------------------------------
(000'S)
Expected federal income tax expense $ 16,589 $ 14,702 $ 8,919
State income taxes (826) 1,373 1,202
Other (152) (1,073) (638)
---------------------------------
Total income tax provision $ 15,611 $ 15,002 $ 9,483
=================================
B-11
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
The components of net deferred income taxes payable are as follows:
YEAR ENDED
DECEMBER 31,
1996 1995
------- -------
DEFERRED INCOME TAX ASSETS (000'S)
Insurance liabilities $ 6,189 $ 6,966
Other -- 276
------- -------
Total deferred income tax assets $ 6,189 $ 7,242
------- -------
DEFERRED INCOME TAX LIABILITIES
Deferred acquisition costs $28,424 $25,322
Net investment gains 1,940 5,729
------- -------
Total deferred income tax liabilities 30,364 31,051
------- -------
Deferred federal income tax payable $24,175 $23,809
======= =======
The Internal Revenue Service (the "Service") has completed examinations of the
consolidated federal income tax returns through 1989. The Service is examining
the years 1990 through 1992. Discussions are being held with the Service with
respect to proposed adjustments. However, management believes there are adequate
defenses against, or sufficient reserves to provide for, such adjustments.
B-12
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
7. STOCKHOLDER'S EQUITY RECONCILIATION
The reconciliation of statutory net income to GAAP net income, and statutory
surplus to GAAP equity as of December 31, 1996, 1995, and 1994 are as follows:
1996 1995 1994
---------------------------------
(000'S)
Statutory net income $ 24,774 $ 25,567 $ 16,309
Deferred acquisition costs 5,656 (2,589) (4,727)
Deferred premium 221 (58) 241
Insurance liabilities 1,154 4,366 4,614
Income taxes (2,883) 510 8,518
Interest maintenance reserve (765) 1,285 (10,327)
Separate accounts and other 3,630 (2,080) 1,372
---------------------------------
GAAP net income $ 31,787 $ 27,001 $ 16,000
=================================
Statutory surplus $ 216,019 $ 191,607 $ 163,066
Investment valuation 4,170 15,392 --
Deferred acquisition costs 106,965 96,031 105,105
Deferred premium (2,205) (2,426) (2,368)
Insurance liabilities (21,501) (25,062) (23,882)
Income taxes (21,829) (21,510) (13,015)
Asset valuation reserve and interest
maintenance reserve 13,598 13,966 5,512
Other 29 17 8
---------------------------------
GAAP stockholder's equity $ 295,246 $ 268,015 $ 234,426
=================================
The New York State Insurance Department ("Department") recognizes only statutory
accounting for determining and reporting the financial condition and results of
operations of an insurance company, for determining its solvency under the New
York Insurance Law, and for determining whether its financial condition warrants
the payment of a dividend to its stockholders. No consideration is given by the
Department to financial statements prepared in accordance with generally
accepted accounting principles in making such determinations.
B-13
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
DECEMBER 31, 1996, 1995, AND 1994
8. RELATED PARTY TRANSACTIONS
A. SERVICE AGREEMENTS
The Company, Prudential, Pruco Life, and Pruco Securities Corporation, an
indirect wholly-owned subsidiary of Prudential, operate under service and lease
agreements whereby services of officers and employees, supplies, use of
equipment and office space are provided. The net cost of these services
allocated to the Company were $12 million, $16 million, and $15 million for the
years ended December 31, 1996, 1995, and 1994, respectively.
B. PENSION PLANS
The Company is an indirect wholly-owned subsidiary of Prudential which sponsors
several defined benefit pension plans that cover substantially all of its
employees. Benefits are generally based on career average earnings and credited
length of service. Prudential's funding policy is to contribute annually the
amount necessary to satisfy the Internal Revenue Service contribution
guidelines.
No pension expense for contributions to the plan was allocated to the Company in
1996, 1995, or 1994 because the plan was subject to the full funding limitation
under the Internal Revenue Code.
C. POSTRETIREMENT LIFE AND HEALTH BENEFITS
Prudential also sponsors certain life insurance and health care benefits for its
retired employees. Substantially all employees may become eligible to receive a
benefit if they retire after age 55 with at least 10 years of service.
Prudential elected to amortize its obligation over twenty years. A provision for
contributions to the postretirement fund is included in the net cost of services
allocated to the Company discussed above for the years ended December 31, 1996,
1995, and 1994.
D. REINSURANCE
The Company currently has one reinsurance agreement in place with Prudential
(the reinsurer). This contract is a yearly renewable term agreement in which the
Company may offer and the reinsurer may accept reinsurance on any life in excess
of the Company's maximum limit of retention of $2.5 million. The Company is not
relieved of its primary obligation to the policyholder as a result of this
reinsurance transaction. This agreement had no material effect on net income for
the years ended December 31, 1996, 1995, and 1994.
9. CONTINGENCIES
Several actions have been brought against the Company on behalf of those persons
who purchased life insurance policies based on complaints about sales practices
engaged in by Prudential, the Company and agents appointed by Prudential and the
Company. Prudential has agreed to indemnify the Company for any and all losses
resulting from such litigation.
10. DIVIDENDS
The Company is subject to New Jersey law which limits the amount of dividends
that insurance companies may pay to stockholders. The maximum dividend which may
be paid in any twelve month period without prior approval of the New Jersey
Commissioner of Insurance is limited to the greater of 10% of surplus as of
December 31 of the preceding year or the net gain from operations of the
preceding calendar year. Cash dividends may only be paid out of surplus derived
from realized net profits. Based on these limitations and the Company's surplus
position at December 31, 1996, the Company would be permitted a maximum of $25
million in dividend distributions in 1997, all of which could be paid in cash,
without approval from The State of New Jersey Department of Insurance.
B-14
<PAGE>
Report of Independent Accountants
To the Board of Directors of
Pruco Life Insurance Company of New Jersey
In our opinion, the accompanying statement of financial position and the related
statements of operations, of stockholder's equity and of cash flows present
fairly, in all material respects, the financial position of Pruco Life Insurance
Company of New Jersey at December 31, 1996, and the results of its operations
and its cash flows for the year in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion expressed
above.
/s/
PRICE WATERHOUSE LLP
New York, New York
April 11, 1997
B-15
<PAGE>
INDEPENDENT AUDITORS' REPORT
To The Board of Directors of
Pruco Life Insurance Company of New Jersey
Newark, New Jersey
We have audited the accompanying statement of financial position of Pruco Life
Insurance Company of New Jersey as of December 31, 1995, and the related
statements of operations, stockholder's equity and cash flows for the years
ended December 31, 1995 and 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the accompanying financial statements presents fairly, in all
material respects, the financial position of Pruco Life Insurance Company of New
Jersey as of December 31, 1995, and the results of operations and cash flows for
the years ended December 31, 1995 and 1994 in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the financial statements, the Company has
retroactively adopted all applicable generally accepted accounting principles
relating to stock life insurance subsidiaries of mutual life insurance companies
and has changed, as of January 1, 1995, the method of accounting for fixed
maturity investments.
/s/
Deloitte & Touche LLP
Parsippany, NJ
December 19, 1996
B-16
<PAGE>
VARIABLE
APPRECIABLE
LIFE(R)
INSURANCE CONTRACTS
[GRAPHIC OMITTED]
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 Washington Street, Newark, NJ 07102-2992
Telephone 800 437-4016, Extension 46
A Subsidiary of
The Prudential Insurance Company of America
<PAGE>
PART II
OTHER INFORMATION
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
REPRESENTATION WITH RESPECT TO CHARGES
Pruco Life Insurance Company of New Jersey represents that the fees and charges
deducted under the Variable Appreciable Life insurance contracts registered by
this registration statement, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by Pruco Life Insurance Company of New Jersey.
UNDERTAKING WITH RESPECT TO INDEMNIFICATION
Prudential Directors' and Officers' Liability and Corporation Reimbursement
Insurance program, purchased by Prudential from Aetna Casualty & Surety Company,
CNA Insurance Companies, Lloyds of London, Great American Insurance Company,
Reliance Insurance Company, Corporate Officers & Directors Assurance Ltd.,
A.C.E. Insurance Company, Ltd., XL Insurance Company, Ltd., and Zurich-American
Insurance Company, provides reimbursement for "Loss" (as defined in the
policies) which the Company pays as indemnification to its directors or officers
resulting from any claim for any actual or alleged act, error, misstatement,
misleading statement, omission, or breach of duty by persons in the discharge of
their duties in their capacities as directors or officers of Prudential, any of
its subsidiaries, or certain investment companies affiliated with Prudential.
Coverage is also provided to the individual directors or officers for such Loss,
for which they shall not be indemnified. Loss essentially is the legal liability
on claims against a director or officer, including adjudicated damages,
settlements and reasonable and necessary legal fees and expenses incurred in
defense of adjudicatory proceedings and appeals therefrom. Loss does not include
punitive or exemplary damages or the multiplied portion of any multiplied damage
award, criminal or civil fines or penalties imposed by law, taxes or wages, or
matters which are uninsurable under the law pursuant to which the policies are
construed.
There are a number of exclusions from coverage. Among the matters excluded are
Losses arising as the result of (1) claims brought about or contributed to by
the criminal, dishonest or fraudulent acts or omissions or the willful violation
of any law by a director or officer, (2) claims based on or attributable to
directors or officers gaining personal profit or advantage to which they were
not legally entitled, and (3) claims arising from actual or alleged performance
of, or failure to perform, services as, or in any capacity similar to, an
investment adviser, investment banker, underwriter, broker or dealer, as those
terms are defined in the Securities Act of 1933, the Securities Exchange Act of
1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940,
any rules or regulations thereunder, or any similar federal, state or local
statute, rule or regulation.
The limit of coverage under the program for both individual and corporate
reimbursement coverage is $150,000,000. The retention for corporate
reimbursement coverage is $10,000,000 per loss.
The relevant provisions of New Jersey law permitting or requiring
indemnification, New Jersey being the state of organization of Prudential and
Pruco Life of New Jersey, can be found in Section 14A:3-5 of the New Jersey
Statutes Annotated. The text of Prudential's by-law 26, which relates to
indemnification of officers and directors, is incorporated by reference to
Exhibit 1.A.(6)(b) of Post-Effective Amendment No. 1 to Form S-6, Registration
No. 33-61079, filed April 25, 1996, on behalf of The Prudential Variable
Appreciable Account. The text of Pruco Life of New Jersey's by-laws, Article V,
which relates to indemnification of officers and directors, is incorporated by
reference to Exhibit 1.A.(6)(b) to this Registration Statement.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
Cross-reference to items required by Form N-8B-2.
The prospectus consisting of 71 pages.
The undertaking to file reports.
The representation with respect to charges.
The undertaking with respect to indemnification.
The signatures.
Written consents of the following persons:
1. Deloitte & Touche LLP, independent auditors.
2. Price Waterhouse LLP, independent accountants.
3. Clifford E. Kirsch, Esq.
4. Pam A. Schiz, FSA, MAAA.
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of
the instructions as to exhibits in Form N-B-2:
A. (1) Resolution of Board of Directors of Pruco Life Insurance
Company of New Jersey establishing the Pruco Life of New
Jersey Variable Appreciable Account. (Note 1)
(2) Not Applicable.
(3) Distributing Contracts:
(a) Distribution Agreement between Pruco Securities
Corporation and Pruco Life Insurance Company of New
Jersey. (Note 1)
(b) Proposed form of Agreement between Pruco Securities
Corporation and independent brokers with respect to the
Sale of the Contracts. (Note 1)
(c) Schedules of Sales Commissions. (Note 1)
(4) Not Applicable.
(5) Variable Life Insurance Contracts.
(a) With fixed death benefit. (Note 1)
(b) With variable death benefit. (Note 1)
(c) Revised Contract with fixed death benefit. (Note 1)
(d) Revised Contract with variable death benefit. (Note 1)
(6) (a) Articles of Incorporation of Pruco Life Insurance
Company of New Jersey, as amended March 11, 1983. (Note
1)
(b) By-laws of Pruco Life Insurance Company of New Jersey,
as amended February 1, 1991. (Note 1)
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) (a) Application Form for Variable Appreciable Life
Insurance Contract. (Note 1)
(b) Supplement to the Application for Variable Appreciable
Life Insurance Contract. (Note 1)
(c) New Jersey Application Form for Variable Appreciable
Life Insurance Contract. (Note 2)
(d) New York Application Form for Variable Appreciable Life
Insurance Contract. (Note 1)
(e) Revised New York Application Form for Variable
Appreciable Life Insurance Contract. (Note 3)
(11) Form of Notice of Withdrawal Right. (Note 1)
(12) Memorandum describing Pruco Life Insurance Company of New
Jersey's issuance, transfer, and redemption procedures for
the Contracts pursuant to Rule 6e-2(b) (12)(ii) and method
for computing cash adjustment upon exercise of right to
exchange for fixed benefit insurance
II-2
<PAGE>
pursuant to Rule 6e-2(b)(13)(v)(B). (Note 7)
(13) Available Contract Riders.
(a) Rider for Insured's Waiver of Premium Benefit. (Note 1)
(b) Rider for Applicant's Waiver of Premium Benefit. (Note
1)
(c) Rider for Insured's Accidental Death Benefit. (Note 1)
(d) Rider for Level Term Insurance Benefit on Life of
Insured. (Note 1)
(e) Rider for Decreasing Term Insurance Benefit on Life of
Insured. (Note 1)
(f) Rider for Interim Term Insurance Benefit. (Note 1)
(g) Rider for Option to Purchase Additional Insurance on
Life of Insured. (Note 1)
(h) Rider for Decreasing Term Insurance on Life of Insured
Spouse. (Note 1)
(i) Rider for Level Term Insurance on Dependent Children.
(Note 1)
(j) Rider for Level Term Insurance on Dependent
Children-from Term Conversions. (Note 1)
(k) Rider for Level Term Insurance on Dependent
Children-from Term Conversions or Attained Age Change.
(Note 1)
(l) Rider for Coverage on Other Insured. (Note 1)
(m) Rider defining Insured Spouse. (Note 1)
(n) Rider covering lack of Evidence of Insurability on a
Child. (Note 3)
(o) Rider modifying Waiver of Premium. (Note 3)
(p) Rider to terminate a Supplementary Benefit. (Note 1)
(q) Rider providing for election of Variable Reduced
Paid-up Insurance. (Note 1)
(r) Rider to provide for exclusion of Aviation Risk. (Note
1)
(s) Rider to provide for exclusion of Military Aviation
Risk. (Note 1)
(t) Rider to provide for exclusion of War Risk. (Note 1)
(u) Endorsement for conversion of a Dependent Child. (Note
1)
(v) Endorsement for Contractual Conversion of a Term
Policy. (Note 1)
(w) Endorsement for conversion of Level Term Insurance
Benefit on a Child. (Note 3)
(x) Endorsement providing for Variable Loan Interest Rate.
(Note 1)
(y) Endorsement for Increase in Face Amount. (Note 1)
(z) Supplementary Monthly Renewable Non-Convertible One
Month Term Insurance
(i) for use in New Jersey with fixed death benefit
Contract. (Note 1)
(ii) for use in New Jersey with variable death benefit
Contract. (Note 1)
(iii) for use in New York with fixed death benefit
Contract. (Note 1)
(iv) for use in New York with variable death benefit
Contract. (Note 1)
(aa) Rider for Term Insurance Benefit on Life of
Insured-Decreasing Amount After Three Years. (Note 1)
(bb) New Jersey Rider for Term Insurance Benefit on Life of
Insured Spouse-Decreasing Amount After Three Years.
(Note 1)
(cc) New York Rider for Term Insurance Benefit on Life of
Insured Spouse-Decreasing Amount After Three Years.
(Note 1)
(dd) Endorsement for Contracts issued in connection with
tax-qualified pension plans. (Note 1 )
(ee) Appreciable Plus Rider
(i) for use in New Jersey. (Note 1)
(ii) for use in New York. (Note 1)
(ff) Living Needs Benefit Rider for use in New Jersey.
(Note 4)
(gg) Living Needs Benefit Rider for use in New York.
(Note 5)
2. See Exhibit 1.A.(5).
3. Opinion and Consent of Clifford E. Kirsch, Esq., as to the legality of the
securities being registered. (Note 1)
4. None.
5. Not Applicable.
6. Opinion and Consent of Pam A. Schiz, FSA, MAAA, as to actuarial matters
pertaining to the securities being registered. (Note 1)
II-3
<PAGE>
7. Powers of Attorney.
(a) William M. Bethke, Ira J. Kleinman, Mendel A. Melzer, Esther H. Milnes, I.
Edward Price, William F. Yelverton (Note 6)
(b) Linda S. Dougherty (Note 8)
27. Financial Data Schedule (Note 1)
(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Pre-Effective Amendment No. 2 to this
Registration Statement, filed October 25, 1984.
(Note 3) Incorporated by reference to Post-Effective Amendment No. 1 to this
Registration Statement, filed April 30, 1985.
(Note 4) Incorporated by reference to Post-Effective Amendment No. 16 to this
Registration Statement, filed April 26, 1990.
(Note 5) Incorporated by reference to Post-Effective Amendment No. 20 to this
Registration Statement filed April 28, 1993.
(Note 6) Incorporated by reference to Form N-4, Registration No. 333-18117,
filed December 18, 1996 on behalf of the Pruco Life of New Jersey
Flexible Premium Variable Annuity Account.
(Note 7) Incorporated by reference to Post-Effective Amendment No. 25 to this
Registration Statement filed April 25, 1996.
(Note 8) Incorporated by reference to Post-Effective Amendment No. 9 to Form
S-1, Registration No. 33- 20018, filed April 9, 1997 on behalf of the
Pruco Life of New Jersey Variable Contract Real Property Account.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Pruco Life of New Jersey Variable Appreciable Account, certifies that this
Amendment is filed solely for one or more of the purposes specified in Rule
485(b)(1) under the Securities Act of 1933 and that no material event requiring
disclosure in the prospectus, other than one listed in Rule 485(b)(1), has
occurred since the effective date of the most recent Post-Effective Amendment to
the Registration Statement which included a prospectus and has caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized and its seal hereunto affixed and attested, all in the city of
Newark and the State of New Jersey, on this 25th day April, 1997.
(Seal) PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
(Registrant)
By: PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(Depositor)
Attest: /s/ THOMAS C. CASTANO By: /s/ ESTHER H. MILNES
---------------------------- ------------------------
Thomas C. Castano Esther H. Milnes
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 26 to the Registration Statement has been signed below by the
following persons in the capacities indicated on this 25th day of April, 1997.
SIGNATURE AND TITLE
/s/ *
- ----------------------------------------
Esther H. Milnes
President and Director
/s/ *
- ----------------------------------------
Linda S. Dougherty
Chief Accounting Officer and Comptroller
/s/ *
- ----------------------------------------
William M. Bethke
Director
/s/* *By: /s/ THOMAS C. CASTANO
- ---------------------------------------- ----------------------
Ira J. Kleinman Thomas C. Castano
Director (Attorney-in-Fact)
/s/*
- ----------------------------------------
Mendel A. Melzer
Director
/s/ *
- ----------------------------------------
I. Edward Price
Director
/s/ *
- ----------------------------------------
William F. Yelverton
Director
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
Consent of Deloitte & Touche LLP, independent auditors. Page II-8
Consent of Price Waterhouse LLP, independent accountants. Page II-9
1.A.(1) Resolution of Board of Directors of Pruco Life Insurance Company Page II-10
of New Jersey establishing the Pruco Life of New Jersey Variable
Appreciable Account.
1.A.(3)(a) Distribution Agreement between Pruco Securities Corporation and Page II-13
Pruco Life Insurance Company of New Jersey.
(b) Proposed form of Agreement between Pruco Securities Corporation Page II-20
and independent brokers with respect to the Sale of the
Contracts.
(c) Schedules of Sales Commissions. Page II-30
1.A.(5) Variable Life Insurance Contracts:
(a) With fixed death benefit. Page II-33
(b) With variable death benefit. Page II-57
(c) Revised Contract with fixed death benefit. Page II-81
(d) Revised Contract with variable death benefit. Page II-112
1.A.(6)(a) Articles of Incorporation of Pruco Life Insurance Company of New Page II-143
Jersey, as amended March 11, 1983.
(b) By-laws of Pruco Life Insurance Company of New Jersey, as amended Page II-156
February 1, 1991.
1.A.(10)(a) Application Form for Variable Appreciable Life Insurance Page II-172
Contract.
(b) Supplement to the Application for Variable Appreciable Life Page II-179
Insurance Contract.
(d) New York Application Form for Variable Appreciable Life Insurance Page II-180
Contract.
1.A.(11) Form of Notice of Withdrawal Right. Page II-187
1.A.(13)(a) Rider for Insured's Waiver of Premium Benefit. Page II-189
(b) Rider for Applicant's Waiver of Premium Benefit. Page II-191
(c) Rider for Insured's Accidental Death Benefit. Page II-193
(d) Rider for Level Term Insurance Benefit on Life of Insured. Page II-194
(e) Rider for Decreasing Term Insurance Benefit on Life of Insured. Page II-196
(f) Rider for Interim Term Insurance Benefit. Page II-199
(g) Rider for Option to Purchase Additional Insurance on Life of Page II-200
Insured.
(h) Rider for Decreasing Term Insurance on Life of Insured Spouse. Page II-203
(i) Rider for Level Term Insurance on Dependent Children. Page II-207
(j) Rider for Level Term Insurance on Dependent Children-from Term Page II-210
Conversions.
(k) Rider for Level Term Insurance on Dependent Children-from Term Page II-213
Conversions or Attained Age Change.
(l) Rider for Coverage on Other Insured. Page II-216
(m) Rider defining Insured Spouse. Page II-217
(p) Rider to terminate a Supplementary Benefit. Page II-218
(q) Rider providing for election of Variable Reduced Paid-up Page II-219
Insurance.
II-6
<PAGE>
<S> <C> <C>
(r) Rider to provide for exclusion of Aviation Risk. Page II-220
(s) Rider to provide for exclusion of Military Aviation Risk. Page II-221
(t) Rider to provide for exclusion of War Risk. Page II-222
(u) Endorsement for conversion of a Dependent Child. Page II-223
(v) Endorsement for Contractual Conversion of a Term Policy. Page II-224
(x) Endorsement providing for Variable Loan Interest Rate. Page II-225
(y) Endorsement for Increase in Face Amount. Page II-226
(z) Supplementary Monthly Renewable Non-Convertible One Month Term
Insurance:
(i) for use in New Jersey with fixed death benefit Contract. Page II-231
(ii) for use in New Jersey with variable death benefit Contract. Page II-238
(iii) for use in New York with fixed death benefit Contract. Page II-245
(iv) for use in New York with variable death benefit Contract. Page II-251
(aa) Rider for Term Insurance Benefit on Life of Insured-Decreasing Page II-257
Amount After Three Years.
(bb) New Jersey Rider for Term Insurance Benefit on Life of Insured Page II-262
Spouse-Decreasing Amount After Three Years.
(cc) New York Rider for Term Insurance Benefit on Life of Insured Page II-268
Spouse-Decreasing Amount After Three Years.
(dd) Endorsement for Contracts issued in connection with tax-qualified Page II-274
pension plans.
(ee) Appreciable Plus Rider:
(i) for use in New Jersey. Page II-275
(ii) for use in New York. Page II-278
3. Opinion and Consent of Clifford E. Kirsch, Esq., as to the Page II-280
legality of the securities being registered.
6. Opinion and Consent of Pam Schiz, FSA, MAAA, as to actuarial Page II-281
matters pertaining to the securities being registered.
27. Financial Data Schedule. Page II-282
</TABLE>
II-7
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 26 to Registration
Statement No. 2-89780 on Form S-6 of Pruco Life of New Jersey Variable
Appreciable Account of Pruco Life Insurance Company of New Jersey of our report
dated February 15, 1996, relating to the financial statements of Pruco Life of
New Jersey Variable Appreciable Account, and of our report dated December 19,
1996, relating to the financial statements of Pruco Life Insurance Company of
New Jersey appearing in the Prospectus, which is part of such Registration
Statement, and to the reference to us under the heading "Experts" in such
Prospectus.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
April 25, 1997
II-8
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this Post-
Effective Amendment No. 26 to the registration statement on Form S-6 (the
"Registration Statement") of our report dated March 31, 1997, relating to the
financial statements of Pruco Life of New Jersey Variable Appreciable Account,
which appears in such Prospectus.
We also consent to the use in the Prospectus constituting part of this
Registration Statement of our report dated April 11, 1997, relating to the
financial statements of Pruco Life Insurance Company of New Jersey, which
appears in such Prospectus.
We also consent to the reference to us under the heading "Experts" in the
Prospectus.
/s/ PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
April 24, 1997
II-9
EXHIBIT 1.A.(1)
84-1
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Action by Executive Committee of
Board of Directors by Unanimous Consent
Pursuant to Section 9 of Article II of the By-Laws of Pruco Life Insurance
Company of New Jersey, a New Jersey corporation, the undersigned being all of
the regular members of the Executive Committee of the Board of Directors of such
corporation, hereby consent to and adopt the following resolutions:
R-56
Election of Officers
RESOLVED, that Mr. George E. Hartz, Jr. is hereby elected as a Vice
President of the Company, effective December 26, 1983 and Mr. Meyer Okun is
hereby elected as a Vice President of the Company, effective January 2,
1984.
R-57
Establishment of Separate Account
RESOLVED, that, subject to the approval of the Commissioner of
Insurance of the State of New Jersey, the Company hereby establishes,
pursuant to Section 17B:28-7 of the Revised Statutes of New Jersey, a
variable contract account to be designated initially as the "Pruco Life
Variable Appreciable Account" (hereinafter in these resolutions referred to
as the "Account"); and
FURTHER RESOLVED, that the Company shall receive and hold in the
Account amounts arising from (i) purchase payments received made pursuant
to certain Variable Appreciable Life Insurance Contracts ("Variable
Contracts") of the Company sold as part of its Variable Appreciable Life
Insurance Program ("Program") and (ii) such assets of the Company as the
proper officers of the Company may deem prudent and appropriate to have
invested in the same manner as the assets applicable to its reserve
liability under Variable Contracts and lodged in the Account, and such
amounts and the dividends, interest and gains produced thereby shall be
invested and reinvested, subject to the rights of the holders of such
Variable Contracts, in shares of the Pruco Life Series Fund, Inc., an
open-end diversified management investment company of the series type, at
the net asset value of such shares at the time of acquisition; and
FURTHER RESOLVED, that the Account shall be registered as a unit
investment trust under the Investment Company Act of 1940, and that the
proper officers of the Company be and they hereby are authorized to sign
and file, or cause to be filed, with the Securities and Exchange
Commission a
II-10
<PAGE>
84-2
registration statement, on behalf of the Account, as registrant, under
the Investment Company Act of 1940 ("Investment Company Act Registration"),
and to sign and file, or cause to be filed, an application, including any
amendments thereto, for an order under Section 6(c) of the Investment
Company Act of 1940 for such exemptions from the provisions of that Act as
may be necessary or desirable ("Investment Company Act Application"); and
FURTHER RESOLVED, that the Company shall as part of its Program sell
Variable Contracts on a variable basis and that the proper officers of the
Company be and they hereby are authorized to sign and file, or cause to be
filed, with the Securities and Exchange Commission, on behalf of the
Company, as issuer, a registration statement, including the financial
statements and schedules, exhibits and form of prospectus required as a
part thereof, for the registration of the offering and sale of such
Variable Contracts, to the extent they represent participating interests in
the Account, under the Securities Act of 1933 ("Securities Act
Registration") and to pay the registration fees required in connection
therewith; and
FURTHER RESOLVED, that the proper officers of the Company are
authorized and directed to sign and file, or cause to be filed, such
amendment or amendments of such Investment Company Act Registration,
Investment Company Act Application and Securities Act Registration as they
may find necessary or advisable from to time; and
FURTHER RESOLVED, that the signature of any director or officer
required by law to affix his signature to such Investment Company Act
Registration, Investment Company Act Application and Securities Act
Registration, or to any amendment thereof, may be affixed by said director
or officer personally, or by an attorney-in-fact duly constituted in
writing by said director or officer to sign his name thereto; and
FURTHER RESOLVED, that the Senior Vice President and General Counsel
of the Company is appointed agent of the Company to receive any and all
notices and comunications from the Securities and Exchange relating to such
Investment Company Act Registration, Investment Company Act Application,
and Securities Act Registration and any and all amendments thereof; and
FURTHER RESOLVED, that the proper officers of the Company be and they
hereby are authorized to take whatever steps may be necessary or desirable
to comply with such of the laws and regulations of the several states as
may be applicable to the Company's Program; and
II-11
<PAGE>
84-3
FURTHER RESOLVED, that the proper officers of the Company be and they
hereby are authorized, in the name and on behalf of the Company, to execute
and deliver such corporate documents and certificates and to take such
further action as may be necessary or desirable including, but not limited
to, the payment of applicable fees, in order to effectuate the purposes of
the foregoing resolutions or any of them.
January 13, 1984
/s/ JOHN J. MARCUS
----------------------
John J. Marcus
/s/ JOSEPH J. MELONE
----------------------
Joseph J. Melone
/s/ RICHARD A. YORKS
----------------------
Richard A. Yorks
II-12
EXHIBIT 1.A.(3)(a)
DISTRIBUTION AGREEMENT
AGREEMANT made this 29th day of February, 1984, by and between Pruco Life
Insurance Company of New Jersey, a New Jersey corporation ("Company"), on its
own behalf and on behalf of the Pruco Life of New Jersey Variable Appreciable
Account ("Account"), and Pruco Securities Corporation, a New Jersey corporation
("Distributor").
WITNESSETH:
WHEREAS, the Company has established and maintains the Account, a separate
investment account, pursuant to the laws of New Jersey for the purpose of
selling variable appreciable life insurance contracts ("Contracts"), to commence
after the effectivenese of the Registration Statement relating thereto filed
with the Securities and Exchange Commission on Form S-6 pursuant to the
Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Account will be registered as a unit investment trust under
the Investaent Company Act of 1940 (the "1940 Act"); and
WHEREAS, Distributor is registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") and is a member of the
Nationa1 Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, the Company and the Distributor wish to enter into an agreement to
have the Distributor act as the Company's principal underwriter for the
sale of the Contracts through the Account;
NOW, THEREFORE, the parties agree as follows:
II-13
<PAGE>
-2-
1. Appointment of the Distributor
The Company agrees that during the term of this Agreement it will take all
action which is required to cause the Contracts to comply as an insurance
product and a registered security with all applicable federal and state laws and
regulations. The Company appoints the Distributor and the Distributor agrees to
act as the principai underwriter for the sale of Contracts to the public, during
the term of this Agreement, in each state and other jurisdictions in which such
Contracts may lawfully be sold. Distributor shall offer the Contracts for sale
and distribution at premium rates set by the Company. Applications for premium
the Contracts shall be solicited only by representatives duly and appropriately
licensed or other-wise qualified for the sale of such Contracts in each state or
other jurisdiction. Company shall undertake to appoint Distributor's qualified
representatives as life insurance agents of Company. Completed applications for
Contracts shall be transmitted directly to the Company for acceptance or
rejection in accordance with underwriting rules established by the Company.
Initial premium payments under the Contracts shall be made by check payable to
the Company and shall be held at all times by Distributor or its representatives
in a fiduciary capacity and remitted promptly to the Company. Anything in this
Agreement to the contrary notwithstanding, the Company retains the ultimate
right to control the sale of the Contracts and to appoint and discharge life
insurance agents of the Company. The Distributor shall be held to the exercise
of reasonable care in carrying out the provisions of this Agreement.
2. Sales Agreements
Distributor is hereby authorized to enter into separate
II-14
<PAGE>
-3-
written agreements, on such terms and conditions as Distributor may determine
not inconsistent with this Agreement, with one or more organizations which
agree to participate in the distribution of Contracts. Such organization
(hereafter "Broker") shall be both registered as A broker/dealer under the
Securities Exchange Act and a member of NASD). Broker and its agents or
representatives soliciting applications for Contracts shall be duly and
appropriately licensed, registered or otherwise qualified for the sale of such
Contracts (and the riders and other policies offered in connection therewith)
under the insurance laws and any applicable blue-sky laws of each state or other
jurisdiction in which the Company is licensed to sell the Contracts.
Distributor shall have the responsibility for ensuring that Broker
supervises its representatives. Broker shall assumes any legal responsibilities
of Company for the acts, commissions or dafalcations of such representatives
insofar as they relate to the sale of the Contracts. Applications for Contracts
solicited by such Broker through its agents or representatives shall be
transmitted directly to the Company, and if received by Distributor, shall be
forwarded to Company. All premium payments under the Contracts shall be made by
check to Company and, if received by Distributor, shall be held at all time in a
fiduciary capacity and remitted promptly to Company.
3. Life Insurance Licensing
Company shall be responsible for insuring that Brokers are duly qualified,
under the insurance laws of the applicable jurisdictions, to sell the Contracts.
II-15
<PAGE>
-4-
4. Suitability
Company wishes to ensure that Contracts sold by Distributor will be issued
to purchasers for whom the Contract will be suitable. Distributor shall take
reasonable steps to ensure that the various representatives appointed by it
shall not make recommendations to an applicant to purchase a Contract in the
absence of reasonable grounds to believe that the purchase of the Contract is
suitable for such applicant. While not limited to the following, a determination
of suitability shall be based on information furnished to a representative after
reasonable inquiry of such applicant concerning the applicant's insurance and
investment objectives, financial situation and needs, and the likelihood that
the applicant will continue to make the premium payments contemplated by the
Contracts.
5. Promotion Materials
Company shall have the responsibility for furnishing to Distributor and its
representatives sales promotion materials and individual sales proposals related
to the sale of the Contracts. Distributor shall not use any such materials that
have not been approved by Company.
6. Compensation
Company shall arrange for the payment of commissions directly to those
registered representatives of Distributor who are entitled thereto in connection
with the sale of the Contracts on behalf of Distributor, in the amounts and on
such term and conditions as Company and Distributor shall determine; provided
that such terms, conditions and commissions shall
II-16
<PAGE>
-5-
be as are set forth in or as are not inconsistent with the Prospectus included
as part of the Registration Statement for the Contracts and effective under the
1933 Act.
Company shall arrange for the payment of commissions directly to those
Brokers who sell Contracts under agreements entered into pursuant to paragraph
2. hereof, in amounts as may be agreed to by the company and specified in such
written agreements.
Company shall reimburse Distributor for the costs and expenses incurred by
Distributor in furnishing or obtaining the services, materials and supplies
required by the terms of this Agreement in the initial sales efforts and the
continuing obligations hereunder.
7. Records
Distributor shall have the responsibility for maintaining the records of
representatives licensed, registered and otherwise qualified to sell the
Contracts. Distributor shall maintain such other records as are required of it
by applicable laws and regulations. The books, accounts and records of Company,
the Account and Distributor shali be maintained so as to clearly and accurately
disclose the nature and details of the transactions. All records maintained by
the Distributor in connection with this Agreement shall be the property of the
Company and shall be returned to the Company upon termination of this Agreement,
free from any claims or retention of rights by the Distributor. The Distributor
shall keep confidential any information obtained pursuant to this Agreement and
shall disclose such information, only if the Company has authorized such
disclosure, or if such disclosure is expressly required by applicable federal or
state regulatory authorities.
II-17
<PAGE>
-6-
8. Investigation and Proceeding
(a) Distributor and Company agree to cooperate fully in any insurance
regulatory investigation or proceeding or judicial proceeding arising in
connection with the Contracts distributed under this Agreement. Distributor and
Company further agree to cooperate fully in any securities regulatory
investigation or proceeding or judiciai proceeding with respect to Company,
Distributor, their affiliates and their agents or representatives to the extent
that such investigation or proceeding is in connection with Contracts
distributed under this Agreement. The Distributor shall furnish applicable
federal and state regulatory authorities with any information or reports in
connection with its services under this Agreement which such authorities may
request in order to ascertain whether the Company's operations are being
conducted in a manner consistent with any applicable law or regulations.
(b) In the case of a substantive customer complaint, Distributor and
Company will cooperate in investigating such complaint and any response to such
complaint will be sent to the other party to this Agreement for approval not
less than five business days prior to its being sent to the customer or
regulatory authority, except that if a more prompt response is required, the
proposed response shall be communicated by telephone or telegraph.
9. Termination
This Agreement shall terminate automatically upon its assignment without
the prior written consent of both parties. This Agreement may be terminated at
any time by either party on 60 days' written notice to the other party, without
the payment of any penalty. Upon
II-18
<PAGE>
-7-
termination of this Agreement all authorizations, rights and obligations shall
cease except the obligation to settle accounts hereunder, including commissions
on premiums subsequently received for Contracts in effect at time of
termination, and the agreements contained in paragraph 8. hereof.
10. Regulation
This Agreement shall be subject to the provisions of the 1940 Act and the
Securities Exchange Act of the rules, regulations, and rulings thereunder and of
the applicable rules and regulations of the NASD, from time to time in effect,
and the terms hereof shall be interpreted and construed in accordance therewith.
11. Severability
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
12. Applicable Law
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
By /s/ SPECIMEN
--------------------------------------
PRUCO SECURITIES CORPORATION
By /s/ SPECIMEN
--------------------------------------
II-19
Exhibit 1.A.(3)(b)
SELECTED BROKER AGREEMENT
AGREEMENT dated ____________, 1984, by and between Pruco Securities
Corporation (Distributor), a New Jersey corporation, and ________________
(Broker), a _________________ corporation.
WITNESSETH:
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
A. Definitions
(1) Contracts - The variable appreciable life insurance contracts which
Pruco Life Insurance Company of New Jersey (Company), a New Jersey
corporation, proposes to issue and for which Distributor has been
appointed the principal underwriter pursuant to a Distribution
Agreement, a copy of which has been furnished to Broker.
(2) Pruco Life of New Jersey Variable Appreciable Account, or the Account
The separate account established and maintained by Company pursuant to
the laws of New Jersey to fund the benefits under the Contracts.
(3) Pruco Life Series Fund, Inc., or the Fund - An open-end management
investment company registered under the 1940 Act, shares of which are
sold to the Account in connection with the sale of the Contracts.
(4) Registration Statement - The registration statements and amendments
thereto relating to the Contracts, the Account, and the Fund,
including financial statements and all exhibits.
(5) Prospectus - The prospectuses included within the registration
Statements referred to herein.
II-20
<PAGE>
-2-
(6) 1933 Act - The Securities Act of 1933, as amended.
(7) 1934 Act - The Securities Exchange Act of 1934, as amended.
(8) SEC - The Securities and Exchange Commission.
B. Agreements of Distributor
(1) Pursuant to the authority delegated to it by Company, Distributor
hereby authorizes Broker during the term of this Agreement to solicit
applications for Contracts from eligible persons provided that there
is an effective Registration Statement relating to such Contracts and
provided further that Broker has been notified by Distributor that the
Contracts are qualified for sale under all applicable securities and
insurance laws of the state or jurisdiction in which the application
will be solicited. In connection with the solicitation of applications
for Contracts, Broker is hereby authorized to offer riders that are
available with the Contracts in accordance with instructions furnished
by Distributor or Company.
(2) Distributor, during the term of this Agreement, will notify Broker of
the issuance by the SEC of any stop order with respect to the
Registration Statement or any amendments thereto or the initiation of
any proceedings for that purpose or for any other purpose relating to
the registration and/or offering of the Contracts and of any other
action or circumstance that may prevent the lawful sale of the
Contracts in any state or jurisdiction.
(3) During the term of this Agreement, Distributor shall advise Broker of
any amendment to the Registration Statement or any amendment or
supplement to any Prospectus.
II-21
<PAGE>
-3-
C. Agreements of Broker
(1) It is understood and agreed that Broker is a registered broker/dealer under
the 1934 Act and a member of the National Association of Securities
Dealers, Inc. and that the agents or representatives of Broker who will be
soliciting applications for the Contracts also will be duly registered
representatives of Broker.
(2) Commencing at such time as Distributor and Broker shall agree upon, Broker
agrees to use its best efforts to find purchasers for the contracts
acceptable to Company. In meeting its obligation to use its best efforts to
solicit applications for Contracts, Broker shall, during the term of this
Agreement, engage in the following activities:
(a) Continuously utilize training, sales and promotional materials which
have been approved by Company;
(b) Establish and implement reasonable procedures for periodic inspection
and supervision of sales practices of its agents or representatives
and submit periodic reports to Distributor as may be requested on the
results of such inspections and the compliance with such procedures.
(c) Broker shall take reasonable steps to ensure that the various
representatives appointed by it shall not make recommendations to an
applicant to purchase a Contract in the absence of reasonable grounds
to believe that the purchase of the Contract is suitable for such
applicant. While not limited to the following, a determination of
8uitability shall be based on information furnished to a
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<PAGE>
-4-
representative after reasonable inquiry of such applicant concerning
the applicant1s insurance and investment objectives, financial
situation and needs, and the likelihood that the applicant will
continue to make the premium payments contemplated by the Contract.
(3) All payments for Contracts collected by agents or representatives of
Broker shall be held at all times in a fiduciary capacity and shall be
remitted promptly in full together with such applications, forms and other
required documentation to an office of the Company designated by
Distributor. Checks or money orders in payment of initial premiums shall
be drawn to the order of "Pruco Life Insurance Company." Broker
acknowledges that the Company retains the ultimate right to control the
sale of the Contracts and that the Distributor or Company shall have the
unconditional right to reject, in whole or in part, any application for
the Contract. In the event Company or Distributor rejects an application,
Company immediately will return all payments directly to the purchaser and
Broker will be notified of such action. In the event that any purchaser of
a Contract elects to return such Contract pursuant to Rule
6e-2(b)(13)(viii) of the 1940 Act, the purchaser will receive a refund of
any premium payments, plus or minus any change due to investment
performance in the value of the invested portion of such premiums;
however, if applicable state law so requires, the purchaser who exercises
his short-term cancellation right will receive a refund of all payments
made, unadjusted for investment experience prior to the cancellation. The
Broker will be notified of any such action.
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<PAGE>
-5-
(4) Broker shall act as an independent contractor, and nothing herein
contained shall constitute Broker, its agents or representatives, or any
employees thereof as employees of Company or Distributor in connection
with the solicitation of applications for Contracts. Broker, its agents or
representatives, and its employees shall not hold themselves out to be
employees of Company or Distributor in this connection or in any dealings
with the public.
(5) Broker agrees that any material it develops, approves or uses for sales,
training, explanatory or other purposes in connection with the
solicitation of applications for Contracts hereunder (other than generic
advertising materials which do not make specific reference to the
Contracts) will not be used without the prior written consent of
Distributor and, where appropriate, the endorsement of Company to be
obtained by Distributor.
(6) Solicitation and other activities by Broker shall be undertaken only in
accordance with applicable laws and regulations. No agent or
representative of Broker shall solicit applications for the contracts
until duly licensed and appointed by Company as a life insurance and
variable contract broker or agent of Company in the appropriate states or
other jurisdictions. Broker shall ensure that such agents or
representatives fulfill any training requirements necessary to be
licensed. Broker understands and acknowledges that neither it nor its
agents or representatives is authorized by Distributor or Company to give
any information or make any representation in connection with this
Agreement or the offering of the Contracts other than those contained in
the Prospectus or other solicitation material authorized in writing by
Distributor or Company.
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<PAGE>
-6-
(7) Broker shall not have authority on behalf of Distributor or Company to:
make, alter or discharge any Contract or other form; waive any forfeiture,
extent the time of paying any premium; receive any monies or premiums due,
or to become due, to Company, except as set forth in Section C(3) of this
Agreement. Broker shall not expend, nor contract for the expenditure of the
funds of Distributor, nor shall Broker possess or exercise any authority on
behalf of Broker by this Agreement.
(8) Broker shall have the responsibility for maintaining the records of its
representatives licensed, registered and otherwise qualified to sell the
Contracts. Broker shall maintain such other records as are required of it
by applicable laws and regulations. The books, accounts and records of
Company, the Account, Distributor and Broker relating to the sale of the
Contracts shall be maintained so as to clearly and accurately disclose the
nature and details of the transactions. All records maintained by the
Broker in connection with this Agreement shall be the property of the
Company and shall be returned to the Company upon termination of this
Agreement, free from any claims or retention of rights by the Broker. The
Broker shall keep confidential any information obtained pursuant to this
Agreement and shall disclose such information, only if the Company has
authorized such disclosure, or if such disclosure is expressly required by
applicable federal or state regulatory authorities.
II-25
<PAGE>
-7-
D. Compensation
(1) Pursuant to the Distribution Agreement between Distributor and Company,
Distributor shall cause Company to arrange for the payment of commissions
to Broker as compensation for the sale of each contract sold by an agent or
representative of Broker. The amount of such compensation shall be based on
a schedule to be determined by agreement of Company, Distributor and
Broker. Company shall identify to Broker with each such payment the name of
the agent or representative of Broker who solicited each Contract covered
by the payment.
(2) Neither Broker nor any of its agents or representatives shall have any
right to withhold or deduct any part of any premium it shall receive for
purposes of payment of commission or otherwise. Neither Broker nor any of
its agents or representatives shall have an interest in any compensation
paid by Company to Distributor, now or hereafter, in connection with the
sale of any Contracts hereunder.
E. Complaints and Investigations
(1) Broker and Distributor jointly agree to cooperate fully in any insurance
regulatory investigation or proceeding or judicial proceeding arising in
connection with the Contracts marketed under this Agreement. Broker and
Distributor further agree to cooperate fully in any securities regulatory
investigation or proceeding or judicial proceeding with respect to Broker,
Distributor, their affiliates and their agents or representatives to the
extent that such investigation or proceeding is in connection with
Contracts marketed under this Agreement. Broker shall furnish applicable
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<PAGE>
-8-
federal and state regulatory authorities with any information or reports in
connection with its services under this Agreement which such authorities
may request in order to ascertain whether the Company's operations are
being conducted in a manner consistent with any applicable law or
regulation.
F. Term of Agreement
(1) This Agreement shall continue in force for one year from its effective date
and thereafter shall automatically be renewed every year for a further one
year period; provided that either party may unilaterally terminate this
Agreement upon thirty (30) days' written notice to the other party of its
intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except (a) the agreements contained in Section E
hereof; (b) the indemnity set forth in Section G hereof; and (c) the
obligations to settle accounts hereunder, including payments on premiums
subsequently received for Contracts in effect at the time of termination or
issued pursuant to applications received by Broker prior to termination.
G. Indemnity
(1) Broker shall be held to the exercise of reasonable care in carrying out the
provisions of this Agreement.
(2) Distributor agrees to indemnify and hold harmless Broker and each officer
or director of Broker against any losses, claims, damages or liabilities,
joint or several, to which Broker or such officer or director become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions
II-27
<PAGE>
-9-
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact, required to be stated therein
or necessary to make the statements therein not misleading, contained in
any Registration Statement or any post-effective amendment thereof or in
the Prospectus or any amendment or supplement to the Prospectus.
(3) Broker agrees to indemnify and hold harmless Company and Distributor and
each of their current and former directors and officers and each person, if
any, who controls or has controlled Company or Distributor within the
meaning of the 1933 Act or the 1934 Act, against any losses, claims,
damages or liabilities to which Company or Distributor and any such
director or officer or controlling person may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(a) Any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning the
Contracts by Brokers; or
(b) Claims by agents or representatives or employees of Broker for
commissions, service fees, development allowances or other
compensation or renumeration of any type;
(c) The failure of Broker, its officers, employees, or agents to comply
with the provisions of this Agreement; and Broker will reimburse
Company and Distributor and any director or officer or controlling
person of either for any legal or other expenses reasonably incurred
by Company, Distributor, or such director, officer or
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<PAGE>
- 10 -
controlling person in connection with investigating or defending any
such loss, claims, damage, liability or action. This indemnity
agreement will be in addition to any liability which Broker may
otherwise have.
E. Assignability
This Agreement shall not be assigned by either party without the written
consent of the other.
I. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey.
In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PRUCO SECURITIES CORPORATION
(Distributor)
By
---------------------------------
(Broker)
By
---------------------------------
II-29
EXHIBIT 1.A.(3)(c)
~
Commission Schedule For
Variable Appreciable Life Insurance Contracts
---------------------------------------------
I. DISTRICT AGENCIES
A. First Year Commissions on Contracts Issued on the Following Insureds:
Commission as Percentage
Insured of Scheduled Premiums
------- ------------------------
Under Age 60 50%
Age 60-69 45%
Age 70-75 40%
B. Commissions on Renewal Scheduled Premiums in Contract Years Two Through
Four:
Commission as Percentage
Insured of Scheduled Premiums
------- ------------------------
Age 0-75 10%
C. On renewal scheduled premiums in Contract years Five Through Ten, a
commission of 3% will be paid until the client has paid premiums equal
to ten years of scheduled premiums, and 2% thereafter.
D. On premiums paid in excess of scheduled premiums, a commission of 3%
will be paid until the client has paid premiums equal to ten years of
scheduled premiums, and 2% thereafter.
II. ORDINARY AGENCIES
A. First Year Commissions Are the Same as Those Stated Above for District
Agencies.
B. Commissions on Renewal Scheduled Premiums on Contracts Sold Through
Ordinary Agencies Depend On the Classification of the Selling Agent.
II-30
<PAGE>
1. For Agents in categories T (Career agent--ICP/TAP), W (Career agent
--temporary ACCUM), and Y (Career agent--temporary), the following
commission schedule on renewal scheduled premiums applies:
Commission as Percentage
Insured of Scheduled Premiums
------- ------------------------
Age 0-75 12% in Contract Years
Two through Four; 3% in
Contract Years Five
through Ten
2. For Agents in categories A (Asst. Mgr. or Assoc. mgr.), B (Broker), G
(Part-Time Special Agent), K (Retired Agent), M (Manager), P
(Part-Time Special Agent), S (Surplus Broker), and U (Manager), the
commission rate on renewal scheduled premiums is 5% for Contract
years Two Through Ten.
3. For Agents in Categories F (Asst. Mgr. or Assoc. Mgr., Special), E
(Full-Time Agents, PCAP), V (Full-Time Career Agents), and N (Agent
Emeritus), the following commission schedule on renewal scheduled
premiums applies:
Commission as Percentage
Insured of Scheduled Premiums
------- ------------------------
Age 0-75 10% in Contract Years
Two Through Four; 3% in
Contract Years Five
Through Ten
4. For Agents in Category X (Retired Part-Time Agent), the commission
rate on renewal scheduled premiums is 9% for Contract years Two
Through Five.
5. Agents with less than three years of service may be paid on a
different basis. Agents who meet certain productivity, profitability,
and persistency standards with regard to the sale of the Contracts
will be eligible for additional compensation.
II-31
<PAGE>
III. The registered representatives of Prudential-Bache Securities, Inc. will be
paid the following commissions on contracts they sell: the same as stated
above for DA for first year scheduled premiums, and 5% of the second
through tenth year scheduled premiums. They will also be paid 3% of
premiums paid in excess of scheduled premiums until the client has paid
premiums equal to ten years of scheduled premiums, and 2% thereafter.
IV. In the event a Contract lapses or is surrendered within the first two
Contract years, a portion or all of the first year commission may be
subject to recapture by the Pruco Life Insurance Company. If the Contract
lapses at the end of year one, 30% of the commission is subject to
recapture. A higher percentage of the first year commission may be
recaptured on earlier lapses. A lower and decreasing portion of the first
year commission is subject to recapture throughout the second Contract
year.
V. The Contract may also be sold through other broker-dealers authorized by
Prusec and applicable law to do so. Registered representatives of such
other broker-dealers may be paid on a different basis than that stated
above.
II-32
EXHIBIT 1.A.(5)(a)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
NEWARK, NEW JERSEY
A Stock Company Subsidiary of The Prudential Insurance Company of America
- -------------------------------------------------------------------------------
INSURED POLICY NUMBER
CONTRACT DATE
FACE AMOUNT
PREMIUM PAID CONTRACT
AGENCY CHANGE DATE
- -------------------------------------------------------------------------------
We will pay the beneficiary the proceeds of this contract promptly if we receive
due proof that the Insured died. We make this promise subject to all the
provisions of the contract.
The Death Benefit will be the face amount we show above plus the amount of any
extra benefit unless the contract is in default or there is contract debt. (If
and when the contract becomes paid-up, the death benefit after that will be as
we describe under Paid-up Contract on page 9.)
The cash value may increase or decrease daily depending on the payment of
premiums, the investment experience of the separate account and the level of
mortality charges made. There is no guaranteed minimum.
We specify a schedule of premiums. Additional unscheduled premiums may be paid
at your option subject to the limitations in the contract.
Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 2. If there is ever a question about it, or if there
is a claim, just see one of our representatives or get in touch with one of our
offices.
RIGHT TO CANCEL CONTRACT.--You may return this contract to us within (1) 10 days
after you get it, or (2) 45 days after Part 1 of the application was signed, or
(3) 10 days after we mail or deliver to you any withdrawal right notice required
by the Securities and Exchange Commission, whichever is latest. All you have to
do is take the contract or mail it to one of our offices or to the
representative who sold it to you. It will be canceled from the start and we
will promptly give you the value of your contract Fund on the date you return
the contract to us. We will also give back any charges we made in accord with
this contract.
Signed for Pruco Life Insurance Company of New Jersey,
a New Jersey Corporation.
/s/ [SPECIMEN] /s/ [SPECIMEN]
Secretary President
MODIFIED PREMIUM VARIABLE LIFE INSURANCE POLICY. INSURANCE PAYABLE ONLY UPON
DEATH. SCHEDULED PREMIUMS PAYABLE THROUGHOUT INSURED'S LIFETIME. PROVISION FOR
OPTIONAL ADDITIONAL PREMIUMS. CASH VALUES REFLECT PREMIUM PAYMENTS, INVESTMENT
RESULTS AND MORTALITY CHARGES. GUARANTEED DEATH BENEFIT IF SCHEDULED PREMIUMS
DULY PAID AND NO CONTRACT DEBT. INCREASE IN FACE AMOUNT AT ATTAINED AGE 21 IF
CONTRACT ISSUED AT AGE 14 OR LOWER. NON-PARTICIPATING.
VALA--84 - N
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<PAGE>
CONTRACT SUMMARY
We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.
This is a contract of life insurance. Premiums are to be paid throughout the
Insured's lifetime. We specify a schedule of premiums that will keep the
contract in force. Additional premiums may be paid at your option, subject to
limits in the contract. The cash value will vary with the payment of premiums,
the investment performance of those subaccounts of the Pruco Life
Variable Appreciable Account that you select, and the extent to which mortality
charges are less than the guaranteed maximums. But the death benefit is
guaranteed and, until the time if any when the contract becomes paid-up, will
not vary if the contract is not in default past its days of grace, and there is
no contract debt. (We describe on page 8 the way the contract can go into
default, and on page 9 how the contract may become paid-up and how the death
benefit may vary above the face amount after that.) If the contract remains in
default past its days of grace, the contract may end or it may stay in force
with reduced benefits. If either occurs, you may be able to reinstate its full
benefits. The guaranteed death benefit is the face amount. On the date, if any,
when we determine that the contract has become fully paid-up, we will recompute
the guaranteed death benefit. It may be higher; it will not be lower. The death
benefit may vary after that, but it will not be less than the recomputed
guaranteed amount if there is no contract debt.
Proceeds is a word we use to mean the amount we would pay if we were to settle
the contract in one sum. To compute the proceeds that may arise from the
Insured's death, we start with a basic amount. We may adjust that amount if
there is a loan or if the contract is in default. The table on page 21 tells
what the basic amount is. The amount depends on how the contract is in force.
The table will refer you to the parts of the contract that tell you how we
adjust the basic amount. If you surrender the contract. the proceeds will be the
net cash value. We describe it under Cash Value Option on pages 13 and 14.
Proceeds often are not taken in one sum. For instance, on surrender, you may be
able to put proceeds under a settlement option to provide retirement income or
for some other purpose. Also, for all or part of the proceeds that arise from
the Insured's death, you may be able to choose a manner of payment for the
beneficiary. If an option has not been chosen, the beneficiary may be able to
choose one. We will pay interest under Option 3 from the date of death on any
proceeds to which no other manner of payment applies. This will be automatic as
we state on page 20. There is no need to ask for it.
You and we may agree on a change in the ownership of this contract. Also, unless
we endorse it to say otherwise, the contract gives you these rights, among
others:
o You may change the beneficiary under it.
o You may borrow on it up to its loan value.
o You may surrender it for its net cash value.
o You may change the allocation of future net premiums among the subaccounts.
o You may transfer amounts among subaccounts.
The contract, as issued, may or may not have extra benefits that we call
Supplementary Benefits. If it does, we list them under Supplementary Benefits on
the Contract Data page(s) and describe them after page 20. The contract may or
may not have other extra benefits. If it does, we add them by rider. Any extra
benefit ends as soon as the contract is in default past its days of grace,
unless the form that describes it states otherwise.
(Contract Summary Continued on Page 21)
Page 2 (VALA--84)
II-34
<PAGE>
CONTRACT DATA
INSURED'S SEX AND ISSUE AGE M-35
RATING CLASS NONSMOKER
INSURED JOHN DOE XX XXX XXX POLICY NUMBER
JUL 1, 1984 CONTRACT DATE
FACE AMOUNT $50,000-- CONTRACT
PREMIUM PERIOD LIFE
AGENCY R-NK 1 JUL 1, 2014 CHANGE DATE
BENEFICIARY CLASS 1 MARY DOE, WIFE
CLASS 2 ROBERT DOE, SON
LIST OF CONTRACT MINIMUMS
THE MINIMUM FACE AMOUNT IS $50,000
THE MINIMUM UNSCHEDULED PREMIUM IS $25.
LIST OF SUPPLEMENTARY BENEFITS
*****NONE*****
SCHEDULE OF PREMIUMS
PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT
INTERVALS OF 12 MONTHS AFTER THAT DATE.
SCHEDULED PREMIUMS ARE $XXX.XX EACH
CHANGING JUL 1, 2014 TO $XXX.XX EACH THEREAFTER
*****END OF SCHEDULE*****
*****NOTICE*****
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3(84)
II-35
<PAGE>
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS
FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00.
FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%, WHICH IS USED TO PAY FOR SALES
CHARGES AND STATE PREMIUM TAXES. AFTER DEDUCTION OF THIS AMOUNT, THE BALANCE IS
THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.)
*****END OF SCHEDULE*****
SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND
THE MONTHLY ADMNISTRATION CHARGE IS $3.50. THE MONTHLY CHARGE TO GUARANTEE THE
MINIMUM DEATH BENEFIT IS $0.50
*****END OF SCHEDULE*****
SCHEDULE OF MAXIMUM SURRENDER CHARGES
FOR FULL SURRENDER AT THE END OF THE CONTRACT YEAR INDICATED, THE MAXIMUM
CHARGES WE WILL DEDUCT FROM THE CONTRACT FUND ARE SHOWN BELOW. FOR SURRENDER AT
OTHER THAN YEAR-END DURING THE SIXTH THROUGH TENTH YEARS, THE AMOUNT OF THE
CHARGE WILL REFLECT THE NUMBER OF COMPLETED CONTRACT MONTHS SINCE THE BEGINNING
OF THE CONTRACT YEAR. (SEE PAGE 14.)
YEAR OF DEFERRED DEFERRED UNDERWRITING
SURRENDER SALES CHARGE AND ISSUE CHARGE TOTAL
- --------- ------------ ---------------------- -------
1 $XXX.XX $XXX.XX $XXX.XX
2 XXX.XX XXX.XX XXX.XX
3 XXX.XX XXX.XX XXX.XX
4 XXXOXX XXX.XX XXX.XX
5 XXX.XX XXX.XX XXX.XX
6 XXX.XX XXX.XX XXX.XX
7 XXX.XX XXX.XX XXX.XX
8 XXX.XX XXX.XX XXX.XX
9 XXX.XX XXX.XX XXX.XX
10 ZERO ZERO ZERO
11 AND LATER ZERO ZERO ZERO
*****END OF SCHEDULE*****
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3A(84)
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<PAGE>
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
LIST OF SUBACCOUNTS AND PORTFOLIOS
EACH SUBACCOUNT OF THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT INVESTS IN A
SPECIFIC PORTFOLIO OF THE PRUCO LIFE SERIES FUND. WE SHOW BELOW THE SUBACCOUNTS
AND THE FUND PORTFOLIOS THEY INVEST IN.
FUND
SUBACCOUNT PORTFOLIO
- ---------- ----------
MONEY MARKET MONEY MARKET
BOND BOND
COMMON STOCK COMMON STOCK
AGGRESSIVELY MANAGED FLEXIBLE AGGRESSIVELY MANAGED FLEXIBLE
CONSERVATIVELY MANAGED FLEXIBLE CONSERVATIVELY MANAGED FLEXIBLE
INITIAL ALLOCATION OF NET PREMIUMS
MONEY MARKET SUBACCOUNT 20%
BOND SUBACCOUNT 20%
COMMON STOCK SUBACCOUNT 20%
AGGRESSIVELY MANAGED FLEXIBLE SUBACCOUNT 20%
CONSERVATIVELY MANAGED FLEXIBLE SLUBACCOUNT 20%
*****END OF LIST*****
SERVICE OFFICE--PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS CONTRACT TO:
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
P.O. BOX XXXX
CITY, STATE XXXXX
Page 3B(84)
II-37
<PAGE>
POLICY NO. XX XXX XXX
TABULAR VALUES
WE EXPLAIN THIS TABLE UNDER CONTRACT FUND AND TABULAR VALUES. ACTUAL CONTRACT
FUND VALUES AND CASH VALUES MAY BE MORE OR LESS THAN AMOUNT SHOWN (SEE CONTRACT
FUND AND CASH VALUE OPTION.)
END OF TABULAR TABULAR
CONTRACT CONTRACT CASH
YEAR FUND VALUE
- -------- -------- -------
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
ATTAINED
AGE
- --------
60
62
65
TABULAR CASH VALUES THROUGH THE FIRST 10 CONTRACT YEARS ARE THE TABULAR CONTRACT
FUND VALUES MINUS A SURRENDER CHARGE. WE DESCRIBE UNDER CASH VALUE OPTION ON
PAGES 13 AND 14 HOW THE SURRENDER CHARGE IS DETERMINED. WE SHOW ON A PRIOR
CONTRACT DATA PAGE WHAT THE MAXIMUM SURRENDER CHARGE WILL BE.
TABULAR CASH VALUES AFTER THE 10TH CONTRACT YEAR WILL BE THE SAME AS THE TABULAR
CONTRACT FUND VALUES SHOWN ABOVE.
Page 4(84)
II-38
<PAGE>
ENDORSEMENTS
(Only we can endorse this contract.)
GENERAL PROVISIONS
DEFINITIONS.--We define here some of the words and phrases used all through this
contract. We explain others, not defined here, in other parts of the text.
WE, OUR, US AND COMPANY.--Pruco Life Insurance Company of New Jersey, a New
Jersey Corporation.
YOU AND YOUR.--The owner of the contract.
INSURED.--The person named as the Insured on the first page. He or she need not
be the owner.
Example: Suppose we issue a contract on the life of your spouse. You applied
for it and named no one else as owner. Your spouse is the Insured and you are
the owner.
SEC.--The Securities and Exchange Commission.
ISSUE DATE.--The contract date.
MONTHLY DATE.--The contract date and the same day as the contract date in each
later month.
Example: If the contract date is March 9, 1986, the Monthly Dates are each March
9, April 9, May 9 and so on.
ANNIVERSARY OR CONTRACT ANNIVERSARY.--The same day and month as the contract
date in each later year.
Example: If the contract date is March 9, 1986, the first anniversary is March
9, 1987. The second is March 9, 1988, and so on.
CONTRACT YEAR.--A year that starts on the contract date or on an anniversary.
Example: If the contract date is March 9, 1986, the first contract year starts
then and ends on March 8, 1987. The second starts on March 9, 1987 and ends on
March 8, 1988, and so on.
CONTRACT MONTH.--A month that starts on a Monthly Date.
Example: If March 9, 1986 is a Monthly Date, a contract month starts then and
ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends
on May 8, 1986, and so on.
ATTAINED AGE.--The Insured's attained age at any time is the issue age plus the
length of time since the contract date. You will find the issue age near the top
of page 3.
THE CONTRACT.--This policy and the application, a copy of which is attached,
form the whole contract. We assume that all statements in the application were
made to the best of the knowledge and belief of the person(s) who made them; in
the absence of fraud they are deemed to be representations and not warranties.
We relied on those statements when we issued the contract. We will not use any
statement, unless made in the application, to try to void the contract or to
deny a claim.
CONTRACT MODIFICATIONS.--Only a Company officer may agree to modify this
contract, and then only in writing.
NON-PARTICIPATING.--This contract will not share in our profits or surplus
earnings. We will pay no dividends on it.
SERVICE OFFICE.--This is the office that will service this contract. Its mailing
address is the one we show on the Contract Data pages, unless we notify you of
another one.
OWNERSHIP AND CONTROL.--Unless we endorse this contract to say otherwise: (1)
the owner of the contract is the Insured; and (2) while the Insured is living
the owner alone is entitled to (a) any contract benefit and value, and (b) the
exercise of any right and privilege granted by the contract or by us.
SUICIDE EXCLUSION.--lf the Insured, whether sane or insane, dies by suicide
within two years from the issue date, we will pay no more under this contract
than the sum of the premiums paid.
CURRENCY.--Any money we pay, or that is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.
(Continued on Next Page)
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GENERAL PROVISIONS (Continued)
MISSTATEMENT OF AGE OR SEX.--If the Insured's stated age or sex or both are not
correct, we will adjust each benefit and any amount to be paid to reflect the
correct age and sex. Where required, we have given the insurance regulator a
detailed statement of how we will make these changes.
The Schedule of Premiums may show that premiums change or stop on a certain
date. We may have used that date because the Insured would attain a certain age
on that date. If we find that the issue age was wrong, we will correct that
date.
INCONTESTABILITY.--Except for default, we will not contest this contract after
it has been in force during the Insured's lifetime for two years from the issue
date.
ASSIGNMENT.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient.
ANNUAL REPORT.--Each year we will send you a report. It will show: (1) the
current death benefit; (2) the investment amount; (3) the amount of investment
amount in each subaccount; (4) the net cash value; (5) premiums paid and monthly
charges deducted since the last report; and (6) any contract debt and the
interest on the debt for the prior year. The report will also include any other
data that may be currently required where this contract is delivered. No report
will be sent if this contract is being continued under extended term insurance.
You may ask for a similar report at some other time during the year. Or you may
request from time to time a report protecting results under your contract on the
basis of premium payment assumptions and assumed investment results. We have the
right to make a reasonable charge for reports such as these that you ask for,
and to limit the scope and frequency of such reports.
INCREASE IN FACE AMOUNT AT AGE 21 FOR CONTRACTS ISSUED AT AGE 14 OR LOWER.--If
this contract was issued at age 14 or lower, it shows on page 3 an increase in
face amount at attained age 21, which applies if the contract is not then in
default beyond its days of grace. If so, any references in the contract to face
amount or death benefit which apply at or after attained age 21 will be based
upon the increased face amount, unless otherwise stated.
DEATH PROCEEDS.--The table of Basic Amounts on page 21 describes how the
proceeds payable at death will be determined, depending on the status of the
contract at the time of death. In addition to what is shown in that table, a
special situation will apply in those cases where all of these conditions exist:
(a) the contract was issued at an age below 15; (b) death occurs before attained
age 21; (c) the contract is on a premium paying basis and not in default past
its days of grace; (d) the contract fund is not sufficient to make the contract
paid up for the ultimate face amount; (e) the contract fund is greater than the
sum of the net single premium for the initial face amount and the present value,
discounted at a rate we set from time to time but no less than 4% a year, of all
future charges for extra benefits other than those which do not continue after a
contract such as this becomes paid up. (See above and Paid-up Contract, page 9.)
In this case, the Basic Amount will not be as described on page 21 but will be
the total of (1) the initial face amount, plus (2) the amount which results from
dividing the contract fund minus the present value of the future charges for
extra benefits referred to above, minus the net single premium for the initial
face amount, by the net single premium at the then attained age, plus (3) the
amount of any extra benefits.
PAYMENT OF DEATH CLAIM.--If we settle this contract in one sum as a death claim,
we will usually pay the proceeds within 7 days after we receive at our Service
Office proof of death and any other information we need to pay the claim. But in
the event of death while the contract is either fully paid-up or is in force as
variable reduced paid-up insurance we have the right to defer paying any portion
of the proceeds greater than the minimum guaranteed death benefit if (1) the New
York Stock Exchange is closed; or (2) the SEC requires that trading be
restricted or declares an emergency; or (3) the SEC lets us defer payment to
protect our contract owners.
Page 6 (VALA--84)
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PREMIUM PAYMENT AND REINSTATEMENT
PAYMENT OF PREMIUMS.--Premiums may be paid at our Service Office or to any of
our authorized representatives. If we are asked to do so, we will give a signed
receipt.
Premium payments will in most cases be credited as of the date of receipt, to
both the contract fund and the premium account. (See Contract Fund, page 11, and
Premium Account, page 8.) Premium credits to the contract fund are the invested
premium amounts, (see page 11.) Premium credits to the premium account are the
full premiums paid with no deductions. But in the following cases, to the extent
stated, premium payments will be credited as of a date other than the date of
receipt:
1. The first scheduled premium is due on the Contract Date. But if the first
premium payment is received after the Contract Date, the scheduled portion will
be credited to the contract fund and the premium account as of the Contract
Date. And any portion of that first premium payment in excess of the first
scheduled premium will be credited as of the date of receipt. If the first
premium is received before the Contract Date, the entire payment will be
credited as of the Contract Date.
2. If a premium payment is received during the 61 day period after the day when
a scheduled premium was due and had not yet been paid, here is what we will do.
We will determine whether the premium account, (see Premium Account below,) just
before receipt of that payment was a negative amount. If not--that is, if the
premium account was zero or higher--the premium payment will be credited as of
the date of receipt. But if the premium account was negative, by no more than
the scheduled premium on the due date, that portion of the premium payment
required to bring the premium account up to zero will be credited to the premium
account as of the due date; any remaining portion of the premium payment will be
credited to the premium account as of the date of receipt. If the premium
account is negative by more than the scheduled premium then due, the premium
payment will be credited as of the date of receipt, except in the situation
described in 3 below.
3. On each Monthly Date we will determine if the contract fund is in default.
(See Default on page 8.) We will notify you of the minimum payment amount needed
to bring the contract out of default. If one or more premium payments are made
during the days of grace after that monthly date, (see Grace Period on page 8,)
we will credit to the contract fund and the premium account as of the applicable
Monthly Dates, such parts of the payments as are needed to end the default
status; any remaining part of these premium payments will be credited to the
contract fund and premium account as of the date of receipt.
Scheduled Premiums.--We show the amount and frequency of the scheduled premiums
in the Schedule of Premiums. The first scheduled premium is due on the contract
date. There is no insurance under this contract unless an amount at least equal
to the first scheduled premium is paid.
The scheduled premium shown is the minimum required, at the frequency chosen, to
continue the contract in full force if all scheduled premiums are paid when due,
investment returns are at the rate assumed, we deduct mortality charges at no
less than the maximum rate, and any contract debt does not exceed the cash
value.
If you wish to pay, on a regular basis, higher premiums than the amount of the
scheduled premium, we will bill you for the higher amount you choose.
If scheduled premiums that are due are not paid, or if smaller payments are
made, the contract may then or at some future time go into default. The
conditions under which default will exist are described below.
UNSCHEDULED PREMIUMS.--Except as we state in the next paragraph unscheduled
premiums may be paid at any time during the Insured's lifetime as long as the
contract is not in default beyond its days of grace. We show on page 3 the
minimum premium we will accept. We have the right to limit unscheduled premiums
to a total of $10,000 in any contract year.
If we determine at any time that investment returns above the assumed rate, or
smaller than maximum mortality charges or greater than scheduled premium
payments have made the contract paid-up, we have the right to accept no further
premium payments, or to limit the amount or frequency of premium payments
thereafter. (See Paid-up Contract, page 9.)
PREMIUM CHANGE ON CONTRACT CHANGE DATE.--We show the Contract Change Date in the
Contract Data on page 3. We also show in the Schedule of Premiums on page 3 that
the amount of each scheduled premium will change on the Contract Change Date and
what the new premium will be. However, when the Contract Change Date arrives we
will recompute a new premium amount to be used in calculating the premium
account. The new premium that we recompute will be no greater than the new
premium for that date which we show on page 3. In addition, if the premium
account is less than zero, we will set the premium account to zero.
(Continued on Next Page)
Page 7 (VALA--84)
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PREMIUM PAYMENT AND REINSTATEMENT (Continued)
The Schedule of Premiums may also show that the premium changes at other times.
This may occur, for example, with a contract issued with extra benefits or in an
extra rating class if, in either case, this calls for a higher or extra premium
for a limited period of time.
DEFAULT.--Unless the contract is already in the grace period, (see below,) on
each monthly date, after we deduct any charges from the contract fund (which we
describe on page 11) and add any credits to it, we will determine whether the
contract is in default. To do so we will compute the amount which will accrue to
the tabular contract fund on the next monthly date if, during the current
contract month: (1) investment returns are at the assumed rate; and (2) we make
the other charges and credits we have set, including interest on contract debt;
and (3) we receive no premiums or loan repayments and make no more loans or
grant any partial withdrawals. We will subtract this amount from the contract
fund. If the result is zero or more, (that is, not a negative amount,) the
contract is not in default. But if there is a fund deficit--that is, if the
result is less than zero--the contract is in default if the premium account,
which we define below, is also less than zero.
GRACE PERIOD.--We grant 61 days of grace from any monthly date (other than the
contract date) on which the contract goes into default. During the days of grace
we will continue to accept premiums and make the charges we have set. If the
monthly date was a scheduled premium due date, when we receive a premium payment
during the days of grace we will first determine whether it satisfies case 2
under Payment of Premiums above. If it does, the default will end. If it does
not, or if the monthly date when the contract went into default was not a
scheduled premium due date, here is what we will do:
If at any time during the days of grace, we have received payments that in total
are at least equal to the lesser of (a) the sum of the fund deficit, (that is,
the amount by which the contract fund is below the tabular contract fund,) on
the date of default and any subsequent Monthly Date, and (b) the sum of the
amount by which the premium account is negative on the date of default and any
scheduled premiums due since the date of default, the default will end.
If the contract is still in default when the days of grace are over, it will end
and have no value, except as we state under Contract Value Options, (which we
describe on page 13).
PREMIUM ACCOUNT.--On the contract date, the premium account is equal to the
premium received on that date minus the scheduled premium then due. On any other
day, the premium account is equal to:
1. what it was on the prior day; plus
2. if the premium account was greater than zero on the prior day, interest on
the excess at 4% year; minus
3. if the premium account was less than zero on the prior day, interest on the
deficit at 4% a year; plus
4. any premium received on that day; minus
5. any scheduled premium due on that day; minus
6. any partial withdrawals on that day.
The contract might be in default, as described above. If so, the premium account
is a negative amount, less than zero. If a premium payment is received on any
day during the days of grace while the contract is in default and the premium
account is negative by no more than one scheduled premium, that payment. to the
extent that it is required to bring the premium account up to zero, will, as we
describe under Payment of Premiums above, be credited to the premium account as
of the monthly date when the scheduled premium was due, whether the date of
default or a subsequent monthly date. Any remaining portion of the premium
payment will be credited as of the actual date of receipt. In this case the
premium account for all days from the monthly date to the actual date of receipt
will be recalculated.
REINSTATEMENT.--If this contract ends as we describe under Grace Period, you may
reinstate it, if all these conditions are met:
1. No more than three years must have elapsed since the date of default.
2. You must not have surrendered the contract for its net cash value.
3. You must give us any facts we need to satisfy us that the insured is
insurable for the contract.
4. We must be paid a premium at least equal to the amount required to bring the
premium account up to zero on the first monthly date on which a scheduled
premium is due after the date of reinstatement. From this amount we will deduct
$2, plus 7 1/2% of the remaining payment, plus any charges with interest for any
extra benefits, plus any other expense charges with interest. The contract fund
will be equal to the balance, plus the cash value of the contract immediately
before reinstatement, plus a refund of that part of any surrender charge paid at
the time of default which would be charged if the contract were surrendered
immediately after reinstatement.
5. If before reinstatement the contract is in force as reduced paid-up insurance
(see page 13) any contract debt under reduced paid-up insurance must be repaid
with interest or carried over to the reinstated contract.
If we approve the reinstatement, these statements apply. The date of
reinstatement will be the date of your request or the date the required premium
is paid, if later. And we will start to make daily and monthly charges and
credits again as of the date of reinstatement.
Page 8 (VALA)--84)
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BENEFICIARY
You may designate or change a beneficiary. Your request must be in writing and
in a form that meets our needs. It will take effect only when we file it at our
Service Office; this will be after you send the contract to us to be endorsed,
if we ask you to do so. Then any previous beneficiary's interest will end as of
the date of the request. It will end then even if the Insured is not living when
we file the request. Any beneficiary's interest is subject to the rights of any
assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:
1. One who survives the Insured will have the right to be paid only if no one in
a prior class survives the Insured.
2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Insured.
3. Two or more in the same class who have the right to be paid will be paid in
equal shares.
4. If none survives the Insured, we will pay in one sum to the Insured's estate.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. We owe Jane the proceeds if she is living at the Insured's
death. We owe Paul and John the proceeds if they are living then but Jane is
not. But if only one of them is living, we owe him the proceeds. If none of them
is living we owe the Insured's estate.
Beneficiaries who do not have a right to be paid under these terms may still
have a right to be paid under the Automatic Mode of Settlement.
Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on
that proof, we will not have to make the payment(s) again.
PAID-UP CONTRACT
This contract will become fully paid-up if and when whichever of the following
situations is applicable occurs:
(a) For a contract issued at an age lower than 15, the contract fund has grown
to an amount at least equal to the net single premium for the ultimate face
amount (see page 3 and 8,) plus the present value, discounted at a rate we set
from time to time but no less than 4% a year, of all future charges for any
extra benefits which will continue under the paid-up contract.
(b) For a contract issued at age 15 or above, the contract fund has grown to an
amount at least equal to the net single premium for the face amount, (see page 3
and 6,) plus the present value, discounted at a rate we set from time to time
but no less than 4% a year, of all future charges for any extra benefits which
will continue under the paid-up contract.
We will notify you when we determine that the contract has become fully paid-up.
We have the right at that time to return any part of any payment then being made
which is in excess of the amount billed or required to make the contract
paid-up. And we have the right to accept no further premium payments, or to
limit the amount or frequency of premium payments thereafter. The contract will
continue as paid-up life insurance on the Insured's life.
The death benefit under the paid-up contract may change daily, as we explain
below, but if there is no contract debt, it will not be less than the minimum
guaranteed death benefit determined on the day the contract becomes paid-up.
That amount will be no less than the face amount shown on page 3, (or, if the
contract was issued below age 15, the ultimate face amount.) It will be computed
by using the contract fund on that day, less the present value of all future
charges for any extra benefits, (computed as described above,) at the net single
premium rate. The net single premium rate depends on the Insured's issue age end
sex and on the length of time since the contract date. The amount payable in
event of death thereafter will be the guaranteed death benefit, or if greater,
the contract fund, divided by the net single premium at the Insured's attained
age on the date of death. In either case the amount will be adjusted for any
contract debt and for the amount of any paid-up extra benefits.
The monthly charge described on page 12 and shown on page 3A and any charges
for extra benefits will not be made after the contract becomes paid-up.
Page 9 (VALA--84) - N
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SEPARATE ACCOUNT
THE ACCOUNT.--The word account, where we use it in this contract without
qualification, means the Pruco Life Variable Appreciable Account. This is a unit
investment trust registered with the SEC under the Investment Company Act of
1940. It is also subject to the laws of New Jersey. We own the assets of the
account; we keep them separate from the assets of our general investment
account. We established the account to support variable life insurance
contracts. But we do not use it to support this contract if the contract is
being continued under extended term insurance. (See page 13.)
SUBACCOUNTS.--The account has several subaccounts. We list them on the Contract
Data page(s). You determine, using percentages. how invested premium amounts
will be allocated among the subaccounts. You may choose to allocate nothing to a
particular subaccount. But any allocation you make must be at least 10%; you may
not choose a fractional percent.
Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up
to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or
any percent that is not a whole number. The total for all subaccounts must be
100%.
The allocation of invested premium amounts (see page 11) that took effect on the
contract date is shown in the Contract Data pages. You may change the allocation
for future invested premium amounts at any time if the contract is not in
default. To do so, you must notify us in writing in a form that meets our needs.
The change will take effect on the date we receive your notice at our Service
Office.
A premium might be paid when the investment amount is less than zero. In that
case, when we receive that premium, we first use as much of the invested premium
amount as we need to eliminate the deficit in the investment amount. We will
then allocate any remainder of the invested premium amount in accord with your
most recent request. (We describe investment amount on page 11.)
THE FUND.--The word fund, where we use it in this contract without
qualification, means the fund we identify in the Contract Data pages. The fund
is registered with the SEC under the Investment Company Act of 1940 as an
open-end diversified management investment company. The fund has several
portfolios; there is a portfolio that corresponds to each of the subaccounts of
the account. We list these portfolios in the Contract Data pages.
ACCOUNT INVESTMENTS.--We use the assets of the account to buy shares in the
fund. Each subaccount is invested in a corresponding specific portfolio. Income
and realized and unrealized gains and losses from assets in each subaccount are
credited to, or charged against, the subaccount. This is without regard to
income, gains, or losses in our other investment accounts.
We will determine the value of the assets in the account at the end of each
business day. When we use the term business day, we mean a day when the New York
Stock Exchange is open for trading. We might need to know the value of an asset
on a day that is not a business day or on which trading in that asset does not
take place. In this case, we will use the value of that asset as of the end of
the last prior business day on which trading took place.
Example: If we need to know the value of an asset on a Sunday, we will normally
use the value of the asset as of the end of business on Friday.
We will always keep assets in the account with a total value at least equal to
the amount of the investment amounts under contracts like this one. To the
extent those assets do not exceed this amount, we use them only to support those
contracts; we do not use those assets to support any other business we conduct.
We may use any excess over this amount in any way we choose.
CHANGE IN INVESTMENT POLICY.--A portfolio of the fund might make a material
change in its investment policy. In that case, we will send you a notice of the
change. Within 60 days after you receive the notice, or within 60 days after the
effective date of the change, if later, you may exchange this contract for a new
contract of fixed benefit insurance on the Insured's life. The conditions for
exchange, and the specifications for the new contract, are described under
Exchange of Contract on page 16.
CHANGE OF FUND.--A portfolio might, in our judgment, become unsuitable for
investment by a subaccount. This might happen because of a change in investment
policy, or a change in the laws or regulations, or because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the fund, or to invest in a
fund other than the one we show on the Contract Data page(s). But we would first
seek approval from the SEC and, where required, the insurance regulator where
this contract is delivered.
Page 10 (VALA--84) - N
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INVESTMENT AMOUNT AND RETURN ON INVESTMENT
INVESTMENT AMOUNT.--The investment amount for this contract is the amount we use
to compute the investment return. The amount is allocated among the subaccounts.
The amount of the investment amount and its allocation to subaccounts depend on
(1) how you choose to allocate net premiums; (2) whether or not you transfer
amounts among subaccounts, as we discuss below; (3) the investment performance
of the subaccounts to which amounts are allocated or transferred; (4) the amount
and timing of premium payments you make; (5) whether or not you take any loan;
and (6) whether or not you make any partial withdrawals. The investment amount
exists only if the contract is not in default past the days of grace or if it is
being continued as variable reduced paid-up insurance.
The investment amount at any time is equal to the contract fund, (we explain
this under Contract Fund,) minus the amount of any loan on the contract, minus
interest accrued on the loan at 4% a year since the last Monthly Date (we
explain this under Loans.)
ASSUMED RATE OF RETURN.--The assumed rate of return is an effective rate of 4% a
year. This is the same as .01074598% a day compounded daily.
TRANSFERS AMONG SUBACCOUNTS.--You may transfer amounts among subaccounts as
often as four times in a contract year, if the contract is not in default or if
the contract is being continued under the variable reduced paid up option. To do
so, you must notify us in writing in a form that meets our needs. The transfer
will take effect on the date we receive your notice at our Service Office.
CONTRACT FUND
CONTRACT FUND DEFINED.--On the contract date the contract fund is equal to the
invested premium amounts received, (see below), minus any of the charges
described in items (d) through (j) below which may have been due on that date.
On any day after that the contract fund is equal to what it was on the previous
day, plus any invested premium amounts received, plus these items:
(a) any increase due to investment results in the value of the
subaccounts to which that portion of the contract fund that is in the
investment amount is allocated; (we explain investment amount above);
and
(b) guaranteed interest at 4% a year on that portion of the contract fund
that is not in the investment amount;
Minus these items:
(c) any decrease due to investment results in the value of the subaccounts
to which that portion of the contract fund that is in the
investment amount is allocated;
(d) a charge against the investment amount at a rate of not more than
.00163894% a day (.60% a year) for mortality and expense risks that we
assume;
(e) any amount charged against the investment amount for Federal or State
income taxes;
(f) a monthly charge to guarantee the minimum death benefit;
(g) a charge for the cost of expected mortality;
(h) any charges for extra rating class;
(i) any charges for extra benefits;
(j) a monthly administration charge;
(k) any partial withdrawals; and
(l) if the contract becomes paid-up on that day, the present value of any
future charges for any extra benefits that will continue under the
paid-up contract.
We describe under Reinstatement on page 7 what the contract fund will be equal
to on any reinstatement date.
INVESTED PREMIUM AMOUNT.--This is the portion of each premium paid that we will
add to the contract fund. It is equal to the premium paid, minus $2.00, minus
7-1/2% of the rest of the premium. We explain this under Schedule of Expense
Charges from Premium Payments.
GUARANTEED INTEREST CREDITS.--We will credit interest to the contract fund each
day on any portion of the contract fund on that day which is not in the
investment amount. That portion will be any contract loan plus interest accrued
on the loan at the rate of 4% a year since the last Monthly Date. (See Loans.)
We will credit .01074598% a day which is an effective rate of 4% a year.
COST OF EXPECTED MORTALITY.--This charge is computed daily and deducted monthly
from the contract fund, on each Monthly Date. We apply this charge to the
coverage amount. The coverage amount is equal to what the Basic Amount (see page
21) would be if there were no extra benefits, minus the contract fund. Where
required, we have given the insurance regulator a detailed description of the
method we use.
We will not charge more than the maximum guaranteed rates, which are based on
the Insured's sex and attained age and the mortality table described under the
Basis of Computation. We may charge less. At least every five years, but not
more often than once a year, we will consider the need to change the charges. We
will change them only if we do so for all contracts like this one dated in the
same year as this one.
CHARGE FOR EXTRA RATING CLASS.--If there is an extra charge because of the
rating class of the Insured or because the Insured is a cigarette smoker, we
will deduct
(Continued on Next Page)
Page 11 (VALA--84)
II-45
<PAGE>
CONTRACT FUND (Continued)
it from the contract fund at the beginning of each contract month. Any charge is
included in the amount shown in the Contract Data pages under Schedule of
Mdnthly Deductions from Contract Fund.
CHARGE FOR EXTRA BENEFITS.--If the contract has extra benefits, we will deduct
the charges for such benefits from the contract fund at the beginning of each
contract month. Charges for any such extra benefits are included in the amount
shown in the Contract Data pages under Schedule of Monthly Deductions from
Contract Fund.
If and when we determine that the contract has become paid-up, we will deduct
from the contract fund the present value of any future charges for any extra
benefits that will continue under the paid-up contract. We will make no further
deductions for these benefits after that. The description of any such benefit
(which can be found following page 20) describes how the future cash value, if
any, of that benefit will be determined.
MONTHLY ADMINISTRATION CHARGE AND MORTALITY RISK CHARGE.--On each monthly date,
we will deduct up to $2.50, plus up to 2 cents per $1000 of face amount, from
the contract fund, as a monthly administration charge. We will also deduct 1
cent per $1000 of face amount for guaranteeing the death benefit regardless of
the investment performance of the separate account. (Both of these references to
charges based upon face amount are to initial face amount for contracts issued
below age 15. The total charges do not increase when the face amount increases
at attained age 21.) These charges will be made only while the contract is on a
premium paying basis; they will not be made if the contract becomes paid-up or
is continued as variable reduced paid-up or extended term insurance, (see
Contract Value Options). We show the amount of these charges in the Contract
Data pages under Schedule of Monthly Deductions from Contract Fund.
PARTIAL WITHDRAWALS.--You may be able to make partial withdrawals from the
contract. All these conditions must be met:
1. The contract must have passed its first contract anniversary.
2. You must ask for the change in writing and in a form that meets our needs.
3. The amount withdrawn, plus the net cash value after withdrawal, may not be
more than the net cash value before withdrawal.
4. The cash value after withdrawal must not be less than the tabular cash value
for the new face amount.
5. The amount you withdraw must be at least $2,000.
6. The face amount must not decrease below the minimum shown on page 3.
7. You must send the contract to us to be endorsed.
We will add a withdrawal fee of $15 to the amount you ask to withdraw.
We will decrease the face amount by the amount of the withdrawal. We will
compute a new tabular contract fund, a new tabular contract value, and new
minimum premiums based on the reduced face amount. These new minimum premiums
will be used thereafter for the computation of the premium account.
An amount withdrawn may not be repaid, except as an unscheduled premium subject
to charges.
We will tell you how much you may withdraw if you ask us.
Page 12 (VALA--84)
II-46
<PAGE>
CONTRACT VALUE OPTIONS
BENEFIT AFTER THE GRACE PERIOD.--If the contract is in default beyond its days
of grace, we will use any net cash value (which we describe under Cash Value
Option) to keep the contract in force as one of two kinds of insurance. One kind
is extended insurance. The second kind is variable reduced paid-up insurance. We
describe each below. You will find under Automatic Benefit which kind it will
be. Any extra benefit(s) will end as soon as the contract is in default past its
days of grace, unless the form that describes the extra benefit states
otherwise.
EXTENDED INSURANCE.--This will be term insurance of a fixed amount on the
Insured's life. We will pay the amount of term insurance if the Insured dies in
the term we describe below. Before the end of the term there will be cash values
but no loan value.
The amount of term insurance will be the death benefit on the day of default,
minus any part of that death benefit which was provided by extra benefits. The
term is a period of time that will start on the day the contract went into
default. The length of the term will be what is provided when we use the net
cash value at the net single premium rate. This rate depends on the Insured's
issue age and sex and on the length of time since the contract date.
There may be extra days of term insurance. This will occur if, on the day the
contract goes into default, the term of extended insurance provided by the net
cash value does not exceed 90 days, or the number of days the contract was in
force before the default began, if less. The number of extra days will be (1)
90, or the number of days the contract was in force before the default began, if
less, minus (2) the number of days of extended insurance that would be provided
by the net cash value if there were no contract debt. The extra days, if any,
start on the day after the last day of term insurance provided by the net cash
value, if any. If there is no such term insurance, the extra days start on the
day the contract goes into default. The term insurance for the extra days has no
cash value. There will be no extra days if you replace the extended insurance
with variable reduced paid-up insurance or you surrender the contract before the
extra days start.
VARIABLE REDUCED PAID-UP INSURANCE.--This will be paid-up variable life
insurance on the insured's life. The death benefit may change from day to day,
as we explain below, but if there is no contract debt, it will not be less than
a minimum guaranteed amount determined as of the day when the contract went into
default. There will be cash values and loan values.
The minimum guaranteed amount of insurance will be computed by using the net
cash value at the net single premium rate. The net single premium rate depends
on the Insured's issue age and sex and on the length of time since the contract
date. The amount payable in event of death thereafter will be the greater of (a)
the minimum guaranteed amount and (b) the contract fund divided by the net
single premium at the Insured's attained age. In either case the amount will be
adjusted for any contract debt.
Except when it is provided as the automatic benefit, (see below), the variable
reduced paid-up insurance option will be available only when the guaranteed
death benefit under the option will be $5000 or more.
COMPUTATIONS.--We will make all computations for either of these benefits as of
the date the contract goes into default. But we will consider any loan you take
out or pay back or any premium payments or partial withdrawals you make in the
days of grace.
AUTOMATIC BENEFIT.--When the contract is in default, it will stay in force as
extended insurance. But it will stay in force as variable reduced paid-up
insurance if either of these statements applies: (1) We issued the contract in
a rating class for which we do not provide extended insurance; in this case the
phrase No Extended Insurance is in the Rating Class on page 3. (2) The amount of
reduced paid-up insurance would be at least as great as the amount of term
insurance.
OPTIONAL BENEFIT.--You may choose to replace any fixed extended insurance that
has a net cash value by variable reduced paid-up insurance. To make this choice,
you must do so in writing to us in a form that meets our needs, not more than
three months after the date the contract goes into default. You must also send
the contract to us to be endorsed.
CASH VALUE OPTION.--You may surrender this contract for its net cash value. The
net cash value at any time is the cash value at that time, less any contract
debt. To surrender this contract, you must ask us in writing in a form that
meets our needs. You must also send the contract to us. Here is how we will
compute the cash value for surrender of the contract or for its continuation
under extended insurance or variable reduced paid-up insurance.
1. If the contract is not in default: the cash value on surrender at any time in
the first ten contract years is the
(Continued on Next Page)
Page 13 (VALA--84)
II-47
<PAGE>
CONTRACT VALUE OPTIONS (Continued)
contract fund, minus a surrender charge, consisting of a deferred sales charge
and a deferred underwriting and issue charge. The cash value on surrender at the
end of the 10th contract year or later is the contract fund.
A schedule of maximum surrender charges for this contract is on page 3A.
In no event will the deferred sales charge upon surrender be greater than 25%
of scheduled premiums due in contract year 1, plus .5% of the scheduled premiums
due in contract years 2 through 5. For the purpose of computing this limit we
use the lesser of premiums due and premiums paid.
For a paid-up contract that includes extra benefits, the cash value is the
amount described above, plus the cash value, if any, of the extra benefits. (See
the description of any such extra benefits following page 20.)
2. If the contract is in default during its days of grace: We will compute the
net cash value as of the date the contract went into default. But we will adjust
this value for any loan you take out or pay back or any premium payments or
partial withdrawals you make in the days of grace.
3. If the contract is in default beyond its days of grace: The net cash value as
of any date will be the value on that date of any extended insurance benefit
then in force. Or it will be the value on that date of any variable reduced
paid-up insurance benefit then in force, less any contract debt.
Within 30 days of a contract anniversary, the net cash value of any extended
insurance will not be less than the value on that anniversary.
If the contract is not in default past the days of grace, or if the contract is
in force as variable reduced paid up insurance, we will usually pay any cash
value within 7 days after we receive your request and the contract at our
Service Office. But we have the right to defer payment if (1) the New York Stock
Exchange is closed; or (2) the SEC requires that trading be restricted or
declares an emergency; or (3) the SEC lets us defer payments to protect our
contract owners.
If the contract is in force as extended insurance we have the right to postpone
paying a cash value for up to six months. If we do so for more than 30 days, we
will pay interest at the rate of 3% a year.
TABULAR VALUES.--In the table on page 4 we show tabular contract fund and
tabular cash values at the end of contract years. The tabular contract fund
values are the amount which will then be in the contract fund, (see page 11,) if
all scheduled premiums have been paid on their due dates, there have been no
unscheduled premiums paid, there is no contract debt, the subaccounts you have
chosen cam exactly the assumed rate of return, and we have deducted the maximum
mortality charges. The tabular cash values are the amounts which, under the same
conditions, will then be used to provide extended insurance or variable reduced
paid-up insurance or will be paid in cash, if the maximum surrender charges are
applied. The tabular cash value shown is equal to the tabular contract fund
value as of the same date after deducting any surrender charges (at the maximum
rate) from the tabular contract fund value. (See Cash Value Option above.) Since
surrender charges are not deducted after the end of the 10th contract year, the
tabular cash values are the same as the tabular contract fund values thereafter.
If we need to compute tabular values at some time during a contract year, we
will count the time since the start of the year. We will let you know the
tabular values for other durations if you ask for them.
Page 14 (VALA--84)
II-48
<PAGE>
LOANS
LOAN REQUIREMENTS.--After the first anniversary, you may borrow from us on the
contract. All these conditions must be met:
1. The Insured is living.
2. The contract is in force other than as extended insurance.
3. The contract debt will not be more than the loan value. (We explain these
terms below.)
4. As sole security for the loan, you assign the contract to us in a form that
meets our needs.
5. Except when used to pay premiums on this contract, the amount you borrow at
any one time must be at least $500.
If there is already contract debt when you borrow from us, we will add the new
amount you borrow to that debt.
CONTRACT DEBT.--Contract debt at any time means the loan on the contract, plus
the interest we have charged that is not yet due and that we have not yet added
to the loan.
LOAN VALUE.--You may borrow any amount up to the difference between the loan
value and any existing contract debt. At any time the loan value is 90% of the
net cash value.
There is one exception. If the contract is in default, the loan value during the
days of grace is whai it was on the date of default.
Example 1: Suppose the contract has a loan value of $6,000. About eight months
ago you borrowed $1,500. By now there is interest of $55 charged but not yet
due. The contract debt is now $1,555, which is made up of the $1,500 loan and
the $55 interest.
Example 2: Suppose, in example 1, you want to borrow all that you can. We will
lend you $4,445 which is the difference between the $6,000 loan value and the
$1,555 contract debt. This will increase the contract debt to $6,000. We will
add the new amount borrowed to the existing loan and will charge interest on it,
too.
INTEREST CHARGE.--We will charge interest daily on any loan at the effective
rate of 5 1/2% a year. Interest is due on each contract anniversary, or when the
loan is paid back if that comes first. If interest is not paid when due, it will
become part of the loan. Then we will start to charge interest on it. too.
Example 3: Suppose the contract date is in 1987. Six months before the
anniversary in 1996 you borrow $1,600 out of a $4,000 loan value. We charge
5 1/2% a year. Three months later, but still three months before the
anniversary, we will have charged about $22 interest. This amount will be a few
cents more or less than $22 since some months have more days than others. The
interest will not be due until the anniversary unless the loan is paid back
sooner. The loan will still be $1,600. The contract debt will be $1,622, since
contract debt includes interest charged but not yet due.
On the anniversary in 1996 we will have charged about $44 interest. The interest
will then be due.
Example 4: Suppose the $44 interest in example 3 was paid on the anniversary.
The loan and contract debt each became $1,600 right after the payment.
Example 5: Suppose the $44 interest in example 3 was not paid on the
anniversary. The interest became part of the loan, and we began to charge
interest on it, too. The loan and contract debt each became $1,644.
REPAYMENT.--All or part of any contract debt may be paid back at any time while
the Insured is living. When we settle the contract, any contract debt is due us.
If there is contract debt at the end of the last day of grace when the contract
is in default, it will be deducted from the cash value to determine the net cash
value. We will make this adjustment so that the proceeds will not include the
amount of that debt.
EFFECT OF A LOAN.--When you take a loan, the amount of the loan continues to be
a part of the contract fund and is credited with interest at the guaranteed rate
of 4% a year. However, we will reduce the investment amount by the amount you
borrow, and by loan interest that becomes part of the loan because it is not
paid when due. On each Monthly Date, if there is a contract loan outstanding, we
will increase the investment amount by interest credits accrued on the loan at
4% a year since the last Monthly Date. When you repay part or all of a loan we
will increase the investment amount by the amount of loan you repay, plus, if
you repay all the loan, interest credits accrued on the loan at 4% a year since
the last Monthly Date. We will not increase the investment amount by loan
interest that is paid before we make it part of the loan.
We will allocate loans and repayments among the subaccounts in proportion to the
investment amount in each subaccount as of the date of the loan or repayment.
Only the amount of the investment amount will reflect the
investment results of the subaccounts. Since the amount you borrow is removed
from the investment amount, a loan may have a permanent effect on the net cash
value of this contract, and also, for a contract which is paid-up or which is in
force under the variable reduced paid-up option, on any death benefit in excess
of the guaranteed death benefit. The longer the loan is outstanding, the greater
this effect is likely to be.
(Continued on Next Page)
Page 15 (VALA--84)
II-49
<PAGE>
LOANS (Continued)
Example 6: Suppose the contract's investment amount is $15,000 and that $10,000
is in subaccount A and $5,000 is in subaccount B. If you make a $9,000 loan we
will reduce the amount in subaccount A by $6,000 and the amount in subaccount B
by $3,000.
Suppose that sometime later, when the investment amount in each of the two
subaccounts is the same you choose to repay the $9,000 loan. We will add $4,500
to the amount in each subaccount.
EXCESS CONTRACT DEBT.--If contract debt ever becomes equal to or more than the
cash value, all the contract's benefits will end 61 days after we mail a notice
to you and any assignee of whom we know. Also, we may send a notice to the
Insured's last known address. In the notice we will state the amount that, if
paid to us, will keep the contract's benefits from ending for a limited time.
POSTPONEMENT OF LOAN.--We will usually make a loan within 7 days after we
receive your request at our Service Office. But we have the right to defer
making the loan if (1) the New York Stock Exchange is closed: or (2) the SEC
requires that trading be restricted or declares an emergency: or (3) the SEC
lets us defer payments to protect our contract owners.
EXCHANGE OF CONTRACT
RIGHT TO EXCHANGE.--Before the second anniversary you may exchange this contract
for a new contract of fixed benefit insurance on the Insured's life. You will
not have to prove to us that the Insured is insurable. Also, you may make such
an exchange at any time if there is a material change in the investment policy
of a portfolio (see Change in Investment Policy on page 10). When we use the
term new contract we mean the contract for which this contract may be exchanged.
CONDITIONS.--Your right to make this exchange is subject to all these
conditions: (1) You must ask for the exchange in writing in a form that meets
our needs. (2) You must surrender the contract to us. (3) We must have your
request and the contract at our Service Office while the contract is in force
and not in default past its days of grace. (4) You must pay back any contract
debt under this contract, to the extent it may exceed the loan value of the new
contract. (5) You must pay any other charges required for the exchange.
EXCHANGE DATE.--The exchange date will be the later of: (1) the date we receive
the contract and your request at our Service Office: and (2) the date we receive
the payment. if any, required for the exchange. The new contract will take
effect on the exchange date only if the Insured is then living. If the new
contract takes effect, this contract will end just before the exchange date.
CONTRACT SPECIFICATIONS.--The new contract will be on the Modified Premium Whole
Life plan. It will have a face amount equal to the face amount of this one. It
will have the same contract date and issue age as this contract and be in the
same rating class.
If for any reason, we are not issuing the Modified Premium Whole Life Contract
on the exchange dates, then the new contract will be another life plan that we
would regularly issue on that date for the same rating class, amount, issue age
and sex.
This contract might include an extra benefit which is still in effect just
before the exchange date. And a similar kind of benefit might have been
regularly offered in contracts like the new one on the date the extra benefit
took effect in this contract. In that case. if you ask for it in your request
for the exchange, that similar kind of benefit will be put in the new contract.
When we use the phrase contracts like the new one, we mean contracts that were,
on the contract date of this contract, regularly issued on the same plan as the
new one and for the same rating class, amount, issue age and sex.
The amount of any accidental death benefit included in the new contract in
accord with this provision will be the same as the amount of any accidental
death benefit in this contract.
If a benefit for waiving scheduled premiums is included in the new contract in
accord with this provision, any scheduled premiums to be waived under the new
contract for a disability that began before the exchange date must be at the
billing frequency that applied to this contract when the disability started. But
premiums will not be waived under the new contract unless it has a benefit for
waiving premiums in the event of disability. This will be so even if we have
waived premiums under this contract.
A charge may be made on exchange in the following situation: If, on the date of
exchange, the contract fund of this contract is less than the tabular contract
fund, a charge will be made for the difference in the two amounts. If the
contract fund of this contract is equal to or greater than the tabular contract
fund, no charge will be made. In these cases, the contract fund of the new
contract will be equal to that of this contract.
EXCHANGE AT OTHER TLMES.--You may be able to exchange this contract for a fixed
benefit Modified Premium Whole Life contract at a time other than those
described under Right to Exchange above. But any such exchange may be made only
if we consent, and will be subject to conditions and charges which we then
determine.
Page 16 (VALA--84)
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<PAGE>
SETTLEMENT OPTIONS
PAYEE DEFINED.--In these provisions and under the Automatic Mode of Settlement,
the word Payee means a person who has a right to receive a settlement under the
contract. Such a person may be the Insured, the owner, a beneficiary, or a
contingent payee.
CHOOSING AN OPTION.--While the Insured is living you may choose, or change the
choice of, an option for all or part of the proceeds that may arise from the
Insured's death. The requirements are the same as those to designate or change a
beneficiary. We describe them under Beneficiary.
A payee may choose an option for all or part of any proceeds or residue that
becomes payable to him or her in one sum. We describe residue later on this
page.
In some cases, you or another Payee will need our consent to choose an option.
We describe these cases under conditions.
OPTIONS DESCRIBED.--Here are the options we offer. We may also consent to other
arrangements.
OPTION 1 (INSTALMENTS FOR A FIXED PERIOD).--We will make equal payments for up
to 25 years based on the Option 1 Table. The payments will include interest at
an effective rate of 3 1/2% a year. We may credit more interest. If and while we
do so, the payments will be larger.
OPTION 2 (LIFE INCOME).--We will make equal monthly payments for as long as the
person on whose life the settlement is based lives, with payments certain for
the period chosen. The choices are either ten years (10-Year Certain) or until
the sum of the payments equals the amount put under this option (Instalment
Refund). The amount of each payment will be based on the Option 2 Table and on
the sex and age, on the due date of the first payment, of the person on whose
life the settlement is based. But if a choice is made more than two years after
the Insured's death, we may use the Option 2 payment rates in individual annuity
contracts or life insurance contracts we regularly issue, based on United States
currency, on the due date of the first payment. On request, we will quote the
payment rates in contracts we then issue. We must have proof of the date of
birth of the person on whose life the settlement is based. If on the due date of
the first payment under this option, we have declared a higher payment rate
under the option, we will base the payments on that higher rate.
OPTION 3 (INTEREST PAYMENT).--We will hold an amount at interest. We will pay
interest at an effective rate of at least 3% a year ($30.00 annually, $14.89
semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more
interest.
OPTION 4 (INSTALMENTS OF A FIXED AMOUNT).--We will make equal annual,
semi-annual, quarterly or monthly payments if they total at least $90 a year for
each $1,000 put under this option. We will credit the unpaid balance with
interest at an effective rate of at least 3 1/2% a year. We may credit more
interest. If we do so, the balance will be larger. The final payment will be any
balance equal to or less than one payment.
FIRST PAYMENT DUE DATE.--Unless a different date is stated when the option is
chosen: (1) the first payment for Option 3 will be due at the end of the chosen
payment interval; and (2) the first payment for any of the other options will be
due on the date the option takes effect.
RESIDUE DESCRIBED.--For Options 1 and 2, residue on any date means the then
present value of any unpaid payments certain. We will compute it at an effective
interest rate of 3 1/2% a year. But we will use the interest rate we used to
compute the actual Option 2 payments if they were not based on the table in this
contract.
For Options 3 and 4, residue on any date means any unpaid balance with interest
to that date.
For Option 2, residue does not include the value of any payment that may become
due after the certain period.
(Continued on Page 191
Page 17 (VALA--84)
II-51
<PAGE>
SETTLEMENT OPTIONS (Continued)
OPTION 1 TABLE
----------------------------
MINIMUM AMOUNT OF
MONTHLY PAYMENT FOR
EACH $1,000, THE FIRST
PAYABLE IMMEDIATELY
----------------------------
Number of Monthly
Years Payment
----------------------------
1 $84.65
2 43.05
3 29.19
4 22.27
5 18.12
6 15.35
7 13.38
8 11.90
9 10.75
10 9.83
11 9.09
12 8.46
13 7.94
14 7.49
15 7.10
16 6.76
17 6.47
18 6.20
19 5.97
20 5.75
21 5.56
22 5.39
23 5.24
24 5.09
25 4.96
----------------------------
Multiply the monthly amount
by 2.989 for quarterly,
5.952 for semi-annual or
11.804 for annual.
----------------------------
<TABLE>
<CAPTION>
OPTION 2 TABLE
- -------------------------------------------------------------------------------------
MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY
- -------------------------------------------------------------------------------------
KIND OF LIFE INCOME KIND OF LIFE INCOME
----------------------------- -----------------------------
10-Year Instalment 10-Year Instalment
AGE Certain Refund AGE Certain Refund
LAST ----------------------------- LAST -----------------------------
BIRTHDAY Male Female Male Female BIRTHDAY Male Female Male Female
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 $3.18 $3.11 $3.17 $3.10 45 $4.06 $3.82 $3.99 $3.78
and under 46 4.12 3.86 4.03 3.81
11 3.19 3.12 3.18 3.11 47 4.17 3.90 4.08 3.85
12 3.20 3.13 3.19 3.12 48 4.23 3.94 4.13 3.90
13 3.21 3.14 3.20 3.13 49 4.28 3.99 4.18 3.94
14 3.22 3.15 3.21 3.14
50 4.35 4.04 4.24 3.98
15 3.24 3.16 3.23 3.15 51 4.41 4.09 4.29 4.03
16 3.25 3.17 3.24 3.16 52 4.48 4.15 4.35 4.08
17 3.27 3.19 3.25 3.18 53 4.55 4.21 4.41 4.13
18 3.28 3.20 3.27 3.19 54 4.62 4.27 4.48 4.19
19 3.30 3.21 3.28 3.20
55 4.70 4.33 4.55 4.24
20 3.31 3.22 3.30 3.21 56 4.78 4.40 4.62 4.30
21 3.33 3.24 3.32 3.23 57 4.86 4.47 4.69 4.37
22 3.35 3.25 3.33 3.24 58 4.95 4.54 4.77 4.43
23 3.36 3.26 3.35 3.25 59 5.05 4.62 4.86 4.50
24 3.38 3.28 3.37 3.27
60 5.15 4.71 4.94 4.58
25 3.40 3.30 3.39 3.29 61 5.25 4.79 5.03 4.66
26 3.42 3.31 3.41 3.30 62 5.36 4.89 5.13 4.74
27 3.45 3.33 3.43 3.32 63 5.48 4.98 5.23 4.82
28 3.47 3.35 3.45 3.34 64 5.60 5.09 5.34 4.92
29 3.49 3.37 3.47 3.35
65 5.73 5.20 5.45 5.01
30 3.52 3.39 3.49 3.37 66 5.87 5.31 5.57 5.11
31 3.54 3.41 3.52 3.39 67 6.01 5.43 5.70 5.22
32 3.57 3.43 3.54 3.41 68 6.15 5.56 5.83 5.34
33 3.60 3.45 3.57 3.44 69 6.30 5.70 5.97 5.46
34 3.63 3.47 3.60 3.46
70 6.46 5.84 6.11 5.58
35 3.66 3.50 3.63 3.48 71 6.62 5.99 6.27 5.72
36 3.69 3.52 3.66 3.50 72 6.79 6.15 6.43 5.86
37 3.72 3.55 3.69 3.53 73 6.96 6.31 6.60 6.01
38 3.76 3.58 3.72 3.56 74 7.13 6.49 6.78 6.18
39 3.80 3.61 3.75 3.58
75 7.30 6.67 6.97 6.35
40 3.84 3.64 3.79 3.61 76 7.48 6.85 7.17 6.53
41 3.88 3.67 3.82 3.64 77 7.66 7.04 7.38 6.72
42 3.92 3.70 3.86 3.67 78 7.83 7.24 7.60 6.93
43 3.97 3.74 3.90 3.71 79 8.00 7.44 7.83 7.15
44 4.01 3.78 3.94 3.74
80 8.17 7.64 8.07 7.38
and over
- -------------------------------------------------------------------------------------
</TABLE>
(Continued on Next Page)
Page 18 (VALA--84)
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<PAGE>
SETTLEMENT OPTIONS (Continued)
WITHDRAWAL OF RESIDUE.--Unless otherwise stated when the option is chosen: (1
under Options 1 and 2 the residue may be withdrawn; and (2) under Options 3 and
4 all, or any part not less than $100, of the residue may be withdrawn. If an
Option 3 residue is reduced to less than $1,000, we have the right to pay it in
one sum. Under Option 2, withdrawal of the residue will not affect any payments
that may become due after the certain period; the value of those payments cannot
be withdrawn. Instead, the payments will start again if they were based on the
life of a person who lives past the certain period.
DESIGNATING CONTINGENT PAYEE(S).--A Payee under an option has the right, unless
otherwise stated, to name or change a contingent payee to receive any residue at
that Payee's death. This may be done only if (1) the Payee has the full right to
withdraw the residue; or (2) the residue would otherwise have been payable to
that Payee's estate at death.
A Payee who has this right may choose, or change the choice of, an option for
all or part of the residue. In some cases, the Payee will need our consent to
choose or change an option. We describe these cases under Conditions.
Any request to exercise any of these rights must be in writing and in a form
that meets our needs. It will take effect only when we file it at our Service
Office. Then the interest of anyone who is being removed will end as of the
date of the request, even if the Payee who made the request is not living when
we file it.
CHANGING OPTIONS.--A Payee under Option 1, 3 or 4 may choose another option for
any sum that the Payee oould withdraw on the date the chosen option is to start.
That date may be before the date the Payee makes the choice only if we consent.
In some cases, the Payee will need our consent to choose or change an option. We
describe these cases next.
CONDITIONS.--Under any of these conditions, our consent is needed for an option
to be used for any person:
1. The person is not a natural person who will be paid in his or her own right.
2. The person will be paid as assignee.
3. The amount to be held for the person under Option 3 is less than $1,000. But
we will hold any amount for at least one year in accord with the Automatic Mode
of Settlement.
4. Each payment to the person under the option would be less than $20.
5. The option is for residue arising other than at (a) the Insured's death, or
(b) the death of the beneficiary who was entitled to be paid as of the date of
the Insured's death.
6. The option is for proceeds that arise other than from the Insured's death,
and we are settling with an owner or any other person who is not the Insured.
DEATH OF PAYEE.--If a Payee under an option dies and if no other distribution is
shown, we will pay any residue under that option in one sum to the Payee's
estate.
ENDORSEMENTS
(Only we can endorse this contract.)
Page 19 (VALA--84)
II-53
<PAGE>
AUTOMATIC MODE OF SETTLEMENT
APPLICABILITY.--These provisions apply to proceeds arising from the Insured's
death and payable in one sum to a Payee who is a beneficiary. They do not apply
to any periodic payment.
INTEREST ON PROCEEDS.--We will hold the proceeds at interest under Option 3 of
the Settlement Options provision. The Payee may withdraw the residue. We will
pay it promptly on request. We will pay interest annually unless we agree to pay
it more often. We have the right to pay the residue in one sum after one year if
(1) the Payee is not a natural person who will be paid in his or her own right;
(2) the Payee will be paid as assignee; or (3) the original amount we hold under
Option 3 for the Payee is less than $1,000.
SETTLEMENT AT PAYEE'S DEATH.--If the Payee dies and leaves an Option 3 residue,
we will honor any contingent payee provision then in effect. If there is none,
here is what we will do. We will look to the beneficiary designation of the
contract; we will see what other beneficiary(ies), if any, would have been
entitled to the portion of the proceeds that produced the Option 3 residue if
the Insured had not died until immediately after the Payee died. Then we will
pay the residue in one sum to such other beneficiary(ies), in accord with that
designation. But if, as stated in that designation, payment would be due the
estate of someone else, we will instead pay the estate of the Payee.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. Jane was living when the Insured died. Jane later died
without having chosen an option or naming someone other than Paul and John as
contingent payee. If Paul and John are living at Jane's death we owe them the
residue. If only one of them is living then, and if the contract called for
payment to the survivor of them, we owe him the residue. If neither of them is
living then, we owe Jane's estate.
SPENDTHRIFT AND CREDITOR.--A beneficiary or contingent payee may not, at or
after the Insured's death, assign, transfer, or encumber any benefit payable. To
the extent allowed by law, the benefits will not be sublect to the claims of any
creditor of any beneficiary or contingent payee.
ENDORSEMENTS
(Only we can endorse this contract.)
Page 20 (VALA--84)
II-54
<PAGE>
BASIS OF COMPUTATION
MORTALITY TABLES DESCRIBED.--Except as we state in the next paragraph, (1) we
base all net premiums and net values to which we refer in this contract on the
Insured's issue age and sex and on the length of time since the contract date;
(2) we use the Commissioners 1980 Standard Ordinary Mortality Table; and (3) we
use continuous functions based on age last birthday.
For extended insurance, we base net premiums and net values on the Commissioners
1980 Extended Term Insurance Table.
INTEREST RATE.--For all net premiums and net values to which we refer in this
contract we use an effective rate of 4% a year.
EXCLUSIONS.--When we compute net values we exclude the value of any
Supplementary Benefits and any other extra benefits added by rider to this
contract.
VALUES AFTER 20 CONTRACT YEARS.--Tabular values after the 2Oth contract year
will be the net level premium reserves, taking into account the increase in
scheduled premium amount on the Contract Change Date. To compute them, we will
use the mortality tables and interest rate we describe above. There will be the
same exclusions.
MINIMUM LEGAL VALUES.--The cash, loan and other values in this contract are at
least as large as those set by law where it is delivered. Where required, we
have given the insurance regulator a detailed statement of how we compute values
and benefits.
Pruco Life Insurance Company of New Jersey,
By
/s/ SPECIMEN
Secretary
PLIY 45--84
CONTRACT SUMMARY (Continued from Page 2)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
TABLE OF BASIC AMOUNT'S
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
When the proceeds arise from the Insured's death:
- ------------------------------------------------------------------------------------------------------------------------------------
And The Contract Is In Force: Then The Basic Amount Is: And We Adjust The Basic Amount For:
- ------------------------------------------------------------------------------------------------------------------------------------
on a premium paying basis and not in the face amount (see page 3), or the contract debt (see page 15), plus any
default past its days of grace paid-up value if greater, plus the charges due in the days of grace (see
amount of any extra benefits* page 8).
- ------------------------------------------------------------------------------------------------------------------------------------
as a fully paid-up contract the amount of paid-up insurance (see contract debt.
page 9), plus the amount of any paid-up
extra benefits
- ------------------------------------------------------------------------------------------------------------------------------------
as variable reduced paid-up insurance the amount of variable raduced paid-up contract debt.
(see page 13) insurance (see page 13)
- ------------------------------------------------------------------------------------------------------------------------------------
as extended insurance (see page 13) The amount of term insurance, if the nothing.
Insured dies in the term (see page
13); otherwise zero
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* But see Death Proceeds on page 6 for the determination of Basic Amount under
certain conditions which may arise when death occurs before attained age 21,
under a contract issued below age 15.
This Table is a part of the Contract Summary and of the Contract.
Page 21 (VALA--84) - N
II-55
<PAGE>
GUIDE TO CONTENTS
Page
Contract Summary ......................................... 2
Table of Basic Amounts ................................ 21
Contract Data ............................................ 3
Rating Class: List of Contract Minimums;
List of Supplementary Benefits, if any;
Schedule of Premiums; Schedule of Expense
Charges from Premium Payments; Schedule
of Monthly Deductions from Contract Fund;
Schedule of Maximum Surrender Charges;
List of Subaccounts and Portfolios; Service
Office
Tabular Contract Fund and Tabular
Cash Values ........................................... 4
General Provisions ....................................... 5
Definitions; The Contract; Contract
Modifications; Non-participating;
Service Office; Ownership and Control;
Suicide Exclusion; Currency; Misstatement
of Age or Sex; Incontestability; Assignment;
Annual Report; Increase in Face Amount at Age
21 for Contracts Issued at Age 14 or Lower;
Death Proceeds; Payment of Death Claim
Premium Payment and Reinstatement ........................ 7
Payment of Premiums; Scheduled Premiums;
Unscheduled Premiums; Premium Change on
Contract Change Date; Default; Grace Period;
Premium Account; Reinstatement
Beneficiary .............................................. 9
Paid-Up Contract ......................................... 9
Separate Account ......................................... 10
The Account; Subaccounts; The Fund;
Account Investments; Change in Investment
Policy; Change of Fund
Investment Amount and Return on Investment ............... 11
Investment Amount; Assumed Rate of Return;
Transfers Among Subaccounts
Page
Contract Fund ............................................ 11
Contract Fund Defined; Invested Premium
Amount; Guaranteed Interest Credits,
Cost of Expected Mortality; Charge for
Extra Rating Class; Charge for
Extra Benefits; Monthly Administration Charge
and Mortality Risk Charge; Partial Withdrawals
Contract Value Options ................................... 13
Benefit After the Grace Period; Extended
Insurance; Variable Reduced Paid-up
Insurance; Computations; Automatic
Benefit; Optional Benefit; Cash Value
Option; Tabular Values
Loans .................................................... 15
Loan Requirements; Contract Debt; Loan
Value; Interest Charge; Repayment; Effect
of a Loan; Excess Contract Debt; Postponement
of Loan
Exchange of Contract ..................................... 16
Right to Exchange; Conditions;
Exchange Date; Contract Specifications;
Exchange at Other Times
Settlement Options ....................................... 17
Payee Defined; Choosing an Option;
Options Described; First Payment
Due Date; Residue Described; Income
Tables; Withdrawal of Residue;
Designating Contingent Payee(s);
Changing Options; Conditions;
Death of Payee
Automatic Mode of Settlement ............................. 20
Applicability; Interest on Proceeds;
Settlement at Payee's Death;
Spendthrift and Creditor
Basis of Computation ..................................... 21
Mortality Tables Described; Interest Rate;
Exclusions; Values after 20 Contract Years;
Minimum Legal Values
Any Supplementary Benefits and a copy of the
application follow page 20.
Page 22
MODIFIED PREMIUM VARIABLE LIFE INSURANCE POLICY. INSURANCE PAYABLE ONLY UPON
DEATH. SCHEDULED PREMIUMS PAYABLE THROUGHOUT INSURED'S LIFETIME. PROVISION FOR
OPTIONAL ADDITIONAL PREMIUMS. CASH VALUES REFLECT PREMIUM PAYMENTS, INVESTMENT
RESULTS AND MORTALITY CHARGES. GUARANTEED DEATH BENEFIT IF SCHEDULED PREMIUMS
DULY PAID AND NO CONTRACT DEBT. INCREASE IN FACE AMOUNT AT ATTAINED AGE 21 IF
CONTRACT ISSUED AT AGE 14 OR LOWER. NON-PARTICIPATING.
VALA--84 - N
II-56
Exhibit 1.A.(5)(b)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Newark, New Jersey
A Stock Company Subsidiary of The Prudential Insurance Company of America
================================================================================
Insured Policy Number
Contract Date
Face Amount
Contract
Premium Period Change Date
Agency
================================================================================
We will pay the beneficiary the proceeds of this contract promptly if we receive
due proof that the insured died. We make this promise subject to all the
provisions of the contract.
The Death Benefit may increase or decrease daily, depending on the payment of
premiums, the investment experience of the separate account and the level of
mortality changes made. But it will not be less than the face amount we show
above, plus the amount of any extra benefit, if the contract is not in default
and if there is no contract debt.
The cash value may increase or decrease daily depending on the payment of
premiums, the investment experience of the separate account and the level of
mortality charges made. There is no guaranteed minimum.
We specify a schedule of premiums. Additional unscheduled premiums may be paid
at your option subject to the limitations in the contract.
Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 2. If there is ever a question about it, or if there
is a claim, just see one of our representatives or get in touch with one of our
offices.
RIGHT TO CANCEL CONTRACT.--You may return this contract to us within (1) 10
days after you get it, or (2) 45 days after Part 1 of the application was
signed, or (3) 10 days after we mail or deliver to you any withdrawal right
notice required by the Securities and Exchange Commission, whichever is latest.
All you have to do is take the contract or mail it to one of our offices or to
the representative who sold it to you. It will be canceled from the start and we
will promptly give you the value of our Contract Fund on the date you return the
contract to us. We will also give back any charges we made in accord with this
contract.
Signed for Pruco Life Insurance Company of New Jersey,
a New Jersey Corporation
/s/ [SPECIMEN] /s/ [SPECIMEN]
Secretary President
MODIFIED PREMIUM VARIABLE LIFE INSURANCE POLICY WITH VARIABLE INSURANCE AMOUNT.
INSURANCE PAYABLE ONLY UPON DEATH. SCHEDULED PREMIUMS PAYABLE THROUGHOUT
INSURED'S LIFETIME. PROVISION FOR OPTIONAL ADDITIONAL PREMIUMS. BENEFITS REFLECT
PREMIUM PAYMENTS, INVESTMENT RESULTS AND MORTALITY CHARGES. GUARANTEED MINIMUM
DEATH BENEFIT IF SCHEDULED PREMIUMS DULY PAID AND NO CONTRACT DEBT. INCREASE IN
FACE AMOUNT AT ATTAINED AGE 21 IF CONTRACT ISSUED AT AGE 14 OR LOWER.
NON-PARTICIPATING.
VALB--84 - N
II-57
<PAGE>
CONTRACT SUMMARY
We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.
This is a contract of life insurance. Premiums are to be paid throughout the
Insured's lifetime. We specify a schedule of premiums that will keep the
contract in force. Additional premiums may be paid at your option, subject to
limits in the contract. The death benefit and the cash value will vary with the
payment of premiums, the investment performance of those subaccounts of the
Pruco Life Variable Appreciable Account that you select, and the extent to which
mortality charges are less than the guaranteed maximums. But the death benefit
is guaranteed never to be less than the face amount if the contract is not in
default past its days of grace, and there is no contract debt. (We describe on
page 8 the way the contract can go into default.) If the contract remains in
default past its days of grace, the contract may end or it may stay in force
with reduced benefits. If either occurs, you may be able to reinstate its full
benefits. On the date, if any, when we determine that the contract has become
fully paid-up, we will recompute the guaranteed death benefit. It may be higher;
it will not be lower. We describe on page 9 how the contract may become paid-up.
Proceeds is a word we use to mean the amount we would pay if we were to settle
the contract in one sum. To compute the proceeds that may arise from the
Insured's death, we start with a basic amount. We may adjust that amount if
there is a loan or if the contract is in default. The table on page 21 tells
what the basic amount is. The amount depends on how the contract is in force.
The table will refer you to the parts of the contract that tell you how we
adjust the basic amount. If you surrender the contract, the proceeds will be the
net cash value. We describe it under Cash Value Option on pages 13 and 14.
Proceeds often are not taken in one sum. For instance, on surrender, you may be
able to put proceeds under a settlement option to provide retirement income or
for some other purpose. Also, for all or part of the proceeds that arise from
the Insured's death, you may be able to choose a manner of payment for the
beneficiary. If an option has not been chosen, the beneficiary may be able to
choose one. We will pay interest under Option 3 from the date of death on any
proceeds to which no other manner of payment applies. This will be automatic as
we state on page 20. There is no need to ask for it.
You and we may agree on a change in the ownership of this contract. Also, unless
we endorse it to say otherwise, the contract gives you these rights, among
others:
o You may change the beneficiary under it.
o You may borrow on it up to its loan value.
o You may surrender it for its net cash value.
o You may change the allocation of future net premiums among the subaccounts.
o You may transfer amounts among subaccounts.
The contract, as issued, may or may not have extra benefits that we call
Supplementary Benefits. If it does, we list them under Supplementary Benefits on
the Contract Data page(s) and describe them after page 21. The contract may or
may not have other extra benefits. If it does, we add them by rider. Any extra
benefit ends as soon as the contract is in default past its days of grace,
unless the form that describes it states otherwise.
(Contract Summary Continued on Page 21)
Page 2 (VALB--84)
II-58
<PAGE>
CONTRACT DATA
INSURED'S SEX AND ISSUE AGE M-35
RATING CLASS NONSMOKER
INSURED JOHN DOE XX XXX XXX POLICY NUMBER
July 1, 1984 CONTRACT DATE
FACE AMOUNT $50,000--
CONTRACT
PREMIUM PERIOD LIFE JUL 1, 2014 CHANGE DATE
AGENCY R-NK 1
BENEFICIARY CLASS 1 MARY DOE, WIFE
CLASS 2 ROBERT DOE, SON
LIST OF CONTRACT MINIMUMS
THE MINIMUM FACE AMOUNT IS $50,000
THE MINIMUM UNSCHEDULED PREMIUM IS $25.
LIST OF SUPPLEMENTARY BENEFITS
*****NONE*****
SCHEDULE OF PREMIUMS
PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND
AT INTERVALS OF 12 MONTHS AFTER THAT DATE.
SCHEDULED PREMIUMS ARE $XXX.XX EACH
CHANGING JUL 1, 2014 TO $XXX.XX EACH THEREAFTER
*****END OF SCHEDULE*****
*****NOTICE*****
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3(84)
II-59
<PAGE>
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS
FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00.
FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%, WHICH IS USED TO PAY FOR SALES
CHARGES AND STATE PREMIUM TAXES. AFTER DEDUCTION OF THIS AMOUNT, THE BALANCE IS
THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.)
*****END OF SCHEDULE*****
SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND
THE MONTHLY ADMINISTRATION CHARGE IS $3.50. THE MONTHLY CHARGE TO GUARANTEE THE
MINIMUM DEATH BENEFIT IS $0.50
*****END OF SCHEDULE*****
SCHEDULE OF MAXIMUM SURRENDER CHARGES
FOR FULL SURRENDER AT THE END OF THE CONTRACT YEAR INDICATED, THE MAXIMUM
CHARGES WE WILL DEDUCT FROM THE CONTRACT FUND ARE SHOWN BELOW. FOR SURRENDER AT
OTHER THAN YEAR-END DURING THE SIXTH THROUGH TENTH YEARS, THE AMOUNT OF THE
CHARGE WILL REFLECT THE NUMBER OF COMPLETED CONTRACT MONTHS SINCE THE BEGINNING
OF THE CONTRACT YEAR. (SEE PAGE 14.)
YEAR OF DEFERRED DEFERRED UNDERWRITING
SURRENDER SALES CHARGE AND ISSUE CHARGE TOTAL
- --------- ------------ ---------------- -----
1 $XXX.XX $XXX.XX $XXX.XX
2 XXX.XX XXX.XX XXX.XX
3 XXX.XX XXX.XX XXX.XX
4 XXX.XX XXX.XX XXX.XX
5 XXX.XX XXX.XX XXX.XX
6 XXX.XX XXX.XX XXX.XX
7 XXX.XX XXX.XX XXX.XX
8 XXX.XX XXX.XX XXX.XX
9 XXX.XX XXX.XX XXX.XX
10 ZERO ZERO ZERO
11 AND LATER ZERO ZERO ZERO
*****END OF SCHEDULE*****
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3A(84)
II-60
<PAGE>
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
LIST OF SUBACCOUNTS AND PORTFOLIOS
EACH SUBACCOUNT OF THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT INVESTS IN A
SPECIFIC PORTFOLIO OF THE PRUCO LIFE SERIES FUND. WE SHOW BELOW THE SUBACCOUNTS
AND THE FUND PORTFOLIOS THEY INVEST IN.
FUND
SUBACCOUNT PORTFOLIO
- ---------- ---------
MONEY MARKET MONEY MARKET
BOND BOND
COMMON STOCK COMMON STOCK
AGGRESSIVELY MANAGED FLEXIBLE AGGRESSIVELY MANAGED FLEXIBLE
CONSERVATIVELY MANAGED FLEXIBLE CONSERVATIVELY MANAGED FLEXIBLE
INITIAL ALLOCATION OF NET PREMIUMS
MONEY MARKET SUBACCOUNT 20%
BOND SUBACCOUNT 20%
COMMON STOCK SUBACCOUNT 20%
AGGRESSIVELY MANAGED FLEXIBLE SUBACCOUNT 20%
CONSERVATIVELY MANAGED FLEXIBLE SUBACCOUNT 20%
*****END OF LIST*****
SERVICE OFFICE -- PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS
CONTRACT TO:
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
P.O. BOX XXXX
CITY, STATE XXXXX
Page 3B(84)
II-61
<PAGE>
POLICY NO. XX XXX XXX
TABULAR VALUES
WE EXPLAIN THIS TABLE UNDER CONTRACT FUND AND TABULAR VALUES. ACTUAL CONTRACT
FUND VALUES AND CASH VALUES MAY BE MORE OR LESS THAN AMOUNT SHOWN (SEE CONTRACT
FUND AND CASH VALUE OPTION.)
END OF TABULAR TABULAR
CONTRACT CONTRACT CASH
YEAR FUND VALUE
- -------- -------- -------
1
2
3
4
5
6
7
8
9
10
11
12
12
13
14
15
16
17
18
19
20
ATTAINED
AGE
- --------
60
62
65
TABULAR CASH VALUES THROUGH THE FIRST 10 CONTRACT YEARS ARE THE TABULAR CONTRACT
FUND VALUES MINUS A SURRENDER CHARGE. WE DESCRIBE UNDER CASH VALUE OPTION ON
PAGES 13 AND 14 HOW THE SURRENDER CHARGE IS DETERMINED. WE SHOW ON A PRIOR
CONTRACT DATA PAGE WHAT THE MAXIMUM SURRENDER CHARGE WILL BE.
TABULAR CASH VALUES AFTER THE 10TH CONTRACT YEAR WILL BE THE SAME AS THE TABULAR
CONTRACT FUND VALUES SHOWN ABOVE.
Page 4 (84)
II-62
<PAGE>
ENDORSEMENTS
(Only we can endorse this contract.)
GENERAL PROVISIONS
Definitions.--We define here some of the words and phrases used all through this
contract. We explain others, not defined here, in other parts of the text.
We, Our, Us and Company.--Pruco Life Insurance Company, a New Jersey
Corporation.
You and Your.--The owner of the Contract.
Insured.--The person named as the Insured on the first page. He or she need not
be the owner.
Example: Suppose we issue a contract on the life of your spouse. You applied for
it and named no one else as owner. Your spouse is the Insured and you are the
owner.
SEC.--The Securities and Exchange Commission.
Issue Date.--The contract date.
Monthly Date.--The contract date and the same day as the contract date in each
later month.
Example: If the contract date is March 9, 1986, the Monthly Dates are each March
9, April 9, May 9 and so on.
Anniversary or Contract Anniversary.--The same day and month as the contract
date in each later year.
Example: If the contract date is March 9, 1986, the first anniversary is March
9, 1987. The second is March 9, 1988, and so on.
Contract year.--A year that starts on the contract date or on an anniversary.
Example: If the contract date is March 9, 1986, the first contract year starts
then and ends on March 9, 1987. The second starts on March 9, 1987 and ends on
March 8, 1988, and so on.
Contract Month.--A month that starts on a Monthly Date.
Example: If March 9, 1986 is a Monthly Date, a contract month starts then and
ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends
on May 8, 1986, and so on.
Attained Age.--The Insured's attained age at any time is the issue age plus the
length of time since the contract date. You will find the issue age near the top
of page 3.
The Contract.--This policy and the application, a copy of which is attached,
form the whole contract. We assume that all statements in the application were
made to the best of the knowledge and belief of the person(s) who made them; in
the absence of fraud they are deemed to be representations and not warranties.
We relied on those statements when we issued the contract. We will not use any
statement, unless made in the application, to try to void the contract or to
deny a claim.
Contract Modifications.--Only a Company officer may agree to modify this
contract, and then only in writing.
Non-participating.--This contract will not share in our profits or surplus
earnings. We will pay no dividends on it.
Service Office.--This is the office that will service this contract. Its mailing
address is the one we show on the Contract Data pages, unless we notify you of
another one.
Ownership and Control.--Unless we endorse this contract to say otherwise: (1)
the owner of the contract is the Insured; and (2) while the Insured is living
the owner alone is entitled to (a) any contract benefit and value, and (b) the
exercise of any right and privilege granted by the contract or by us.
Suicide Exclusion. --If the Insured, whether sane or insane, dies by suicide
within two years from the issue date, we will pay no more under this contract
than the sum of the premiums paid.
Currency.--Any money we pay, or that is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.
(Continued on Next Page)
page 5 (VALB--84) - N
II-63
<PAGE>
GENERAL PROVISIONS (Continued)
Misstatement of Age or Sex.--If the Insured's stated age or sex or both are not
correct, we will adjust each benefit and any amount to be paid to reflect the
correct age and sex. Where required, we have given the insurance regulator a
detailed statement of how we will make these changes.
The Schedule of Premiums may show that scheduled premiums change or stop on a
certain date. We may have used that date because the Insured would attain a
certain age on that date. If we find that the issue age was wrong, we will
correct that date.
Incontestability.--Except for default, we will not contest this contract after
it has been in force during the Insured's lifetime for two years from the issue
date.
Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient.
Annual Report.--Each year we will send you a report. It will show: (1) the
current death benefit; (2) the investment amount; (3) the amount of investment
amount in each subaccount; (4) the net cash value; (5) premiums paid and monthly
charges deducted since the last report; (6) any partial withdrawals since the
last report; and (7) any contract debt and the interest on the debt for the
prior year. The report will also include any other data that may be currently
required where this contract is delivered. No report will be sent if this
contract is being continued under extended term insurance.
You may ask for a similar report at some other time during the year. Or you may
request from time to time a report projecting results under your contract on the
basis of premium payment assumptions and assumed investment results. We have the
right to make a reasonable charge for reports such as these that you ask for,
and to limit the scope and frequency of such reports.
Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower.--If
this contract was issued at age 14 or lower, it shows on page 3 an increase in
face amount at attained age 21, which applies if the contract is not then in
default beyond its days of grace. If so, any references in the contract to face
amount or death benefit which apply at or after attained age 21 will be based
upon the increased face amount, unless otherwise stated.
Death Proceeds.--The Table of Basic Amounts on page 21 describes how the
proceeds payable at death will be determined, depending on the status of the
contract at the time of death. In addition to what is shown in that table, a
special situation will apply in those cases where all of these conditions exist:
(a) the contract was issued at an age below 15; (b) death occurs before attained
age 21; (c) the contract is on a premium paying basis and not in default past
its days of grace; (d) the contract fund is not sufficient to make the contract
paid up for the ultimate face amount plus the excess of the contract fund over
the tabular contract fund; (e) the contract fund is greater than the sum of (i)
the net single premium for the initial face amount, (ii) the net single premium
for the excess of the contract fund over the tabular contract fund, and (iii)
the present value, discounted at a rate we set from time to time but no less
than 4% a year, of all future charges for extra benefits other than those which
do not continue after a contract such as this becomes paid up. (See above and
paid-up Contract, page 9.)
In these cases, the Basic Amount will not be as described on page 21 but will be
the total of (1) the initial face amount, plus (2) the excess of the contract
fund over the tabular contract fund, plus (3) the amount which results from
dividing the contract fund, minus the present value of the future charges for
extra benefits referred to above, minus the net single premium for the sum of
the initial face amount and the excess of the contract fund over the tabular
contract fund, by the net single premium at the then attained age, plus (4) the
amount of any extra benefits.
Payment of Death Claim.--If we settle this contract in one sum as a death claim,
we will usually pay the proceeds within 7 days after we receive at our Service
Office proof of death and any other information we need to pay the claim. But we
have the right to defer paying any portion of the proceeds greater than the
minimum guaranteed death benefit if (1) the New York Stock Exchange is closed;
or (2) the SEC requires that trading be restricted or declares an emergency; or
(3) the SEC lets us defer payment to protect our contract owners.
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PREMIUM PAYMENT AND REINSTATEMENT
Payment of Premiums.--Premiums may be paid at our Service Office or to any of
our authorized representatives. If we are asked to do so, we will give a signed
receipt.
Premium payments will in most cases be credited as of the date of receipt, to
both the contract fund and the premium account. (See Contract Fund, page 11 and
Premium Account, page 8.) Premium credits to the contract fund are the invested
premium amounts, (see page 11). Premium credits to the premium account are the
full premium paid with no deductions. But in the following cases, to the extent
states premium payments will be credited as of a date other than the date of
receipt:
1. The first scheduled premium is due on the Contract Date. But if the first
premium payment is received after the Contract Date, the scheduled portion will
be credited to the contract fund and the premium account as of the Contract
Date. And any portion of that first premium payment in excess of the first
scheduled premium will be credited as of the date of receipt. If the first
premium is received before the Contract Date, the entire payment will be
credited as of the Contract Date.
2. If a premium payment is received during the 61 day period after the day when
a scheduled premium was due and had not yet been paid, here is what we will do.
We will determine whether the premium account, (see Premium Account below), just
before receipt of that payment was a negative amount. If not--that is, if the
premium account was zero or higher--the premium payment will be credited as of
the date of receipt. But if the premium account was negative by no more than the
scheduled premium on the due date, that portion of the premium payment required
to bring the premium account up to zero will be credited to the premium account
as of the due date; any remaining portion of the premium payment will be
credited to the premium account as of the date of receipt. If the premium
account is negative by more than the scheduled premium than due, the premium
payment will be credited as of the date of receipt, except in the situation
described in 3 below.
3. On each Monthly Date we will determine if the contract fund is in default.
(See Default on page 8.) We will notify you on the minimum payment amount needed
to bring the contract out of default. If one or more premium payments are made
during the days of grace after that monthly date, (see Grace period on page 8,)
we will credit to the contract fund and the premium account, as of the
applicable Monthly Dates, such parts of the payments as are needed to end the
default status; any remaining part of those premium payments will be credited to
the contract fund and premium account as of the date of receipt.
Scheduled Premiums.--We show the amount and frequency of the scheduled premiums
in the Schedule of Premiums. The first scheduled premium is due on the contract
date. There is no insurance under this contract unless an amount at least equal
to the first scheduled premium is paid.
The scheduled premium shown is the minimum required, at the frequency chosen, to
continue the contract in full force if all scheduled premiums are paid when due,
investment returns are at the rate assumed, we deduct mortality charges at no
less than the maximum rate, and any contract debt does not exceed the cash
value.
If you wish to pay, on a regular basis, higher premiums than the amount of the
scheduled premium, we will bill you for the higher amount you choose.
If scheduled premiums that are due are not paid, or if smaller payments are
made, the contract may then or at some future time go into default. The
conditions under which default will exist are described below:
Unscheduled Premiums.--Except as we state in the next paragraph, unscheduled
premiums may be paid at any time during the Insured's lifetime, as long as the
contract is not in default beyond its days of grace. We show on page 3 the
minimum premium we will accept. We have the right to limit unscheduled premiums
to a total of $10,000 in any contract year.
If we determine at any time that investment returns above the rate assumed, or
smaller than maximum mortality charges or greater than scheduled premium
payments have made the contract paid-up, we have the right not to accept any
further premium payments, or to limit the amount or frequency of premium
payments thereafter. (See Paid-up Contract, page 9.)
Premium Change on Contract Change Date.--We show the Contract Change Date, in
the Contract Data on page 3. We also show in the Schedule of Premiums on page 3
that the amount of each scheduled premium will change on the Contract Change
Date and what the new premium will be. However, when the Contract Change Date
arrives we will recompute a new premium amount to be used in calculating the
premium account. The new premium that we recompute will be no greater than the
new premium for that date which we show on page 3. In addition, if the premium
account is less than zero, we will set the premium account to zero.
The Schedule of Premiums may also show that the premium changes at other times.
This may occur, for example, with a contract issued with extra benefits or in an
extra rating class if, in either case, this calls for a higher or extra premium
for a limited period of time.
(Continued on Next Page)
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PREMIUM PAYMENT AND REINSTATEMENT (Continued)
Default.--Unless the contract is already in the grace period, (see below), on
each monthly date, after we deduct any charges from the contract fund (which we
describe on page 11) and add any credits to it, we will determine whether the
contract is in default. To do so we will compute the amount which will accrue to
the tabular contract fund on the next monthly date if, during the current
contract month; (1) investment returns are at the assumed rate; and (2) we make
the other charges and credit we have set, including interest on contract debt;
and (3) we receive no premiums or loan repayments and make no more loans or
grant no partial withdrawals. We will subtract this amount from the contract
fund. If the result is zero or more, (that is, not a negative amount,) the
contract is not in default. But if there is a fund deficit--that is, if the
result is less than zero--the contract is in default if the premium account,
which we define below, is also less than zero.
Grace Period.--We grant 61 days of grace from any monthly date (other than the
contract date) on which the contract goes into default. During the days of grace
we will continue to accept premiums and make the charges we have set. If the
monthly date was a scheduled premium due date, when we receive a premium payment
during the days of grace we will first determine whether it satisfies case 2
under Payment of Premiums above. If it does, the default will end. If it does
not, or if the monthly date when the contract went into default was not a
scheduled premium due date, here is what we will do:
If at any time during the days of grace, we have received payments that in total
are at least equal to the lesser of (a) the sum of the fund deficit, (that is,
the amount by which the contract fund is below the tabular contract fund,) on
the date of default and any subsequent Monthly Date, and (b) the sum of the
amount by which the premium account is negative on the date of default and any
scheduled premiums due since the date of default, the default will end.
If the contract is still in default when the days of grace are over, it will end
and have no value, except as we state under contract Value Options, (which we
describe on page 13).
Premium Account.--On the contract date, the premium account is equal to the
premium received on that date minus the scheduled premium then due. On any other
day, the premium account is equal to:
1. what it was on the prior day; plus
2. if the premium account was greater than zero on the prior day, interest on
the excess at 4% year, minus
3. if the premium account was less than zero on the prior day, interest on the
deficit at 4% a year; plus
4. any premium received on that day; minus
5. any scheduled premium due on that day; minus
6. any partial withdrawals on that day.
The contract might be in default, as described above. If so, the premium account
is a negative amount, less than zero. If a premium payment is received on any
day during the days of grace while the contract is in default and the premium
account is negative by no more than one scheduled premium, that payment, to the
extent that it is required to bring the premium account up to zero, will, as we
describe under Payment of Premiums above, be credited to the premium account as
of the monthly date when the scheduled premium, was due, whether the date of
default or a subsequent monthly date. Any remaining portion of the premium
payment will be credited as of the actual date of receipt. In this case the
premium account for all days from the monthly date to the actual date of receipt
will be recalculated.
Reinstatement.--If this contract ends as we describe under Grace Period, you may
reinstate it, if all these conditions are met:
1. No more than three years must have elapsed since the date of default.
2. You must mot have surrendered the contract for its net cash value.
3. You must give us any facts we need to satisfy us that the insured is
insurable for the contract.
4. We must be paid a premium at least equal to the amount required to bring the
premium account up to zero on the first monthly date on which a scheduled
premium is due after the date of reinstatement. From this amount we will deduct
$2, plus 7 1/2% of the remaining payment, plus any charges with interest for any
extra benefits, plus any other expense charges with interest. The contract fund
will be equal to the balance, plus the cash value of the contract immediately
before reinstatement, plus a refund of that part of any surrender charge paid at
the time of default which would be charged if the contract were surrendered
immediately after reinstatement.
5. If before reinstatement the contract is in force as reduced paid-up insurance
(see page 13) any contract debt under reduced paid-up insurance must be repaid
with interest or carried over to the reinstated contract.
If we approve the reinstatement, these statements apply. The date of
reinstatement will be the date of your request or the date the required premium
is paid, if later. And we will start to make daily and monthly charges and
credits again as of the date of reinstatement.
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BENEFICIARY
You may designate or change a beneficiary. Your request must be in writing and
in a form that meets our needs. It will take effect only when we file it at our
Service Office; this will be after you send the contract to us to be endorsed,
if we ask you to do so. Then any previous beneficiary's interest will end as of
the date of the request. It will end then even if the Insured is not living when
we file the request. Any beneficiary's interest is subject to the rights of any
assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:
1. One who survives the Insured will have the right to be paid only if no one in
a prior class survives the Insured.
2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Insured.
3. Two or more in the same class who have the right to be paid will be paid in
equal shares.
4. If none survives the Insured, we will pay in one sum to the Insured's estate.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. We owe Jane the proceeds if she is living at the Insured's
death. We owe Paul and John the proceeds if they are living then but Jane is
not. But if only one of them is living, we owe him the proceeds. If none of them
is living we owe the Insured's estate.
Beneficiaries who do not have a right to be paid under these terms may still
have a right to be paid under the Automatic Mode of Settlement.
Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.
PAID-UP CONTRACT
This contract will become fully paid-up if and when whichever of the following
situations is applicable occurs:
(a) For a contract issued at an age lower than 15, the contract fund has grown
to an amount at least equal to the net single premium for the sum of the
ultimate face amount and any excess of the contract fund over the tabular
contract fund, (see pages 3 and 4) plus the present value, discounted at a rate
we set from time to time but no less than 4% a year, of all future charges for
any extra benefits which will continue under the paid-up contract.
(b) For a contract issued at age 15 or above, the contract fund has grown to an
amount at least equal to the net single premium for the sum of the face amount
and any excess of the contract fund over the tabular contract fund, (see pages 3
and 4) plus the present value, discounted at a rate we set from time to time but
no less than 4% a year, of all future charges for any extra benefits which will
continue under the paid-up contract.
We will notify you when we determine that the contract has become fully paid-up.
We have the right at that time to return any part of any payment then being made
which is in excess of the amount billed or required to make the contract
paid-up. And we have the right to accept no further premium payments, or to
limit the amount or frequency of premium payments thereafter. The contract will
continue as paid-up life insurance on the Insured's life.
The death benefit under the paid-up contract may change daily, as we explain
below, but if there is no contract debt, it will never be less than the minimum
guaranteed death benefit determined on the day the contract becomes paid-up.
That amount will be no less than the sum of the face amount shown on page 3,
(or, if the contract was issued below age 15, the ultimate face amount,) and the
excess of the contract fund over the tabular contract fund on that day. It will
be computed by using the contract fund on that day, less the present value of
all future charges for any extra benefits, (computed as described above,) at the
net single premium rate. The net single premium rate depends on the Insured's
issue age and sex and on the length of time since the contract date. The amount
payable in event of death thereafter will be the guaranteed death benefit, or if
greater, the contract fund divided by the net single premium at the Insured's
attained age on the date of death. In either case the amount will be adjusted
for any contract debt and for the amount of any paid-up extra benefits.
The monthly charge described on page 12 and shown on page 3A, and any charges
for extra benefits will not be made after the contract becomes paid-up.
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SEPARATE ACCOUNT
The Account.--The word account, where we use it in this contract without
qualification, means the Pruco Life Variable Appreciable Account. This is a unit
investment trust registered with the SEC under the Investment Company Act of
1940. It is also subject to the laws of New Jersey. We own the assets of the
account; we keep them separate from the assets of our general investment
account. We established the account to support variable life insurance
contracts. But we do not use it to support this contract if the contract is
being continued under extended term insurance. (See page 13.)
Subaccounts.--The account has several subaccounts. We list them on the Contract
Data page(s). You determine, using percentages, how invested premium amounts
will be allocated among the subaccounts. You may choose to allocate nothing to a
particular subaccount. But any allocation you make must be at least 10%; you may
not choose a fractional percent.
Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up
to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or
any percent that is not a whole number. The total for all subaccounts must be
100%.
The allocation of invested premium amounts (see page 11,) that took effect on
the contract date is shown in the Contract Data pages. You may change the
allocation for future invested premium amounts at any time if the contract is
not in default. To do so, you must notify us in writing in a form that meets our
needs. The change will take effect on the date we receive your notice at our
Service Office.
A premium might be paid when the investment amount is less than zero. In that
case, when we receive that premium, we first use as much of the invested premium
amount as we need to eliminate the deficit in the investment amount. We will
then allocate any remainder of the invested premium amount in accord with your
most recent request. (We describe investment amount on page 11.)
The Fund.--The word fund, where we use it in this contract without
qualification, means the fund we identify in the Contract Data pages. The fund
is registered with the SEC under the Investment Company Act of 1940 as an
open-end diversified management investment company. The fund has several
portfolios; there is a portfolio that corresponds to each of the subaccounts of
the account. We list these portfolios in the Contract Data pages.
Account Investments.--We use the assets of the account to buy shares in the
fund. Each subaccount is invested in a corresponding specific portfolio. Income
and realized and unrealized gains and losses from assets in each subaccount are
credited to, or charged against, the subaccount. This is without regard to
income, gains, or losses in our other investment accounts.
We will determine the value of the assets in the account at the end of each
business day. When we use the term business day, we mean a day when the New York
Stock Exchange is open for trading. We might need to know the value of an asset
on a day that is not a business day or on which trading in that asset does not
take place. In this case, we will use the value of that asset as of the end of
the last prior business day on which trading took place.
Example: If we need to know the value of an asset on a Sunday, we will normally
use the value of the asset as of the end of business on Friday.
We will always keep assets in the account with a total value at least equal to
the amount of the investment amounts under contracts like this one. To the
extent those assets do not exceed this amount, we use them only to support those
contracts; we do not use those assets to support any other business we conduct.
We may use any excess over this amount in any way we choose.
Change in Investment Policy.--A portfolio of the fund might make a material
change in its investment policy. In that case, we will send you a notice of the
change. Within 60 days after you receive the notice, or within 60 days after the
effective date of the change, if later, you may exchange this contract for a new
contract of fixed benefit insurance on the Insured's life. The conditions for
exchange, and the specifications for the new contract, are described under
Exchange of Contract on page 16.
Change of Fund.--A portfolio might, in our judgment, become unsuitable for
investment by a subaccount. This might happen because of a change in investment
policy, or a change in the laws or regulations, or because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the fund, or to invest in a
fund other than the one we show on the Contract Data page(s). But we would first
seek approval from the SEC and, where required, the insurance regulator where
this contract is delivered.
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INVESTMENT AMOUNT AND RETURN ON INVESTMENT
Investment Amount.--The investment amount for this contract is the amount we use
to compute the investment return. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate net premiums; (2) whether
or not to transfer amounts among subaccounts, as we discuss below; (3) the
investment performance of the subaccounts to which amounts are allocated or
transferred; (4) the amount and timing of premium payments you make; (5) whether
or not you take any loan; and (6) whether or not you make any partial
withdrawals. The investment amount exists only if the contract is not in default
past the days of grace or if it is being continued as variable reduced paid-up
insurance.
The investment amount at any time is equal to the contract fund, (we explain
this under Contract Fund,) minimum the amount of any loan on the contract, minus
interest accrued on the loan at 4% a year since the last Monthly Date (we
explain this under Loans.)
Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a
year. This is the same as .01074598% a day compounded daily.
Transfers Among Subaccounts.--You may transfer amounts among subaccounts as
often as four times in a contract year, if the contract is not in default or if
the contract is being continued under the variable reduced paid up option. To do
so, you must notify us in writing in a form that meets our needs. The transfer
will take effect on the date we receive your notice at our Service Office.
CONTRACT FUND
Contract Fund Defined.--On the contract date the contract fund is equal to the
invested premium amounts received, (see below), minus any of the charges
described in items (d) through (j) below which may have been due on that date.
On any day after that the contract fund is equal to what it was on the previous
day, plus any invested premium amount received that day, plus these items:
(a) any increase due to investment results in the value of the subaccounts
to which that portion of the contract fund that is in the investment
amount is allocated; (we explain investment amount above); and
(b) guaranteed interest at 4% a year on that portion of the contract fund
that is not in the investment amount;
and minus these items:
(c) any decrease due to investment results in the value of the subaccounts
to which that portion of the contract fund that is in the investment
amount is allocated;
(d) a charge against the investment amount at a rate of not more than
.00163894% a day (.60% a year) for mortality and expense risks that we
assume;
(e) any amount charged against the investment amount for Federal or State
income taxes;
(f) a monthly charge to guarantee the minimum death benefit;
(g) a charge for the cost of expected mortality;
(h) any charges for extra rating class;
(i) any charges for extra benefits;
(j) a monthly administration charge;
(k) any partial withdrawals; and
(l) if the contract becomes paid-up on that day, the present value of any
future charges for any extra benefits that will continue under the
paid-up contract.
We describe under Reinstatement on page 7 what the contract fund will be equal
to on any reinstatement date.
Invested Premium Amount.--This is the portion of each premium paid that we will
add to the contract fund. It is equal to the premium paid, minus $2, minus
7 1/2% of the rest of the premium. We explain this under Schedule of Expense
Charges from Premium Payments.
Guaranteed Interest Credits.--We will credit interest to the contract fund each
day on any portion of the contract fund on that day which is not in the
investment amount. That portion will be any contract loan plus interest accrued
on the loan at the rate of 4% a year since the last Monthly Date. (See Loans.)
We will credit .01074598% a day, which is an effective rate of 4% a year.
Cost of Expected Mortality.--This charge is computed daily and deducted monthly
from the contract fund, on each Monthly Date. We apply this charge to the
coverage amount. The coverage amount is equal to what the Basic Amount (see page
21) would be if there were no extra benefits, minus the contract fund. Where
required, we have given the insurance regulator a detailed description of the
method we use.
We will not charge more than the maximum guaranteed rates, which are based on
the Insured's sex and attained age and the mortality table described under the
Basis of Computation. We may charge less. At lease once every five years, but
not more often than once a year, we will consider the need to change the
charges. We will change them only if we do so for all contracts like this one
dated in the same year as this one.
(Continued on Next Page)
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CONTRACT FUND (Continued)
Charge for Extra Rating Class.--If there is an extra charge because of the
rating class of the Insured or because the Insured is a cigarette smoker, we
will deduct it from the contract fund at the beginning of each contract month.
Any charge is included in the amount shown in the Contract Data pages under
Schedule of Monthly Deductions from Contract Fund.
Charge for Extra Benefits.--If the contract has extra benefits, we will deduct
the charges for such benefits from the contract fund at the beginning of each
contract month. Charges for any such extra benefits are included in the amount
shown in the Contract Data pages under Schedule of Monthly Deductions from
Contract Fund.
If and when we determine that the contract has become paid-up, we will deduct
from the contract fund the present value of any future charges for any extra
benefits that will continue under the paid-up contract. We will make no further
deductions for these benefits after that. The description of any such benefit
(which can be found following page 20) describes how the future cash value, if
any, of that benefit will be determined.
Monthly Administration Charge and Mortality Risk Charge.--On each monthly date,
we will deduct up to $2.50 plus up to 2c per $1,000 of face amount, from the
contract fund, as a monthly administration charge. We will also deduct 1c per
$1,000 of face amount for guaranteeing the minimum death benefit regardless of
the investment performance of the separate account. (Both of these references to
charges based upon face amount are to initial face amount for contracts issued
below age 15. The total charges do not increase when the face amount increases
at attained age 21.) These charges will be made only while the contract is on a
premium paying basis; they will not be made if the contract becomes paid-up or
is continued as variable reduced paid-up or extended term insurance, (see
Contract Value Options). We show the amount of these charges in the Contract
Date pages under Schedule of Monthly Deductions from Contract Fund.
Partial Withdrawals.--If the cash value of this contract is more than the
tabular cash value, you may be able to make partial withdrawals from the
contract. All these conditions must be met.
(1) The amount withdrawn, plus the net cash value after withdrawal, may not be
more than the net cash value before withdrawal.
(2) The cash value after withdrawal must not be less than the tabular cash
value.
(3) The amount you withdraw must be at least $500.
(4) You may make no more than four withdrawals in a contract year. We will add a
withdrawal fee of $15 to the amount you ask to withdraw;
(5) An amount withdrawn may not be repaid, except as an unscheduled premium
subject to charges.
We will tell you how much you may withdraw if you ask us.
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CONTRACT VALUE OPTIONS
Benefit After the Grace Period.--If the contract is in default beyond its days
of grace, we will use any net cash value (which we describe under Cash Value
Option) to keep the contract in force as one of two kinds of insurance. One kind
is extended insurance. The second kind is variable reduced paid-up insurance. We
describe each below. You will find under Automatic Benefit which kind it will
be. Any extra benefit(s) will end as soon as the contract is in default past its
days of grace, unless the form that describes the extra benefit states
otherwise.
Extended Insurance.--This will be term insurance of a fixed amount on the
Insured's life. We will pay the amount of term insurance if the Insured dies in
the term we describe below. Before the end of the term there will be cash values
but no loan value.
The amount of term insurance will be the death benefit on the date of default,
minus any part of that death benefit which was provided by extra benefits. The
term is a period of time that will start on the day the contract went into
default. The length of the term will be what is provided when we use the net
cash value at the net single premium rate. This rate depends on the Insured's
issue age and sex and on the length of time since the contract date.
There may be extra days of term insurance. This will occur if, on the day the
contract goes into default, the term of extended insurance provided by the net
cash value does not exceed 90 days, or the number of days the contract was in
force before the default began, if less. The number of extra days will be (1)
90, or the number of days the contract was in force before the default began, if
less, minus (2) the number of days of extended insurance that would be provided
by the net cash value if there were no contract debt. The extra days, if any,
start on the day after the last day of term insurance provided by the net cash
value, if any. If there is no such term insurance, the extra days start on the
day the contract goes into default. The term insurance for the extra days has no
cash value. There will be no extra days if you replace the extended insurance
with variable reduced paid-up insurance or you surrender the contract before the
extra days start.
Variable Reduced Paid-up Insurance.--This will be paid-up variable life
insurance on the Insured's life. The death benefit may change from day to day,
as we explain below, but if there is no contract debt, it will not be less than
a minimum guaranteed amount determined as of the day when the contract went into
default. There will be cash values and loan values.
The minimum guaranteed amount of insurance will be computed by using the net
cash value at the net single premium rate. The net single premium rate depends
on the Insured's issue age and sex and on the length of time since the contract
date. The amount payable in event of death thereafter will be the greater of (a)
the minimum guaranteed amount and (b) the contract fund divided by the net
single premium at the Insured's attained age. In either case the amount will be
adjusted for any contract debt.
Except when it is provided as the automatic benefit, (see below), the variable
reduced paid-up insurance option will be available only when the guaranteed
death benefit under the option will be $5000 or more.
Computations.--We will make all computations for either of these benefits as of
the date the contract goes into default. But we will consider any loan you take
out or pay back or any premium payments or partial withdrawals you make in the
days of grace.
Automatic Benefit.--When the contract is in default, it will stay in force as
extended insurance. But it will stay in force as variable reduced paid-up
insurance if either of these statements applies: (1) We issued the contract in a
rating class for which we do not provide extended insurance; in this case the
phrase No Extended Insurance is in the Rating Class on page 3. (2) The amount of
reduced paid-up insurance would be at least as great as the amount of term
insurance.
Optional Benefit.--You may choose to replace any fixed extended insurance that
has a net cash value by variable reduced paid-up insurance. To make this choice,
you must do so in writing to us in a form that meets our needs, not more than
three months after the date the contract goes into default. You must also send
the contract to us to be endorsed.
Cash Value Option.--You may surrender this contract for its net cash value. The
net cash value at any time is the cash value at that time less any contract
debt. To surrender this contract, you must ask us in writing in a form that
meets our needs. You must also send the contract to us. Here is how we will
compute the case value for surrender of the contract or for its continuation
under extended insurance or variable reduced paid-up insurance:
1. If the contract is not in default: The cash value on surrender at any time in
the first ten contract years is the contract fund, minus a surrender charge,
consisting of a deferred sales charge and a deferred underwriting and issue
charge. The cash value on surrender at the end of the tenth contract year or
later is the contract fund.
A schedule of maximum surrender charges for this contract is on page 3A.
(Continued on Next Page.
Page 13 (VALB--84)
II-71
<PAGE>
CONTRACT VALUE OPTIONS (Continued)
In no event will the deferred sales charge upon surrender be greater than 25% of
scheduled premiums due in contract year 1, plus 5% of the scheduled premiums due
in contract years 2 through 5. For the purpose of computing this limit we use
the lesser of premiums due and premiums paid.
For a paid-up contract that includes extra benefits, the cash value is the
amount described above, plus the cash value, if any, of the extra benefits. (See
the description of any such extra benefits following page 20.)
2. If the contract is in default during the days of grace: We will compute the
net cash value as of the day the contract went into default. But we will adjust
this value for any loan you take out or pay back or any premium payments or
partial withdrawals you make in the days of grace.
3. If the contract is in default beyond its days of grace: The net cash value as
of any date will be the value on that date of any extended insurance benefit
then in force. Or it will be the value on that date of any variable reduced
paid-up insurance benefit then in force, less any contract debt.
Within 30 days of a contract anniversary, the net cash value of any extended
insurance will not be less than the value on that anniversary.
If the contract is not in default past the days of grace, or if the contract is
in force as variable reduced paid up insurance, we will usually pay any cash
value within 7 days after we receive your request and the contract at our
Service Office. But we have the right to defer payment if (1) the New York Stock
Exchange is closed; or (2) the SEC requires that trading be restricted or
declares an emergency; or (3) the SEC lets us defer payments of protect our
contract owners.
If the contract is in force as extended insurance we have the right to postpone
paying a cash value for up to six months. If we do so for more than 30 days, we
will pay interest at the rate of 3% a year.
Tabular Values.--In the table on page 4 we show tabular contract fund and
tabular cash values at the end of the contract years. The tabular contract fund
values are the amount which will then be in the contract fund, (see page 11,) if
all scheduled premiums have been paid on their due dates, there have been no
unscheduled premiums paid, there is no contract debt, the subaccounts you have
chosen earn exactly the assumed rate of return, and we have deducted the maximum
mortality charges. The tabular cash values are the amounts which, under the same
conditions, will then be used to provide extended insurance or variable reduced
paid-up insurance or will be paid in cash if the maxim surrender charges are
applied. The tabular cash value shown is equal to the tabular contract fund
value as of the same date, after deducting any surrender charges (at the maximum
rate) from the tabular contract fund value. (See Cash Value Option above.) Since
surrender charges are not deducted after the end of the 10th contract year, the
tabular cash values are the same as the tabular contract fund values thereafter.
If we need to compute tabular values at some time during a contract year, we
will count the time since the start of the year. We will let you know the
tabular values for other durations if you ask for them.
Page 14 (VALB--84)
II-72
<PAGE>
LOANS
Loan Requirements.--After the first anniversary, you may borrow from us on the
contract. All these conditions must be met:
1. The Insured is living.
2. The contract is in force other than as extended insurance.
3. The contract debt will not be more than the loan value. (We explain these
terms below.)
4. As sole security for the loan, you assign the contract to us in a form that
meets our needs.
5. Except when used to pay premiums on this contract, the amount you borrow at
any one time must be at lease $500.
If there is already contract debt when you borrow from us, we will add the new
amount you borrow to that debt.
Contract Debt.--Contract debt at any time means the loan on the contract, plus
the interest we have charged that is not yet due and that we have not yet added
to the loan.
Loan Value.--You may borrow any amount up to the difference between the loan
value and any existing contract debt. At any time the loan value is 90% of the
net cash value.
There is one exception. If the contract is in default, the loan value during the
days of grace is what it was on the date of default.
Example 1: Suppose the contract has a loan value of $6,000. About eight months
ago you borrowed $1,500. By now there is interest of $55 charged but not yet
due. The contract debt is now $1,555, which is made up of the $1,500 loan and
the $55 interest.
Example 2: Suppose, in example 1, you want to borrow all that you can. We will
lend out $4,445 which is the difference between the $6,000 loan value and the
$1,555 contract debt. This will increase the contract debt to $6,000. We will
add the new amount borrowed to the existing loan and will charge interest on it,
too.
Interest Charge.--We will charge interest daily on any loan at the effective
rate of 5 1/2% a year. Interest is due on each contract anniversary, or when the
loan is paid back if that comes first. If interest is not paid when due, it will
become part of the loan. Then we will start to charge interest on it, too.
Example 3: Suppose the contract date is in 1987. Six months before the
anniversary in 1996 you borrow $1,600 out of a $4,000 loan value. We charge 5
1/2% a year. Three months later, but still three months before the anniversary,
we will have charged about $22 interest. This amount will be a few cents more or
less than $22 since some months have more days than others. The interest will
not be due until the anniversary unless the loan is paid back sooner. The loan
will still be $1,600. The contract debt will be $1,622, since contract debt
included interest charged but not yet due.
On the anniversary in 1996 we will have charged about $44 interest. The interest
will then be due.
Example 4: Suppose the $44 interest in example 3 was paid on the anniversary.
The loan and contract debt each became $1,600 right after the payment.
Example 5: Suppose the $44 interest in example 3 was not paid on the
anniversary. The interest became part of the loan, and we began to charge
interest on it, too. The loan and contract debt each became $1,644.
Repayment.--All or part of any contract debt may be paid back at any time while
the Insured is living. When we settle the contract, any contract debt is due us.
If there is contract debt at the end of the last day of grace when the contract
is in default, it will be deducted from the cash value to determine the net cash
value. We will make this adjustment so that the proceeds will not include the
amount of that debt.
Effect of a Loan.--When you take a loan, the amount of the loan continues to be
a part of the contract fund and is credited with interest at the guaranteed rate
of 4% a year. However, we will reduce the investment amount by the amount you
borrow, and by loan interest that becomes part of the loan because it is not
paid when due. On each Monthly Date, if there is a contract loan outstanding, we
will increase the investment amount by interest credits accrued on the loan at
4% a year since the last Monthly Date. When you repay part or all of a loan we
will increase the investment amount by the amount of loan you repay, plus, if
you repay all the loan, interest credits accrued on the loan at 4% a year since
the last Monthly Date. We will not increase the investment amount by loan
interest that is paid before we make it part of the loan.
We will allocate loans and repayments among the subaccounts in proportion to the
investment amount in each subaccount as of the date of the loan or repayment.
Only the amount of the investment amount will reflect the investment results of
the subaccounts. Since the amount you borrow is removed from the investment
amount, a loan may have a permanent effect on the net cash value of this
contract, and also for a contract which is paid-up or which is in force under
the variable reduced paid-up option, on any death benefit in excess of the
guaranteed death benefit. The longer the loan is outstanding, the greater this
effect is likely to be.
(Continued on Next Page)
Page 15 (VALA--84)
II-73
<PAGE>
LOANS (Continued)
Example 6: Suppose the contract's investment amount is $15,000 and that $10,000
is in subaccount A and $5,000 is in subaccount B. If you make a $9,000 loan we
will reduce the amount in subaccount A by $6,000 and the amount in subaccount B
by $3,000.
Suppose that sometime later, when the investment amount in each of the two
subaccounts is the same you choose to repay the $9,000 loan. We will add $4,500
to the amount in each subaccount.
Excess Contract Debt.--If contract debt ever becomes equal to or more than the
cash value, all the contract's benefits will end 61 days after we mail a notice
to you and any assignee of whom we know. Also, we may send a notice to the
Insured's last known address. In the notice we will state the amount that, if
paid to us, will keep the contract's benefits from ending for a limited time.
Postponement of Loan.--We will usually make a loan within 7 days after we
receive your request at our Service Office. But we have the right to defer
making the loan if (1) the New York Stock Exchange is closed; or (2) the SEC
requires that trading be restricted or declares an emergency; or (3) the SEC
lets us defer payments to protect our contract owners.
EXCHANGE OF CONTRACT
Right to Exchange.--Before the second anniversary you may exchange this contract
for a new contract of fixed benefit insurance on the Insured's life. You will
not have to prove to us that the Insured is insurable. Also, you may make such
an exchange at any time if there is a material change in the investment policy
of a portfolio (see Change in Investment Policy on page 10). When we use the
term new contract we mean the contract for which this contract may be exchanged.
Conditions.--Your right to make this exchange is subject to all these
conditions: (1) You must ask for the exchange in writing in a form that meets
our needs. (2) You must surrender the contract to us. (3) We must have your
request and the contract at our Service Office while the contract is in force
and not in default past its days of grace. (4) You must pay back any contract
debt under this contract, to the extent it may exceed the loan value of the new
contract. (5) You must pay any other charges required for the exchange.
Exchange Date.--The exchange date will be the later of: (1) the date we receive
the contract and our request at our Service Office; and (2) the date we receive
the payment, if any, required for the exchange. The new contract will take
effect on the exchange date only if the Insured is then living. If the new
contract takes effect, this contract will end just before the exchange date.
Contract Specifications.--The new contract will be on the Modified Premium Whole
Life plan. It will have a face amount equal to the face amount of this one. It
will have the same contract date and issue age as this contract and be in the
same rating class.
If, for any reason, we are not issuing the Modified Premium Whole Life Contract
on the exchange dates, then the new contract will be another life plan that we
would regularly issue on that date for the same rating class, amount, issue, age
and sex.
This contract might include an extra benefit which is still in effect just
before the exchange date. And a similar kind of benefit might have been
regularly offered in contracts like the new one on the date the extra benefit
took effect in this contract. In that case, if you ask for it in your request
for the exchange, that similar kind of benefit will be put in the new contract.
When we use the phrase contracts like the new one, we mean contracts that were,
on the contract date of this contract, regularly issued on the same plan as the
new one and for the same rating class, amount, issue age and sex.
The amount of any accidental death benefit included in the new contract in
accord with this provision will be the same as the amount of any accidental
death benefit in this contract.
If a benefit for waiving scheduled premiums is included in the new contract in
accord with this provision, any scheduled premiums to be waived under the new
contract for a disability that began before the exchange date must be at the
billing frequency that applied to this contract when the disability started. But
premiums will not be waived under the new contract unless it has a benefit for
waiving premiums in the event of disability. This will be so even if we have
waived premiums under this contract.
A charge may be made on exchange in the following situation: If, on the date of
exchange, the contract fund of this contract is less than the tabular contract
fund, a charge will be made for the difference in the two amounts. If the
contract fund of this contract is equal to or greater than the tabular contract
fund, no charge will be made. In these cases, the contract fund of the new
contract will be equal to that of this contract.
Exchange at Other Times.--You may be able to exchange this contract for a fixed
benefit Modified Premium Whole Life contract at a time other than those
described under right to Exchange above. But any such exchange may be made only
if we consent, and will be subject to conditions and charges which we then
determine.
Page 16 (VALA--84)
II-74
<PAGE>
SETTLEMENT OPTIONS
Payee Defined.--In these provisions and under the Automatic Mode of Settlement,
the word Payee means a person who has a right to receive a settlement under the
contract. Such a person may be the Insured, the owner, a beneficiary, or a
contingent payee.
Choosing an Option.--While the Insured is living you may choose, or change the
choice of, an option for all or part of the proceeds that may arise from the
Insured's death. The requirements are the same as those to designate or change a
beneficiary. We describe them under Beneficiary.
A payee may choose an option for all or part of any proceeds or residue that
becomes payable to him or her in one sum. We describe residue later on this
page.
In some cases, you or another Payee will need our consent to choose an option.
We describe these cases under conditions.
Options Described.--Here are the options we offer. We may also consent to other
arrangements.
Option 1 (Instalments for a Fixed Period).--We will make equal payments for up
to 25 years based on the Option 1 Table. The payments will include interest at
an effective rate of 3 1/2% a year. We may credit more interest. If and while we
do so, the payments will be larger.
Option 2 (Life Income).--We will make equal monthly payments for as long as the
person on whose life the settlement is based lives, with payments certain for
the period chosen. The choices are either ten years (10-Year Certain) or until
the sum of the payments equals the amount put under this option (Instalment
Refund). The amount of each payment will be based on the Option 2 Table and on
the sex and age, on the due date of the first payment, of the person on whose
life the settlement is based. But if a choice is made more than two years after
the Insured's death, we may use the Option 2 payment rates in individual annuity
contracts or life insurance contracts we regularly issue, based on United States
currency, on the due date of the first payment. On request, we will quote the
payment rates in contracts we then issue. We must have proof of the date of
birth of the person on whose life the settlement is based. If on the due date of
the first payment under this option, we have declared a higher payment rate
under the option, we will base the payments on that higher rate.
Option 3 (Interest Payment).--We will hold an amount at interest. We will pay
interest at an effective rate of at least 3% a year ($3.000 annually, $14.89
semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more
interest.
Option 4 (Instalments of a Fixed Amount).--We will make equal annual,
semi-annual, quarterly or monthly payments if they total at least $90 a year for
each $1,000 put under this option. We will credit the unpaid balance with
interest at an effective rate of at least 3 1/2% a year. We may credit more
interest. If we do so, the balance will be larger. The final payment will be any
balance equal to or less than one payment.
First Payment Due Date.--Unless a different date is stated when the option is
chosen: (1) the first payment for Option 3 will be due at the end of the chosen
payment interval; and (2) the first payment for any of the other options will be
due on the date the option takes effect.
Residue Described.--For Options 1 and 2, residue on any date means the then
present value of any unpaid payments certain. We will compute it at an effective
interest rate of 3 1/2% a year. But we will use the interest rate we used to
compute the actual Option 2 payments if they were not based on the table in this
contract.
For Options 3 and 4, residue on any date means any unpaid balance with interest
to that date.
For option 2, residue does not include the value of any payment that may become
due after the certain period.
(Continued on Page 19)
Page 17 (VALA--84)
II-75
<PAGE>
SETTLEMENT OPTIONS (Continued)
OPTION 1 TABLE
- ------------------------
MINIMUM AMOUNT OF
MONTHLY PAYMENT FOR
EACH $1,000, THE FIRST
PAYABLE IMMEDIATELY
- ------------------------
Number Monthly
of Years Payment
- ------------------------
1 $84.65
2 43.05
3 29.19
4 22.27
5 18.12
6 15.35
7 13.38
8 11.90
9 10.75
10 9.83
11 9.09
12 8.46
13 7.94
14 7.49
15 7.10
16 6.76
17 6.47
18 6.20
19 5.97
20 5.75
21 5.56
22 5.39
23 5.24
24 5.09
25 4.96
- ------------------------
Multiply the monthly
amount by 2.989 for
quarterly, 5.952 for
semi-annual or 11.804
for annual.
- ------------------------
<TABLE>
<CAPTION>
OPTION 2 TABLE
----------------------------------------------------------------------------------------
MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST
PAYABLE IMMEDIATELY
----------------------------------------------------------------------------------------
KIND OF LIFE INCOME KIND OF LIFE INCOME
------------------------------- -----------------------------
10-Year Instalment 10-Year Instalment
AGE Certain Refund AGE Certain Refund
LAST ------------------------------- LAST -----------------------------
BIRTHDAY Male Female Male Female BIRTHDAY Male Female Male Female
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 $ 3.18 $3.11 $3.17 $3.10 45 $4.06 $3.82 $3.99 $3.78
and under 46 4.12 3.86 4.03 3.81
11 3.19 3.12 3.18 3.11 47 4.17 3.90 4.08 3.85
12 3.20 3.13 3.19 3.12 48 4.23 3.94 4.13 3.90
13 3.21 3.14 3.20 3.13 49 4.28 3.99 4.18 3.94
14 3.22 3.15 3.21 3.14
50 4.35 4.04 4.24 3.98
15 3.24 3.16 3.23 3.15 51 4.41 4.09 4.29 4.03
16 3.25 3.17 3.24 3.16 52 4.48 4.15 4.35 4.08
17 3.27 3.19 3.25 3.18 53 4.55 4.21 4.41 4.13
18 3.28 3.20 3.27 3.19 54 4.62 4.27 4.48 4.19
19 3.30 3.21 3.28 3.20
55 4.70 4.33 4.55 4.24
20 3.31 3.22 3.30 3.21 56 4.78 4.40 4.62 4.30
21 3.33 3.24 3.32 3.23 57 4.86 4.47 4.69 4.37
22 3.35 3.25 3.33 3.24 58 4.95 4.54 4.77 4.43
23 3.36 3.26 3.35 3.25 59 5.05 4.62 4.86 4.50
24 3.38 3.28 3.37 3.27
60 5.15 4.71 4.94 4.58
25 3.40 3.30 3.39 3.29 61 5.25 4.79 5.03 4.66
26 3.42 3.31 3.41 3.30 62 5.36 4.89 5.13 4.74
27 3.45 3.33 3.43 3.32 63 5.48 4.98 5.23 4.82
28 3.47 3.35 3.45 3.34 64 5.60 5.09 5.34 4.92
29 3.49 3.37 3.47 3.35
65 5.73 5.20 5.45 5.01
30 3.52 3.39 3.49 3.37 66 5.87 5.31 5.57 5.11
31 3.54 3.41 3.52 3.39 67 6.01 5.43 5.70 5.22
32 3.57 3.43 3.54 3.41 68 6.15 5.56 5.83 5.34
33 3.60 3.45 3.57 3.44 69 6.30 5.70 5.97 5.46
34 3.63 3.47 3.60 3.46
70 6.46 5.84 6.11 5.58
35 3.66 3.50 3.63 3.48 71 6.62 5.99 6.27 5.72
36 3.69 3.52 3.66 3.50 72 6.79 6.15 6.43 5.86
37 3.72 3.55 3.69 3.53 73 6.96 6.31 6.60 6.01
38 3.76 3.58 3.72 3.56 74 7.13 6.49 6.78 6.18
39 3.80 3.61 3.75 3.58
75 7.30 6.67 6.97 6.35
40 3.84 3.64 3.79 3.61 76 7.48 6.85 7.17 6.53
41 3.88 3.67 3.82 3.64 77 7.66 7.04 7.38 6.72
42 3.92 3.70 3.86 3.67 78 7.83 7.24 7.60 6.93
43 3.97 3.74 3.90 3.71 79 8.00 7.44 7.83 7.15
44 4.01 3.78 3.94 3.74
80 8.17 7.64 8.07 7.38
and over
</TABLE>
(Continued on Next Page)
Page 18 (VALA--84)
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<PAGE>
SETTLEMENT OPTIONS (Continued)
WITHDRAWAL OF RESIDUE.--Unless otherwise stated when the option is chosen: (1)
under Options 1 and 2 the residue may be withdrawn; and (2) under Options 3 and
4 all, or any part not less than $100, of the residue may be withdrawn. If an
Option 3 residue is reduced to less than $1,000, we have the right to pay it in
one sum. Under Option 2, withdrawal of the residue will not affect any payments
that may become due after the certain period; the value of those payments cannot
be withdrawn. Instead, the payments will start again if they were based on the
life of a person who lives past the certain period.
DESIGNATING CONTINGENT PAYEE(S).--A Payee under an option has the right, unless
otherwise stated, to name or change a contingent payee to receive any residue at
that Payee's death. This may be done only if (1) the Payee has the full right to
withdraw the residue; or (2) the residue would otherwise have been payable to
that Payee's estate at death.
A Payee who has this right may choose, or change the choice of, an option for
all or part of the residue. In some cases, the Payee will need our consent to
choose or change an option. We describe these cases under Conditions.
Any request to exercise any of these rights must be in writing and in a form
that meets our needs. It will take effect only when we file it at our Service
Office. Then the interest of anyone who is being removed will end as of the date
of the request, even if the Payee who made the request is not living when we
file it.
CHANGING OPTIONS.--A Payee under Option 1, 3 or 4 may choose another option for
any sum that the Payee could withdraw on the date the chosen option is to start.
That date may be before the date the Payee makes the choice only if we consent.
In some cases, the Payee will need our consent to choose or change an option. We
describe these cases next.
Conditions.--Under any of these conditions, our consent is needed for an option
to be used for any person:
1. The person is not a natural person who will be paid in his or her own right.
2. The person will be paid as assignee.
3. The amount to be held for the person under Option 3 is less than $1,000. But
we will hold any amount for at least one year in accord with the Automatic Mode
of Settlement.
4. Each payment to the person under the option would be less than $20.
5. The option is for residue arising other than at (a) the Insured's death, or
(b) the death of the beneficiary who was entitled to be paid as of the date of
the Insured's death.
6. The option is for proceeds that arise other than from the Insured's death,
and we are settling with an owner or any other person who is not the Insured.
DEATH OF PAYEE.--If a Payee under an option dies and if no other distribution is
shown, we will pay any residue under that option in one sum to the Payee's
estate.
ENDORSEMENTS
(Only we can endorse this contract.)
Page 19 (VALA--84)
II-77
<PAGE>
AUTOMATIC MODE OF SETTLEMENT
APPLICABILITY.--These provisions apply to proceeds arising from the Insured's
death and payable in one sum to a Payee who is a beneficiary. They do not apply
to any periodic payment.
INTEREST ON PROCEEDS.--We will hold the proceeds at interest under Option 3 of
the Settlement Options provision. The Payee may withdraw the residue. We will
pay it promptly on request. We will pay interest annually unless we agree to pay
it more often. We have the right to pay the residue in one sum after one year if
(1) the Payee is not a natural person who will be paid in his or her own right;
(2) the Payee will be paid as assignee; or (3) the original amount we hold under
Option 3 for the Payee is less than $1,000.
SETTLEMENT AT PAYEE'S DEATH.--If the Payee dies and leaves an Option 3 residue,
we will honor any contingent payee provision then in effect. If there is none,
here is what we will do. We will look to the beneficiary designation of the
contract; we will see what other beneficiary(ies), if any, would have been
entitled to the portion of the proceeds that produced the Option 3 residue if
the Insured had not died until immediately after the Payee died. Then we will
pay the residue in one sum to such other beneficiary(ies), in accord with that
designation. But if, as stated in that designation, payment would be due the
estate of someone else, we will instead pay the estate of the Payee.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. Jane was living when the Insured died. Jane later died
without having chosen an option or naming someone other than Paul and John as
contingent payee. If Paul and John are living at Jane's death we owe them the
residue. If only one of them is living then, and if the contract called for
payment to the survivor of them, we owe him the residue. If neither of them is
living then, we owe Jane's estate.
SPENDTHRIFT AND CREDITOR.--A beneficiary or contingent payee may not, at or
after the Insured's death, assign, transfer, or encumber any benefit payable. To
the extent allowed by law, the benefits will not be subject to the claims of any
creditor of any beneficiary or contingent payee.
ENDORSEMENTS
(Only we can endorse this contract.)
Page 20 (VALA--84)
II-78
<PAGE>
BASIS OF COMPUTATION
MORTALITY TABLES DESCRIBED.--Except as we state in the next paragraph, (1) we
base all net premium and net values to which we refer in this contract on the
Insured's issue age and sex and on the length of time since the contract date;
(2) we use the Commissioners 1980 Standard Ordinary Mortality Table; and (3) we
use continuous functions based on age last birthday.
For extended insurance, we base net premiums and net values on the Commissioners
1980 Extended Term Insurance Table.
INTEREST RATE.--For all net premium and net values to which we refer in this
contract we use an effective rate of 4% a year.
EXCLUSIONS.--When we compute net values we exclude the value of any
Supplementary Benefits and any other extra benefits added by rider to this
contract.
VALUES AFTER 20 CONTRACT YEARS.--Tabular values after the 20th contract year
will be the net level premium reserves, taking into account the increase in
scheduled premium amount on the Contract Change Date. To compute them, we will
use the mortality tables and interest rate we describe above. There will be the
same exclusions.
MINIMUM LEGAL VALUES.--The cash, loan and other values in this contract are at
least as large as those set by law where it is delivered. Where required, we
have given the insurance regulator a detailed statement of how we compute values
and benefits.
Pruco Life Insurance Company of New Jersey,
By /s/ [SPECIMEN]
Secretary
- -----------
PLIY 45--84
- -----------
<TABLE>
<CAPTION>
CONTRACT SUMMARY (continued from Page 2)
- ----------------------------------------------------------------------------------------------------------------
TABLE OF BASIC AMOUNTS
- ----------------------------------------------------------------------------------------------------------------
When the proceeds arise from the Insured's death:
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
And The Contract Is In Force: Then The Basic Amount is: And We Adjust The Basic Amount For:
- ----------------------------------------------------------------------------------------------------------------
on a premium paying basis and not the face amount (see page 3) plus contract debt (see page 15), plus
in default past its days of grace any excess of the contract fund (see any charges due in the days of
page 11) over the tabular contract grace (see page 8).
fund (see page 4); plus the amount
of any extra benefits*
- ----------------------------------------------------------------------------------------------------------------
as a fully paid-up contract the amount of paid-up insurance contract debt.
(see page 9.); plus the amount of
any paid-up extra benefits
- ----------------------------------------------------------------------------------------------------------------
as variable reduced paid-up the amount of variable reduced contract debt.
insurance (see page 13) paid-up insurance (see page 13)
- ----------------------------------------------------------------------------------------------------------------
as extended insurance (see the amount of term insurance, if nothing.
page 13) the Insured dies in the term (see
page 13); otherwise zero
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* But see Death Proceeds on page 6 for the determination of Basic Amount
under certain conditions which may arise when death occurs before attained
age 21, under a contract issued below age 15.
This Table is a part of the Contract Summary and of the Contract.
Page 21 (VALB--84) - N
II-79
<PAGE>
GUIDE TO CONTENTS
Page
Contract of Summary ....................................................... 2
Table of Basic Amounts .................................................. 21
Contract Data ............................................................. 3
Rating Class; List of Contract Minimums;
List of Supplementary Benefits, if any;
Schedule of Premiums; Schedule of Expense
Charges from Premium Payments; Schedule
of Monthly Deductions from Contract Fund;
Schedule of Minimum Surrender Charges;
List of Subaccounts and Portfolios; Service
Office
Tabular Contract Fund and Tabular
Cash Values ............................................................. 4
General Provisions ........................................................ 5
Definitions; The Contract; Contract
Modifications; Non-participating Service
Office; Ownership and Control;
Suicide Exclusion; Currency; Misstatement
of Age or Sex; Incontestability; Assignment;
Annual Report; Increase in Face Amount
at Age 21 for Contract Issued at Age 14
and Lower; Death Proceeds; Payment of
Death Claim
Premium Payment and Reinstatement ......................................... 7
Payment of Premiums; Scheduled Premiums;
Unscheduled Premiums; Premium Change on
Contract Change Date; Default; Grace Period;
Premium Account; Reinstatement
Beneficiary ............................................................... 9
Paid-Up Contract .......................................................... 9
Separate Account .......................................................... 10
The Account; Subaccounts; The Fund;
Account Investments; Change in
Investment Policy; Change of Fund
Investment Amount and Return on Investment ................................ 11
Investment Amount; Assumed Rate of Return;
Transfers Among Subaccounts
Contract Fund ............................................................. 11
Contract Fund Defined;
Invested Premium Account; Guaranteed
Interest Credits, Cost of Expected Mortality;
Charge for Extra Rating Class; Charges for
Extra Benefits; Monthly Administration Charge
and Mortality Risk Charge; Partial Withdrawals
Contract Value Options .................................................... 13
Benefit After the Grace Period; Extended
Insurance; Variable Reduced Paid-up
Insurance; Computations; Automatic
Benefit; Optional Benefit; Cash Value
Option; Tabular Values
Loans ..................................................................... 15
Loan Requirements; Contract Debt; Loan
Value; Interest Charge; Repayment; Effect
of a Loan; Excess Contract Debt; Postponement
of Loan
Exchange of Contract ...................................................... 16
Right to Exchange; Conditions;
Exchange Date; Contract Specifications;
Exchange at Other Times
Settlement Options ........................................................ 17
Payee Defined; Choosing an Option;
Options Described; First Payment
Due Date; Residue Described; Income
Tables; Withdrawal of Residue;
Designating Contingent Payee(s);
Changing Options; Conditions;
Death of Payee
Automatic Mode of Settlement .............................................. 20
Applicability; Interest on Proceeds;
Settlement at Payee's Death;
Spendthrift and Creditor
Basis of Computation ...................................................... 21
Mortality Tables Described, Interest Rate;
Exclusions; Values after 20 Contract Years;
Minimum Legal Values
Any Supplementary Benefits and a copy of the
application follow page 20.
Page 22
MODIFIED PREMIUM VARIABLE LIFE INSURANCE POLICY WITH VARIABLE INSURANCE AMOUNT.
INSURANCE PAYABLE ONLY UPON DEATH. SCHEDULED PREMIUMS PAYABLE THROUGHOUT
INSURED'S LIFETIME. PROVISION FOR OPTIONAL ADDITIONAL PREMIUMS. BENEFITS REFLECT
PREMIUM PAYMENTS, INVESTMENT RESULTS AND MORTALITY CHARGES. GUARANTEED MINIMUM
DEATH BENEFIT IF SCHEDULED PREMIUMS DULY PAID AND NO CONTRACT DEBT. INCREASE IN
FACE AMOUNT AT ATTAINED AGE 21 IF CONTRACT ISSUED AT AGE 14 OR LOWER.
NON-PARTICIPATING.
VALB--84 - N
II-80
EXHIBIT 1.A.(5)(c)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Newark, New Jersey
A Stock Company subsidiary of
The Prudential Insurance Company of America
================================================================================
Insured JOHN DOE xx xxx xxx Policy Number
JUN 4, l986 Contract Date
Face Amount $50,000--
Premium Period LIFE
Agency R-NK 1
================================================================================
We will pay the beneficiary the proceeds of this contract promptly if we
receive due proof that the Insured died. We make this promise subject to
all the provisions of the contract.
The Death Benefit will be the Insurance Amount, plus the amount of any
extra benefit (unless the contract is in default or there is contract
debt). The Death Benefit may be fixed or variable depending on the payment
of premiums, the investment experience of the separate account and the
level of charges made. But the Insurance Amount will not be less than the
face amount. (We describe the Insurance Amount on page 14.)
The cash value may increase or decrease daily depending on the payment of
premiums, the separate account investment experience and the charges made.
There is no guaranteed minimum.
We specify a schedule of premiums. Additional unscheduled premiums may be
paid at your option subject to the limitations in the contract.
Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 5. If there is ever a question about it, or if
there is a claim, just see one of our representatives or get in touch with
one of our offices.
RIGHT TO CANCEL CONTRACT.--You may return this contract to us within (1) 10
days after you get it, or (2) 45 days after Part 1 of the application was
signed, or (3) 10 days after we mail or deliver to you any withdrawal right
notice, required by the Securities and Exchange Commission, whichever is
latest. All you have to do is take the contract or mail it to one of our
offices or to the representative who sold it to you. It will be canceled
from the start and we will promptly give you the value of your Contract
Fund on the date you return the contract to us. We will also give back any
charges we made in accord with this contract.
Signed for Pruco Life Insurance Company of New Jersey, a New Jersey Corporation
/s/ [SPECIMEN] /s/ [SPECIMEN]
Secretary President
MODIFIED PREMIUM VARIABLE LIFE INSURANCE POLICY. INSURANCE PAYABLE ONLY UPON
DEATH. SCHEDULED PREMIUMS PAYABLE THROUGHOUT INSURED'S LIFETIME. PROVISION FOR
OPTIONAL ADDITIONAL PREMIUMS. CASH VALUES REFLECT PREMIUM PAYMENTS, INVESTMENT
RESULTS AND CHARGES. GUARANTEED DEATH BENEFIT IF SCHEDULED PREMIUMS DULY PAID
AND NO CONTRACT DEBT, OR WITHDRAWALS. INCREASE IN FACE AMOUNT AT ATTAINED AGE 21
IF CONTRACT ISSUED AT AGE L4 OR LOWER. NON-PARTICIPATING.
VALA--86 - N
II-81
<PAGE>
ENDORSEMENTS
(Only we can endorse this contract)
Page 2 (VALA--86)
II-82
<PAGE>
CONTRACT DATA
INSURED'S SEX AND ISSUE AGE M-35
INSURED JOHN DOE XX XXX XXX POLICY NUMBER
FACE AMOUNT $50,000-- SEP 10, 1996 CONTRACT DATE
PREMIUM PERIOD LIFE
AGENCY R-NK 1
BENEFICIARY CLASS 1 MARY DOE, WIFE
CLASS 2 ROBERT DOE, SON
FIXED LOAN INTEREST RATE
LIST OF CONTRACT MINIMUMS
THE MINIMUM UNSCHEDULED PREMIUM IS $25.
THE MINIMUM INCREASE IN FACE AMOUNT IS $25,000.
THE MINIMUM DECREASE IN FACE AMOUNT IS $10,000.
THE MINIMUM FACE AMOUNT IS $50,000.
***** END OF LIST *****
LIST OF SUPPLEMENTARY BENEFITS
***** NONE *****
SUMMARY OF FACE AMOUNT
EFFECTIVE RATING CONTRACT CHANGE
AMOUNT DATE CLASS DATE
INITIAL $50,000-- SEP 10, 1986 NONSMOKER SEP 10, 2016
*****END OF SUMMARY *****
SCHEDULE OF PREMIUMS
PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT
INTERVALS OF 12 MONTHS AFTER THAT DATE.
SCHEDULED PREMIUMS ARE $ 468.00 EACH
CHANGING ON SEP 10, 2016 TO $2903.50 EACH
***** END OF SCHEDULE *****
CONTRACT DATA CONTINUED ON NEXT PAGE
PAGE 3 (86)
II-83
<PAGE>
CONTRACT DATA CONTINUED POLICY NO. XX XXX XXX
SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS
FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF UP TO $2.00.
FROM THE REMAINDER WE DEDUCT A CHARGE OF UP TO 7.5% WHICH IS USED TO PAY FOR
SALES CHARGES AND STATE PREMIUM TAXES. AFTER DEDUCTION OF THIS AMOUNT, THE
BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 14).
***** END OF SCHEDULE *****
SCHEDULE OF MONTHLY DEDUCTIONS FROM THE CONTRACT FUND
THE MONTHLY ADMINISTRATION CHARGE IS NO MORE THAN $3.50. THE MONTHLY CHARGE TO
GUARANTEE THE MINIMUM DEATH BENEFIT IS NO MORE THAN $.50.
***** END OF SCHEDULE *****
***** SCHEDULE ON OTHER CHARGES *****
THERE IS A FEE OF UP TO $15 FOR ANY PARTIAL WITHDRAWAL OR DECREASE IN FACE
AMOUNT.
***** END OF SCHEDULE *****
SCHEDULE OF MAXIMUM SURRENDER CHARGES
FOR FULL SURRENDER AT THE END OF THE CONTRACT YEAR INDICATED, THE MAXIMUM CHARGE
WE WILL DEDUCT FROM THE CONTRACT FUND IS SHOWN BELOW. FOR SURRENDER OTHER THAN
YEAR-END THE AMOUNT OF THE CHARGE WILL REFLECT THE NUMBER OF COMPLETED CONTRACT
MONTHS SINCE THE BEGINNING OF THE CONTRACT YEAR (SEE PAGE 17).
YEAR OF DEFERRED DEFERRED UNDERWRITING
SURRENDER SALES CHARGES AND ISSUE CHARGE TOTAL
--------- ------------- ---------------- -----
1 $217.00 $250.00 $467.00
2 $217.00 $250.00 $467.00
3 $217.00 $250.00 $467.00
4 $217.00 $250.00 $467.00
5 $217.00 $250.00 $467.00
6 $173.50 $200.00 $373.50
7 $130.00 $150.00 $280.00
8 $87.00 $100.00 $187.00
9 $43.50 $50.00 $93.50
10 $0.00 $0.00 $0.00
11 AND LATER ZERO ZERO ZERO
***** END OF SCHEDULE *****
CONTRACT DATA CONTINUED ON NEXT PAGE
PAGE 3A (86)
II-84
<PAGE>
CONTRACT DATA CONTINUED POLICY NO. XX XXX XXX
LIST OF SUBACCOUNTS AND PORTFOLIOS
EACH SUBACCOUNT OF THE PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
INVESTS IN A SPECIFIC PORTFOLIO OF THE PRUCO LIFE SERIES FUND. WE SHOW BELOW THE
SUBACCOUNTS AND THE FUND PORTFOLIOS THEY INVEST IN.
FUND
SUBACCOUNT PORTFOLIO
- ---------- ---------
MONEY MARKET NJ MONEY MARKET
BOND NJ BOND
COMMON STOCK NJ COMMON STOCK
AGGRESSIVELY MANAGED FNJ AGGRESSIVELY MANAGED FLX
CONSERVATIVELY MANAGED FNJ CONSERVATIVELY MANAGED FLX
***** END OF LIST *****
LIST OF FIXED ACCOUNT OPTIONS
FIXED RATE OPTION
***** END OF LIST *****
SCHEDULE OF INITIAL ALLOCATION OF NET PREMIUMS
MONEY MARKET SUBACCOUNT 25%
CONSERVATIVELY MANAGED FLX SUBACCOUNT 50%
FIXED RATE OPTION 25%
***** END OF SCHEDULE *****
SERVICE OFFICE - PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS CONTRACT TO:
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
P.O. BOX XXXX, MINNEAPOLIS, MN XXXXX
PAGE 3B (86)
II-85
<PAGE>
POLICY. NO. XX XXX XXX
TABULAR VALUES
WE EXPLAIN THIS TABLE UNDER CONTRACT FUND AND TABULAR VALUES. ACTUAL CONTRACT
FUND VALUES AND CASH VALUES MAY BE MORE OR LESS THAN AMOUNT SHOWN (SEE CONTRACT
FUND AND CASH VALUE OPTION.)
END OF TABULAR TABULAR
CONTRACT CONTRACT CASH
YEAR FUND VALUE
---- ---- -----
1 288.00 0.00
2 581.50 114.50
3 878.00 411.00
4 1178.00 711.00
5 1479.50 1012.50
6 1782.00 1408.50
7 2084.00 1804.00
8 2385.00 2198.20
9 2683.00 2590.10
10 2979.00 2979.00
11 3270.50 3270.50
12 3556.50 3556.50
13 3835.50 3835.50
14 4106.50 4106.50
15 4367.50 4367.50
16 4615.00 4615.00
17 4845.00 4845.00
18 5053.00 5053.00
19 5234.50 5234.50
20 5384.00 5384.00
ATTAINED
AGE
---
60 5490.50 5490.50
62 5105.00 5105.00
85 3750.00 3750.00
TABULAR CASH VALUES ARE THE TABULAR CONTRACT FUND VALUES MINUS A
SURRENDER CHARGE. WE SHOW ON A PRIOR CONTRACT PAGE WHAT THE
MAXIMUM SURRENDER CHARGE WILL BE.
THE TABULAR CONTRACT FUND VALUES AND TABULAR CASH VALUES SHOWN ARE THE AMOUNTS
WHICH WILL APPLY IF ALL SCHEDULED PREMIUMS HAVE BEEN PAID ON THEIR DUE DATES,
THERE HAVE BEEN NO UNSCHEDULED PREMIUMS PAID, THERE IS NOT CONTRACT DEBT, THE
SUBACCOUNTS AND THE FIXED ACCOUNT OPTIONS YOU HAVE CHOSEN EARN EXACTLY THE
ASSUMED RATE OF RETURN AND WE HAVE DEDUCTED THE MAXIMUM MORTALITY CHARGES.
Page 4 (86)
II-86
<PAGE>
CONTRACT SUMMARY
We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.
This is a contract of life insurance. Premiums are to be paid throughout the
Insured's lifetime. We specify a schedule of premiums that will keep the
contract in force. Additional premiums may be paid at your option, subject to
limits in the contract. The cash value will vary with the payment of premiums,
the investment performance of the Separate Account subaccounts that you select,
the interest credited to any portion of the contract fund not allocated to the
subaccounts, and the mortality and expense charges deducted.
The face amount shown on page 3 is the guaranteed death benefit. The death
benefit will not decrease below the guaranteed death benefit if the contract is
not in default past its days of grace and there is no contract debt. (We
describe on page 9 the way the contract can go into default.) Subject to certain
requirements, you may increase or decrease the face amount. If the contract
remains in default past its days of grace, the contract may end or it may stay
in force with reduced benefits. If either occurs, you may be able to reinstate
its full benefits.
Proceeds is a word we use to mean the amount we would pay if we were to settle
the contract in one sum. To compute the proceeds that may arise from the
Insured's death, we start with a basic amount. We may adjust that amount if
there is a loan or if the contract is in default. The table on page 23 tells
what the basic amount is. The amount depends on how the contract is in force.
The table will refer you to the parts of the contract that tell you how we
adjust the basic amount. If you surrender the contract, the proceeds will be the
net cash value. We describe it under Cash Value Option on page 17.
Proceeds often are not taken in one sum. For instance, on surrender, you may be
able to put proceeds under a settlement option to provide retirement income or
for some other purpose. Also, for all or part of the proceeds that arise from
the Insured's death, you may be able to choose a manner of payment for the
beneficiary. If an option has not been chosen, the beneficiary may be able to
choose one. We will pay interest under the Interest Payment Option from the date
of death on any proceeds to which no other manner of payment applies. This will
be automatic as we state on page 21. There is no need to ask for it
You and we may agree on a change in the ownership of this contract. Also, unless
we endorse it to say otherwise, the contract gives you these rights, subject to
certain limitations and requirements:
o You may change the beneficiary under it;
o You may borrow on it up to its loan value;
o You may surrender it for its net cash value;
o You may change the allocation of future net premiums among the subaccounts
and the fixed account;
o You may transfer amounts among subaccounts and the fixed account;
o You may change the face amount;
o You may withdraw a portion of the contract's value.
The contract, as issued, may or may not have extra benefits that we call
Supplementary Benefits. If it does, we list them under Supplementary Benefits on
the Contract Data pages and describe them after page 24. The contract may or may
not have other extra benefits. If it does, we add them by rider. Any extra
benefit ends as soon as the contract is in default past its days of grace,
unless the form that describes it states otherwise.
(Contract Summary Continued on Page 23)
Page 5 (VALA--86) (NJ)
II-87
<PAGE>
GENERAL PROVISIONS
DEFINITIONS.--We define here some of the words and phrases used all through this
contract. We explain others, not defined here, in other parts of the text.
WE, OUR, US AND COMPANY.--Pruco Life Insurance Company of New Jersey,
a New Jersey Corporation.
YOU AND YOUR.--The owner of the contract.
INSURED.--The person named as the Insured on the first page. He or she need not
be the owner.
EXAMPLE: Suppose we issue a contract on the life of your spouse. You applied for
it and named no one else as owner. Your spouse is the Insured and you are the
owner.
SEC.--The Securities and Exchange Commission.
PLVAA.-- The Pruco Life of New Jersey Variable Appreciable Account.
ISSUE DATE.--The contract date.
MONTHLY DATE.--The contract date and the same day as the contract date in each
later month.
Example: If the contract date is March 9, 1986, the Monthly Dates are each March
9, April 9, May 9 and so on.
ANNIVERSARY OR CONTRACT ANNIVERSARY.--The same day and month as the contract
date in each later year.
Example: If the contract date is March 9, 1986, the first anniversary is March
9, 1987. The second is March 9, 1988, and so on.
CONTRACT YEAR.--A year that starts on the contract date or on an anniversary.
Example: If the contract date is March 9, 1986, the first contract year starts
then and ends on March 8, 1987. The second starts on March 9, 1987 and ends on
March 8, 1988, and so on.
CONTRACT MONTH.--A month that starts on a Monthly Date.
Example: If March 9, 1986 is a Monthly Date, a contract month starts then and
ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends
on May 8, 1986, and so on.
ATTAINED AGE.--The Insured's attained age at any time is the issue age plus the
length of time since the contract date. You will find the issue age near the top
of page 3.
THE CONTRACT.--This policy, and the attached copy of the initial application
together with copies of any subsequent applications to change the policy, and
any additional Contract Data pages added to this policy form the whole contract.
We assume that all statements in the application were made to the best of the
knowledge and belief of the person(s) who made them; in the absence of fraud
they are deemed to be representations and not warranties. We relied on those
statements when we issued the contract. We will not use any statement, unless
made in the application, to try to void the contract or to deny a claim.
CONTRACT MODIFICATIONS.--Only a Company officer with the rank or title of Vice
President or above may agree to modify this contract, and then only in writing.
NON-PARTICIPATING.--This contract will not share in our profits or surplus
earnings. We will pay no dividends on it.
SERVICE OFFICE.--This is the office that will service this contract. Its mailing
address is the one we show on the Contract Data pages, unless we notify you of
another one.
OWNERSHIP AND CONTROL.--Unless we endorse this contract to say otherwise: (1)
the owner of the contract is the Insured; and (2) while the Insured is living
the owner alone is entitled to (a) any contract benefit and value, and (b) the
exercise of any right and privilege granted by the contract or by us.
SUICIDE EXCLUSION.--If the Insured, whether sane or insane, dies by suicide
within two years from the issue date, we will pay no more under this contract
than the sum of the premiums paid, minus any contract debt and minus any partial
withdrawals.
Also, for any increase in the face amount, if the Insured, whether sane or
insane, dies by suicide within two years from the effective date of the
increase, we will pay, as to the increase in amount, no more than the sum of the
scheduled premiums that were due for the increase.
CURRENCY.--Any money we pay, or that is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.
MISSTATEMENT OF AGE OR SEX.--If the Insured's stated age or sex or both are not
correct, we will adjust each benefit and any amount to be paid to reflect the
correct age and sex. Any death benefit will be based on what the most recent
charge for mortality would have provided at the correct age and sex. Where
required, we have given the insurance regulator a detailed statement of how we
will make these changes.
The Schedule of Premiums may show that premiums change or stop on a certain
date. We may have used that date because the Insured would attain a certain age
on that date. If we find that the issue age was wrong, we will correct that
date.
(Continued on Next Page)
Page 6 (VALA--86) (NJ)
II-88
<PAGE>
GENERAL PROVISIONS (Continued)
INCONTESTABILITY.--Except as we state in the next sentence, we will not contest
this contract after it has been in force during the Insured's lifetime for two
years from the issue date. There are two exceptions: (1) non-payment of enough
premium to provide the required charges; and (2) any change in the contract that
requires our approval and that would increase our liability. For any such
change, we will not contest the change after it has been in effect during the
Insured's lifetime for two years from the date it takes effect.
ASSIGNMENT.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient.
ANNUAL REPORT.--Each year we will send you a report. It will show: (1) the
current death benefit; (2) the investment amount; (3) the amount of the
investment amount in each subaccount; (4) the amount in the fixed account; (5)
the net cash value; (6) premiums paid, interest credited and monthly charges
deducted since the last report; (7) any partial withdrawals since the last
report; and (8) any contract debt and the interest on the debt for the prior
year. The report will also include any other data that may be currently required
where this contract is delivered. No report will be sent if this contract is
being continued under extended term insurance.
You may ask for a similar report at some other time during the year. Or you may
request from time to time a report projecting results under your contract on the
basis of premium payment assumptions and assumed investment results. We have the
right to make a reasonable charge for reports such as these that you ask for,
and to limit the scope and frequency of such reports.
INCREASE IN FACE AMOUNT AT AGE 21 FOR CONTRACTS ISSUED AT AGE 14 OR LOWER.--If
this contract was issued at age 14 or lower, it shows on page 3 an increase in
face amount at attained age 21 which applies if the contract is not then in
default beyond its days of grace. Any references in the contract to face amount
or death benefit which apply at or after attained age 21 will be based upon the
increased face amount, unless otherwise stated.
PAYMENT OF DEATH CLAIM.--If we settle this contract in one sum as a death claim,
we will usually pay the proceeds within 7 days after we receive at our Service
Office proof of death and any other information we need to pay the claim. But we
have the right to defer paying the excess of the Insurance Amount over the face
amount if (1) the New York Stock Exchange is closed; or (2) the SEC requires
that trading be restricted or declares an emergency.
BASIS OF COMPUTATION
MORTALITY TABLES DESCRIBED.--Except as we state in the next paragraph, (1) we
base all net premiums and net values to which we refer in this contract on the
Insured's issue age and sex and on the length of time since the contract date;
(2) we use the Commissioners 1980 Standard Ordinary Mortality Table; and (3) we
use continuous functions based on age last birthday.
For extended insurance, we base net premiums and net values on the Commissioners
1980 Extended Term Insurance Table.
INTEREST RATE.--For all net premiums and net values to which we refer in this
contract we use an effective rate of 4% a year.
EXCLUSIONS.--When we compute net values we exclude the value of any
Supplementary Benefits and any other extra benefits added by rider to this
contract.
VALUES AFTER 20 CONTRACT YEARS.--Tabular values not shown on page 4 will be the
net level premium reserves, taking into account modified premiums. To compute
them, we will use the mortality tables and interest rate we describe above.
There will be the same exclusions.
MINIMUM LEGAL VALUES.--The cash, loan and other values in this contract are at
least as large as those set by law where it is delivered. Where required, we
have given the insurance regulator a detailed statement of how we compute values
and benefits.
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY,
By /s/ [SPECIMEN]
Secretary
- -----------
PLIY 72--86
- -----------
Page 7 (VALA--86) (NJ)
II-89
<PAGE>
PREMIUM PAYMENT AND REINSTATEMENT
PAYMENT OF PREMIUMS.--Premiums may be paid at our Service Office or to any of
our authorized representatives. If we are asked to do so, we will give a signed
receipt.
Premium payments will in most cases be credited as of the date of receipt, to
both the premium account and the contract fund. (See Premium Account, page 9
and Contract Fund, page 14.) Premium credits to the premium account are the full
premiums paid with no deductions. Premium credits to the contract fund are the
invested premium amounts (see page 14). But in the following cases, to the
extent stated, premium payments will be credited as of a date other than the
date of receipt:
1. The first scheduled premium is due on the Contract Date. But if the first
premium payment is received after the Contract Date, the scheduled portion will
be credited to the contract fund and the premium account as of the Contract
Date. And any portion of that first premium payment in excess of the first
scheduled premium will be credited as of the date of receipt. If the first
premium is received before the Contract Date, the entire payment will be
credited as of the Contract Date.
2. If a premium payment is received during the 61 day period after the day when
a scheduled premium was due and had not yet been paid, here is what we will do.
We will determine whether the premium account (see page 9) just before receipt
of that payment was a negative amount. If not--that is, if the premium account
was zero or higher--the premium payment will be credited as of the date of
receipt. But if the premium account was negative, by no more than the scheduled
premium on the due date, that portion of the premium payment required to bring
the premium account up to zero will be credited to the premium account as of the
due date; any remaining portion of the premium payment will be credited to the
premium account as of the date of receipt. If the premium account is negative by
more than the scheduled premium then due, the premium payment will be credited
as of the date of receipt, except in the situation described in 3 below.
3. On each Monthly Date we will determine if the contract is in default. (See
Default on page 9.) We will notify you of the minimum payment amount needed to
bring the contract out of default. If one or more premium payments are made
during the days of grace after that Monthly Date (see Grace Period on page 9),
we will credit to the contract fund and the premium account as of the applicable
Monthly Dates, such parts of the payments as are needed to end the default
status; any remaining part of these premium payments will be credited to the
contract fund and premium account as of the date of receipt.
SCHEDULED PREMIUMS.--We show the amount and frequency of the scheduled premiums
in the Schedule of Premiums. The first scheduled premium is due on the contract
date. There is no insurance under this contract unless an amount at least equal
to the first scheduled premium is paid.
The scheduled premium shown is the minimum required, at the frequency chosen, to
continue the contract in full force if all scheduled premiums are paid when due,
you make no withdrawals, any interest credited and investment returns are at the
assumed rate, mortality and expense charges are at the maximum rate, and any
contract debt does not exceed the cash value. An increase in the face amount
increases the scheduled premium.
If you wish to pay, on a regular basis, higher premiums than the amount of the
scheduled premiums, we will bill you for the higher amount you choose. Or if you
wish, you may from time to time make a smaller premium payment than the amount
of the scheduled premium, subject to the minimum premium amount shown on page 3.
If scheduled premiums that are due are not paid, or if smaller payments are
made, the contract may then or at some future time go into default. Payment of
less than the scheduled premium increases the risk that the contract will end if
investment results are not favorable. The conditions under which default will
exist are described below.
UNSCHEDULED PREMIUMS.--Except as we state in the next paragraph, unscheduled
premiums may be paid at any time during the Insured's lifetime as long as the
contract is not in default beyond its days of grace. We show on page 3 the
minimum premium we will accept. We have the right to limit unscheduled premiums
to a total of $10,000 in any contract year.
We have the right to refuse any payment that increases the basic amount by more
than it increases the contract fund.
PREMIUM CHANGE ON CONTRACT CHANGE DATE(S).--We show the Contract Change Date(s)
in the Contract Data pages. We also show in the Schedule of Premiums on these
pages that the amount of each scheduled premium will change on each Contract
Change Date and what the new premium will be. However, when a Contract Change
Date arrives we will recompute a new premium amount to be used in calculating
the premium account. The new premium that we recompute will be no greater than
the new premium for that date which we show in the Contract Data pages. In
addition, if the premium account is less than zero, we will set the premium
account to zero.
(Continued on Next Page)
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PREMIUM PAYMENT AND REINSTATEMENT (Continued)
The Schedule of Premiums may also show that the premium changes at other times.
This may occur, for example, with a contract issued with extra benefits or in an
extra rating class if, in either case, this calls for a higher or extra premium
for a limited period of time.
ALLOCATIONS.--You may allocate all or a part of your invested premium amount to
one or more of the subaccounts and fixed account option(s) listed in the
Contract Data pages. You may choose to allocate nothing to a particular
subaccount or fixed account option. But any allocation you make must be at least
10%; you may not choose a fractional percent.
Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up
to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or
any percentage that is not a whole number. The total for all subaccounts must be
100%.
The initial allocation of invested premium amounts (see page 14) is shown in the
Contract Data pages. You may change the allocation for future invested premium
amounts at any time if the contract is not in default. To do so, you must notify
us in writing in a form that meets our needs. The change will take effect on the
date we receive your notice at our Service Office.
A premium might be paid when the contract fund is less than zero. In that case,
when we receive that premium, we first use as much of the invested premium
amount as we need to eliminate the deficit in the contract fund. We will then
allocate any remainder of the invested premium amount in accord with your most
recent request. (We describe contract fund on page 14).
DEFAULT.--Unless the contract is already in the grace period, on each Monthly
Date, after we deduct any charges from the contract fund (which we describe on
page 14) and add any credits to it, we will determine whether the contract is in
default. To do so, we will compute the amount which will accrue to the tabular
contract fund on the next Monthly Date if, during the current contract month:
(1) any interest credited and investment returns are at the assumed rate (see
Assumed Rate of Return on page 13); (2) we make the other charges and credits we
have set, including interest on contract debt; and (3) we receive no premiums or
loan repayments, make no loans nor grant any partial withdrawals. We will
compare this amount to the contract fund. If this amount is not more than the
contract fund, the contract is not in default. If this amount is more than the
contract fund, the difference is the fund deficit. In this case the contract is
in default if the premium account, which we define below, is also less than
zero. See Excess Contract Debt on page 19 for another way the contract may end.
GRACE PERIOD.--The days of grace begin on any monthly date (other than the
contract date) on which the contract goes into default. We grant 61 days from
the date we mail you a notice of default to make the required payment which we
define below. During the days of grace we will continue to accept premiums and
make the charges we have set. If the monthly date was a scheduled premium due
date, when we receive a premium payment during the days of grace we will first
determine whether it satisfies case 2 under Payment of Premiums above. If it
does, the default will end. If it does not, or if the monthly date when the
contract went into default was not a scheduled premium due date, here is what we
will do:
Within 30 days after any default we will send you a notice that your contract
is in default. We will indicate the minimum payment required to keep your
contract in force and the length of the grace period for payment of such amount.
If at any time during the days of grace, we have received payments that in total
are at least equal to the lesser of (a) the sum of the fund deficit on the date
of default and any additional fund deficits on any subsequent Monthly Dates
since the date of default, and (b) the sum of the amount by which the premium
account is negative on the date of default and any scheduled premiums due since
the date of default, the default will end.
If the contract is still in default when the days of grace are over, it will end
and have no value, except as we state under Contract Value Options (which we
describe on page 16).
If death occurs when the contract is in default during its days of grace, the
death benefit proceeds will be reduced by the amount needed to bring the
contract out of default.
This contract might have an extra benefit that insures someone other than the
Insured. And there might be a claim under that benefit while the Insured is
living and in the days of grace while the contract is in default. In this case,
we will subtract the amount needed to bring the contract out of default when we
settle the claim.
PREMIUM ACCOUNT.--On the contract date, the premium account is equal to the
premium credited on that date minus the scheduled premium then due. On any other
day, the premium account is equal to:
1. what it was on the prior day; plus
2. if the premium account was greater than zero on the prior day, interest on
the excess at 4% a year; minus
3. if the premium account was less than zero on the prior day, interest on the
amount of the deficit at 4% a year; plus
4. any premium credited on that day; minus
5. any scheduled premium due on that day; minus
6. any partial withdrawals on that day.
(Continued on Next Page)
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PREMIUM PAYMENT AND REINSTATEMENT (Continued)
The contract might be in default, as described above. If so, the premium account
is less than zero. If a premium payment is received on any day during the days
of grace while the contract is in default and the premium account is negative by
no more than one scheduled premium, that payment, to the extent that it is
required to bring the premium account up to zero, will, as we describe under
Payment of Premiums above, be credited to the premium account as of the Monthly
Date when the scheduled premium was due, whether that date is the date of
default or a subsequent Monthly Date. Any remaining portion of the premium
payment will be credited as of the actual date of receipt. In this case the
premium account for all days from the monthly date to the actual date of receipt
will be recalculated.
REINSTATEMENT.--If this contract is still in default after the last day of
grace, you may reinstate it, if all these conditions are met:
1. No more than three years must have elapsed since the date of default.
2. You must not have surrendered the contract for its net cash value.
3. You must give us any facts we need to satisfy us that the insured is
insurable for the contract.
4. We must be paid a premium at least equal to the amount required to bring
the premium account up to zero on the first Monthly Date on which a
scheduled premium is due after the date of reinstatement. From this amount
we will deduct the expense charges from premium payments described in the
Contract Data pages, plus any charges with 4% interest for any extra
benefits, plus any other charges with 4% interest. The contract fund will
be equal to the remainder, plus the cash value of the contract immediately
before reinstatement, plus a refund of that part of any surrender charge
deducted at the time of default which would be charged if the contract were
surrendered immediately after reinstatement.
If we approve, you may be able to reinstate the contract for a premium less
than that described above. We will deduct the same charges and adjust the
contract fund in the same manner. If you do so, the premium account will be
less than zero. You may need to pay more than the scheduled premiums to
guarantee that the contract will not go into default at some future time.
5. If before reinstatement the contract is in force as reduced paid-up
insurance (see page 16), any contract debt under reduced paid-up insurance
must be repaid with interest or carried over to the reinstated contract.
If we approve the reinstatement, these statements apply. The date of
reinstatement will be the date of your request or the date the required premium
is paid, if later. And we will start to make daily and monthly charges and
credits again as of the date of reinstatement.
CHANGING THE FACE AMOUNT AND PARTIAL WITHDRAWALS
FACE AMOUNT.--The face amount is shown on page 3. It will change if (1) you
increase or decrease it, or (2) you make a partial withdrawal.
INCREASE IN FACE AMOUNT.--After the first contract year, you may be able to
increase the face amount once each contract year. Your right to do so is subject
to all these conditions and the paragraph that follows:
1. You must ask for the increase in writing and in a form that meets our
needs; if you are not the Insured and the Insured is age 8 or over, he or
she must sign the form too.
2. The amount of the increase must be at least equal to the minimum increase
in face amount, which we show on page 3.
(Continued on Next Page)
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CHANGING THE FACE AMOUNT AND PARTIAL WITHDRAWALS (Continued)
3. You must give us any facts we need to satisfy us that the Insured is
insurable for the amount of the increase.
4. If we ask you to do so, you must send us the contract to be endorsed.
5. The contract must not be in default.
6. We must not have changed the basis on which benefits and charges are
calculated under newly issued contracts since the Issue Date.
7. You must make any required payment.
8. The Insured must be eligible for the same rating class and benefits as
shown on page 3.
9. We must not be waiving premiums in accord with any Waiver of Premium
benefit that may be included in the contract.
An increase will take effect only if we approve your request for it at our
Service Office. If the increase is approved, we will recompute the contract's
scheduled premiums, maximum surrender charges, tabular values, monthly
deductions and expense charges. We will send you new Contract Data pages showing
the amount and effective date of the increase and the recomputed values. If the
insured is not living on the effective date, the increase will not take effect.
DECREASE IN FACE AMOUNT.--After the first contract year, you may be able to
decrease the face amount. Your right to do so is subject to all these conditions
and the paragraphs that follow:
1. You must ask for the decrease in writing and in a form that meets our
needs.
2. The amount of the decrease must be at least equal to the minimum decrease
in face amount, which we show on page 3.
3. The face amount after the decrease must be at least equal to the minimum
face amount, which we show on page 3.
4. It we ask you to do so, you must send us the contract to be endorsed.
A decrease will take effect only if we approve your request for it at our
Service Office. If the decrease is approved, we will recompute the contract's
scheduled premiums, maximum surrender charges, tabular values, monthly
deductions and expense charges. A decrease in face amount may also effect the
amount of any extra benefits this contract might have. We will send you new
Contract Data pages showing the amount and effective date of the decrease and
the recomputed values. If the Insured is not living on the effective date, the
decrease will not take effect.
We may deduct an administrative fee of up to $15.00, and a proportionate part of
any then applicable surrender charge from the contract fund.
PARTIAL WITHDRAWALS.--After the first contract year, you may be able to make
partial withdrawals from the contract. Your right to do so is subject to all
these conditions and the paragraphs that follow:
1. You must ask for the partial withdrawal in writing and in a form that meets
our needs.
2. The amount withdrawn, plus the net cash value after withdrawal, may not be
more than the net cash value before withdrawal.
3. The cash value after withdrawal must not be less than the tabular cash
value for the new face amount.
4. The amount you withdraw must be at least $2,000.
5. You may make up to four partial withdrawals in any contract year.
6. The face amount after the partial withdrawal must be at least equal to the
minimum face amount, which we show on page 3.
7. If we ask you to do so, you must send us the contract to be endorsed.
We may deduct an administrative fee of up to $15.00, and a proportionate part of
any then applicable surrender charge, based on the reduction in the face amount
described below, from the contract fund.
We will decrease the face amount by the amount of the withdrawal. We will
recompute the contract's scheduled premiums, maximum surrender charges, tabular
values, monthly deductions and expense charges. The decrease in face amount may
also affect the amount of any extra benefitS this contract might have. We will
send you new Contract Data pages showing the recomputed values.
We will usually pay any partial withdrawal within seven days after we receive
your request and, if we request it, the contract at our Service Office. But we
have the right to deter paying the portion of the proceeds that is to come from
the portion of the contract fund in the PLVAA if (1) the New York Stock Exchange
is closed; or (2) the SEC requires that trading be restricted or declares an
emergency. We have the right to postpone paying you the remainder of the
proceeds for up to six months. If we do so for more than thirty days, we will
pay interest at the rate of 3% a year.
An amount withdrawn may not be repaid, except as an unscheduled premium subject
to charges.
We will tell you how much you may withdraw if you ask us.
Page 11 (VALA--86) (NJ)
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SEPARATE ACCOUNT
THE SEPARATE ACCOUNT.--The words separate account, where we use them in this
contract without qualification, mean the Pruco Life of New Jersey Variable
Appreciable Account (PLVAA) and any other separate account that we establish.
PLVAA is a unit investment trust registered with the SEC under the Investment
Company Act of 1940.
We established PLVAA to support variable life insurance contracts. We own the
assets of this separate account; we keep them separate from the assets of our
general account. We guarantee that the expense and mortality results of the
account will not adversely affect the dollar amounts of values, benefits or
payments under this contract.
SUBACCOUNTS.--A separate account may have several subaccounts. We list the
subaccounts in the Contract Data pages. You determine, using percentages, how
invested premium amounts will be allocated among the subaccounts. We may
establish additional subaccounts.
THE FUND.--The word fund, where we use it in this contract without
qualification, means the fund we identify in the Contract Data pages. The fund
is registered with the SEC under the Investment Company Act of 1940 as an
open-end diversified management investment company. The fund has several
portfolios; there is a portfolio that corresponds to each of the subaccounts of
PLVAA. We list these portfolios in the Contract Data pages.
SEPARATE ACCOUNT INVESTMENTS.--We use the assets of PLVAA to buy shares in the
fund. Each subaccount of PLVAA is invested in a specific portfolio. Income and
realized and unrealized gains and losses from assets in each of these
subaccounts are credited to, or charged against, that subaccount. This is
without regard to income, gains, or losses in our other investment accounts.
We will determine the value of the assets in PLVAA at the end of each business
day. When we use the term business day, we mean a day when the New York Stock
Exchange is open for trading. We might need to know the value of an asset on a
day that is not a business day or on which trading in that asset does not take
place. In this case, we will use the value of that asset as of the end of the
last prior business day on which trading took place.
Example: It we need to know the value of an asset on a Sunday, we will normally
use the value of the asset as of the end of business on Friday.
We will always keep assets in the separate account with a total value at least
equal to the amount of the investment amounts under contracts like this one. To
the extent those assets do not exceed this amount, we use them only to support
those contracts; we do not use those assets to support any other business we
conduct. We may use any excess over this amount in any way we choose.
If we create additional separate accounts, we may invest the assets in them in a
different way. But we will do so only with the consent of the SEC and, where
required, of the insurance regulator where this contract is delivered.
CHANGE IN INVESTMENT POLICY.--A portfolio of the fund might make a material
change in its investment policy. In that case, we will send you a notice of the
change. Within 60 days after you receive the notice, or within 60 days after the
effective date of the change, if later, you may transfer to the Fixed Account
any amounts in the subaccount investing in that portfolio.
CHANGE OF FUND.--A portfolio of the fund might, in our judgment, become
unsuitable for investment by a subaccount. This might happen because of a change
in investment policy, or a change in the laws or regulations, or because the
shares are no longer available for investment, or for some other reason. If that
occurs, we have the right to substitute another portfolio of the fund, or to
invest in a fund other than the one we show in the Contract Data pages. But we
would first seek the consent of the SEC and, where required, the insurance
regulator where this contract is delivered.
FIXED ACCOUNT
THE FIXED ACCOUNT.--If you choose, you may allocate all or part of your invested
premium amount to the fixed account. The fixed account is funded by the general
account of Pruco Life. The fixed account is credited with interest as described
under Guaranteed Interest and Excess Interest on page 14.
FIXED ACCOUNT OPTIONS.--We may have more than one fixed account option. We list
the fixed account option(s) in the Contract Data pages.
Page 12 (VALA--86) (NJ)
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TRANSFERS
TRANSFERS AMONG SUBACCOUNTS AND INTO THE FIXED ACCOUNT.--You may transfer
amounts among subaccounts of PLVAA and into the Fixed Account as often as four
times in a contract year if the contract is not in default or if the contract is
being continued under the reduced paid up option. In addition, at any time
within the first two contract years, or within two years of the effective date
of any increase, the entire amount in all subaccounts may be transferred to the
fixed account. If we establish new separate accounts, transfers into or out of
these separate accounts will be allowed only with our consent. To make a
transfer, you must notify us in writing in a form that meets our needs. The
transfer will take effect on the date we receive your notice at our Service
Office.
TRANSFERS AMONG FIXED ACCOUNT OPTIONS AND INTO THE SUBACCOUNTS.--You may
transfer amounts among the available Fixed Account Options and into the
subaccounts only with our consent.
INVESTMENT AMOUNT AND ASSUMED RATE OF RETURN
INVESTMENT AMOUNT.--The investment amount for this contract is an amount we use
to compute the investment return. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate net premiums; (2) whether
or not you transfer amounts among subaccounts and the fixed account; (3) the
investment performance of the subaccounts to which amounts are allocated or
transferred; (4) the deductions we make from the contract fund; (5) the amount
and timing of premium payments you make; (6) whether or not you take any loan;
and (7) whether or not you make any partial withdrawals or change the face
amount. The investment amount exists only if the contract is not in default past
the days of grace or if it is being continued as reduced paid-up insurance.
The investment amount at any time is equal to the contract fund, minus the
amount of any contract loan and interest accrued on the loan since the last
transaction date, minus the amount in the Fixed Account.
ASSUMED RATE OF RETURN.--The assumed rate of return is an effective rate of 4% a
year. This is the same as .01074598% a day compounded daily.
Page 13 (VALA--86) (NJ)
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INSURANCE AMOUNT
The insurance amount on any date is equal to the greater of (1) the face amount,
which we show on the page 3, and (2) the contract fund divided by the net single
premium per $1 at the insured's attained age on that date.
CONTRACT FUND
CONTRACT FUND DEFINED.--On the contract date the contract fund is equal to the
invested premium amounts credited (see below), minus any of the charges
described in items (d) through (l) below which may have been due on that date.
On any day after that the contract fund is equal to what it was on the previous
day, plus any invested premium amounts credited, plus these items:
(a) any increase due to investment results in the value of the subaccounts
to which that portion of the contract fund that is in the investment
amount is allocated;
(b) guaranteed interest at an effective rate of 4% a year on that portion
of the contract fund that is not in the investment amount; and
(c) any excess interest on that portion of the contract fund that is not
in the investment amount;
and minus these items:
(d) any decrease due to investment results in the value of the subaccounts
to which that portion of the contract fund that is in the investment
amount is allocated;
(e) any amount charged against the investment amount for Federal or State
income taxes;
(f) a charge to guarantee the minimum death benefit;
(g) a charge for the cost of expected mortality;
(h) any charges for extra rating class;
(i) any charges for extra benefits;
(j) any charge for administration;
(k) any partial withdrawals; and
(l) any surrender charges and administrative charges that may result from
a partial withdrawal or a decrease in face amount.
We describe under Reinstatement on page 10 what the contract fund will be equal
to on any reinstatement date.
There is no contract fund for a contract in force as extended insurance.
INVESTED PREMIUM AMOUNT.--This is the portion of each premium paid that we will
add to the contract fund. It is equal to the premium paid minus the expense
charges described in the Contract Data pages under Schedule of Expense Charges
from Premium Payments.
GUARANTEED INTEREST.--We will credit interest each day on that portion of the
contract fund not in the investment amount. We will credit .01074598% a day,
which is equivalent to an effective rate of 4% a year.
EXCESS INTEREST.--We may credit interest in addition to the guaranteed interest
on that portion of the contract fund not in the investment amount. The rate of
any excess interest will be determined from time to time and will continue
thereafter until a new rate is determined. We may use different rates of excess
interest for different portions of the contract fund not in the investment
amount. We may from time to time guarantee rates of excess interest on some
portions of the contract fund.
COST OF EXPECTED MORTALITY.--On each Monthly Date, we will deduct a charge for
the cost of expected mortality. The amount deducted is computed as the annual
mortality rate multiplied by the coverage amount. The coverage amount is the
difference between the adjusted death benefit and the adjusted contract fund.
The adjusted death benefit is equal to the Insurance Amount multiplied by the
Factor for Adjusting the Insurance Amount (see Table of Adjustment Factors). If
the insurance amount equals the face amount, the adjusted contract fund is equal
to the tabular contract fund at the end of the month plus the excess, positive
or negative, of the actual contract fund, after deduction of any charges due on
the Monthly Date, over the tabular contract fund at the beginning of the month,
all multiplied by the Factor for Adjusting the Contract Fund. If the insurance
amount exceeds the face amount, the adjusted contract fund is equal to the net
single premium at the end of the month for the insurance amount on the Monthly
Date, all multiplied by the Factor for Adjusting the Contract Fund. The
adjustment factors depend on the month as shown in the table that follows.
(Continued on Next Page)
Page 14 (VALA--86) (NJ)
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CONTRACT FUND (Continued)
We will not charge more than the maximum guaranteed rates, which are based on
the Insured's sex and attained age and the mortality table described in the
Basis of Computation. We may charge less. At least once every five years, but
not more often than once a year, we will consider the need to change the rates.
We will change them only if we do so for all contracts like this one dated in
the same year as this one.
CHARGE FOR EXTRA RATING CLASS.--If there is an extra charge because of the
rating class of the Insured, we will deduct it from the contract fund at the
beginning of each contract month. Any charge is included in the amount shown in
the Contract Data pages under Schedule of Monthly Deductions from the Contract
Fund.
CHARGE FOR EXTRA BENEFITS.--If the contract has extra benefits, we will deduct
the charges for such benefits from the contract fund at the beginning of each
contract month. Charges for any such extra benefits are included in the amount
shown in the Contract Data pages under Schedule of Monthly Deductions from
Contract Fund.
CHARGES FOR ADMINISTRATION AND MINIMUM DEATH BENEFIT GUARANTEE.--On each monthly
date, we will deduct a charge for administration. We will also deduct a charge
for guaranteeing the minimum death benefit regardless of the investment
performance of the separate account. We show the amount of these charges in the
Contract Data pages under Schedule of Monthly Deductions from the Contract Fund.
- --------------------------------------------------------------------------------
TABLE OF ADJUSTMENT FACTORS
- --------------------------------------------------------------------------------
Factor for Adjusting Factor for Adjusting
Month the Insurance Amount the Contract Fund
February .076597042 .076481870
A month with 30 days .082059446 .081927252
A month with 31 days .084790207 .084649064
- --------------------------------------------------------------------------------
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CONTRACT VALUE OPTIONS
BENEFIT AFTER THE GRACE PERIOD.--If the contract is in default beyond its days
of grace, we will use any net cash value (which we describe under Cash Value
Option) to keep the contract in force as one of two kinds of insurance. One kind
is extended insurance. The second kind is reduced paid-up insurance. We describe
each below. You will find under Automatic Benefit which kind it will be. Any
extra benefit(s) will end as soon as the contract is in default past its days of
grace, unless the form that describes the extra benefit states otherwise.
EXTENDED INSURANCE.--This will be term insurance of a fixed amount on the
Insured's life. We will pay the amount of term insurance if the Insured dies in
the term we describe below. Before the end of the term there will be cash values
but no loan value.
The amount of term insurance will be the death benefit on the day of default,
minus any part of that death benefit which was provided by extra benefits. The
term is a period of time that will start on the day the contract went into
default. The length of the term will be what is provided when we use the net
cash value at the net single premium rate. This rate depends on the Insured's
issue age and sex and on the length of time since the contract date.
There may be extra days of term insurance. This will occur if, on the day the
contract goes into default, the term of extended insurance provided by the net
cash value does not exceed 90 days, or the number of days the contract was in
force before the default began, if less. The number of extra days will be (1)
90, or the number of days the contract was in force before the default began, if
less, minus (2) the number of days of extended insurance that would be provided
by the net cash value if there were no contract debt. The extra days, if any.
start on the day after the last day of term insurance provided by the net cash
value, if any. If there is no such term insurance, the extra days start on the
day the contract goes into default. The term insurance for the extra days has no
cash value. There will be no extra days if you replace the extended insurance
with reduced paid-up insurance or you surrender the contract before the extra
days start.
REDUCED PAID-UP INSURANCE.--This will be paid-up variable life insurance on the
Insured's life. The death benefit may change from day to day, as we explain
below, but if there is no contract debt, it will not be less than a minimum
guaranteed amount. There will be cash values and loan values.
The minimum guaranteed amount of insurance will be computed by using the net
cash value at the net single premium rate determined as of the day the contract
went into default. The net single premium rate depends on the Insured's issue
age and sex and on the length of time since the contract date. The amount
payable in the event of death thereafter will be the greater of (a) the minimum
guaranteed amount and (b) the contract fund divided by the net single premium
per $1 at the Insured's attained age. In either case the amount will be adjusted
for any contract debt.
Except when it is provided as the automatic benefit, (see below), the reduced
paid-up insurance option will be available only when the guaranteed death
benefit under the option will be $5000 or more.
If we issued the contract in a rating class for which we do not provide extended
insurance, you may not allocate the contract fund of the reduced paid-up
insurance to any subaccount without our consent.
COMPUTATIONS.--We will make all computations for either of these benefits as of
the date the contract goes into default. But we will consider any loan you take
out or pay back or any premium payments or partial withdrawals you make in the
days of grace.
AUTOMATIC BENEFIT.--When the contract is in default, it will stay in force as
extended insurance. But it will stay in force as reduced paid-up insurance if
either of these statements applies: (1) We issued the contract in a rating class
for which we do not provide extended insurance; in this case the phrase No
Extended Insurance is in the Rating Class in the Contract Data pages. (2) The
amount of reduced paid-up insurance would be at least as great as the amount of
extended term insurance.
OPTIONAL BENEFIT.--You may choose to replace any extended insurance that has a
net cash value by reduced paid-up insurance. To make this choice, you must do so
in writing to us in a form that meets our needs, not more than three months
after the date the contract goes into default. You must also send the contract
to us to be endorsed.
(Continued on Next Page)
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CONTRACT VALUE OPTIONS (Continued)
CASH VALUE OPTION.--You may surrender this contract for its net cash value. The
net cash value at any time is the cash value at that time, less any contract
debt. To surrender this contract, you must ask us in writing in a form that
meets our needs. You must also send the contract to us. Here is how we will
compute the cash value for surrender of the contract or for its continuation
under extended insurance or reduced paid-up insurance.
1. If the contract is not in default: The cash value on surrender is the
contract fund, minus any surrender charge, consisting of a deferred sales charge
and a deferred underwriting and issue charge. The schedule of Maximum Surrender
Charges for this contract is in the Contract Data pages.
2. If the contract is in default during its days of grace: We will compute the
net cash value as of the date the contract went into default. But we will adjust
this value for any loan you take out or pay back, and any premium payments,
partial withdrawals or decreases in face amount you make in the days of grace.
3. If the contract is in default beyond its days of grace: The net cash value as
of any date will be the net value on that date of any extended insurance benefit
then in force. Or it will be the net value on that date of any reduced paid-up
insurance benefit then in force, less any contract debt.
Within 30 days after a contract anniversary, the net cash value of any extended
insurance will not be less than the value on that anniversary.
We will usually pay any cash value within seven days after we receive your
request and the contract at our Service Office. But we have the right to defer
paying the portion of the proceeds that is to come from the portion of the
contract fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2)
the SEC requires that trading be restricted or declares an emergency. We have
the right to postpone paying you the remainder of the proceeds for up to six
months. If we do so for more than thirty days, we will pay interest at the rate
of 3% a year.
TABULAR VALUES.--We show tabular contract fund values and tabular cash values at
the end of contract years in the Contract Data pages. The tabular contract fund
at the end of any contract year is the amount which will then be in the contract
fund if all scheduled premiums have been paid on their due dates, there have
been no unscheduled premiums paid, there is no contract debt, the subaccounts
you have chosen earn exactly the assumed rate of return, we have credited no
excess interest, and we have deducted the maximum mortality and expense charges.
The tabular cash values are the amounts which, under the same conditions, will
then be used to provide extended insurance or reduced paid-up insurance or will
be paid in cash, if the maximum surrender charges are applied. The tabular cash
value shown is equal to the tabular contract fund value as of the same date
after deducting any surrender charges (at the maximum rate) from the tabular
contract fund value. (See Cash Value Option above.)
If we need to compute tabular values at some time during a contract year, we
will count the time since the start of the year. We will let you know the
tabular values for other durations if you ask for them.
Page 17 (VALA--86)
II-99
<PAGE>
LOANS
LOAN REQUIREMENTS.--After the first anniversary, you may borrow from us on the
contract. All these conditions must be met:
1. The Insured is living.
2. The contract is in force other than as extended insurance.
3. The contract debt will not be more than the loan value. (We explain these
terms below.)
4. As sole security for the loan, you assign the contract to us in a form that
meets our needs.
5. Except when used to pay premiums on this contract, the amount you borrow at
any one time must be at least $500.
If there is already contract debt when you borrow from us, we will add the new
amount you borrow to that debt.
CONTRACT DEBT.--Contract debt at any time means the loan on the contract, plus
the interest we have charged that is not yet due and that we have not yet added
to the loan.
LOAN VALUE.--You may borrow any amount up to the difference between the loan
value and any existing contract debt. At any time the loan value is 90% of the
cash value.
There is one exception. If the contract is in default, the loan value during the
days of grace is what it was on the date of default.
Example 1: Suppose the contract has a loan value of $6,000. About eight months
ago you borrowed $1,500. By now there is interest of $55 charged but not yet
due. The contract debt is now $1,555, which is made up of the $1,500 loan and
the $55 interest.
Example 2: Suppose, in example 1, you want to borrow all that you can. We will
lend you $4,445 which is the difference between the $6,000 loan value and the
$1,555 contract debt. This will increase the contract debt to $6,000. We will
add the new amount borrowed to the existing loan and will charge interest on it,
too.
INTEREST CHARGE.--You may select either the Fixed Loan Rate Option or the
Variable Loan Rate Option. Both are described below. We show on page 3 the
option you have selected. You may request a change to the loan rate option at
any time. If we agree, we will tell you the effective date of the change.
FIXED LOAN RATE OPTION.--We charge interest daily on any loan at the effective
rate of 5 1/2% a year. Interest is due on each contract anniversary, or when the
loan is paid back if that comes first. If interest is not paid when due. it
becomes part of the loan. Then we start to charge interest on it, too.
Example 3: Suppose the contract date is in 1987. Six months before the
anniversary in 1996 you borrow $1,600 out of a $4,000 loan value. We charge
5 1/2% a year. Three months later, but still three months before the
anniversary, we will have charged about $22 interest. This amount will be a few
cents more or less than $22 since some months have more days than others. The
interest will not be due until the anniversary unless the loan is paid back
sooner. The loan will still be $1,600. The contract debt will be $1,622, since
contract debt includes interest charged but not yet due.
On the anniversary in 1996 we will have charged about $44 interest. The interest
will then be due.
Example 4: Suppose the $44 interest in example 3 was paid on the anniversary.
The loan and contract debt each became $1,600 right after the payment.
Example 5: Suppose the $44 interest in example 3 was not paid on the
anniversary. The interest became part of the loan, and we began to charge
interest on it, too. The loan and contract debt each became $1,644.
VARIABLE LOAN RATE OPTION.--We charge interest daily on any loan. Interest is
due on each contract anniversary, or when the loan is paid back it that comes
first. If interest is not paid when due, it becomes part of the loan. Then we
start to charge interest on it, too.
The loan interest rate is the annual rate we set from time to time. The rate
will never be greater than is permitted by law. It will change only on a
contract anniversary.
Before the start of each contract year, we will determine the loan interest rate
we can charge for that contract year.
To do this, we will first find the rate that is the greater of (1) The Published
Monthly Average (which we describe below) for the calendar month ending two
months before the calendar month of the contract anniversary; and (2) 5%.
If that greater rate is at least 1/2% more than the loan interest rate we had
set for the current contract year, we have the right to increase the loan
interest rate by at least 1/2%, up to that greater rate. If it is at least 1/2%
less, we will decrease the loan interest rate to be no more than the greater
rate. We will not change the loan interest rate by less than 1/2%.
(Continued on Next Page)
Page 18 (VALA--86)
II-100
<PAGE>
LOANS (Continued)
When you make a loan we will tell you the initial interest rate for the loan. We
will send you a notice it there is to be an increase in the rate.
The Published Monthly Average means:
1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as
published by Moody's Investors Service, Inc. or any successor to that service;
or
2. If that average is no longer published, a substantially similar average,
established by the insurance regulator where this contract is delivered.
REPAYMENT.--All or part of any contract debt may be paid back at any time while
the Insured is living. When we settle the contract, any contract debt is due us.
If there is contract debt at the end of the last day of grace when the contract
is in default, it will be deducted from the cash value to determine the net cash
value. We will make this adjustment so that the proceeds will not include the
amount of that debt.
EFFECT OF A LOAN.--When you take a loan, the amount of the loan continues to be
a part of the contract fund and continues to be credited with interest at the
guaranteed rate of 4% a year. If you have selected the Variable Loan Rate
Option, we will credit excess interest at an effective rate of not less than the
loan interest rate for the contract year less 5 1/2%. However, we will reduce
the portion of the contract fund allocated to the separate account and the fixed
account by the amount you borrow, and by loan interest that becomes part of the
loan because it is not paid when due.
On each transaction date, if there is a contract loan outstanding, we will
increase the portion of the contract fund in the fixed account and the separate
account by interest credits accrued on the loan since the last transaction date.
When you repay part or all of a loan we will increase the portion of the
contract fund in the separate account and the fixed account by the amount of
loan you repay, plus interest credits accrued on the loan since the last
transaction date. We will not increase the portion of the contract fund
allocated to the separate account and the fixed account by loan interest that is
paid before we make it part of the loan.
Only the amount of the investment amount will reject the investment results of
the subaccounts. Since the amount you borrow is removed from the portion of the
contract fund allocated to the separate account and the fixed account, a loan
may have a permanent effect on the net cash value of this contract and also on
any death benefit in excess of the guaranteed death benefit. The longer the loan
is outstanding, the greater this effect is likely to be.
EXCESS CONTRACT DEBT.--If contract debt ever becomes equal to or more than the
cash value, all the contract's benefits will end 61 days after we mail a notice
to you and any assignee of whom we know. Also, we may send a notice to the
Insured's last known address. In the notice we will state the amount that, if
paid to us, will keep the contract's benefits from ending for a limited time.
POSTPONEMENT OF LOAN.--We will usually make a loan within seven days after we
receive your request at our Service Office. But we have the right to defer
making the portion of the loan that is to come from the portion of the contract
fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2) the SEC
requires that trading be restricted or declares an emergency. We have the right
to postpone paying you the remainder of the proceeds of a loan for up to six
months, unless it will be used to pay premiums on this or other contracts with
us.
Page 19 (VALA--86)
II-101
<PAGE>
SETTLEMENT OPTIONS
PAYEE DEFINED.--In these provisions and under the Automatic Mode of Settlement,
the word Payee means a person who has a right to receive a settlement under the
contract. Such a person may be the Insured, the owner, a beneficiary, or a
contingent payee.
CHOOSING AN OPTION.--A Payee may choose an option for all or part of any
proceeds or residue that becomes payable to him or her in one sum. We describe
residue later on this page.
In some cases, a Payee will need our consent to choose an option. We describe
these cases under Conditions.
OPTIONS DESCRIBED.--Here are the options we offer. We may also consent to other
arrangements.
LIFE INCOME OPTION.--We will make equal monthly payments for as long as the
person on whose life the settlement is based lives, with payments certain for a
10-year period (10-Year Certain). The amount of each payment will be based on
the Life Income Option Table and on the sex and age, on the due date of the
first payment, of the person on whose life the settlement is based. That person
must be a Payee. But if a choice is made more than two years after the Insured's
death, we may use the Life Income Option payment rates in individual annuity
contracts or life insurance contracts we regularly issue, based on United States
currency, on the due date of the first payment. On request, we will quote the
payment rates in contracts we then issue. We must have proof of the date of
birth of the person on whose life the settlement is based. If on the due date of
the first payment under this option, we have declared a higher payment rate
under the option, we will base the payments on that higher rate.
INTEREST PAYMENT OPTION.--We will hold an amount at interest. We will pay
interest at an effective rate of at least 3% a year ($30.00 annually, $14.89
semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more
interest.
SUPPLEMENTAL LIFE ANNUITY OPTION.--Any Payee may choose to receive all or part
of the proceeds of this contract in the form of payments like those of any
annuity or life annuity we then regularly issue. But that annuity must (1) be
based on United States currency; (2) be bought by a single sum; (3) not provide
for dividends; and (4) not normally provide for deferral of the first payment.
For purposes of this option only, the words we, our and us include our parent
company, The Prudential Insurance Company of America, which has agreed to make
settlements under this option.
The payment will be at least what we would pay under the chosen kind of annuity
with its first payment due on its contract date.
The phrase regularly issue does not include contracts that are used to qualify
for special federal income tax treatment as a retirement plan unless this
contract has been issued as part of such a plan. At least one of the persons on
whose life this Option is based must be a Payee. We must have proof of the date
of birth of any person on whose life the option is based. This Option cannot be
chosen more than 30 days before the due date of the first payment. On request,
we will quote the payment that would apply for any amount placed under the
option at that time.
FIRST PAYMENT DUE DATE.--Unless a different date is stated when the option is
chosen: (1) the first payment for the Interest Payment Option will be due at the
end of the chosen payment interval; and (2) the first payment for any of the
other options will be due on the date the option takes effect.
RESIDUE DESCRIBED.--For the Life Income Option and the Supplemental Life Annuity
Option, residue on any date means the then present value of any unpaid payments
certain. For the Life Income Option, we will compute it at an effective interest
rate of 3 1/2% a year. But we will use the interest rate we used to compute the
actual Life Income Option payments if they were not based on the table in this
contract. For the Supplemental Life Annuity Option, we will use the interest
rate we would use for the chosen kind of annuity with the same provisions as to
withdrawal.
For the Interest Payment Option, residue on any date means any unpaid balance
with interest to that date.
For the Life Income Option and the Supplemental Life Annuity Option, residue
does not include the value of any payment that may become due after the certain
period.
WITHDRAWAL OF RESIDUE.--Unless otherwise stated when the option is chosen: (1)
under the Life Income Option and the Supplemental Life Annuity Option the
residue may be withdrawn; and (2) under the Interest Payment Option all, or any
part not less than $100, of the residue may be withdrawn. If the Interest
Payment Option residue is reduced to less than $1,000, we have the right to pay
it in one sum. Under the Life Income Option and the Supplemental Life Annuity
Option, withdrawal of the residue will not affect any payments that may become
due after the certain period; the value of those payments cannot be withdrawn.
Instead, the payments will start again if they were based on the life of a
person who lives past the certain period.
(Continued on Next Page)
Page 20 (VALA--86)
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<PAGE>
SETTLEMENT OPTIONS (Continued)
DESIGNATING CONTINGENT PAYEE(S).--A Payee under an option has the right, unless
otherwise stated, to name or change a contingent payee to receive any residue at
the Payee's death. This may be done only if (1) the Payee has the full right to
withdraw the residue; or (2) the residue would otherwise have been payable to
that Payee's estate at death.
A payee who has the right may choose, or change the choice of, an option for all
or part of the residue. In some cases, the Payee will need our consent to choose
or change an option. We describe these cases under Conditions.
Any request to exercise any of these rights must be in writing and in a form
that meets our needs. It will take effect only when we file it at our Service
Office. Then the interest of anyone who is being removed will end as of the date
of the request, even if the Payee who made the request is not living when we
file it.
CHANGING OPTIONS.--A Payee under the Interest Payment Option may choose another
option for any sum that the Payee could withdraw on the date the chosen option
is to start. That date may be before the date the Payee makes the choice only if
we consent. In some cases, the Payee will need our consent to choose or change
an option. We describe these cases next.
CONDITIONS.--Under any of these conditions, our consent is needed for an option
to be used for any person:
1. The person is not a natural person who will be paid in his or her own
right.
2. The person will be paid as assignee.
3. The amount to be held for the person under the Interest Payment Option is
less than $1,000. But we will hold any amount for at least one year in
accord with the Automatic Mode of Settlement.
4. Each payment to the person under the option would be less than $20.
5. The option is for residue arising other than at (a) the Insured's death, or
(b) the death of the beneficiary who was entitled to be paid as of the date
of the Insured's death.
6. The option is for proceeds that arise other than from the Insured's death,
and we are settling with an owner or any other person who is not the
Insured.
DEATH OF PAYEE.--If a Payee under an option dies and if no other distribution is
shown, we will pay any residue under that option in one sum to the Payee's
estate.
AUTOMATIC MODE OF SETTLEMENT
APPLICABILITY.--These provisions apply to proceeds arising from the Insured's
death and payable in one sum to a Payee who is a beneficiary. They do not apply
to any periodic payment.
INTEREST ON PROCEEDS.--We will hold the proceeds at interest under Interest
Payment Option of the Settlement Options provision. The Payee may withdraw the
residue. We will pay it promptly on request. We will pay interest annually
unless we agree to pay it more often. We have the right to pay the residue in
one sum after one year if (1) the Payee is not a natural person who will be paid
in his or her own right; (2) the Payee will be paid as assignee; or (3) the
original amount we hold under Interest Payment Option for the Payee is less than
$1,000.
SETTLEMENT AT PAYEE'S DEATH.--If the Payee dies and leaves an Interest Payment
Option residue, we will honor any contingent payee provision then in effect. If
there is none, here is what we will do. We will look to the beneficiary
designation of the contract; we will see what other beneficiary(ies), if any,
would have been entitled to the portion of the proceeds that produced the
Interest Payment Option residue if the Insured had not died until immediately
after the Payee died. Then we will pay the residue in one sum to such other
beneficiary(ies}, in accord with that designation. But if, as stated in that
designation, payment would be due the estate of someone else, we will instead
pay the estate of the Payee.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. Jane was living when the Insured died. Jane later died
without having chosen an option or naming someone other than Paul and John as
contingent payee. If Paul and John are living at Jane's death we owe them the
residue. If only one of them is living then, and if the contract called for
payment to the survivor of them, we owe him the residue. It neither of them is
living then, we owe Jane's estate.
SPENDTHRIFT AND CREDITOR.--A beneficiary or contingent payee may not, at or
after the Insured's death, assign, transfer, or encumber any benefit payable. To
the extent allowed by law, the benefits will not be subject to the claims of any
creditor of any beneficiary or contingent payee.
Page 21 (VALA--86)
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<PAGE>
SETTLEMENT OPTIONS (Continued)
LIFE INCOME OPTION TABLE
10-YEAR CERTAIN
- --------------------------------------------------------------------------------
MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST
PAYABLE IMMEDIATELY
- --------------------------------
AGE
LAST
BIRTHDAY Male Female
- --------------------------------
10 $3.18 $3.11
and under
11 3.19 3.12
12 3.20 3.13
13 3.21 3.14
14 3.22 3.15
15 3.24 3.16
16 3.25 3.17
17 3.27 3.19
18 3.28 3.20
19 3.30 3.21
20 3.31 3.22
21 3.33 3.24
22 3.35 3.25
23 3.36 3.26
24 3.38 3.28
25 3.40 3.30
26 3.42 3.31
27 3.45 3.33
28 3.47 3.35
29 3.49 3.37
30 3.52 3.39
31 3.54 3.41
32 3.57 3.43
33 3.60 3.45
34 3.63 3.47
35 3.66 3.50
36 3.69 3.52
37 3.72 3.55
38 3.76 3.58
39 3.80 3.61
40 3.84 3.64
41 3.88 3.67
42 3.92 3.70
43 3.97 3.74
44 4.01 3.78
- ---------------------------------
- ---------------------------------
AGE
LAST
BIRTHDAY Male Female
- ---------------------------------
45 $4.06 $3.82
46 4.12 3.86
47 4.17 3.90
48 4.23 3.94
49 4.28 3.99
50 4.35 4.04
51 4.41 4.09
52 4.48 4.15
53 4.55 4.21
54 4.82 4.27
55 4.70 4.33
56 4.78 4.40
57 4.86 4.47
58 4.95 4.54
59 5.05 4.62
60 5.15 4.71
61 5.25 4.79
62 5.36 4.89
63 5.48 4.98
64 5.60 5.09
65 5.73 5.20
66 5.87 5.31
67 6.01 5.43
68 6.15 5.56
69 6.30 5.70
70 6.46 5.84
71 6.62 5.99
72 6.79 6.15
73 6.96 6.31
74 7.13 6.49
75 7.30 6.67
76 7.48 6.85
77 7.66 7.04
78 7.83 7.24
79 8.00 7.44
80 8.17 7.64
and over
- ---------------------------------
Page 22 (VALA--86)
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<PAGE>
BENEFICIARY
You may designate or change a beneficiary. Your request must be in writing and
in a form that meets our needs. It will take effect only when we file it at our
Service Office; this will be after you send the contract to us to be endorsed,
if we ask you to do so. Then any previous beneficiary's interest will end as of
the date of the request. It will end then even if the Insured is not living when
we file the request. Any beneficiary's interest is subject to the rights of any
assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority
is called class 2, and so on. When we use numbered classes, these statements
apply to beneficiaries unless the form states otherwise;
1. One who survives the Insured will have the right to be paid only if no one
in a prior class survives the Insured.
2. One who has the right to be paid will be the only one paid if no one else
in the same class survives the Insured.
3. Two or more in the same class who have the right to be paid will be paid in
equal shares.
4. If none survives the Insured, we will pay in one sum to the Insured's
estate.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. We owe Jane the proceeds if she is living at the Insured's
death. We owe Paul and John the proceeds if they are living then but Jane is
not. But if only one of them is living, we owe him the proceeds. If none of them
is living we owe the Insured's estate.
Beneficiaries who do not have a right to be paid under these terms may still
have a right to be paid under the Automatic Mode of Settlement.
Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
It beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.
<TABLE>
<CAPTION>
CONTRACT SUMMARY (Continued from Page 5)
- ---------------------------------------------------------------------------------------------------------
TABLE OF BASIC AMOUNTS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
When the proceeds arise from the Insured's death:
- ---------------------------------------------------------------------------------------------------------
And The Contract Is In Force: Then The Basic Amount Is: And We Adjust The Basic
Amount For:
- ---------------------------------------------------------------------------------------------------------
and not in default past its days of the insurance amount (see page 14) contract debt (see page 18),
grace plus the amount of any extra benefits plus any charges due in the
arising from the insured's death days of grace (see page 9).
- ---------------------------------------------------------------------------------------------------------
as reduced paid-up insurance (see the amount of reduced contract debt.
page 16) paid-up insurance (see page 16)
- ---------------------------------------------------------------------------------------------------------
as extended insurance (see the amount of term insurance. if the nothing.
page 16) Insured dies in the term (see page
16); otherwise zero
- ---------------------------------------------------------------------------------------------------------
This Table is a part of the Contract Summary and of the Contract.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Page 23 (VALA--86)
II-105
<PAGE>
GUIDE TO CONTENTS
Page
----
Contract Summary .......................................................... 5
Table of Basic Amounts .................................................. 23
Contract Data ............................................................. 3
List of Contract Minimums;
List of Supplementary Benefits, if any;
Summary of Face Amount; Schedule of
Premiums; Schedule of Expense Charges
from Premium Payments; Schedule of
Monthly Deductions from Contract Fund;
Schedule of Maximum Surrender Charges;
List of Subaccounts and Portfolios;
List of Fixed Account Options; Schedule
of Initial Allocation of Net Premiums;
Service Office
Tabular Contract Fund and Tabular
Cash Values ............................................................. 4
General Provisions ........................................................ 6
Definitions; The Contract; Contract
Modifications; Non-participating; Service
Office; Ownership and Control;
Suicide Exclusion; Currency; Misstatement
of Age or Sex; Incontestability; Assignment;
Annual Report; Increase in Face Amount
at Age 21 for Contracts Issued at Age 14
or Lower; Payment of Death Claim
Basis of Computation ...................................................... 7
Mortality Tables Described; Interest Rate;
Exclusions; Values after 20 Contract Years;
Minimum Legal Values
Premium Payment and Reinstatement ......................................... 8
Payment of Premiums; Scheduled Premiums;
Unscheduled Premiums; Premium Change on
Contract Change Date(s); Allocations; Default; Grace
Period; Premium Account; Reinstatement
Changing The Face Amount and
Partial Withdrawals ..................................................... 10
Face Amount; Increase in Face
Amount; Decrease in Face Amount;
Partial Withdrawals
Separate Account .......................................................... 12
The Separate Account; Subaccounts; The Fund;
Separate Account Investments; Change in
Investment Policy; Change of Fund
Fixed Account ............................................................. 12
The Fixed Account; Fixed Account Options
Transfers ................................................................. 13
Transfers Among Subaccounts and into the Fixed
Account; Transfers Among Fixed Account
Options and into the Subaccounts
Investment Amount and Assumed Rate of Return .............................. 13
Investment Amount; Assumed Rate of Return;
Insurance Amount .......................................................... 14
Contract Fund ............................................................. 14
Contract Fund Defined; Invested Premium
Amount; Guaranteed Interest; Excess Interest,
Cost of Expected Mortality; Charge for
Extra Rating Class; Charge for Extra
Benefits; Charges for Administration and Minimum
Death Benefit Guarantee; Schedule of Other Charges
Table of Adjustment Factors ............................................... 15
Contract Value Options .................................................... 16
Benefit After the Grace Period; Extended
Insurance; Reduced Paid-up
Insurance; Computations; Automatic
Benefit; Optional Benefit; Cash Value
Option; Tabular Values
Loans ..................................................................... 18
Loan Requirements; Contract Debt; Loan
Value; Interest Charge; Fixed Loan Rate Option;
Variable Loan Rate Option; Repayment; Effect
of a Loan; Excess Contract Debt; Postponement
of Loan
Settlement Options ........................................................ 20
Payee Defined; Choosing an Option;
Options Described; Life Income Option;
Interest Payment Option; Supplemental
Life Annuity Option;
First Payment Due Date; Residue Described;
Withdrawal of Residue; Designating
Contingent Payee(s); Changing Options;
Conditions; Death of Payee
Automatic Mode of Settlement .............................................. 21
Applicability; Interest on Proceeds;
Settlement at Payee's Death;
Spendthrift and Creditor
Life Income Option Table .................................................. 22
Beneficiary ............................................................... 23
Any Supplementary Benefits and a copy
of the application follow page 24.
Page 24 (VALA--86)
II-106
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------------------===============================================================================
Part 1 Application for Life Insurance to
THE PRUDENTIAL [LOGO] [ ] The Prudential Insurance Company of America
[ ] Pruco Life Insurance Company*
[ ] Pruco Life Insurance Company of New Jersey*
*A Subsidiary of The Prudential Insurance Company of America
No.
- -----------------------------------------------------------------------------------------------------------------------------------
1a. Proposed Insured's name--first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth
M F Mo. Day Yr.
[ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
3. [ ] Single [ ] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Social Security No. / /
- -----------------------------------------------------------------------------------------------------------------------------------
5a. Occupation(s) 5b. Duties
- -----------------------------------------------------------------------------------------------------------------------------------
6. Address for mail No. Street City State Zip
- -----------------------------------------------------------------------------------------------------------------------------------
7a. Kind of policy 7b. Initial amount 8. Accidental death coverage
$ initial amount
If a Variable contract is applied for complete appropriate suitability form. $
- -----------------------------------------------------------------------------------------------------------------------------------
9. Beneficiary: (Include name, age and relationship.) 10.List all life insurance on proposed Insured. Check here if None [ ]
a. Primary (Class 1): Company Initial Yr. Kind Medical
amt. issued (Indiv., Group) Yes No
____________________________________________________ [ ] [ ]
________________________________________________________________________
_______________________________________________________ [ ] [ ]
________________________________________________________________________
b. Contingent (Class 2) if any: [ ] [ ]
________________________________________________________________________
____________________________________________________ [ ] [ ]
________________________________________________________________________
[ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
11. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)
Relationship to Date of birth Total life insurance
Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies
a. Spouse $
___________________________________________________________________________________________________________________________________
b. $
___________________________________________________________________________________________________________________________________
c. $
___________________________________________________________________________________________________________________________________
d. $
___________________________________________________________________________________________________________________________________
e. $
___________________________________________________________________________________________________________________________________
f. $
- -----------------------------------------------------------------------------------------------------------------------------------
12. Supplementary benefits and riders: a. For proposed Insured b. For spouse, children, Applicant for AWP
Type and duration of benefit Amount Type and duration of benefit Amount
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
[ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit
- -----------------------------------------------------------------------------------------------------------------------------------
13. State any special request.
- -----------------------------------------------------------------------------------------------------------------------------------
14. Has any person named in 1a or 11, within the last 12 months:
a. been treated by a doctor for or had a known heart attack, stroke or cancer (including melanoma) other Yes No
than of the skin? ............................................................................................. [ ] [ ]
b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
15. Premium payable [ ] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot.
- -----------------------------------------------------------------------------------------------------------------------------------
16. Amount paid $ [ ] None (Must be "None" if either 14a or b is answered "Yes".)
- -----------------------------------------------------------------------------------------------------------------------------------
17. Is a medical examination to be made on: Yes No
a. the proposed Insured? ......................................................................................... [ ] [ ]
b. spouse (if proposed for coverage)? ............................................................................ [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
18. If 17a or b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No
the person(s) indicated in 17 have been examined, even if 16 shows that an amount has been paid? ................. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------
ORD 84376-86 New Jersey Page 1 (Continued on page 2)
- ------------
II-107
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Continuation of Part 1 of Application
- -----------------------------------------------------------------------------------------------------------------------------------
19. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No
in 1a or 11? If "Yes", give their names, name of company, plan, amount, policy numbers and enclose any [ ] [ ]
required state replacement form(s).
- -----------------------------------------------------------------------------------------------------------------------------------
20. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 11 in Yes No
this or any company? If "Yes", give amount, details and company. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
21. Does any person named in 1a or 11 plan to live or travel outside the United States and Canada within the Yes No
next 12 months? If "Yes", give country(ies), purpose and duration of trip. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
22. Has any person named in 1a or 11 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No
device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [ ]
complete Aviation Questionnaire.
- -----------------------------------------------------------------------------------------------------------------------------------
23. Has any person named in 1a or 11 engaged in hazardous sports such as: auto, motorcycle or power boat Yes No
sports; bobsledding, scuba or skin diving; mountain climbing; parachuting or sky diving; snowmobile [ ] [ ]
racing or any other hazardous sport or hobby within the last 2 years or does any such person plan to
do so in the future? If "Yes", complete Avocation Questionnaire.
- -----------------------------------------------------------------------------------------------------------------------------------
24. Has any person (age 15 or over) named in 1a or 11 in the last 3 years: Yes No
a. had a driver's license denied, suspended or revoked? ......................................................... [ ] [ ]
b. been convicted of three or more moving violations of any motor vehicle law or of driving while under
the influence of alcohol or drugs? ........................................................................... [ ] [ ]
c. been involved as a driver in 2 or more auto accidents? ....................................................... [ ] [ ]
If "Yes", give name, driver's license number and state of issue, type of violation and reason for license
denial, suspension or revocation.
- -----------------------------------------------------------------------------------------------------------------------------------
25. a. Has the proposed Insured smoked cigarettes within the past twelve months? .............................. Yes [ ] No [ ]
b. Has the spouse (if proposed for coverage) smoked cigarettes within the past twelve months? ............. Yes [ ] No [ ]
c. If the proposed Insured or spouse has ever smoked cigarettes, cigars or a pipe, show date(s) last smoked:
Cigarettes Cigars Pipe
Proposed Insured Mo. _______ Yr. _______ Mo. _______ Yr. _______ Mo._______ Yr. _______
Spouse Mo. _______ Yr. _______ Mo. _______ Yr. _______ Mo._______ Yr. _______
- -----------------------------------------------------------------------------------------------------------------------------------
26. Changes made by the Company.
- -----------------------------------------------------------------------------------------------------------------------------------
To the best of the knowledge and belief of those who sign below, the statements in this application are complete and true. It
is understood that, if any of the above statements (for example, the smoking data) is a material misrepresentation, coverage
could be invalidated as a result. The beneficiary named in the application is for insurance payable upon death of (1) the Insured,
and (2) an insured child after the death of the Insured if there is no insured spouse.
When the Company gives a Limited Insurance Agreement form, ORD 84376A-86 New Jersey, of the same date as this Part 1, coverage
will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3)
the full first premium is paid while all persons to be covered are living and their health remains as stated in Parts 1 and 2. If
all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 26 it will be
approved by acceptance of the contract. But where the law requires written consent for any change in the application, such change
can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any
of the Company's rights or needs.
Ownership: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured,
otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract.
--------------------------------------------------------------------
Signature of Proposed Insured (If age 8 or over)
Dated at on , 19
- ----------------------------------------------------------- --------------------------------------------------------------------
(City/State) Signature of Applicant (If other than proposed Insured --
If applicant is a firm or corporation, show that company's name
Witness By
- ----------------------------------------------------------- --------------------------------------------------------------------
(Licensed agent must witness where required by law) (Signature and title of officer signing for that company)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------
ORD 84376-86 New Jersey Page 2
- ------------
II-108
<PAGE>
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY No.
A SUBSIDIARY OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA xx xxx xxx
A Supplement to the Application for Life Insurance in which JOHN DOE is
named the proposed insured. The contract applied for is:
[ ] Variable Life Insurance [ ] Variable Appreciable Life Insurance
[ ] with Variable Insurance Amount
[x] with Fixed Insurance Amount
The person who signs below:
1. acknowledges receipt of the current prospectus for the contract
checked above:
2. UNDERSTANDS THAT THE DEATH BENEFIT (EXCEPT ANY SUPPLEMENTARY BENEFITS)
MAY GO UP OR DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE
BUT WILL NEVER BE LESS THAN THE GUARANTEED MINIMUM, IF PREMIUMS ARE
DULY PAID AND THERE IS NO CONTRACT DEBT;
3. UNDERSTANDS THAT THE CASH VALUES MAY GO UP OR DOWN DEPENDING ON THE
CONTRACT'S INVESTMENT EXPERIENCE AND THAT THERE IS NO GUARANTEED
MINIMUM CASH VALUE;
4. believes that this contract will meet insurance needs and financial
objectives; and
5. requests that the net premium payments (as described in the
prospectus) be allocated to the appropriate Pruco Life variable
contract account for the contract checked above as follows:
Subaccount Allocation+
---------- ----------
Bond 20% (BOND)
Money Market 20% (MMKT)
Common Stock 20% (CSTK)
Aggressively Managed Flexible 20% (AFLX)
Conservatively Managed Flexible 20% (CFLX)
_______________________________ __% ( )
Not available
for Variable Fixed Rate Option __% (FIXD)
Life Insurance
100%
+ If any portion of a net premium is allocated to a particular subaccount,
that portion must be at least 10% on the date the allocation takes effect.
All percentage allocations must be in whole numbers (e.g. 33% can be
selected, but 33 1/3% cannot).
NOTE: Upon request, we will furnish illustrations of benefits, including death
benefits and cash values, for (a) the variable life insurance contract
applied for and (b) a fixed benefit life insurance contract for the same
premium.
Date Signature of Applicant
August 25, 1986 /s/ JOHN DOE
- -------------------------------- -----------------------------------
- ---------
PLY 70-86
- ---------
II-109
<PAGE>
ENDORSEMENTS
(Only we can endorse this contract.)
Page 25 (VALA--86) (N)
II-110
<PAGE>
Page 26
MODIFIED PREMIUM VARIABLE LIFE INSURANCE POLICY. INSURANCE PAYABLE ONLY UPON
DEATH. SCHEDULED PREMIUMS PAYABLE THROUGHOUT INSURED'S LIFETIME. PROVISIONS FOR
OPTIONAL ADDITIONAL PREMIUMS. CASH VALUES REFLECT PREMIUM PAYMENTS, INVESTMENT
RESULTS AND CHARGES. GUARANTEED DEATH BENEFIT IF SCHEDULED PREMIUMS DULY PAID
AND NO CONTRACT DEBT OR WITHDRAWALS. INCREASE IN FACE AMOUNT AT ATTAINED AGE 21
IF CONTRACT ISSUED AT AGE 14 OR LOWER. NON-PARTICIPATING.
VALA--86 - N
II-111
Exhibit 1.A.(5)(d)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
NEWARK, NEW JERSEY
A Stock Company Subsidiary of The Prudential Insurance Company of America
================================================================================
Insured JOHN DOE xx xxx xxx Policy Number
JUN 4, l986 Contract Date
Face Amount $50,000--
Premium Period LIFE
Agency R-NK 1
================================================================================
We will pay the beneficiary the proceeds of this contract promptly if we
receive due proof that the Insured died. We make this promise subject to
all the provisions of the contract.
The Death Benefit will be the insurance amount, plus the amount of any
extra benefit (unless the contract is in default or there is contract
debt). The Death Benefit may be fixed or variable depending on the payment
of premiums, the investment experience of the separate account and the
level of charges made. But the Insurance Amount will not be less than the
face amount. (We describe the insurance amount on page 14.)
The cash value may increase or decrease daily depending on the payment of
premiums, the separate account investment experience and the charges made.
There is no guaranteed minimum.
We specify a schedule of premiums. Additional unscheduled premiums may be
paid at your option subject to the limitations in the contract.
Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 5. If there is ever a question about it, or if
there is a claim, just see one of our representatives or get in touch with
one of our offices.
RIGHT TO CANCEL CONTRACT.--You may return this contract to us within (1) 10
days after you get it, or (2) 45 days after Part 1 of the application was
signed, or (3) 10 days after we mail or deliver to you any Withdrawal Right
notice, whichever is latest. All you have to do is take the contract or
mail it to one of our offices or to the representative who sold it to you.
It will be canceled from the start and we will promptly give you the value
of your Contract Fund on the date you return the contract to us. We will
also give back any charges we made in accord with this contract.
Signed for Pruco Life Insurance Company of New Jersey
a New Jersey Corporation
/s/ [SPECIMEN] /s/ [SPECIMEN]
Secretary President
MODIFIED PREMIUM VARIABLE LIFE INSURANCE POLICY WITH VARIABLE INSURANCE AMOUNT.
INSURANCE PAYABLE ONLY UPON DEATH. SCHEDULED PREMIUMS PAYABLE THROUGHOUT
INSURED'S LIFETIME. PROVISION FOR OPTIONAL ADDITIONAL PREMIUMS. BENEFITS REFLECT
PREMIUM PAYMENTS, INVESTMENT RESULTS AND MORTALITY CHARGES. GUARANTEED MINIMUM
DEATH BENEFIT IF SCHEDULED PREMIUMS DULY PAID AND NO CONTRACT DEBTOR OR
WITHDRAWALS. INCREASE IN FACE AMOUNT AT ATTAINED AGE 21 IF CONTRACT ISSUED AT
AGE 14 OR LOWER. NON-PARTICIPATING.
VALB--86--N
II-112
<PAGE>
ENDORSEMENTS
(Only we can endorse this contract.)
Page 2 (VALB--86)
II-113
<PAGE>
CONTRACT DATA
INSURED'S SEX AND ISSUE AGE M-35
INSURED JOHN DOE XX XXX XXX POLICY NUMBER
FACE AMOUNT $50,000-- SEP 10, 1986 CONTRACT DATE
PREMIUM PERIOD LIFE
AGENCY R-NK 1
BENEFICIARY CLASS 1 MARY DOE, WIFE
CLASS 2 ROBERT DOE, SON
FIXED LOAN INTEREST RATE
LIST OF CONTRACT MINIMUMS
THE MINIMUM UNSCHEDULED PREMIUM IS $25.
THE MINIMUM INCREASE IN FACE AMOUNT IS $25,000.
THE MINIMUM DECREASE IN FACE AMOUNT IS $10,000.
THE MINIMUM FACE AMOUNT IS $50,000.
***** END OF LIST *****
LIST OF SUPPLEMENTARY BENEFITS
***** NONE *****
SUMMARY OF FACE AMOUNT
EFFECTIVE RATING CONTRACT CHANGE
AMOUNT DATE CLASS DATE
INITIAL $50,000-- SEP 10, 1986 NONSMOKER SEP 10, 2016
***** END OF SUMMARY *****
SCHEDULE OF PREMIUMS
PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE AND AT
INTERVALS OF 12 MONTHS AFTER THAT DATE.
SCHEDULED PREMIUMS ARE $ 468.00 EACH
CHANGING ON SEP 10, 2016 TO $2903.50 EACH
***** END OF SCHEDULE *****
CONTRACT DATA CONTINUED ON NEXT PAGE
PAGE 3 (86)
II-114
<PAGE>
CONTRACT DATA CONTINUED POLICY NO. XX XXX XXX
SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS
FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF UP TO $2.00.
FROM THE REMAINDER WE DEDUCT A CHARGE OF UP TO 7.5% WHICH IS USED TO PAY FOR
SALES CHARGES AND STATE PREMIUM TAXES. AFTER DEDUCTION OF THIS AMOUNT, THE
BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 14).
***** END OF SCHEDULE *****
SCHEDULE OF MONTHLY DEDUCTIONS FROM THE CONTRACT FUND
THE MONTHLY ADMINISTRATION CHARGE IS NO MORE THAN $3.50. THE MONTHLY CHARGE TO
GUARANTEE THE MINIMUM DEATH BENEFIT IS NO MORE THAN $.50.
***** END OF SCHEDULE *****
***** SCHEDULE ON OTHER CHARGES *****
THERE IS A FEE OF UP TO $15 FOR ANY PARTIAL WITHDRAWAL OR DECREASE IN FACE
AMOUNT.
***** END OF SCHEDULE *****
SCHEDULE OF MAXIMUM SURRENDER CHARGES
FOR FULL SURRENDER AT THE END OF THE CONTRACT YEAR INDICATED, THE MAXIMUM CHARGE
WE WILL DEDUCT FROM THE CONTRACT FUND IS SHOWN BELOW. FOR SURRENDER OTHER THAN
YEAR-END THE AMOUNT OF THE CHARGE WILL REFLECT THE NUMBER OF COMPLETED CONTRACT
MONTHS SINCE THE BEGINNING OF THE CONTRACT YEAR (SEE PAGE 17).
YEAR OF DEFERRED DEFERRED UNDERWRITING
SURRENDER SALES CHARGES AND ISSUE CHARGE TOTAL
--------- ------------- ---------------- -----
1 $217.00 $250.00 $467.00
2 $217.00 $250.00 $467.00
3 $217.00 $250.00 $467.00
4 $217.00 $250.00 $467.00
5 $217.00 $250.00 $467.00
6 $173.50 $200.00 $373.50
7 $130.00 $150.00 $280.00
8 $87.00 $100.00 $187.00
9 $43.50 $50.00 $93.50
10 $0.00 $0.00 $0.00
11 AND LATER ZERO ZERO ZERO
***** END OF SCHEDULE *****
CONTRACT DATA CONTINUED ON NEXT PAGE
PAGE 3A (86)
II-115
<PAGE>
CONTRACT DATA CONTINUED POLICY NO. XX XXX XXX
LIST OF SUBACCOUNTS AND PORTFOLIOS
EACH SUBACCOUNT OF THE PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
INVESTS IN A SPECIFIC PORTFOLIO OF THE PRUCO LIFE SERIES FUND. WE SHOW BELOW THE
SUBACCOUNTS AND THE FUND PORTFOLIOS THEY INVEST IN.
FUND
SUBACCOUNT PORTFOLIO
- ---------- ---------
MONEY MARKET NJ MONEY MARKET
BOND NJ BOND
COMMON STOCK NJ COMMON STOCK
AGGRESSIVELY MANAGED FNJ AGGRESSIVELY MANAGED FLX
CONSERVATIVELY MANAGED FNJ CONSERVATIVELY MANAGED FLX
***** END OF LIST *****
LIST OF FIXED ACCOUNT OPTIONS
FIXED RATE OPTION
***** END OF LIST *****
SCHEDULE OF INITIAL ALLOCATION OF NET PREMIUMS
MONEY MARKET SUBACCOUNT 25%
CONSERVATIVELY MANAGED FLX SUBACCOUNT 50%
FIXED RATE OPTION 25%
***** END OF SCHEDULE *****
SERVICE OFFICE - PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS CONTRACT TO:
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
P.O. BOX XXXX, MINNEAPOLIS, MN XXXXX
PAGE 3B (86)
II-116
<PAGE>
POLICY. NO. XX XXX XXX
TABULAR VALUES
WE EXPLAIN THIS TABLE UNDER CONTRACT FUND AND TABULAR VALUES. ACTUAL CONTRACT
FUND VALUES AND CASH VALUES MAY BE MORE OR LESS THAN AMOUNT SHOWN (SEE CONTRACT
FUND AND CASH VALUE OPTION.)
END OF TABULAR TABULAR
CONTRACT CONTRACT CASH
YEAR FUND VALUE
---- ---- -----
1 288.00 0.00
2 581.50 114.50
3 878.00 411.00
4 1178.00 711.00
5 1479.60 1012.50
6 1782.00 1408.50
7 2084.00 1804.00
8 2385.00 2198.20
9 2683.00 2590.10
10 2979.00 2979.00
11 3270.50 3270.50
12 3556.50 3556.50
13 3835.50 3835.50
14 4106.50 4106.50
15 4367.50 4367.50
16 4615.00 4615.00
17 4845.00 4845.00
18 5053.00 5053.00
19 5234.50 5234.50
20 5384.00 5384.00
ATTAINED
AGE
---
60 5490.50 5490.50
62 5105.00 5105.00
65 3750.00 3750.00
TABULAR CASH VALUES ARE THE TABULAR CONTRACT FUND VALUES MINUS A
SURRENDER CHARGE. WE SHOW ON A PRIOR CONTRACT PAGE WHAT THE
MAXIMUM SURRENDER CHARGE WILL BE.
THE TABULAR CONTRACT FUND VALUES AND TABULAR CASH VALUES SHOWN ARE THE AMOUNTS
WHICH WILL APPLY IF ALL SCHEDULED PREMIUMS HAVE BEEN PAID ON THEIR DUE DATES,
THERE HAVE BEEN NO UNSCHEDULED PREMIUMS PAID, THERE IS NOT CONTRACT DEBT, THE
SUBACCOUNTS AND THE FIXED ACCOUNT OPTIONS YOU HAVE CHOSEN EARN EXACTLY THE
ASSUMED RATE OF RETURN AND WE HAVE DEDUCTED THE MAXIMUM MORTALITY CHARGES.
Page 4(86)
II-117
<PAGE>
CONTRACT SUMMARY
We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.
This is a contract of life insurance. Premiums are to be paid throughout the
Insured's lifetime. We specify a schedule of premiums that will keep the
contract in force. Additional premiums may be paid at your option, subject to
limits in the contract. The death benefit and the cash value will vary with the
payment of premiums, the investment performance of the Separate Account
subaccounts that you select, the interest credited to any portion of the
contract fund not allocated to the subaccounts, and the mortality and expense
charges deducted.
The face amount shown on page 3 is the guaranteed death benefit. The death
benefit will not decrease below the guaranteed death benefit if the contract is
not in default past its days of grace and there is no contract debt. (We
describe on page 9 the way the contract can go into default.) Subject to certain
requirements, you may increase or decrease the face amount. If the contract
remains in default past its days of grace the contract may end or it may stay
in force with reduced benefits. If either occurs, you may be able to reinstate
its full benefits.
Proceeds is a word we use to mean the amount we would pay if we were to settle
the contract in one sum. To compute the proceeds that may arise from the
Insured's death, we start with a basic amount. We may adjust that amount if
there is a loan or if the contract is in default. The table on page 23 tells
what the basic amount is. The amount depends on how the contract is in force.
The table will refer you to the parts of the contract that tell you how we
adjust the basic amount. If you surrender the contract, the proceeds will be the
net cash value. We describe it under Cash Value Option on page 17.
Proceeds often are not taken in one sum. For instance, on surrender, you may be
able to put proceeds under a settlement option to provide retirement income or
for some other purpose. Also, for all or part of the proceeds that arise from
the Insured's death, you may be able to choose a manner of payment for the
beneficiary. If an option has not been chosen, the beneficiary may be able to
choose one. We will pay interest under the Interest Payment Option from the date
of death on any proceeds to which no other manner of payment applies. This will
be automatic as we state on page 21. There is no need to ask for it
You and we may agree on a change in the ownership of this contract. Also, unless
we endorse it to say otherwise, the contract gives you these rights, subject to
certain limitations and requirements:
o You may change the beneficiary under it.
o You may borrow on it up to its loan value.
o You may surrender it for its net cash value.
o You may change the allocation of future net premiums among the subaccounts
and the fixed account.
o You may transfer amounts among subaccounts and the fixed account.
o You may change the face amount.
o You may withdraw a portion of the contract's value.
The contract, as issued, may or may not have extra benefits that we call
Supplementary Benefits. If it does, we list them under Supplementary Benefits on
the Contract Data pages and describe them after page 24. The contract may or may
not have other extra benefits. If it does, we add them by rider. Any extra
benefit ends as soon as the contract is in default past its days of grace,
unless the form that describes it states otherwise.
(Contract Summary Continued on Page 23)
Page 5 (VALB--86)(NJ)
II-118
<PAGE>
GENERAL PROVISIONS
Definitions.--We define here some of the words and phrases used all through this
contract. We explain others, not defined here, in other parts of the text.
We, Our, Us and Company -- Pruco Life Insurance Company of New Jersey,
a New Jersey Corporation.
You and Your.--The owner of the Contract.
Insured.--The person named as the Insured on the first page. He or she need not
be the owner.
Example: Suppose we issue a contract on the life of your spouse. You applied for
it and named no one else as owner. Your spouse is the Insured and you are the
owner.
SEC.--The Securities and Exchange Commission.
PLVAA.-- The Pruco Life of New Jersey Variable Appreciable Account.
Issue Date.--The contract date.
Monthly Date.--The contract date and the same day as the contract date in each
later month.
Example: If the contract date is March 9, 1986, the Monthly Dates are each March
9, April 9, May 9 and so on.
Anniversary or Contract Anniversary.--The same day and month as the contract
date in each later year.
Example: If the contract date is March 9, 1986, the first anniversary is March
9, 1987. The second is March 9, 1988, and so on.
Contract Year.--A year that starts on the contract date or on an anniversary.
Example: If the contract date is March 9, 1986, the first contract year starts
then and ends on March 8, 1987. The second starts on March 9, 1987 and ends on
March 8, 1988, and so on.
Contract Month.--A month that starts on a Monthly Date.
Example: If March 9, 1986 is a Monthly Date, a contract month starts then and
ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends
on May 8, 1986, and so on.
Attained Age.--The Insured's attained age at any time is the issue age plus the
length of time since the contract date. You will find the issue age near the top
of page 3.
The Contract.--This policy, and the attached copy of the initial application
together with copies of any subsequent applications to change the policy, and
any additional Contract Data pages added to this policy, form the whole
contract. We assume that all statements in the application were made to the best
of the knowledge and belief of the person(s) who made them; in the absence of
fraud they are deemed to be representations and not warranties. We relied on
those statements when we issued the contract. We will not use any statement,
unless made in an application, to try to void the contract or to deny a claim.
Contract Modifications.--Only a Company officer with the rank or title of Vice
President or above may agree to modify this contract, and then only in writing.
Non-participating.--This contract will not share in our profits or surplus
earnings. We will pay no dividends on it.
Service Office.--This is the office that will service this contract. Its mailing
address is the one we show on the Contract Data pages, unless we notify you of
another one.
Ownership and Control.--Unless we endorse this contract to say otherwise: (1)
the owner of the contract is the Insured; and (2) while the Insured is living
the owner alone is entitled to (a) any contract benefit and value, and (b) the
exercise of any right and privilege granted by the contract or by us.
Suicide Exclusion.--If the Insured, whether sane or insane, dies by suicide
within two years from the issue date, we will pay no more under this contract
than the sum of the premiums paid, minus any contract debt and minus any partial
withdrawals.
Also, for any increase in the face amount, if the Insured, whether sane or
insane, dies by suicide within two years from the effective date of the
increase, we will pay, as to the increase in amount, no more than the sum of the
scheduled premiums that were due for the increase.
Currency.--Any money we pay, or that is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.
Misstatement of Age or Sex.--If the Insured's stated age or sex or both are not
correct, we will adjust each benefit and any amount to be paid to reflect the
correct age and sex. Any death benefit will be based on what the most recent
charge for mortality would have provided at the correct age and sex. Where
required, we have given the insurance regulator a detailed statement of how we
will make these changes.
The Schedule of Premiums may show that scheduled premiums change or stop on a
certain date. We may have used that date because the Insured would attain a
certain age on that date. If we find that the issue age was wrong, we will
correct that date.
(Continued on Next Page)
Page 6 (VALB--86) (NJ)
II-119
<PAGE>
GENERAL PROVISIONS (Continued)
Incontestability.--Except as we state in the next sentence, we will not contest
this contract after it has been in force during the Insured's lifetime for two
years from the issue date. There are two exceptions: (1) non-payment of enough
premium to provide the required charges; and (2) any change in the contract that
requires our approval and that would increase our liability. For any such
change, we will not contest the change after it has been in effect during the
Insured's lifetime for two years from the date it takes effect.
Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient.
Annual Report.--Each year we will send you a report. It will show: (1) the
current death benefit; (2) the investment amount; (3) the amount of the
investment amount in each subaccount; (4) the amount in the fixed account; (5)
the net cash value; (6) premiums paid, interest credited and monthly charges
deducted since the last report; (7) any partial withdrawals since the last
report; and (8) any contract debt and the interest on the debt for the prior
year. The report will also include any other data that may be currently required
where this contract is delivered. No report will be sent if this contract is
being continued under extended term insurance.
You may ask for a similar report at some other time during the year. Or you may
request from time to time a report projecting results under your contract on the
basis of premium payment assumptions and assumed investment results. We have the
right to make a reasonable charge for reports such as these that you ask for,
and to limit the scope and frequency of such reports.
Increase in Face Amount at Age 21 for Contracts Issued at Age 14 or Lower.--If
this contract was issued at age 14 or lower, it shows on page 3 an increase in
face amount at attained age 21 which applies if the contract is not then in
default beyond its days of grace. Any references in the contract to face amount
or death benefit which apply at or after attained age 21 will be based upon the
increased face amount, unless otherwise stated.
Payment of Death Claim.--If we settle this contract in one sum as a death claim,
we will usually pay the proceeds within 7 days after we receive at our Service
Office proof of death and any other information we need to pay the claim. But we
have the right to defer paying portion of the proceeds greater than the minimum
guaranteed death benefit that is to come from the subaccounts if (1) the New
York Stock Exchange is closed; or (2) the SEC requires that trading be
restricted or declares an emergency.
BASIS OF COMPUTATION
Mortality Tables Described.--Except as we state in the next paragraph, (1) we
base all net premiums and net values to which we refer in this contract on the
Insured's issue age and sex and on the length of time since the contract date;
(2) we use the Commissioners 1980 Standard Ordinary Mortality Table; and (3) we
use continuous functions based on age last birthday.
For extended insurance, we base net premiums and net values on the Commissioners
1980 Extended Term Insurance Table.
Interest Rate.--For all net premiums and net values to which we refer in this
contract we use an effective rate of 4% a year.
Exclusions.--When we compute net values we exclude the value of any
Supplementary Benefits and any other extra benefits added by rider to this
contract.
Values After 20 Contract Years.--Tabular values not shown on page 4 will be the
net level premium reserves, taking into account modified premiums. To compute
them, we will use the mortality tables and interest rate we describe above.
There will be the same exclusions.
Minimum Legal Values.--The cash, loan and other values in this contract are at
least as large as those set by law where it is delivered. Where required, we
have given the insurance regulator a detailed statement of how we compute values
and benefits.
Pruco Life Insurance Company of New Jersey,
By /s/ ISABELLA L. KIRCHNER
---------------------------
Secretary
- ----------
PLIY 72-86
- ----------
Page 7 (VALB--86)(NJ)
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PREMIUM PAYMENT AND REINSTATEMENT
Payment of Premiums.--Premiums may be paid at our Service Office or to any of
our authorized representatives. If we are asked to do so, we will give a signed
receipt.
Premium payments will in most cases be credited as of the date of receipt, to
both the premium account and the contract fund. (See Contract Fund, page 11 and
Premium Account, page 8.) Premium credits to the premium account are the full
premium paid with no deductions. Premium credits to the contract fund are the
invested premium amounts (see page 14). But in the following cases, to the
extent stated, premium payments will be credited as of a date other than the
date of receipt:
1. The first scheduled premium is due on the Contract Date. But if the first
premium payment is received after the Contract Date, the scheduled portion will
be credited to the contract fund and the premium account as of the Contract
Date. And any portion of that first premium payment in excess of the first
scheduled premium will be credited as of the date of receipt. If the first
premium is received before the Contract Date, the entire payment will be
credited as of the Contract Date.
2. If a premium payment is received during the 61 day period after the day when
a scheduled premium was due and had not yet been paid, here is what we will do.
We will determine whether the premium account, (see Premium Account below), just
before receipt of that payment was a negative amount. If not--that is, if the
premium account was zero or higher--the premium payment will be credited as of
the date of receipt. But if the premium account was negative by no more than the
scheduled premium on the due date, that portion of the premium payment required
to bring the premium account up to zero will be credited to the premium account
as of the due date; any remaining portion of the premium payment will be
credited to the premium account as of the date of receipt. If the premium
account is negative by more than the scheduled premium then due, the premium
payment will be credited as of the date of receipt, except in the situation
described in 3 below.
3. On each Monthly Date we will determine if the contract is in default. (See
Default on page 8.) We will notify you of the minimum payment amount needed to
bring the contract out of default. If one or more premium payments are made
during the days of grace after that Monthly Date (see Grace Period on page 8),
we will credit to the contract fund and the premium account, as of the
applicable Monthly Dates, such parts of the payments as are needed to end the
default status; any remaining part of those premium payments will be credited to
the contract fund and premium account as of the date of receipt.
Scheduled Premiums.--We show the amount and frequency of the scheduled premiums
in the Schedule of Premiums. The first scheduled premium is due on the contract
date. There is no insurance under this contract unless an amount at least equal
to the first scheduled premium is paid.
The scheduled premium shown is the minimum required, at the frequency chosen, to
continue the contract in full force if you pay all scheduled premiums when due,
you make no withdrawals, any interest credited and investment returns are at the
assumed rate, we deduct the maximum mortality and expense charge rate and any
contract debt does not exceed the cash value. An increase in the face amount
increases the scheduled premium.
If you wish to pay, on a regular basis, higher premiums than the amount of the
scheduled premiums, we will bill you for the higher amount you choose. Or if you
wish, you may from time to time make a smaller premium payment than the amount
of the scheduled premium, subject to the minimum premium amount shown on page 3.
If scheduled premiums that are due are not paid, or if smaller payments are
made, the contract may then or at some future time go into default. Payment of
less than the scheduled premium increases the risk that the contract will end if
investment results are not favorable. The conditions under which default will
exist are described below.
Unscheduled Premiums.--Except as we state in the next paragraph, unscheduled
premiums may be paid at any time during the Insured's lifetime, as long as the
contract is not in default beyond its days of grace. We show on page 3 the
minimum premium we will accept. We have the right to limit unscheduled premiums
to a total of $10,000 in any contract year.
We have the right to refuse any payment that increases the insurance amount by
more than it increases the contract fund.
Premium Change on Contract Change Date(s).--We show the Contract Change Date(s)
in the Contract Data pages. We also show in the Schedule of Premiums on page 3
that the amount of each scheduled premium will change on each Contract Change
Date and what the new premium will be. However, when a Contract Change Date
arrives we will recompute a new premium amount to be used in calculating the
premium account. The new premium that we recompute will be no greater than the
new premium for that date which we show on page 3. In addition, if the premium
account is less than zero, we will set the premium account to zero.
(Continued on Next Page)
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PREMIUM PAYMENT AND REINSTATEMENT (Continued)
The Schedule of Premiums may also show that the premium changes at other times.
This may occur, for example, with a contract issued with extra benefits or in an
extra rating class if, in either case, this calls for a higher or extra premium
for a limited period of time.
Allocations.--You may allocate all or a part of your invested premium amount to
one or more of the subaccounts and fixed account option(s) listed in the
Contract Data pages. You may choose to allocate nothing to a particular
subaccount or fixed account option. But any allocation you make must be at least
10%; you may not choose a fractional percent.
Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up
to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or
any percentage that is not a whole number. The total for all subaccounts must be
100%.
The initial allocation of invested premium amounts (see page 14) is shown in the
Contract Data pages. You may change the allocation for future invested premium
amounts at any time if the contract is not in default. To do so, you must notify
us in writing in a form that meets our needs. The change will take effect on the
date we receive your notice at our Service Office.
A premium might be paid when the contract fund is less than zero. In that case,
when we receive that premium, we first use as much of the invested premium
amount as we need to eliminate the deficit in the contract fund. We will then
allocate any remainder of the invested premium amount in accord with your most
recent request. (We describe contract fund on page 14.)
Default.--Unless the contract is already in the grace period, on each Monthly
Date, after we deduct any charges from the contract fund (which we describe on
page 14) and add any credits to it, we will determine whether the contract is in
default. To do so, we will compute the amount which will accrue to the tabular
contract fund on the next Monthly Date if, during the current contract month:
(1) any interest credited and investment returns are at the assumed rate (see
Assumed Rate of Return on page 13); (2) we make the other charges and credits we
have set, including interest on contract debt; and (3) we receive no premiums or
loan repayments make no loans nor grant any partial withdrawals. We will
compare this amount to the contract fund. If this amount is not less than the
contract fund the contract is not in default. If this amount is less than the
Contract Fund the difference is the fund deficit. In this case the contract is
in default if the premium account, which we define below, is also less than
zero. See Excess Contract Debt on page 19 for another way the contract may end.
Grace Period.--The days of grace begin on any monthly date (other than the
contract date) on which the contract goes into default. We grant 61 days from
the date we mail you a notice of default to make the required payments which we
define below. During the days of grace we will continue to accept premiums and
make the charges we have set. If the monthly date was a scheduled premium due
date, when we receive a premium payment during the days of grace we will first
determine whether it satisfies case 2 under Payment of Premiums above. If it
does, the default will end. If it does not, or if the monthly date when the
contract went into default was not a scheduled premium due date, here is what we
will do:
Within 30 days after any default we will send you a notice that your contract is
in default. We will indicate the minimum payment required to keep your contract
in force and the length of the grace period for payment of such amount.
If at any time during the days of grace, we have received payments that in total
are at least equal to the lesser of (a) the sum of the fund deficit on the date
of default and any additional fund deficits on any subsequent Monthly Dates
since the date of default, and (b) the sum of the amount by which the premium
account is negative on the date of default and any scheduled premiums due since
the date of default, the default will end.
If the contract is still in default when the days of grace are over, it will end
and have no value, except as we state under Contract Value Options (which we
describe on page 16).
Premium Account.--On the contract date, the premium account is equal to the
premium credited on that date minus the scheduled premium then due. On any other
day, the premium account is equal to:
1. what it was on the prior day; plus
2. if the premium account was greater than zero on the prior day, interest on
the excess at 4% a year; minus
3. if the premium account was less than zero on the prior day, interest on the
amount of the deficit at 4% a year; plus
4. any premium credited on that day; minus
5. any scheduled premium due on that day; minus
6. any partial withdrawals on that day.
(Continued on Next Page)
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PREMIUM PAYMENT AND REINSTATEMENT (Continued)
The contract might be in default, as described above. If so, the premium account
is less than zero. If a premium payment is received on any day during the days
of grace while the contract is in default and the premium account is negative by
no more than one scheduled premium, that payment, to the extent that it is
required to bring the premium account up to zero, will, as we describe under
Payment of Premiums above, be credited to the premium account as of the Monthly
Date when the scheduled premium was due, whether that date is the date of
default or a subsequent Monthly Date. Any remaining portion of the premium
payment will be credited as of the actual date of receipt. In this case the
premium account for all days from the monthly date to the actual date of receipt
will be recalculated.
Reinstatement.--If this contract is still in default after the last day of
grace, you may reinstate it, if all these conditions are met:
1. No more than three years must have elapsed since the date of default.
2. You must not have surrendered the contract for its net cash value.
3. You must give us any facts we need to satisfy us that the Insured is
insurable for the contract.
4. We must be paid a premium at least equal to the amount required to bring
the premium account up to zero on the first Monthly Date on which a
scheduled premium is due after the date of reinstatement. From this amount
we will deduct the expense charges from premium payments described in the
Contract Data pages, plus any charges with 4% interest for any extra
benefits, plus any other charges with 4% interest. The contract fund will
be equal to the remainder, plus the cash value of the contract immediately
before reinstatement, plus a refund of that part of any surrender charge
deducted at the time of default which would be charged if the contract were
surrendered immediately after reinstatement.
If we approve, you may be able to reinstate the contract for a premium less
than that described above. We will deduct the same charges and adjust the
contract fund in the same manner. If you do so, the premium account will be
less than zero. You may need to pay more than the scheduled premiums to
guarantee that the contract will not go into default at some future time.
5. If before reinstatement the contract is in force as reduced paid-up
insurance (see page 16), any contract debt under reduced paid-up insurance
must be repaid with interest or carried over to the reinstated contract.
If we approve the reinstatement, these statements apply. The date of
reinstatement will be the date of your request or the date the required
premium is paid, if later. And we will start to make daily and monthly
charges and credits again as of the date of reinstatement.
CHANGING THE FACE AMOUNT AND PARTIAL WITHDRAWALS
Face Amount.--The face amount is shown on page 3. It will change if you increase
or decrease it.
Increase in Face Amount.--After the first contract year, you may be able to
increase the face amount once each contract year. Your right to do so is subject
to all these conditions and the paragraph that follows:
1. You must ask for the increase in writing and in a form that meets our
needs; if you are not the Insured and the Insured is age 8 or over, he or
she must sign the form too.
2. The amount of the increase must be at least equal to the minimum increase
in face amount, which we show on page 3.
3. You must give us any facts we need to satisfy us that the Insured is
insurable for the amount of the increase.
4. If we ask you to do so, you must send us the contract to be endorsed.
5. The contract must not be in default.
6. We must not have changed the basis on which benefits and charges are
calculated under newly issued contracts since the Issue Date.
7. You must make any required payment.
8. The insured must be eligible for the same rating class and benefits as
shown on page 3.
9. We must not be waiving premiums in accord with any Waiver of Premium
benefit that may be included in the contract.
An increase will take effect only if we approve your request for it at our
Service Office. If the increase is approved we will recompute the contract's
scheduled premiums, maximum surrender charges, tabular values, monthly
deductions and expense charges. We will send you new Contract Data pages showing
the amount and effective date of the increase and the recomputed values. If the
insured is not living on the effective date, the increase will not take effect.
(Continued on Next Page)
Page 10 (VALB--86)
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CHANGING THE FACE AMOUNT AND PARTIAL WITHDRAWALS (Continued)
Decrease in Face Amount.--After the first contract year, you may be able to
decrease the face amount. Your right to do so is subject to all these conditions
and the paragraphs that follow:
1. You must ask for the decrease in writing and in a form that meets our
needs.
2. The amount of the decrease must be at least equal to the minimum decrease
in face amount, which we show on page 3.
3. The face amount after the decrease must be at least equal to the minimum
face amount, which we show on page 3.
4. It we ask you to do so, you must send us the contract to be endorsed.
A decrease will take effect only if we approve your request for it at our
Service Office. If the decrease is approved, we will recompute the contract's
scheduled premiums, maximum surrender charges, tabular values, monthly
deductions and expense charges. A decrease in face amount may also effect the
amount of any extra benefits this contract might have. We will send you new
Contract Data pages showing the amount and effective date of the decrease and
the recomputed values. If the Insured is not living on the effective date, the
decrease will not take effect.
We may deduct an administrative fee of up to $15.00, and a proportionate part of
any then applicable surrender charge from the contract fund.
Partial Withdrawals.--After the first contract year, you may be able to make
partial withdrawals from the contract. Your right to do so is subject to all
these conditions and the paragraphs that follow:
1. You must ask for the partial withdrawal in writing and in a form that meets
our needs.
2. The amount withdrawn, plus the net cash value after withdrawal, may not be
more than the net cash value before withdrawal.
3. The cash value after withdrawal must not be less than the tabular cash
value.
4. The amount you withdraw must be at least $500.
5. You may make up to four partial withdrawals in any contract year.
6. If we ask you to do so, you must send us the contract to be endorsed.
We may deduct an administrative fee of up to $15.00.
We will usually pay any partial withdrawal within seven days after we receive
your request and, if we request it, the contract at our Service Office. But we
have the right to defer paying the portion of the proceeds that is to come from
the portion of the contract fund in the PLVAA if (1) the New York Stock Exchange
is closed; or (2) the SEC requires that trading be restricted or declares an
emergency. We have the right to postpone paying you the remainder of the
proceeds for up to six months. If we do so for more than thirty days, we will
pay interest at the rate of 3% a year.
An amount withdrawn may not be repaid, except as an unscheduled premium subject
to charges.
We will tell you how much you may withdraw if you ask us.
Page 11 (VALB--86)(NJ)
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<PAGE>
SEPARATE ACCOUNT
The Separate Account.--The words separate account, where we use them in this
contract without qualification, mean the Pruco Life Variable Appreciable Account
(PLVAA) and any other separate account that we establish. PLVAA is a unit
investment trust registered with the SEC under the Investment Company Act of
1940. We established PLVAA to support variable life insurance contracts. We own
the assets of this separate account; we keep them separate from the assets of
our general account.
We guarantee that the expenses and mortality results of the account will not
adversely effect the dollar amounts of values, benefits or payments under this
contract.
Subaccounts.--A separate account may have several subaccounts. We list the
subaccounts in the Contract Data pages. You determine, using percentages, how
invested premium amounts will be allocated among the subaccounts. We may
establish additional subaccounts.
The Fund.--The word fund, where we use it in this contract without
qualification, means the fund we identify in the Contract Data pages. The fund
is registered with the SEC under the Investment Company Act of 1940 as an
open-end diversified management investment company. The fund has several
portfolios; there is a portfolio that corresponds to each of the subaccounts of
PLVAA. We list these portfolios in the Contract Data pages.
Separate Account Investments.--We use the assets of PLVAA to buy shares in the
fund. Each subaccount of PLVAA is invested in a specific portfolio. Income and
realized and unrealized gains and losses from assets in each of these
subaccounts are credited to, or charged against, that subaccount. This is
without regard to income, gains, or losses in our other investment accounts.
We will determine the value of the assets in PLVAA at the end of each business
day. When we use the term business day, we mean a day when the New York Stock
Exchange is open for trading. We might need to know the value of an asset on a
day that is not a business day or on which trading in that asset does not take
place. In this case, we will use the value of that asset as of the end of the
last prior business day on which trading took place.
Example: It we need to know the value of an asset on a Sunday, we will normally
use the value of the asset as of the end of business on Friday.
We will always keep assets in the separate account with a total value at least
equal to the amount of the investment amounts under contracts like this one. To
the extent those assets do not exceed this amount, we use them only to support
those contracts; we do not use those assets to support any other business we
conduct. We may use any excess over this amount in any way we choose.
If we create additional separate accounts, we may invest the assets in them in a
different way. But we will do so only with the consent of the SEC and, where
required, of the insurance regulator where this contract is delivered.
Change in Investment Policy.--A portfolio of the fund might make a material
change in its investment policy. In that case, we will send you a notice of the
change. Within 60 days after you receive the notice, or within 60 days after the
effective date of the change, if later, you may transfer to the Fixed Account
any amounts in the subaccount investing in that portfolio.
Change of Fund.--A portfolio might, in our judgment, become unsuitable for
investment by a subaccount. This might happen because of a change in investment
policy, or a change in the laws or regulations, or because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the fund, or to invest in a
fund other than the one we show in the Contract Data pages. But we would first
seek the consent of the SEC and, where required, the insurance regulator where
this contract is delivered.
FIXED ACCOUNT
The Fixed Account.--If you choose, you may allocate all or part of your invested
premium amount to the fixed account. The fixed account is funded by the general
account of Pruco Life. The fixed account is credited with interest as described
under Guaranteed Interest and Excess Interest on page 14.
Fixed Account Options.--We may have more than one fixed account option. We list
the fixed account option(s) in the Contract Data pages.
Page 12 (VALB--86)(NJ)
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TRANSFERS
Transfers Among Subaccounts and into the Fixed Account.--You may transfer
amounts among subaccounts of PLVAA and into the Fixed Account as often as four
times in a contract year if the contract is not in default or if the contract is
being continued under the reduced paid up option. In addition, at any time
within the first two contract years or within two years of the effective date
of any increase, the entire amount in all subaccounts may be transferred to the
fixed account. If we establish new separate accounts, transfers into or out of
these separate accounts will be allowed only with our consent. To make a
transfer, you must notify us in writing in a form that meets our needs. The
transfer will take effect on the date we receive your notice at our Service
Office.
Transfers Among Fixed Account Options and into the Subaccounts.--You may
transfer amounts among the available Fixed Account Options and into the
subaccounts only with our consent.
INVESTMENT AMOUNT AND ASSUMED RATE OF RETURN
Investment Amount.--The investment amount for this contract is an amount we use
to compute the investment return. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate net premiums; (2) whether
or not you transfer amounts among subaccounts and the fixed account; (3) the
investment performance of the subaccounts to which amounts are allocated or
transferred; (4) the deductions we make from the contract fund; (5) the amount
and timing of premium payments you make; (6) whether or not you take any loan;
and (7) whether or not you make any partial withdrawals or change the face
amount. The investment amount exists only if the contract is not in default past
the days of grace or if it is being continued as reduced paid-up insurance.
The investment amount at any time is equal to the contract fund, minus the
amount of any contract loan and interest accrued on the loan since the last
transaction date, minus the amount in the Fixed Account.
Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a
year. This is the same as .01074598% a day compounded daily.
Page 13 (VALB--86)
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INSURANCE AMOUNT
The insurance amount on any date is equal to the greater of (1) the face amount,
which we show on the page 3, plus any excess of the contract fund over the
tabular contract fund, and (2) the contract fund divided by the net single
premium per $1 at the insured's attained age on that date.
CONTRACT FUND
Contract Fund Defined.--On the contract date the contract fund is equal to the
invested premium amounts credited (see below), minus any of the charges
described in items (g) through (m) below which may have been due on that date.
On any day after that the contract fund is equal to what it was on the previous
day, plus any invested premium amounts credited that day, plus these items:
(a) any increase due to investment results in the value of the subaccounts to
which that portion of the contract fund that is in the investment amount
is allocated;
(b) guaranteed interest at an effective rate of 4% a year on that portion of
the contract fund that is not in the investment amount; and
(c) any excess interest on that portion of the contract fund that is not in
the investment amount;
and minus these items:
(d) any decrease due to investment results in the value of the subaccounts to
which that portion of the contract fund that is in the investment amount
is allocated;
(e) a charge against the investment amount at a rate of not more than
.00163894% a day (.60% a year) for mortality and expense risks that we
assume;
(f) any amount charged against the investment amount for Federal or State
income taxes;
(g) a charge to guarantee the minimum death benefit;
(h) a charge for the cost of expected mortality;
(i) any charges for extra rating class;
(j) any charges for extra benefits;
(k) a charge for administration;
(l) any partial withdrawals; and
(m) any surrender charges and administrative charges that may result from a
partial withdrawal or a decrease in face amount.
We describe under Reinstatement on page 10 what the contract fund will be equal
to on any reinstatement date.
There is no contract fund for a contract in force as extended insurance.
Invested Premium Amount.--This is the portion of each premium paid that we will
add to the contract fund. It is equal to the premium paid minus the expense
charges described in the Contract Data pages under Schedule of Expense Charges
from Premium Payments.
Guaranteed Interest.--We will credit interest to the contract fund each day on
any portion of the contract fund not in the investment amount. We will credit
.01074598% a day, which is equivalent to an effective rate of 4% a year.
Excess Interest.--We may credit interest in addition to the guaranteed interest
on that portion of the contract fund not in the investment amount. The rate of
any excess interest will be determined from time to time and will continue
thereafter until a new rate is determined. We may use different rates of excess
interest for different portions of the contract fund not in the investment
amount. We may from time to time guarantee rates of excess interest on some
portions of the contract fund.
Cost of Expected Mortality.--On each Monthly Date, we will deduct a charge for
the cost of expected mortality. The amount deducted is computed as the annual
mortality rate multiplied by the coverage amount. The coverage amount is the
difference between the adjusted death benefit and the adjusted contract fund. If
the insurance amount equals the face amount plus any excess of the contract fund
over the tabular contract fund, the adjusted death benefit is equal to the face
amount multiplied by the Factor for Adjusting the Insurance Amount (See Table of
Adjustment Factors), and the adjusted contract fund is equal to the tabular
contract fund at the end of the month less any excess, of the tabular contract
fund at the beginning of the month after deduction of any charges due on the
Monthly Date, over the actual contract fund, all multiplied by the Factor for
Adjusting the Contract Fund. If the insurance amount exceeds the face amount
plus any excess of the fund over the tabular contract fund, the adjusted
contract fund is equal to the net single premium at the end of the month for the
insurance amount on the Monthly Date, all multiplied by the Factor for Adjusting
the Contract Fund. The adjustment factors depend on the month as shown in the
table that follows.
(Continued on Next Page)
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CONTRACT FUND (Continued)
We will not charge more than the maximum guaranteed rates, which are based on
the Insured's sex and attained age and the mortality table described in the
Basis of Computation. We may charge less. At least once every five years, but
not more often than once a year, we will consider the need to change the rates.
We will change them only if we do so for all contracts like this one dated in
the same year as this one.
Charge for Extra Rating Class.--If there is an extra charge because of the
rating class of the Insured, we will deduct it from the contract fund at the
beginning of each contract month. Any charge is included in the amount shown in
the Contract Data pages under Schedule of Monthly Deductions from the Contract
Fund.
Charge for Extra Benefits.--If the contract has extra benefits, we will deduct
the charges for such benefits from the contract fund at the beginning of each
contract month. Charges for any such extra benefits are included in the amount
shown in the Contract Data pages under Schedule of Monthly Deductions from
Contract Fund.
Charges For Administration and Minimum Death Benefit Guarantees.--On each
monthly date, we will deduct a charge for administration. We will also deduct a
charge for guaranteeing the minimum death benefit regardless of the investment
performance of the separate account. We show the amount of these charges in the
Contract Data pages under Schedule of Monthly Deductions from the Contract Fund.
- --------------------------------------------------------------------------------
TABLE OF ADJUSTMENT FACTORS
- --------------------------------------------------------------------------------
Factor for Adjusting Factor for Adjusting
Month the Insurance Amount the Contract Fund
February .076597042 .076481870
A month with 30 days .082059446 .081927252
A month with 31 days .084790207 .084649064
- --------------------------------------------------------------------------------
Page 15 (VALB-86)
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<PAGE>
CONTRACT VALUE OPTIONS
Benefit After the Grace Period.--If the contract is in default beyond its days
of grace, we will use any net cash value (which we describe under Cash Value
Option) to keep the contract in force as one of two kinds of insurance. One kind
is extended insurance. The second kind is reduced paid-up insurance. We describe
each below. You will find under Automatic Benefit which kind it will be. Any
extra benefit(s) will end as soon as the contract is in default past its days of
grace, unless the form that describes the extra benefit states otherwise.
Extended Insurance.--This will be term insurance of a fixed amount on the
Insured's life. We will pay the amount of term insurance if the Insured dies in
the term we describe below. Before the end of the term there will be cash values
but no loan value.
The amount of term insurance will be the death benefit on the day of default,
minus any part of that death benefit which was provided by extra benefits. The
term is a period of time that will start on the day the contract went into
default. The length of the term will be what is provided when we use the net
cash value at the net single premium rate. This rate depends on the Insured's
issue age and sex and on the length of time since the contract date.
There may be extra days of term insurance. This will occur if, on the day the
contract goes into default, the term of extended insurance provided by the net
cash value does not exceed 90 days, or the number of days the contract was in
force before the default began, if less. The number of extra days will be (1)
90, or the number of days the contract was in force before the default began, if
less, minus (2) the number of days of extended insurance that would be provided
by the net cash value if there were no contract debt. The extra days, if any.
start on the day after the last day of term insurance provided by the net cash
value, if any. If there is no such term insurance, the extra days start on the
day the contract goes into default. The term insurance for the extra days has no
cash value. There will be no extra days if you replace the extended insurance
with reduced paid-up insurance or you surrender the contract before the extra
days start.
Reduced Paid-up Insurance.--This will be paid-up variable life insurance on the
Insured's life. The death benefit may change from day to day, as we explain
below, but if there is no contract debt, it will not be less than a minimum
guaranteed amount. There will be cash values and loan values.
The minimum guaranteed amount of insurance will be computed by using the net
cash value at the net single premium rate determined as of the day the contract
went into default. The net single premium rate depends on the Insured's issue
age and sex and on the length of time since the contract date. The amount
payable in the event of death thereafter will be the greater of (a) the minimum
guaranteed amount and (b) the contract fund divided by the net single premium
per $1 at the Insured's attained age. In either case the amount will be adjusted
for any contract debt.
Except when it is provided as the automatic benefit, (see below), the reduced
paid-up insurance option will be available only when the guaranteed death
benefit under the option will be $5000 or more.
If we issued the contract in a rating class for which we do not provide extended
insurance, you may not allocate the contract fund of the reduced paid-up
insurance to any subaccount without our consent.
Computations.--We will make all computations for either of these benefits as of
the date the contract goes into default. But we will consider any loan you take
out or pay back or any premium payments or partial withdrawals you make in the
days of grace.
Automatic Benefit.--When the contract is in default, it will stay in force as
extended insurance. But it will stay in force as reduced paid-up insurance if
either of these statements applies: (1) We issued the contract in a rating class
for which we do not provide extended insurance; in this case the phrase No
Extended Insurance is in the Rating Class in the Contract Data pages. (2) The
amount of reduced paid-up insurance would be at least as great as the amount of
extended term insurance.
Optional Benefit.--You may choose to replace any extended insurance that has a
net cash value by reduced paid-up insurance. To make this choice, you must do so
in writing to us in a form that meets our needs, not more than three months
after the date the contract goes into default. You must also send the contract
to us to be endorsed.
(Continued on Next Page)
Page 16 (VALB--86)
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<PAGE>
CONTRACT VALUE OPTIONS (Continued)
Cash Value Option.--You may surrender this contract for its net cash value. The
net cash value at any time is the cash value at that time, less any contract
debt. To surrender this contract, you must ask us in writing in a form that
meets our needs. You must also send the contract to us. Here is how we will
compute the cash value for surrender of the contract or for its continuation
under extended insurance or reduced paid-up insurance.
1. If the contract is not in default: The cash value on surrender is the
contract fund, minus any surrender charge, consisting of a deferred sales charge
and a deferred underwriting and issue charge. The schedule of Maximum Surrender
Charges for this contract is in the Contract Data pages.
2. If the contract is in default during its days of grace: We will compute the
net cash value as of the date the contract went into default. But we will adjust
this value for any loan you take out or pay back, and any premium payments,
partial withdrawals or decreases in face amount you make in the days of grace.
3. If the contract is in default beyond its days of grace: The net cash value as
of any date will be the net value on that date of any extended insurance benefit
then in force. Or it will be the net value on that date of any reduced paid-up
insurance benefit then in force, less any contract debt.
Within 30 days after a contract anniversary, the net cash value of any extended
insurance will not be less than the value on that anniversary.
We will usually pay any cash value within seven days after we receive your
request and the contract at our Service Office. But we have the right to defer
paying the portion of the proceeds that is to come from the portion of the
contract fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2)
the SEC requires that trading be restricted or declares an emergency. We have
the right to postpone paying you the remainder of the proceeds for up to six
months. If we do so for more than thirty days, we will pay interest at the rate
of 3% a year.
Tabular Values.--We show tabular contract fund values and tabular cash values at
the end of contract years in the Contract Data pages. The tabular contract fund
at the end of any contract year is the amount which will then be in the contract
fund if all scheduled premiums have been paid on their due dates, there have
been no unscheduled premiums paid, there is no contract debt, the subaccounts
you have chosen earn exactly the assumed rate of return, we have credited no
excess interest, and we have deducted the maximum mortality and expense charges.
The tabular cash values are the amounts which, under the same conditions, will
then be used to provide extended insurance or reduced paid-up insurance or will
be paid in cash, if the maximum surrender charges are applied. The tabular cash
value shown is equal to the tabular contract fund value as of the same date
after deducting any surrender charges (at the maximum rate) from the tabular
contract fund value. (See Cash Value Option above.)
If we need to compute tabular values at some time during a contract year, we
will count the time since the start of the year. We will let you know the
tabular values for other durations if you ask for them.
Page 17 (VALB--86)
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<PAGE>
LOANS
Loan Requirements.--After the first anniversary, you may borrow from us on the
contract. All these conditions must be met:
1. The Insured is living.
2. The contract is in force other than as extended insurance.
3. The contract debt will not be more than the loan value. (We explain these
terms below.)
4. As sole security for the loan, you assign the contract to us in a form that
meets our needs.
5. Except when used to pay premiums on this contract, the amount you borrow at
any one time must be at least $500.
If there is already contract debt when you borrow from us, we will add the new
amount you borrow to that debt.
Contract Debt.--Contract debt at any time means the loan on the contract, plus
the interest we have charged that is not yet due and that we have not yet added
to the loan.
Loan Value.--You may borrow any amount up to the difference between the loan
value and any existing contract debt. At any time the loan value is 90% of the
cash value.
There is one exception. If the contract is in default, the loan value during the
days of grace is what it was on the date of default.
Example 1: Suppose the contract has a loan value of $6,000. About eight months
ago you borrowed $1,500. By now there is interest of $55 charged but not yet
due. The contract debt is now $1,555, which is made up of the $1,500 loan and
the $55 interest.
Example 2: Suppose, in example 1, you want to borrow all that you can. We will
lend you $4,445 which is the difference between the $6,000 loan value and the
$1,555 contract debt. This will increase the contract debt to $6,000. We will
add the new amount borrowed to the existing loan and will charge interest on it,
too.
Interest Charge.--You may select either the Fixed Loan Rate Option or the
Variable Loan Rate Option. Both are described below. We show on page 3 the
option you have selected. You may request a change to the loan rate option at
any time. If we agree, we will tell you the effective date of the change.
Fixed Loan Rate Option.--We charge interest daily on any loan at the effective
rate of 5 1/2% a year. Interest is due on each contract anniversary, or when the
loan is paid back if that comes first. If interest is not paid when due, it
becomes part of the loan. Then we start to charge interest on it, too.
Example 3: Suppose the contract date is in 1987. Six months before the
anniversary in 1996 you borrow $1,600 out of a $4,000 loan value. We charge
5 1/2% a year. Three months later, but still three months before the
anniversary, we will have charged about $22 interest. This amount will be a few
cents more or less than $22 since some months have more days than others. The
interest will not be due until the anniversary unless the loan is paid back
sooner. The loan will still be $1,600. The contract debt will be $1,622, since
contract debt includes interest charged but not yet due.
On the anniversary in 1996 we will have charged about $44 interest. The interest
will then be due.
Example 4: Suppose the $44 interest in example 3 was paid on the anniversary.
The loan and contract debt each became $1,600 right after the payment.
Example 5: Suppose the $44 interest in example 3 was not paid on the
anniversary. The interest became part of the loan, and we began to charge
interest on it, too. The loan and contract debt each became $1,644.
Variable Loan Rate Option.--We charge interest daily on any loan. Interest is
due on each contract anniversary, or when the loan is paid back it that comes
first. If interest is not paid when due, it becomes part of the loan. Then we
start to charge interest on it, too.
The loan interest rate is the annual rate we set from time to time. The rate
will never be greater than is permitted by law. It will change only on a
contract anniversary.
Before the start of each contract year, we will determine the loan interest rate
we can charge for that contract year.
To do this, we will first find the rate that is the greater of (1) The Published
Monthly Average (which we describe below) for the calendar month ending two
months before the calendar month of the contract anniversary; and (2) 5%.
If that greater rate is at least 1/2% more than the loan interest rate we had
set for the current contract year, we have the right to increase the loan
interest rate by at least 1/2%, up to that greater rate. If it is at least 1/2%
less, we will decrease the loan interest rate to be no more than the greater
rate. We will not change the loan interest rate by less than 1/2%.
(Continued on Next Page)
Page 18 (VALB--86)
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<PAGE>
LOANS (Continued)
When you make a loan we will tell you the initial interest rate for the loan. We
will send you a notice it there is to be an increase in the rate.
The Published Monthly Average means:
1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as
published by Moody's Investors Service, Inc. or any successor to that service;
or
2. If that average is no longer published, a substantially similar average,
established by the insurance regulator where this contract is delivered.
Repayment.--All or part of any contract debt may be paid back at any time while
the Insured is living. When we settle the contract, any contract debt is due us.
If there is contract debt at the end of the last day of grace when the contract
is in default, it will be deducted from the cash value to determine the net cash
value. We will make this adjustment so that the proceeds will not include the
amount of that debt.
Effect of a Loan.--When you take a loan, the amount of the loan continues to be
a part of the contract fund and continues to be credited with interest at the
guaranteed rate of 4% a year. If you have selected the Variable Loan Rate
Option, we will credit excess interest at an effective rate of not less than the
loan interest rate for the contract year less 5 1/2%. However, we will reduce
the portion of the contract fund allocated to the separate account and the fixed
account by the amount you borrow, and by loan interest that becomes part of the
loan because it is not paid when due.
On each transaction date, if there is a contract loan outstanding, we will
increase the portion of the contract fund in the fixed account and the separate
account by interest credits accrued on the loan since the last transaction date.
When you repay part or all of a loan we will increase the portion of the
contract fund in the separate account and the fixed account by the amount of
loan you repay, plus interest credits accrued on the loan since the last
transaction date. We will not increase the portion of the contract fund
allocated to the separate account and the fixed account by loan interest that is
paid before we make it part of the loan.
Only the amount of the investment amount will reflect the investment results of
the subaccounts. Since the amount you borrow is removed from the portion of the
contract fund allocated to the separate account and the fixed account, a loan
may have a permanent effect on the net cash value of this contract and also on
any death benefit in excess of the guaranteed death benefit. The longer the loan
is outstanding, the greater this effect is likely to be.
Excess Contract Debt.--If contract debt ever becomes equal to or more than the
cash value, all the contract's benefits will end 61 days after we mail a notice
to you and any assignee of whom we know. Also. we may send a notice to the
Insured's last known address. In the notice we will state the amount that, if
paid to us, will keep the contract's benefits from ending for a limited time.
Postponement of Loan.--We will usually make a loan within seven days after we
receive your request at our Service Office. But we have the right to defer
making the portion of the loan that is to come from the portion of the contract
fund in the PLVAA if (1) the New York Stock Exchange is closed; or (2) the SEC
requires that trading be restricted or declares an emergency. We have the right
to postpone paying you the remainder of the proceeds of a loan for up to six
months, unless it will be used to pay premiums on this or other contracts with
us.
Page 19 (VALA--86)
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<PAGE>
SETTLEMENT OPTIONS
Payee Defined.--In these provisions and under the Automatic Mode of Settlement,
the word Payee means a person who has a right to receive a settlement under the
contract. Such a person may be the Insured, the owner, a beneficiary, or a
contingent payee.
Choosing an Option.--A Payee may choose an option for all or part of any
proceeds or residue that becomes payable to him or her in one sum. We describe
residue later on this page.
In some cases, a Payee will need our consent to choose an option. We describe
these cases under Conditions.
Options Described.--Here are the options we offer. We may also consent to other
arrangements.
Life Income Option.--We will make equal monthly payments for as long as the
person on whose life the settlement is based lives, with payments certain for a
10-year period (10-Year Certain). The amount of each payment will be based on
the Life Income Option Table and on the sex and age, on the due date of the
first payment, of the person on whose life the settlement is based. That person
must be a Payee. But if a choice is made more than two years after the Insured's
death, we may use the Life Income Option payment rates in individual annuity
contracts or life insurance contracts we regularly issue, based on United States
currency, on the due date of the first payment. On request, we will quote the
payment rates in contracts we then issue. We must have proof of the date of
birth of the person on whose life the settlement is based. If on the due date of
the first payment under this option, we have declared a higher payment rate
under the option, we will base the payments on that higher rate.
Interest Payment Option.--We will hold an amount at interest. We will pay
interest at an effective rate of at least 3% a year ($30.00 annually, $14.89
semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more
interest.
Supplemental Life Annuity Option.--Any Payee may choose to receive all or part
of the proceeds of this contract in the form of payments like those of any
annuity or life annuity we then regularly issue. But that annuity must (1) be
based on United States currency; (2) be bought by a single sum; (3) not provide
for dividends; and (4) not normally provide for deferral of the first payment.
For purposes of this option only, the words we, our and us include our parent
company, The Prudential Insurance Company of America, which has agreed to make
settlements under this option.
The payment will be at least what we would pay under the chosen kind of annuity
with its first payment due on its contract date.
The phrase regularly issue does not include contracts that are used to qualify
for special federal income tax treatment as a retirement plan unless this
contract has been issued as part of such a plan. At least one of the persons on
whose life this Option is based must be a Payee. We must have proof of the date
of birth of any person on whose life the option is based. This Option cannot be
chosen more than 30 days before the due date of the first payment. On request,
we will quote the payment that would apply for any amount placed under the
option at that time.
First Payment Due Date.--Unless a different date is stated when the option is
chosen: (1) the first payment for the Interest Payment Option will be due at the
end of the chosen payment interval; and (2) the first payment for any of the
other options will be due on the date the option takes effect.
Residue Described.--For the Life Income Option and the Supplemental Life Annuity
Option, residue on any date means the then present value of any unpaid payments
certain. For the Life Income Option, we will compute it at an effective interest
rate of 3 1/2% a year. But we will use the interest rate we used to compute the
actual Life Income Option payments if they were not based on the table in this
contract. For the Supplemental Life Annuity Option, we will use the interest
rate we would use for the chosen kind of annuity with the same provisions as to
withdrawal.
For the Interest Payment Option, residue on any date means any unpaid balance
with interest to that date.
For the Life Income Option and the Supplemental Life Annuity Option, residue
does not include the value of any payment that may become due after the certain
period.
Withdrawal of Residue.--Unless otherwise stated when the option is chosen: (1)
under the Life Income Option and the Supplemental Life Annuity Option the
residue may be withdrawn; and (2) under the Interest Payment Option all, or any
part not less than $100, of the residue may be withdrawn. If the Interest
Payment Option residue is reduced to less than $1,000, we have the right to pay
it in one sum. Under the Life Income Option and the Supplemental Life Annuity
Option, withdrawal of the residue will not affect any payments that may become
due after the certain period; the value of those payments cannot be withdrawn.
Instead, the payments will start again if they were based on the life of a
person who lives past the certain period.
(Continued on Next Page)
Page 20 (VALA--86)
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SETTLEMENT OPTIONS (Continued)
Designating Contingent Payee(s).--A Payee under an option has the right, unless
otherwise stated, to name or change a contingent payee to receive any residue at
the Payee's death. This may be done only if (1) the Payee has the full right to
withdraw the residue; or (2) the residue would otherwise have been payable to
that Payee's estate at death.
A payee who has the right may choose, or change the choice of, an option for all
or part of the residue. In some cases, the Payee will need our consent to choose
or change an option. We describe these cases under Conditions.
Any request to exercise any of these rights must be in writing and in a form
that meets our needs. It will take effect only when we file it at our Service
Office. Then the interest of anyone who is being removed will end as of the date
of the request, even if the Payee who made the request is not living when we
file it.
Changing Options.--A Payee under the Interest Payment Option may choose another
option for any sum that the Payee could withdraw on the date the chosen option
is to start. That date may be before the date the Payee makes the choice only if
we consent. In some cases, the Payee will need our consent to choose or change
an option. We describe these cases next.
Conditions.--Under any of these conditions, our consent is needed for an option
to be used for any person:
1. The person is not a natural person who will be paid in his or her own
right.
2. The person will be paid as assignee.
3. The amount to be held for the person under the Interest Payment Option is
less than $1,000. But we will hold any amount for at least one year in
accord with the Automatic Mode of Settlement.
4. Each payment to the person under the option would be less than $20.
5. The option is for residue arising other than at (a) the Insured's death, or
(b) the death of the beneficiary who was entitled to be paid as of the date
of the Insured's death.
6. The option is for proceeds that arise other than from the Insured's death,
and we are settling with an owner or any other person who is not the
Insured.
Death of Payee.--If a Payee under an option dies and if no other distribution is
shown, we will pay any residue under that option in one sum to the Payee's
estate.
AUTOMATIC MODE OF SETTLEMENT
Applicability.--These provisions apply to proceeds arising from the Insured's
death and payable in one sum to a Payee who is a beneficiary. They do not apply
to any periodic payment.
Interest on Proceeds.--We will hold the proceeds at interest under Interest
Payment Option of the Settlement Options provision. The Payee may withdraw the
residue. We will pay it promptly on request. We will pay interest annually
unless we agree to pay it more often. We have the right to pay the residue in
one sum after one year if (1) the Payee is not a natural person who will be paid
in his or her own right; (2) the Payee will be paid as assignee; or (3) the
original amount we hold under Interest Payment Option for the Payee is less than
$1,000.
Settlement at Payee's Death.--If the Payee dies and leaves an Interest Payment
Option residue, we will honor any contingent payee provision then in effect. If
there is none, here is what we will do. We will look to the beneficiary
designation of the contract; we will see what other beneficiary(ies), if any,
would have been entitled to the portion of the proceeds that produced the
Interest Payment Option residue if the Insured had not died until immediately
after the Payee died. Then we will pay the residue in one sum to such other
beneficiary(ies}, in accord with that designation. But if, as stated in that
designation, payment would be due the estate of someone else, we will instead
pay the estate of the Payee.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. Jane was living when the Insured died. Jane later died
without having chosen an option or naming someone other than Paul and John as
contingent payee. If Paul and John are living at Jane's death we owe them the
residue. If only one of them is living then, and if the contract called for
payment to the survivor of them, we owe him the residue. It neither of them is
living then, we owe Jane's estate.
Spendthrift and Creditor.--A beneficiary or contingent payee may not, at or
after the Insured's death, assign, transfer, or encumber any benefit payable. To
the extent allowed by law, the benefits will not be subject to the claims of any
creditor of any beneficiary or contingent payee.
Page 21 (VALA--86)
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<PAGE>
SETTLEMENT OPTIONS (Continued)
LIFE INCOME OPTION TABLE
10-YEAR CERTAIN
- --------------------------------------------------------------------------------
MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST
PAYABLE IMMEDIATELY
- --------------------------------
AGE
LAST
BIRTHDAY Male Female
- --------------------------------
10 $3.18 $3.11
and under
11 3.19 3.12
12 3.20 3.13
13 3.21 3.14
14 3.22 3.15
15 3.24 3.16
16 3.25 3.17
17 3.27 3.19
18 3.28 3.20
19 3.30 3.21
20 3.31 3.22
21 3.33 3.24
22 3.35 3.25
23 3.36 3.26
24 3.38 3.28
25 3.40 3.30
26 3.42 3.31
27 3.45 3.33
28 3.47 3.35
29 3.49 3.37
30 3.52 3.39
31 3.54 3.41
32 3.57 3.43
33 3.60 3.45
34 3.63 3.47
35 3.66 3.50
36 3.69 3.52
37 3.72 3.55
38 3.76 3.58
39 3.80 3.61
40 3.84 3.64
41 3.88 3.67
42 3.92 3.70
43 3.97 3.74
44 4.01 3.78
- ---------------------------------
- ---------------------------------
AGE
LAST
BIRTHDAY Male Female
- ---------------------------------
45 $4.06 $3.82
46 4.12 3.86
47 4.17 3.90
48 4.23 3.94
49 4.28 3.99
50 4.35 4.04
51 4.41 4.09
52 4.48 4.15
53 4.55 4.21
54 4.82 4.27
55 4.70 4.33
56 4.78 4.40
57 4.86 4.47
58 4.95 4.54
59 5.05 4.62
60 5.15 4.71
61 5.25 4.79
62 5.36 4.89
63 5.48 4.98
64 5.60 5.09
65 5.73 5.20
66 5.87 5.31
67 6.01 5.43
68 6.15 5.56
69 6.30 5.70
70 6.46 5.84
71 6.62 5.99
72 6.79 6.15
73 6.96 6.31
74 7.13 6.49
75 7.30 6.67
76 7.48 6.85
77 7.66 7.04
78 7.83 7.24
79 8.00 7.44
80 8.17 7.64
and over
- ---------------------------------
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<PAGE>
BENEFICIARY
You may designate or change a beneficiary. Your request must be in writing and
in a form that meets our needs. It will take effect only when we file it at our
Service Office; this will be after you send the contract to us to be endorsed,
if we ask you to do so. Then any previous beneficiary's interest will end as of
the date of the request. It will end then even if the Insured is not living when
we file the request. Any beneficiary's interest is subject to the rights of any
assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority
is called class 2, and so on. When we use numbered classes, these statements
apply to beneficiaries unless the form states otherwise;
1. One who survives the Insured will have the right to be paid only if no one
in a prior class survives the Insured.
2. One who has the right to be paid will be the only one paid if no one else
in the same class survives the Insured.
3. Two or more in the same class who have the right to be paid will be paid in
equal shares.
4. If none survives the Insured, we will pay in one sum to the Insured's
estate.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. We owe Jane the proceeds if she is living at the Insured's
death. We owe Paul and John the proceeds if they are living then but Jane is
not. But if only one of them is living, we owe him the proceeds. If none of them
is living we owe the Insured's estate.
Beneficiaries who do not have a right to be paid under these terms may still
have a right to be paid under the Automatic Mode of Settlement.
Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
It beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.
<TABLE>
<CAPTION>
CONTRACT SUMMARY (Continued from Page 5)
- ---------------------------------------------------------------------------------------------------------
TABLE OF BASIC AMOUNTS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
When the proceeds arise from the Insured's death:
- ---------------------------------------------------------------------------------------------------------
And The Contract Is In Force: Then The Basic Amount Is: And We Adjust The Basic
Amount For:
- ---------------------------------------------------------------------------------------------------------
and not in default past its days of the insurance amount (see page 14) contract debt (see page 18),
grace plus the amount of any extra benefits plus any charges due in the
arising from the insured's death days of grace (see page 9).
- ---------------------------------------------------------------------------------------------------------
as reduced paid-up insurance (see the amount of reduced contract debt.
page 16) paid-up insurance (see page 16)
- ---------------------------------------------------------------------------------------------------------
as extended insurance (see the amount of term insurance. if the nothing.
page 16) Insured dies in the term (see page
16); otherwise zero
- ---------------------------------------------------------------------------------------------------------
This Table is a part of the Contract Summary and of the Contract.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Page 23 (VALA--86)
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<PAGE>
GUIDE TO CONTENTS
Page
Contract Summary .......................................................... 5
Table of Basic Amounts ................................................. 23
Contract Data ............................................................. 3
List of Contract Minimums;
List of Supplementary Benefits, if any;
Summary of Face Amount; Schedule of
Premiums; Schedule of Expense Charges
from Premium Payments; Schedule of
Monthly Deductions from Contract Fund;
Schedule of Maximum Surrender Charges;
List of Subaccounts and Portfolios;
List of Fixed Account Options; Schedule
of Initial Allocation of Net Premiums;
Service Office
Tabular Contract Fund and Tabular
Cash Values ............................................................. 4
General Provisions ........................................................ 6
Definitions; The Contract; Contract
Modifications; Non-participating; Service
Office; Ownership and Control;
Suicide Exclusion; Currency; Misstatement
of Age or Sex; Incontestability; Assignment;
Annual Report; Increase in Face Amount
at Age 21 for Contracts Issued at Age 14
or Lower; Payment of Death Claim
Basis of Computation ...................................................... 7
Mortality Tables Described; Interest Rate;
Exclusions; Values after 20 Contract Years;
Minimum Legal Values
Premium Payment and Reinstatement ......................................... 8
Payment of Premiums; Scheduled Premiums;
Unscheduled Premiums; Premium Change on
Contract Change Date(s); Allocations; Default; Grace
Period; Premium Account; Reinstatement
Changing The Face Amount and
Partial Withdrawals .................................................... 10
Face Amount; Increase in Face
Amount; Decrease in Face Amount;
Partial Withdrawals
Separate Account .......................................................... 12
The Separate Account; Subaccounts; The Fund;
Separate Account Investments; Change in
Investment Policy; Change of Fund
Fixed Account ............................................................. 12
The Fixed Account;
Fixed Account Options
Transfers ................................................................. 13
Transfers Among Subaccounts and into the Fixed
Account; Transfers Among Fixed Account
Options and into the Subaccounts
Investment Amount and Assumed Rate of Return .............................. 13
Investment Amount; Assumed Rate of Return;
Insurance Amount .......................................................... 14
Contract Fund ............................................................. 14
Contract Fund Defined; Invested Premium
Amount; Guaranteed Interest; Excess Interest,
Cost of Expected Mortality; Charge for
Extra Rating Class; Charge for Extra
Benefits; Charges for Administration and Minimum
Death Benefit Guarantee; Schedule of Other Charges
Table of Adjustment Factors ............................................... 15
Contract Value Options .................................................... 16
Benefit After the Grace Period; Extended
Insurance; Reduced Paid-up
Insurance; Computations; Automatic
Benefit; Optional Benefit; Cash Value
Option; Tabular Values
Loans ..................................................................... 18
Loan Requirements; Contract Debt; Loan
Value; Interest Charge; Fixed Loan Rate Option;
Variable Loan Rate Option; Repayment; Effect
of a Loan; Excess Contract Debt; Postponement
of Loan
Settlement Options ........................................................ 20
Payee Defined; Choosing an Option;
Options Described; Life Income Option;
Interest Payment Option; Supplemental
Life Annuity Option;
First Payment Due Date; Residue Described;
Withdrawal of Residue; Designating
Contingent Payee(s);
Changing Options; Conditions;
Death of Payee
Automatic Mode of Settlement .............................................. 21
Applicability; Interest on Proceeds;
Settlement at Payee's Death;
Spendthrift and Creditor
Life Income Option Table .................................................. 22
Beneficiary ............................................................... 23
Any Supplementary Benefits and a copy
of the application follow page 24.
Page 24 (VALA--86)
II-137
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Part 1 Application for Life Insurance to
[Prudential LOGO] [ ] The Prudential Insurance Company of America
[ ] Pruco Life Insurance Company*
[ ] Pruco Life Insurance Company of New Jersey*
*A Subsidiary of The Prudential Insurance Company of America
No. XX XXX XXX
- -----------------------------------------------------------------------------------------------------------------------------------
1a. Proposed Insured's name--first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth
M F Mo. Day Yr.
[ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
3. [ ] Single [ ] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Social Security No. / /
- -----------------------------------------------------------------------------------------------------------------------------------
5a. Occupation(s) 5b. Duties
- -----------------------------------------------------------------------------------------------------------------------------------
6. Address for mail No. Street City State Zip
- -----------------------------------------------------------------------------------------------------------------------------------
7a. Kind of policy 7b. Initial amount 8. Accidental death coverage
$ initial amount
If a Variable contract is applied for complete appropriate suitability form. $
- -----------------------------------------------------------------------------------------------------------------------------------
9. Beneficiary: (Include name, age and relationship.) 10. List all life insurance on proposed Insured. Check here if None [ ]
a. Primary (Class 1): Company Initial Yr. Kind Medical
amt. issued (Indiv., Group) Yes No
___________________________________________________ [ ] [ ]
________________________________________________________________________
___________________________________________________ [ ] [ ]
________________________________________________________________________
b. Contingent (Class 2) if any: [ ] [ ]
Robert, 10, Son ________________________________________________________________________
__________________________________________________ [ ] [ ]
________________________________________________________________________
[ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
11. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)
Relationship to Date of birth Total life insurance
Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies
a. Spouse $
___________________________________________________________________________________________________________________________________
b. $
___________________________________________________________________________________________________________________________________
c. $
___________________________________________________________________________________________________________________________________
d. $
___________________________________________________________________________________________________________________________________
e. $
___________________________________________________________________________________________________________________________________
f. $
- -----------------------------------------------------------------------------------------------------------------------------------
12. Supplementary benefits and riders: a. For proposed Insured b. For spouse, children, Applicant for AWP
Type and duration of benefit Amount Type and duration of benefit Amount
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
[ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit
- -----------------------------------------------------------------------------------------------------------------------------------
13. State any special request.
- -----------------------------------------------------------------------------------------------------------------------------------
14. Has any person named in 1a or 11, within the last 12 months:
a. been treated by a doctor for or had a known heart attack, stroke or cancer (including melanoma) other Yes No
than of the skin? ............................................................................................. [ ] [ ]
b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
15. Premium payable [ ] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot.
- -----------------------------------------------------------------------------------------------------------------------------------
16. Amount paid $ [ ] None (Must be "None" if either 14a or b is answered "Yes".)
- -----------------------------------------------------------------------------------------------------------------------------------
17. Is a medical examination to be made on: Yes No
a. the proposed Insured? ......................................................................................... [ ] [ ]
b. spouse (if proposed for coverage)? ............................................................................ [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
18. If 17a or b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No
the person(s) indicated in 17 have been examined, even if 16 shows that an amount has been paid? ................. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
- ------------
ORD 84376-86 New Jersey Page 1 (Continued on page 2)
- ------------
</TABLE>
II-138
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Continuation of Part 1 of Application
- -----------------------------------------------------------------------------------------------------------------------------------
19. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No
in 1a or 11? If "Yes", give their names, name of company, plan, amount, policy numbers and enclose any [ ] [ ]
required state replacement form(s).
- -----------------------------------------------------------------------------------------------------------------------------------
20. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 11 in Yes No
this or any company? If "Yes", give amount, details and company. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
21. Does any person named in 1a or 11 plan to live or travel outside the United States and Canada within the Yes No
next 12 months? If "Yes", give country(ies), purpose and duration of trip. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
22. Has any person named in 1a or 11 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No
device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [ ]
complete Aviation Questionnaire.
- -----------------------------------------------------------------------------------------------------------------------------------
23. Has any person named in 1a or 11 engaged in hazardous sports such as: auto, motorcycle or power boat Yes No
sports; bobsledding, scuba or skin diving; mountain climbing; parachuting or sky diving; snowmobile [ ] [ ]
racing or any other hazardous sport or hobby within the last 2 years or does any such person plan to
do so in the future? If "Yes", complete Avocation Questionnaire.
- -----------------------------------------------------------------------------------------------------------------------------------
24. Has any person (age 15 or over) named in 1a or 11 in the last 3 years: Yes No
a. had a driver's license denied, suspended or revoked? ......................................................... [ ] [ ]
b. been convicted of three or more moving violations of any motor vehicle law or of driving while under
the influence of alcohol or drugs? ........................................................................... [ ] [ ]
c. been involved as a driver in 2 or more auto accidents? ....................................................... [ ] [ ]
If "Yes", give name, driver's license number and state of issue, type of violation and reason for license
denial, suspension or revocation.
- -----------------------------------------------------------------------------------------------------------------------------------
25. a. Has the proposed Insured smoked cigarettes within the past twelve months? .............................. Yes [ ] No [ ]
b. Has the spouse (if proposed for coverage) smoked cigarettes within the past twelve months? ............. Yes [ ] No [ ]
c. If the proposed Insured or spouse has ever smoked cigarettes, cigars or a pipe, show date(s) last smoked:
Cigarettes Cigars Pipe
Proposed Insured Mo. _______ Yr. _______ Mo. _______ Yr. _______ Mo._______ Yr. _______
Spouse Mo. _______ Yr. _______ Mo. _______ Yr. _______ Mo._______ Yr. _______
- -----------------------------------------------------------------------------------------------------------------------------------
26. Changes made by the Company.
- -----------------------------------------------------------------------------------------------------------------------------------
To the best of the knowledge and belief of those who sign below, the statements in this application are complete and true. It
is understood that, if any of the above statements (for example, the smoking data) is a material misrepresentation, coverage
could be invalidated as a result. The beneficiary named in the application is for insurance payable upon death of (1) the Insured,
and (2) an insured child after the death of the Insured if there is no insured spouse.
When the Company gives a Limited Insurance Agreement form, ORD 84376A-86 New Jersey, of the same date as this Part 1, coverage will
start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the
full first premium is paid while all persons to be covered are living and their health remains as stated in Parts 1 and 2. If all
these take place, coverage will start on the contract date. If the Company makes a change as indicated in 26 it will be approved by
acceptance of the contract. But where the law requires written consent for any change in the application, such change can be made
only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the
Company's rights or needs.
Ownership: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured,
otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract.
--------------------------------------------------------------------
Signature of Proposed Insured (If age 8 or over)
Dated at on , 19
- ----------------------------------------------------------- --------------------------------------------------------------------
(City/State) Signature of Applicant (If other than proposed Insured --
If applicant is a firm or corporation, show that company's name
Witness By
- ----------------------------------------------------------- --------------------------------------------------------------------
(Licensed agent must witness where required by law) (Signature and title of officer signing for that company)
- -----------------------------------------------------------------------------------------------------------------------------------
------------
ORD 84376-86 New Jersey Page 2
------------
</TABLE>
II-139
<PAGE>
|
Pruco Life Insurance Company of New Jersey | No. xx xxx xxx
|__________________________
A Supplement to the Application for Life Insurance in which John Doe is named as
the proposed insured. The contract applied for is:
[ ] Variable Life Insurance [X] Variable Appreciable Life Insurance
[X] with Variable Insurance Amount
[ ] with Fixed Insurance Amount
The person who signs below:
1. acknowledges receipt of the current prospectus for the contract checked
above;
2. UNDERSTANDS THAT THE DEATH BENEFIT (EXCEPT ANY SUPPLEMENTARY BENEFITS) MAY
GO UP OR GO DOWN DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE BUT WILL
NEVER BE LESS THAN THE GUARANTEED MINIMUM, IF PREMIUMS ARE DULY PAID AND THERE
IS NO CONTRACT DEBT;
3. UNDERSTANDS THAT THE CASH VALUES MAY GO UP OR MAY GO DOWN DEPENDING ON THE
CONTRACT'S INVESTMENT EXPERIENCE AND THAT THERE IS NO GUARANTEED MINIMUM CASH
VALUE;
4. believes that this contract will meet insurance needs and financial
objectives; and
5. requests that the premium payments (as described in the prospectus) be
allocated to the appropriate Pruco Life variable contract account for the
contract checked above as follows:
Subaccount Allocation*
---------- -----------
Bond 20% (BOND)
Money Market 20% (MMKT)
Common Stock 20% (CSTK)
Aggressively Managed Flexible 20% (AFLX)
Conservatively Managed Flexible 20% (CFLX)
_______________________________ ___% ( )
Not available for
Variable Life Fixed Rate Option ___% (FIXD)
Insurance
100%
* If any portion of a net premium is allocated to a particular subaccount, that
portion must be at least 10% on the date the allocation takes effect. All
percentages must be in whole numbers (e.g. 33% can be selected, but 33 1/3%
cannot).
NOTE: Upon request, we will furnish illustrations of benefits, including death
benefits and cash values, for (a) the variable life insurance contract
applied for and (b) a fixed benefit life insurance contract for the same
premium.
| Date | Signature of Applicant
| |
| August 25, 1986 | John Doe
|____________________________________ |______________________________________
- ----------
PLY 70--88
- ----------
II-140
<PAGE>
ENDORSEMENTS
(Only we can endorse this contract.)
Page 25 (VALB--86) (N)
II-141
<PAGE>
Page 26
Modified Premium Variable Life Insurance Policy with variable insurance amount.
Insurance payable only upon death Scheduled premiums payable throughout
Insured's lifetime. Provision for optional additional premiums. Benefits reflect
premium payments, investment results and mortality charges. Guaranteed minimum
death if scheduled premiums duly paid and no contract debt or withdrawals.
Increase in face amount at attained age 21 if contract issued at age 14 or
lower. Non-participating.
VALB--86-N
II-142
EXHIBIT 1.A.(6)(a)
CERTIFICATE OF INCORPORATION
OF
PRULIFE INSURANCE COMPANY OF NEW JERSEY
We, the undersigned, hereby state our intention to form a corporation pursuant
to the provisions of Subtitle 3 of Title 17B of the New Jersey Statutes.
We further state that:
1. The name of the corporation is "PRULIFE INSURANCE COMPANY OF NEW JERSEY".
2. The principal office of the corporation in the State of New Jersey is to be
located at 745 Broad Street, City of Newark, Essex County, New Jersey and
the name of the corporation's agent at that office upon whom process against
the corporation may be served is lsabelle L. Kirchner.
3. The business of the corporation shall be that of a stock life insurance
corporation, with all of the rights, privileges and powers conferred upon
such corporation by the general laws of New Jersey, and such as may from
time to time be conferred by law upon such corporations. The kinds of
insurance, reinsurance and annuities to be written by the corporation shall
be "Life insurance" as defined in Section 17B:17-3 of Subtitle 3 of Title
17B of the New Jersey Statutes, "Health insurance" as defined in Section
17B:17-4 of said Subtitle 3, "Annuity" as defined in Section 17B:17-5 of
said Subtit1e 3, "Reinsurance" as defined in
II-143
<PAGE>
-2-
and authorized by Sections 17B:16-62 and 17B:18-63 of said Subtitle 3,
"Extended reinsurance" as defined in and authorized by Section 17B:l8-65 of
said Subtitle 3, and such other insurance and reinsurance as may be
permitted under the laws of the State or New Jersey to be written by an
insurer authorized to do the kinds of business described in Sections
17B:17-3, 17B:17-4 and 17B:17-5 of said Subtitle 3. Independently of any
insurance or annuity contract, the corporation may provide services of the
kinds authorized for a domestic life insurance corporation by Section
17B:18-43 of said Subtitle 3, subject to the provisions of said Section, and
such as may from time to time be authorized for a domestic life insurance
corporation by the laws of New Jersey.
4. The corporation shall be a stock insurer.
5. The amount of the capital stock of the corporation shall be one million five
hundred thousand ($1,5OO,OOO.OO) dollars which shall be divided into three
hundred thousand shares of common stock, with each share having a par value
of five ($5.0O) dollars.
6. The duration of the corporation's life shall be unlimited.
7. The Board of Directors shall exercise all of the corporate powers of the
corporation except as otherwise provided by law and shall manage all of the
property, business and affairs of the corporation.
II-144
<PAGE>
-3-
8. The initial Board of Directors consisting of nine (9) directors shall be
elected by a majority vote of the incorporators and each such director shall
hold office until the first annual meeting of shareholders of the
corporation and until his successor shall have been elected and qualified.
The number of directors may be increased to not more than thirteen (13) or
decreased to not less than six (6) from time to time as provided in the
By-Laws. In case of any increase in the number of directors, the Board of
Directors shall have power to elect each such additional director to hold
office until the next succeeding annual meeting of shareholders and until
his successor shall have been elected and qualified.
9. One or more or all of the directors may be removed for cause or without
cause by the affirmative vote of the majority or the votes cast by the
holders of shares entitled to vote for the election of directors.
10. The Board of Directors shall have full power from time to time to make,
alter and repeal By-Laws, but By-Laws made by the Board may be altered or
repealed and new By-Laws made by the shareholders. The Board or Directors
shall have power to employ such officers and agents as the Board of
Directors in its discretion may determine for the conduct of the business
and affairs of the corporation.
II-145
<PAGE>
-4-
IN WITNESS WHEREOF, the undersigned, the incorporators of the corporation,
have hereunto signed this Certificate of Incorporation on this 17th day of
September, 1982.
/s/ DONALD P. HEITZLER /s/ CLARENCE F. PEASE
- ------------------------------ ------------------------------
Donald P. Heitzler Clarence F. Pease
/s/ ISABELLE L. KIRCHNER /s/ PELLEGRINO P. PORRARO
- ------------------------------ ------------------------------
Isabelle L. Kirchner Pellegrino P. Porraro
/s/ ROBERT F. LEWIS, II /s/ JULIUS VOGEL
- ------------------------------ ------------------------------
Robert F. Lewis, II Julius Vogel
/s/ JOHN J. MARCUS /s/ WILLIAM T. WACHENFELD
- ------------------------------ ------------------------------
John J. Marcus William T. Wachenfeld
/s/ EUGENE M. O'HARA /s/ RICHARD A YORKS
- ------------------------------ ------------------------------
Eugene M. O'Hara Richard A Yorks
STATE OF NEW JERSEY
COUNTY OF ESSEX
Be it remembered that on this 17th day of September, 1982, before me, the
subscriber, a Notary Public in and for the State of New Jersey personally
appeared Donald P. Heitzler, Isabelle L. Kirchner, Robert F. Lewis, II, John J.
Marcus, Eugene M. O'Hara, Clarence F. Pease, Pellegrino P. Porraro, Julius
Vogel, William T. Wachenfeld and
II-146
<PAGE>
-5-
Richard A. Yorks who, I am satisfied, are the persons named in and who executed
the within instrument and they did severally acknowledge that they signed,
sealed and delivered the same as their act and deed for the uses and purposes
therein expressed.
/s/ FLORA B. LYNN
---------------------------------
Notary Public
FLORA B. LYNN
A Notary Public of New Jersey
My Commission Expires May 28, 1985
II-147
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
PRULIFE INSURANCE COMPANY OF NEW JERSEY
By the unanimous consent of the incorporators before the organization meeting of
the directors, the following amendments are hereby made to the Certificate of
Incorporation of PruLife Insurance Company of New Jersey:
1. Article 1 is amended to read as follows:
"The name of the corporation is PRUCO LIFE INSURANCE COMPANY OF NEW
JERSEY."
2. Article 8 is amended to read as follows:
"The initial Board of Directors shall consist of nine (9) directors. The
names and addresses of the persons who are to serve as such directors
are as follows:
Garnett L. Keith, Jr. Prudential Plaza, Newark, N.J.
Robert F. Lewis, II Prudential Plaza, Newark, N.J.
John J. Marcus Prudential Plaza, Newark, N.J.
Joseph J. Melone Prudential Plaza, Newark, N.J.
Clarence F. Pease Prudential Plaza, Newark, N.J.
Pellegrino P. Porraro Prudential Plaza, Newark, N.J.
A. Douglas Murch Prudential Plaza, Newark, N.J.
Robert C. Winters Prudential Plaza, Newark, N.J.
Richard A. Yorks Prudential Plaza, Newark, N.J.
Each such director shall hold office until the first annual meeting of
shareholders of the corporation and until his successor shall have been elected
and qualified. The number of directors may be increased to not more than
thirteen (13) or decreased to not less than six (6) from time to time as
provided in the By-Laws. In case of any increase in the number of directors, the
Board of Directors shall have power to elect each such additional director to
hold office until the next succeeding annual meeting of shareholders and until
his successor shall have been elected and qualified."
II-148
<PAGE>
-6-
I, JOSEPH F.MURPHY, Commissioner of Insurance of the State of New Jersey,
do hereby certify that the foregoing Certificate of Incorporation of PRULIFE
INSURANCE COMPANY OF NEW JERSEY, has been reviewed and examined by me, and I
found it to be in accordance with Title 17B of the Revised Statutes of New
Jersey and not inconsistent with the Constitution or Laws of this State.
/s/ JOSEPH F. MURPHY
----------------------------------
Joseph F. Murphy,
Commissioner of Insurance
DATED: 10-13-82
II-149
<PAGE>
-2-
IN WITNESS WHEREOF, the undersigned, the incorporators of the corporation,
have hereunto signed this Certificate of Amendment on this 22nd day of November,
1982.
/s/ DONALD P. HEITZLER /s/ CLARENCE F. PEASE
- ------------------------------ ------------------------------
Donald P. Heitzler Clarence F. Pease
/s/ ISABELLE L. KIRCHNER /s/ PELLEGRINO P. PORRARO
- ------------------------------ ------------------------------
Isabelle L. Kirchner Pellegrino P. Porraro
/s/ ROBERT F. LEWIS, II /s/ JULIUS VOGEL
- ------------------------------ ------------------------------
Robert F. Lewis, II Julius Vogel
/s/ JOHN J. MARCUS /s/ WILLIAM T. WACHENFELD
- ------------------------------ ------------------------------
John J. Marcus William T. Wachenfeld
/s/ EUGENE O'HARA /s/ RICHARD A. YORKS
- ------------------------------ ------------------------------
Eugene O'Hara Richard A. Yorks
STATE OF NEW JERSEY
COUNTY OF ESSEX
Be it remembered that on this 22nd day of November, 1982, before me, the
subscriber, a Notary Public in and for the State of New Jersey, personally
appeared Donald P. Heitzler, Isabelle L. Kirchner, Robert F. Lewis, II, Jonn J.
Marcus, Eugene M. O'Hara, Clarence F. Pease, Pellegrino P. Porraro, Julius
Vogel, William T. Wachenfeld and Richard A. Yorks who, I am satisfied, are the
persons named in and who executed the within instrument and they did severally
acknowledge that they signed, sealed and delivered the same as their act and
deed for the uses and purposes therein expressed.
/s/ DEBORAH W. BELL
---------------------------------
Notary Public
DEBORAH W. BELL
A Notary Public of New Jersey
My Commission Expires March 11, 1987
II-150
<PAGE>
I, CHARLES N. STEEL, Deputy Commissioner of Insurance of the State of New
Jersey, do hereby certify that the foregoing Certificate of Amendment of the
Certificate of Incorporation of PRULIFE INSURANCE COMPANY OF NEW JERSEY, has
been submitted and examined by me, and I find it to be in accordance with Title
l7B of the Revised Statutes of New Jersey and not inconsistent with the
constitution or laws of this State.
/s/ CHARLES N. STEEL
--------------------------------
Charles N. Steel
Deputy Commissioner of Insurance
DATED: 11-29-82
brj
II-151
<PAGE>
Certificate of Amendment
of the
Certificate of Incorporation
of
Pruco Life Insurance Company of New Jersey
1. The name of the Corporation is Pruco Life Insurance Company of New Jersey.
2. Article 5 of the Certificate of Incorporation is hereby amended to read as
follows:
"The amount of capital stock of the corporation shall be two million
dollars ($2,000,000) which shall be divided into four hundred thousand
shares of common stock with each share having a par value of five dollars
($5.00).
3. The date of the adoption of this amendment by the shareholder of the
corporation was March 11, 1982.
4. The number of shares entitled to vote on the amendment was Three Hundred
Thousand (300,000) shares of Common Stock.
5. All shares entitled to vote voted for the amendment.
II-152
<PAGE>
-2-
IN WITNESS WHEREOF, this Certificate of Amendment has been executed by a
duly authorized officer of the corporation and attested by an Assistant
Secretary under the seal of the corporation.
Dated: March 11, 1983
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
By /s/ WILLIAM J. KELLY
--------------------------------
William J. Kelly
Vice President
Attest:
/S/ JOYCE R. LIEBOWITZ
- ------------------------------
Joyce R. Leibowitz
Assistant Secretary
II-153
<PAGE>
-3-
State of New Jersey
County of Essex
BE IT REMEMBERED, that on this 11th day of March, 1983 before me, the
subscriber, a Notary Public of New Jersey, personally appeared Joyce R.
Leibowitz, who being by me duly sworn upon oath according to law, deposes and
says that deponent is the Assistant Secretary of Pruco Life Insurance Company of
New Jersey, the corporation named in the foregoing instrument; that deponent
well knows the corporate seal of said corporation; that the seal affixed to said
instrument is the corporate seal of said corporation; that the said seal was so
affixed and that said instrument was signed and delivered by William J. Kelly,
who was at the date thereof the Vice President of said corporation, in the
presence of this deponent, and said Vice President at the same time acknowledged
that he signed, sealed and delivered the same as his voluntary act and deed and
as the voluntary act and deed of said corporation, by virtue of authority from
its Board of Directors, and that deponent, at the same time, subscribed her name
to said instrument as an attesting witness to the execution thereof.
Sworn to and subscribed before me,
at Newark, New Jersey the date aforesaid
/s/ SPECIMEN /s/ JOYCE R. LIEBOWITZ
- ------------------------------ ------------------------------
Notary Public Joyce R. Leibowitz
II-154
<PAGE>
-4-
I, JOSEPH F. MURPHY, Commissioner of Insurance of the State of New Jersey,
do hereby certify that the foregoing Certificate of Amendment of the Certificate
of Incorporation of PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY, has been
reviewed and examined by me, and I found it to be in accordance with Title 17B
of the Revised Statutes of New Jersey and not inconsistent with the Constitution
or Laws of this State.
/s/ JOSEPH F. MURPHY
-----------------------------
Commissioner of Insurance
DATED: March 16, 1983
brj
II-155
EXHIBIT 1.A.(6)(b)
BY-LAWS
OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
------------
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of the
corporation shall be held at such time as may from time to time be fixed by the
Board of Directors, at an hour to be named in the notice or waiver of notice of
the meeting for the election of directors and for the transaction of such other
business as may properly come before the meeting. If the date of the annual
meeting falls upon a legal holiday, the meeting shall be held on the next
succeeding business day. The meeting shall be held at such place, either within
or without the State of New Jersey, as the Board of Directors shall determine.
In the event the Board of Directors does not determine otherwise, the annual
meeting of shareholders shall be held at the office of the corporation in
Newark, New Jersey.
SECTION 2. VOTING. Each shareholder shall be entitled to one vote, in
person or by proxy, for each share entitled to vote held by
II-156
<PAGE>
-2-
such shareholder. No proxy shall be voted after eleven months from its date
unless such proxy provides for a longer period, but in no event shall a proxy be
valid after three years from the date of execution. Upon the demand of any
shareholder made before the voting begins, the vote for directors shall be by
ballot. All elections for directors shall be decided by plurality vote; all
other questions shall be decided by majority vote except as otherwise provided
by law or the Certificate of Incorporation.
A complete list of the shareholders entitled to vote at a shareholders'
meeting or any adjournment, arranged in alphabetical order, with the address of
each, and the number of shares held by each, shall be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any shareholder who is present.
SECTION 3. QUORUM. Except as otherwise required by law, by the Certificate
of Incorporation or by the By-Laws, the presence, in person or by proxy, of
shareholders holding a majority of the shares of the corporation entitled to
vote shall constitute a quorum at all meetings of the shareholders. In case a
quorum shall not be present at any meeting, a majority in interest of the
shareholders entitled to vote thereat, present in person or by proxy, shall have
power to
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adjourn the meeting from time to time, without notice other than announcement
at the meeting, until the requisite number of shares entitled to vote shall be
present. At any such adjourned meeting at which the requisite number of shares
entitled to vote shall be represented, any business may be transacted which
might have been transacted at the meeting as originally noticed.
SECTION 4. SPECIAL MEETINGS. Special meetings of the shareholders for any
purpose or purposes may be called by the President or the Chairman of the Board
of Directors, if one be elected, or by resolution of the Board of Directors, and
may be held at such place, within or without the State of New Jersey, as shall
be fixed by the Board and stated in the notice or waiver of notice of the
meeting. If no other place is so fixed, such meetings may be held at the office
of the corporation in Newark, New Jersey.
SECTION 5. NOTICE OF MEETINGS. Written notice, stating the place, date,
time and purpose or purposes of the meeting, shall be given to each shareholder
entitled to vote thereat, either personally or by mail, not less than ten nor
more than sixty days before the date of the meeting.
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SECTION 6. ACTION WITHOUT MEETING. Any action required or permitted to be
taken at a meeting of shareholders by law or the Certificate of Incorporation or
the By-Laws, may be taken without a meeting if all the shareholders entitled to
vote thereon consent thereto in writing.
ARTICLE II
DIRECTORS
SECTION 1. NUMBER AND TERM. The Board of Directors shall have not less than
seven nor more than thirteen members. The directors shall be elected at the
annual meeting of shareholders. Each director shall be elected to hold office
until the next succeeding annual meeting and, subject to law and the By-Laws,
shall hold office for the term for which elected and until his successor shall
be elected and shall qualify. Directors need not be shareholders.
SECTION 2. RESIGNATIONS. Any director, member of a Committee or other
officer may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time of its
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receipt by the corporation or at such subsequent time as shall be specified
therein.
SECTION 3. VACANCIES. If the office of any director, member of a Committee
or other officer becomes vacant, the remaining directors in office, though less
than a quorum, by a majority vote may elect or appoint any qualified person to
fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. INCREASE OF NUMBER. In case of any increase in the number of
directors, the additional directors may be chosen by vote by the Board of
Directors at any meeting of the Board, or by vote of the shareholders at an
annual or special meeting of the shareholders, and shall hold office until the
next annual election and until their successors shall be elected and shall
qualify.
SECTION 5. POWERS. The Board of Directors shall exercise all the powers of
the corporation except such as are conferred upon or reserved to the
shareholders by law, by the Certificate of Incorporation or by the By-Laws.
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SECTION 6. COMMITTEES. The Board of Directors may, by resolution or
resolutions adopted by a majority of the entire Board, appoint an Executive
Committee and one or more other Committees, each Committee to consist of three
or more directors of the corporation. The Executive Committee shall have and
may exercise in the intervals between meetings of the Board of Directors all the
authority of the Board not delegated to other Committees or reserved to the
Board either by virtue of the By-Laws or otherwise, provided that no Committee,
including the Executive Committee, shall
(a) make, alter or repeal any By-Laws of the corporation;
(b) elect or appoint any director, or remove any officer or director;
(c) submit to shareholders any action that requires shareholders' approval;
or
(d) amend or repeal any resolution theretofore adopted by the Board which
by its terms is amendable or repealable only by the Board.
At each meeting of any Committee there shall be present to constitute a
quorum for the transaction of business at least one-third of the members but in
no event less than three members. The vote of a majority of the members present
at a meeting of any Committee at the time of the vote, if a quorum is present at
such time, shall be the
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act of such Committee. All action of each Committee shall be reported to the
Board and shall, except in cases in which the rights of third parties would be
affected, be subject to the direction of the Board.
SECTION 7. MEETINGS. The newly elected directors may hold their first
meeting for the purpose of organization and the transaction of business, if a
quorum be present, immediately after the annual meeting of shareholders; or the
time and place of such meeting may be fixed by consent in writing of all the
directors.
The President, the Chairman of the Board, if one be elected, or a Vice
President may, and at the request of two directors shall, call a special meeting
of the Board of Directors, at least two days' notice of which shall be given in
person or by mail, telegraph, telephone or cable. Regular meetings of the Board
of Directors may be held without notice at such times and places as the Board
may determine by prior resolution.
SECTION 8. QUORUM. A majority of the directors but no less than five
shall constitute a quorum for the transaction of business.
SECTION 9. ACTION WITHOUT MEETING. Any action required or permitted to be
taken pursuant to authorization voted at any meeting of the Board of Directors,
or of any Committee thereof, may be taken
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without a meeting if, prior or subsequent to such action a written consent
thereto is signed by all members of the Board or of such Committee, as the case
may be, and such written consent is filed with the minutes of the proceedings of
the Board or Committee.
SECTION 10. CONFERENCE TELEPHONE MEETINGS. Any or all directors may
participate in a meeting of the Board or any Committee thereof, as the case may
be, by means of a conference telephone or any means of communication by which
all persons participating in the meeting are able to hear each other.
Participation by such means shall constitute presence in person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. OFFICERS. The officers of the corporation shall be a President,
one or more Vice Presidents, a Secretary, a Comptroller and a Treasurer, all of
whom shall be elected by the Board of Directors and who shall hold office,
subject to the By-Laws, until their successors are elected and qualified. In
addition, the Board of Directors may elect a Chairman of the Board and such
Assistant Secretaries, Assistant Treasurers and Assistant Comptrollers as the
Board may deem advisable. None of the officers of the corporation,
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other than the Chairman of the Board of Directors, if one be elected, need be
directors. The officers shall be elected at the organization meeting of the
Board and may be elected at other times. One person may hold two or more
offices, except that the offices of President and Secretary or Assistant
Secretary may not be held by the same person. Vacancies occurring among the
officers shall be filled by the directors. Any officer may be removed by the
Board of Directors, with or without cause at any time.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of Directors may appoint
such other officers and agents as it may deem advisable, who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the Board of
Directors, if one be elected, shall preside at all meetings of the Board of
Directors. He shall also perform such other duties and have such other powers as
may be prescribed or assigned to him from time to time by the Board of Directors
or the By-Laws.
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SECTION 4. PRESIDENT. The President shall be the chief executive officer
of the corporation. He shall exercise all the powers and perform all the duties
usual to such office and shall preside at all meetings of the shareholders if
present thereat and, in the absence or non-election of the Chairman of the
Board, at all meetings of the Board of Directors. Subject to the Board of
Directors, the President shall have general supervision of the business of the
corporation. The President may execute any contract, agreement or instrument,
not prohibited by law, the Certificate of Incorporation or the By-Laws necessary
for the conduct of the business of the corporation. He shall also perform such
other duties and have such other powers as may be prescribed or assigned to him
from time to time by the Board of Directors or the By-Laws.
SECTION 5. VICE PRESIDENT. The Vice President or, if more than one, the
Vice Presidents in the order established by the Board of Directors shall in the
absence or incapacity of the President, exercise all the powers and perform the
duties of the President. The Vice Presidents shall also perform such other
duties and have such other powers as may be prescribed or assigned to them,
respectively, from time to time by the Board of Directors or the By-Laws. Any
Vice President may, in the discretion of the Board, be designated as
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"executive", "senior" or by any succeeding ordinal number or by departmental or
functional classification.
SECTION 6. SECRETARY. The Secretary shall exercise all the powers and
perform all the duties usual to such office, including keeping the minutes of
the meetings of the Board of Directors and of the shareholders, having custody
of the seal of the corporation and affixing the seal to documents when
authorized to do so. He shall also perform such other duties and have such other
powers as may be prescribed or assigned to him from time to time by the Board of
Directors or the By-Laws.
SECTION 7. COMPTROLLER. The Comptroller shall exercise all the powers and
perform all the duties usual to such office, including supervising the accounts
of the corporation, having supervision over and responsibility for the books,
records, accounting and system of accounting and auditing in each office of the
corporation. He shall also perform such other duties and have such other powers
as may be prescribed or assigned to him from time to time by the Board of
Directors or the By-Laws.
SECTION 8. TREASURER. The Treasurer shall exercise all the powers and
perform all the duties usual to that office, including
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having the care and custody of the funds and securities of the corporation and
depositing the same with such depositaries as the Board may designate. The
Treasurer shall also perform such other duties and have such other powers as may
be prescribed or assigned to him from time to time by the Board of Directors or
the By-Laws.
SECTION 9. ASSISTANT SECRETARY. Each Assistant Secretary shall have power
to execute on behalf of the corporation such instruments as may be required to
be executed by the Secretary and to affix the seal of the corporation to
corporate instruments and to attest the same, except as otherwise provided by
law or the By-Laws. Each Assistant Secretary shall also perform such other
duties and have such other powers as may be prescribed or assigned to him from
time to time by the Board of Directors.
SECTION 10. ASSISTANT COMPTROLLERS AND ASSISTANT TREASURERS. Assistant
Comptrollers and Assistant Treasurers, if any, shall be elected and shall have
the such powers and shall perform such duties as shall be assigned to them,
respectively, by the Board of Directors.
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ARTICLE IV
MISCELLANEOUS
SECTION 1. CERTIFICATES. The shares of the corporation shall be represented
by certificates signed by, or in the name of the corporation by, the Chairman of
the Board or the President or a Vice President and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary.
SECTION 2. LOST CERTIFICATES. No certificate representing shares of the
corporation shall be issued in place of any certificate alleged to have been
lost, stolen or destroyed except on prior approval in each case of the Board of
Directors or such officer or officers as the Board from time to time may
designate and on submission to the corporation of satisfactory evidence of such
loss, theft or destruction and, unless otherwise ordered by the Board of
Directors, on delivery to the corporation of a bond of indemnity, in such form
and amount or unlimited as to amount as the Board from time to time may
prescribe, against any loss or claim in respect or by reason of such lost,
stolen or destroyed certificate, or the issuance of a new certificate in lieu
thereof.
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SECTION 3. REGISTRATION OF TRANSFERS. Transfers of shares shall be
registered upon the books of the corporation by the registered holder in person
or by attorney, duly authorized, and on surrender of the certificate or
certificates for such shares, properly assigned for transfer.
SECTION 14. SEAL. The corporate seal shall be circular in form and shall
contain the name of the corporation around the circumference and "New Jersey
1981" in the center.
SECTION 5. FISCAL YEAR. The fiscal year of the corporation shall be a
calendar year.
SECTION 6. CHECKS, ETC. All checks, drafts or orders for the payment of
money shall be signed by such officer or officers or agent or agents, and in
such a manner, as shall be determined from time to time by the Board of
Directors.
SECTION 7. NOTICE AND WAIVER OF NOTICE. Whenever any notice is required by
these By-Laws to be given, personal notice is not meant unless expressly so
stated. Any notice required to be given under the provisions of these By-Laws
may be waived by any person entitled thereto.
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ARTICLE V
INDEMNIFICATION
The corporation shall indemnify each corporate agent (as defined in Section
114A:3-5 of the New Jersey Business Corporation Act) against his expenses
(including reasonable costs, disbursements and counsel fees) and his liabilities
(including amounts paid or incurred in satisfaction of settlements, judgments,
fines and penalties) in connection with any proceeding (as defined in said
Section), including any proceeding by or in the right of the corporation to
procure a judgment in its favor, involving the corporate agent by reason of his
being or having been such a corporate agent, if, as and to the full extent
authorized by law. Any such indemnification shall not exclude any other rights
to which any corporate agent may be entitled under the Certificate of
Incorporation, By-Laws, agreement, vote of shareholders, or otherwise.
ARTICLE VI
CONFLICTING INTERESTS
No director, officer or employee of the Corporation at Manager level or
higher shall have any position with or a substantial interest in any other
enterprise operated for profit, (other than The Prudential Insurance Company of
America or any direct or indirect subsidiary thereof) the
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existence of which would conflict or might reasonably be supposed to conflict
with the proper performance of his or her Corporate responsibilities, or, which
might tend to affect his or her independence of judgment with respect to
transactions between the Corporation and such other enterprise.
If a director or any such officer or employee has a position with or
substantial interest in another such enterprise, which, when acquired, did not
create such an actual or apparent conflict of interest, he or she shall make
timely disclosure of such position or interest to the Board of Directors when he
or she learns that there is an impending transaction between such enterprise and
the Corporation or The Prudential Insurance Company of America or any subsidiary
or affiliate of either the Corporation or Prudential that might create such an
actual or apparent conflict.
The Board of Directors, which may act through an appropriate committee or
sub-committee, shall adopt such regulations and procedures as shall from time to
time appear to it sufficient to secure compliance with the above policy.
ARTICLE VII
AMENDMENTS
The By-Laws may be altered or repealed and new By-Laws may be made by vote
of the shareholders at any meeting of the shareholders. The Board of Directors
may also alter or repeal the By-Laws and make new By-Laws at any meeting of the
Board of Directors; provided, however, that any By-Laws made by the Board of
Directors may be altered or repealed, and new By-Laws made, by the shareholders.
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<TABLE>
<CAPTION>
EXHIBIT 1.A.(10)(a)
Prudential [LOGO]
- -----------------------------------------------------------------------------------------------------------------------------------
APPLICATION FOR LIFE INSURANCE
----------------------------------------------------
____________________________________________________
PROPOSED INSURED
----------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SUBMITTED BY
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
_______________________ ____________________ ______________________________ ______________________ ___________________
Name & Title Contract No. Agcy. No./Rep. Init. Office Code Detached Office
_____%
Credit _______________________ ____________________ ______________________________ ______________________ ___________________
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
[ ] Debit Ord. [ ] New Acct. [ ] Existing Acct. No. of Apps.__________ Fam. Acct. No.
-------------------------------------------------------------------------------------------------------------
[ ] Reg. Ord. Premium Quoted/Scheduled Premium Payment $______________________________________ (According to mode selected)
-------------------------------------------------------------------------------------------------------------
[ ] Pruco FOR FIELD OFFICE STAFF TO COMPLETE: Control No. _________ County Code __________
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------
ORD 84376 82
- ---------
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[ ] Pruco Life Insurance Company -- A Subsidiary of The Prudential Insurance Company of America
- -----------------------------------------------------------------------------------------------------------------------------------
1a. Proposed Insured's name -- first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth
Mo. Day Yr.
[ ]M [ ]F
- -----------------------------------------------------------------------------------------------------------------------------------
3. [ ] Single [ ] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Occupation(s)
- -----------------------------------------------------------------------------------------------------------------------------------
5. Address for mail No. Street City State Zip
- -----------------------------------------------------------------------------------------------------------------------------------
6a. Kind of policy 6b. Initial amount 7. Accidental death coverage
$ initial amount $
- -----------------------------------------------------------------------------------------------------------------------------------
8. Beneficiary: (Include name, age and relationship.) 9. List all life insurance on proposed Insured. (If NONE, so state.)
a. Primary (Class 1): b. Contingent (Class 2) if any: Initial Yr. Kind Medical
Company amt. issued (Indiv., Group) Yes No
[ ] [ ]
_________________________________________________________ ___________________________________________________________________
(For insurance payable upon death of (1) the Insured, and [ ] [ ]
(2) an insured child after the death of the Insured if ___________________________________________________________________
there is no insured spouse.) [ ] [ ]
___________________________________________________________________
[ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
10. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)
Relationship to Date of birth Total life insurance
Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies
a. Spouse $
___________________________________________________________________________________________________________________________________
b. $
___________________________________________________________________________________________________________________________________
c. $
___________________________________________________________________________________________________________________________________
d. $
___________________________________________________________________________________________________________________________________
e. $
___________________________________________________________________________________________________________________________________
f. $
- -----------------------------------------------------------------------------------------------------------------------------------
11. Supplementary benefits: a. For proposed Insured b. For spouse, children, Applicant for AWP
Type and duration of benefit Amount Type and duration of benefit Amount
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
[ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit
- -----------------------------------------------------------------------------------------------------------------------------------
12. State any special request.
- -----------------------------------------------------------------------------------------------------------------------------------
13. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No
in 1a or 10? If "Yes", give their names, name of company, plan, amount and policy numbers. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
14. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 10 in Yes No
this or any company? If "Yes", give amount, details and company. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
15. Does any person named in 1a or 10 plan to live or travel outside the United States and Canada within the next Yes No
12 months? If "Yes", give details. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
16. Has any person named in 1a or 10 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No
device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [ ]
complete Aviation Questionnaire.
- -----------------------------------------------------------------------------------------------------------------------------------
17. Has any person named in 1a or 10, within the last 12 months: Yes No
a. been treated by a doctor for or had a known heart attack, stroke or cancer other than of the skin? ............ [ ] [ ]
b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
18. Premiums payable [ ] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot.
- -----------------------------------------------------------------------------------------------------------------------------------
19. Amount paid $ [ ] None (Must be "None" if either 17a or 17b is answered "Yes".)
- -----------------------------------------------------------------------------------------------------------------------------------
20. Is a medical examination to be made on a. the proposed Insured?.................................................. Yes [ ] No [ ]
b. spouse (if proposed for coverage)? .................................... Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
21. If 20a or 20b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No
the person(s) indicated in 20 have been examined, even if 19 shows that an amount has been paid? ................. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
22. Changes made by the Company.
- -----------------------------------------------------------------------------------------------------------------------------------
------------
ORD 84376-82 Page 1 (Continued on page 2)
------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Continuation of Part 1 of Application
Complete on all persons named in 1a and 10 if any one of them can have insurance on a non-medical basis.
- -----------------------------------------------------------------------------------------------------------------------------------
23. Height and weight of:
a. Proposed Insured Ht._______ Wt._______ b. Spouse Ht.________ Wt.________ c. Applicant for AWP Ht.________ Wt.________
Has the weight changed more than 10 pounds in the past year? Yes [ ] No [ ] If "Yes", give details in 30.
- -----------------------------------------------------------------------------------------------------------------------------------
24. Has the proposed Insured or spouse ever smoked? a. Proposed Insured Yes [ ] No [ ] b. Spouse Yes [ ] No [ ]
If "Yes", give date(s) last smoked: Cigarettes Cigars Pipe
Proposed Insured Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______
Spouse Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______
- -----------------------------------------------------------------------------------------------------------------------------------
25. When was a doctor last consulted by: a. Proposed Insured? b. Spouse? c. Applicant for AWP?
Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______
- -----------------------------------------------------------------------------------------------------------------------------------
26. Is any person to be covered now being treated or taking medicine for any condition or disease? ................. Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
27. Has any person to be covered ever: Yes No
a. had any surgery or been advised to have surgery and has not done so? .............................................. [ ] [ ]
b. been in a hospital, sanitarium or other institution for observation, rest, diagnosis or treatment? ................ [ ] [ ]
c. regularly used or is any such person now using, barbiturates or amphetamines, marijuana or other hallucinatory
drugs, or heroin, opiates or other narcotics, except as prescribed by a doctor? ................................... [ ] [ ]
d. been treated or counseled for alcoholism? ......................................................................... [ ] [ ]
e. had life or health insurance declined, postponed, changed, rated-up or withdrawn? ................................. [ ] [ ]
f. had life or health insurance canceled, or its renewal or reinstatement refused? ................................... [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
28. Other than as shown above, in the past 5 years has any person to be covered: Yes No
a. consulted or been attended or examined by any doctor or other practitioner? ...................................... [ ] [ ]
b. had electrocardiograms, X-rays for diagnosis or treatment, or blood, urine, or other medical tests? .............. [ ] [ ]
c. made claim for or received benefits, compensation, or a pension because of sickness or injury? ................... [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
29. Does any person to be covered now have a known sign of any physical disorder, disease or defect not shown above? Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
30. What are the full details of the answer to 25 and to each part of 23 and 26 thru 29 which is answered "Yes"?
Full names and addresses of
Name & Question No. Illness or other resason Dates and duration of illness doctors and hospitals
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
Those who sign below declare, to the best of their knowledge and belief, that the statements in this application are complete and
true.
When the Company gives a Temporary Insurance Agreement form, ORD 84376A-82, of the same date as this Part 1, coverage will start as
shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first
premium is paid while all persons to be covered are living and their health remains as stated in Part 1. If all these take place,
coverage will start on the contract date. If the Company makes a change as indicated in 22 it will be approved by acceptance of the
contract. But where the law requires written consent for any change in the application, such a change can be made only if those
who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or
needs.
OWNERSHIP: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured,
otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract.
Signature of Proposed Insured (If Age 8 or over)
----------------------------------------------------------------------
Dated at on , 19 Signature of Applicant (If other than proposed Insured)
- ---------------------------------------------------
(City/State) ----------------------------------------------------------------------
Witness (If applicant is a firm or corporation, show that company's name)
- --------------------------------------------------- By
(Licensed agent must witness where required by law) ----------------------------------------------------------------------
(Signature and title of officer signing for that company)
------------
ORD 84376-82 Page 2
------------
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<PAGE>
</TABLE>
- --------------------------------------------------------------------------------
ACKNOWLEDGEMENT
I have received and read a copy of the IMPORTANT NOTICE ABOUT YOUR APPLICATION
FOR INSURANCE.
_________________________________
Date
, 19
----------------------------------------
AUTHORIZATION For the Release of Information to:
[ ] The Prudential Insurance Company of America
[ ] Pruco Life Insurance Company
To: Any licensed physician, medical practitioner, hospital, clinic or like
facility, insurance company or the Medical Information Bureau, Inc. or other
organization, institution or person.
To determine eligibility for life insurance coverage, I authorize you to give
the Company checked above and, through it, to its reinsurers and the Medical
Information Bureau, any data or records you may have about me or my mental or
physical health. This also applies to any child proposed for insurance in the
application.
This authorization is valid until two years after the effective date of any
contract issued in connection with this authorization. A photo of this form will
be as valid as the original. (The person who signs this form may have a copy of
it upon request.)
Signature of Proposed Insured (if age 15 or over) otherwise Applicant
- -------------------------------------------------------------------------------
Signature of Spouse (if proposed for coverage)
- -------------------------------------------------------------------------------
- ---------
ORD 84377 82
- ---------
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[ ] The Prudential Insurance Company of America [ ] Pruco Life Insurance Company
IMPORTANT NOTICE ABOUT YOUR APPLICATION FOR INSURANCE
-----------------------------------------------------
Before we can issue a policy we must first underwrite your application. This
means that we evaluate all the information necessary to determine if you qualify
for the insurance.
In addition to the information on the application, a medical examination may be
required. We also ask you to authorize any doctor, hospital or other
organization or person to give us any information which they may have about you
or your mental or physical health.
We may ask for a report from a consumer reporting agency. These reports provide
information about a person's character, residence, activities, general
reputation, personal characteristics and mode of living. The agency may get this
information through interviews with friends, neighbors and associates. Any
person on whom we ask for a report has a right to ask to be interviewed. You may
also get a copy of the report from the consumer reporting agency which completed
it. An agency may keep the information it has about you and disclose it to other
persons. If you would like further information as to the nature and scope of
these reports, it will be provided upon request.
Any information which we obtain about you will be treated as confidential.
However, we may give this information, as necessary, to: your doctor, if we find
a serious health problem which you do not know about; persons conducting
mortality or morbidity studies; and affiliate companies for marketing purposes.
If you ask, we will describe any other circumstances when we may disclose
information about you without your prior authorization.
- ------------
ORD 84378-82
- ------------
(Continued on reverse)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[ ] The Prudential Insurance Company of America
[ ] Pruco Life Insurance Company
A Subsidiary of The Prudential Insurance Company of America
TEMPORARY INSURANCE AGREEMENT
We, the Company, agree to provide temporary insurance as follows:
1. It will start on the latest of these dates: (a) the date of this agreement,
(b) the date of completion of all medical examinations agreed to, and (c)
any date asked for in the application.
2. This insurance is subject to the terms of the contract applied for.
3. The sum of all death benefits for any person who is to be covered by this
insurance will be the amount asked for on that person or $250,000,
whichever is less.
The temporary insurance will end:
1. When we issue a contract as applied for. It will replace the temporary
insurance.
2. When we issue a contract other than as applied for. It will replace the
temporary insurance if: (a) it is accepted on delivery (this includes
paying at the same time any excess of the correct first premium over the
amount shown below); and (b) the persons who are to be covered are living
when the contract is delivered. If the contract is not accepted on
delivery, the temporary insurance will end at once.
3. When we tell you that we rejected the application or when we tell you that
we will not consider it on a prepaid basis.
4. At the end of 60 days if the temporary insurance has not been ended as we
state in 1, 2 or 3.
- -------------
ORD 84376A-82 (Continued on reverse) Printed in U.S.A.
- -------------
- -------------------------------------------------------------------------------
II-175
<PAGE>
- --------------------------------------------------------------------------------
Names and addresses of three Friends or Business Associates:
1. Name _______________________________________________________________________
Address ____________________________________________________________________
2. Name _______________________________________________________________________
Address ____________________________________________________________________
- -------------------------------------------------------------------------------
II-176
<PAGE>
- --------------------------------------------------------------------------------
We may also make a brief report to the Medical Information Bureau (MIB) which
provides an information exchange for its member insurance companies. When you
apply for life or health insurance or submit a claim for benefits to any member
company, MIB will, on request, give that company the information in its file. If
you have any questions about any report which MIB may have on you, you may
contact MIB at Post Office Box 105, Essex Station, Boston, MA 02112, (617)
426-3660.
If you have any questions concerning any of the personal information which we
obtain or report, let us know. You have the right to see this information and to
correct, amend or delete any information which may be wrong. We will tell you
how to do this if you ask us.
If we are unable to issue the policy you requested, we will tell you and explain
the reasons.
Thank you for applying to us for insurance.
Corporate Offices, Newark, N.J.
These Regional Home Offices of The Prudential Insurance Company of America are
also Service Offices of Pruco Life Insurance Company.
Central Atlantic Home Office, Northeastern Home Office,
Fort Washington, Pa. Boston, Mass.
Eastern Home Office, South-Central Home Office,
South Plainfield, N.J. Jacksonville, Fla.
Mid-America Home Office, Southwestern Home Office,
Chicago, Ill. Houston, Tex.
North Central Home Office, Western Home Office,
Minneapolis, Minn. Los Angeles, Calif.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We received $_____________ on_________, 19___ from __________________________.
This amount was paid when a life insurance application was signed, on the same
date, in which ____________________________________________ is named as the
proposed Insured. This agreement is issued on the condition that any check,
draft or other order for the payment of money is good and can be collected.
All checks must be drawn only to the Company and not to any other party.
No change may be made in the terms and conditions of this form. No statement
which claims to make such a change will bind the Company.
Field Office Writing Representative (Agent)
- ----------------------------------- -----------------------------------------
The Prudential Insurance Company of America Pruco Life Insurance Company
Corporate Offices, Newark, N.J.
These Regional Home Offices of The Prudential Insurance Company of America are
also Service Offices of Pruco Life Insurance Company.
Central Atlantic Home Office, Northeastern Home Office,
Fort Washington, Pa. Boston, Mass.
Eastern Home Office, South-Central Home Office,
South Plainfield, N.J. Jacksonville, Fla.
Mid-America Home Office, Southwestern Home Office,
Chicago, Ill. Houston, Tex.
North Central Home Office, Western Home Office,
Minneapolis, Minn. Los Angeles, Calif.
_____________________________________________________________
Note--Unless you get a contract, or your money back within eight weeks from the
date of this agreement, please notify the Company. Give the amount paid, date of
payment, and name of person to whom paid. (Locations are shown above.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. Name _______________________________________________________________________
Address ____________________________________________________________________
Furnished by ___________________________________________________________
(Name of Proposed Insured/Applicant)
Proposed Insured's Expiration Dates: Auto ___________ Homeowners ______________
- --------------------------------------------------------------------------------
II-177
<PAGE>
<TABLE>
<CAPTION>
AGENT'S SUPPLEMENTARY INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Give current and last previous HOME and BUSINESS addresses.
From To Employer No. Street City or Town Home State
Mo. Yr. Mo. Yr.
Present
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
Bus. Present
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
2. If an Investigative Consumer Report is necessary, is a direct interview desired? .............................. Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
3. What is the total yearly income of: a. Proposed Insured? $ b. Spouse? $
- -----------------------------------------------------------------------------------------------------------------------------------
4. Does more than 50% of the proposed Insured's support come from someone else? Yes [ ] No [ ] If "Yes", give that person's:
Full name Relationship Amt. of Life ins. in force $
- -----------------------------------------------------------------------------------------------------------------------------------
5. Who is to pay the premium? (Check one) [ ] Insured [ ] Employer [ ] Spouse [ ] Parent [ ] Other _______________________________
- -----------------------------------------------------------------------------------------------------------------------------------
6.a. Did someone other than you suggest this insurance? Yes [ ] No [ ] If "Yes", state who and what prompted the request?
________________________________________________________________________________________________________________________________
b. What was the primary source of the Sales Lead? (Check one)(1) [ ] Policyholder Service (2) [ ] Referred Lead (3) [ ] Cold Call
- -----------------------------------------------------------------------------------------------------------------------------------
7. What Sales Services did you use? (Check appropriate boxes)
a. [ ] FACTOR 1 b. [ ] FACTOR 2 c. [ ] Other CPI d. [ ] CNA e. [ ] FNA f. [ ] Business Security Analysis
g. [ ] Employer's Advisory Service h. [ ] Estate Conservation Service i. [ ] Other __________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
8. Complete if this application is for business insurance: c. Amount of business insurance in force and applied for in all
a. Is firm a: (1) [ ] Sole Proprietorship companies on each officer or member of the firm.
(2) [ ] Partnership (3) [ ] Corporation Name Age Position Inforce Applied for
b. Is proposed Insured: $ $
[ ] Owner of firm (state _______%) [ ] Employee ________________________________________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
9. Do you have, from any source, facts which you have not stated any place else in the application which indicate that
any person named in 1a or 10 of the application may: (Give details of "Yes" answers in "REMARKS".) Yes No
a. replace or change any current insurance or annuity in any company? ............................................ [ ] [ ]
b. have in the last 3 years participated in hazardous sports (such as auto racing or parachuting), or been
arrested for driving recklessly or while intoxicated? ......................................................... [ ] [ ]
c. have frequently drunk to excess, illegally used habit forming drugs or have a record of indictment or
conviction of any crime? ...................................................................................... [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
10. Has the last name of any person named in 1a or 10 of the application been changed in the last 5 years (marriage, Yes No
court order, etc.)? If "Yes", who, and what was the previous last name? [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
11. Are the proposed Insured and agent related? Yes [ ] No [ ] If "Yes", state relationship: [ ] Self [ ] Other ______________
- -----------------------------------------------------------------------------------------------------------------------------------
12. a. Proposed Insured's telephone no. b. Social Security no.
- -----------------------------------------------------------------------------------------------------------------------------------
Complete 13 if proposed Insured is age 0-14
13. Family Name Date of Present Pending Family Name Date of Present Pending
details birth insurance Pru app.? details birth insurance Pru app.?
Father Brothers
___________________________________________________________ & Sisters
Mother
- -----------------------------------------------------------------------------------------------------------------------------------
Complete 14 and 15 if dependent children are proposed for coverage (Give details of "Yes" answers in "REMARKS".)
14. Are any children named in 10 of the application: Yes No
a. foster children or children whole legal adoption has not yet been made final? ................................. [ ] [ ]
b. living in a household other than the proposed Insured's or dependent on someone other than the
proposed Insured? ............................................................................................. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
15. Are there any other children less than 18 years of age who have not been named in 10 of the application? ..... Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION
I certify that (a) on this date I saw the proposed Insured and (b), except as stated in "REMARKS", I am not aware of any information
not shown in the answers to the questions in any Part of this application, that would adversely affect the eligibility,
acceptability or insurability of any person proposed for coverage, I recommend that the Company accept the risks proposed for
coverage.
Date Signature of Writing Representative (Agent) Mgr., Asst. Mgr. or Sales Mgr. must sign if present
when application signed
, 19
- -----------------------------------------------------------------------------------------------------------------------------------
REMARKS:
- ---------
ORD 84376 82
- ---------
</TABLE>
II-178
EXHIBIT 1.A.(10)(b)
Pruco Life Insurance Company OF New Jersey No.
A Subsidiary of The Prudential Insurance Company of America XX XXX XXX
--------------
A Supplement to the Application for Life Insurance in which JOHN DOE is named
as the proposed Insured. The contract applied for is:
[X] Variable Life Insurance [X] Variable Appreciable Life Insurance
[X] with Variable Insurance Amount
[ ] with Fixed Insurance Amount
The person who signs below:
1. acknowledges receipt of the current prospectus for the contract checked
above;
2. UNDERSTANDS THAT UNLESS THE CONTRACT APPLIED FOR IS VARIABLE APPRECIABLE
LIFE INSURANCE WITH FIXED INSURANCE AMOUNT AND IS NOT FULLY PAID UP, THE
DEATH BENEFIT (EXCEPT ANY SUPPLEMENTARY BENEFITS) MAY GO UP OR GO DOWN
DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE BUT WILL NEVER BE LESS
THAN THE GUARANTEED MINIMUM, IF PREMIUMS ARE DULY PAID AND THERE IS NO
CONTRACT DEBT;
3. UNDERSTANDS THAT THE CASH VALUES MAY GO UP OR GO DOWN DEPENDING ON
THE CONTRACT'S INVESTMENT EXPERIENCE AND THAT THERE IS NO GUARANTEED
MINIMUM CASH VALUE;
4. believes that this contract will meet insurance needs and financial
objectives; and
5. requests that the net premium payments (as described in the prospectus)
be allocated to the appropriate Pruco Life variable contract account for
the contract checked above as follows:
Subaccount Allocation+
---------- ----------
Bond 20 % (BOND)
Money Market 20 % (MMKT)
Common Stock 20 % (CSTK)
Aggressively Managed Flexible 20 % (AFLX)
Conservatively Managed Flexible 20 % (CFLX)
_______________________________ ____ % ( )
_______________________________ ____ % ( )
100 %
+ If any portion of a net premium is allocated to a particular subaccount,
that portion must be at least 10% on the date the allocation takes
effect. All percentage allocations must be in whole numbers (e.g. 33% can
be selected, but 33 1/3% cannot).
NOTE: Upon request, we will furnish illustrations of benefits, including
death benefits and cash values, for (a) the variable life insurance
contract applied for and (b) a fixed benefit life insurance contract
for the same premium.
Date Signature of Applicant
June 1, 1984 /s/ JOHN DOE
________________________________________ __________________________________
- ----------
PLY 17--84 Printed in U.S.A. by PROF
- ----------
II-179
<TABLE>
<CAPTION>
Prudential [LOGO] EXHIBIT 1.A.(10)(d)
- ----------------------------------------------------------------------------------------------------------------------------------
APPLICATION FOR LIFE INSURANCE
-------------------------------------------------
_________________________________________________
PROPOSED INSURED
-------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SUBMITTED BY
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
_______________________ ____________________ ______________________________ ______________________ ___________________
Name & Title Contract No. Agcy. No./Rep. Init. Office Code Detached Office
_____% ----------------------- -------------------- ------------------------------ ---------------------- -------------------
Credit
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
[ ] Pruco [ ] New Acct. [ ] Existing Acct. No. of Apps.__________ Fam. Acct. No.
-------------------------------------------------------------------------------------------------------------
Premium Quoted/Scheduled Premium Payment $______________________________________ (According to mode selected)
-------------------------------------------------------------------------------------------------------------
FOR FIELD OFFICE STAFF TO COMPLETE: Control No. _________ County Code __________
- -----------------------------------------------------------------------------------------------------------------------------------
- ------
PLY 53 82 NEW YORK
- ------
</TABLE>
II-180
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Part 1 Application to
Pruco Life Insurance Company of New Jersey
A Subsidiary of The Prudential Insurance Company of America
- -----------------------------------------------------------------------------------------------------------------------------------
1a. Proposed Insured's name -- first, initial, last (Print) 1b. Sex 2a. Date of birth 2b. Age 2c. Place of birth
Mo. Day Yr.
[ ]M [ ]F
- -----------------------------------------------------------------------------------------------------------------------------------
3. [ ] Single [ ] Married [ ] Widowed [ ] Separated [ ] Divorced 4. Occupation(s)
- -----------------------------------------------------------------------------------------------------------------------------------
5. Address for mail No. Street City State Zip
- -----------------------------------------------------------------------------------------------------------------------------------
6a. Kind of policy 6b. Initial amount 7. Accidental death coverage
$ initial amount $
- -----------------------------------------------------------------------------------------------------------------------------------
8. Beneficiary: (Include name, age and relationship.) 9. List all life insurance on proposed Insured. (If NONE, so state.)
a. Primary (Class 1): b. Contingent (Class 2) if any: Initial Yr. Kind Medical
Company amt. issued (Indiv., Group) Yes No
[ ] [ ]
_________________________________________________________ ___________________________________________________________________
For insurance payable upon death of (1) the Insured, and [ ] [ ]
(2) an insured child after the death of the Insured if ___________________________________________________________________
there is no insured spouse.) [ ] [ ]
___________________________________________________________________
[ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
10. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)
Relationship to Date of birth Total life insurance
Name--first, initial, last Sex proposed Insured Mo. Day Yr. Age Place of birth in all companies
a. Spouse $
___________________________________________________________________________________________________________________________________
b. $
___________________________________________________________________________________________________________________________________
c. $
___________________________________________________________________________________________________________________________________
d. $
___________________________________________________________________________________________________________________________________
e. $
___________________________________________________________________________________________________________________________________
f. $
- -----------------------------------------------------------------------------------------------------------------------------------
11. Supplementary benefits: a. For proposed Insured b. For spouse, children, Applicant for AWP
Type and duration of benefit Amount Type and duration of benefit Amount
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
$ $
___________________________________________________________________________________________________________________________________
[ ] Option to Purchase Additional Ins. $ [ ] Applicant's Waiver of Premium benefit
- -----------------------------------------------------------------------------------------------------------------------------------
12. State any special request.
- -----------------------------------------------------------------------------------------------------------------------------------
13. Will this insurance replace or change any existing insurance or annuity in any company on any person named Yes No
in 1a or 10? If "Yes", give their names, name of company, plan, amount and policy numbers. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
14. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 10 in Yes No
this or any company? If "Yes", give amount, details and company. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
15. Does any person named in 1a or 10 plan to live or travel outside the United States and Canada within the next Yes No
12 months? If "Yes", give details. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
16. Has any person named in 1a or 10 operated or had any duties aboard an aircraft, glider, balloon, or like Yes No
device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", [ ] [ ]
complete Aviation Questionnaire.
- -----------------------------------------------------------------------------------------------------------------------------------
17. Has any person named in 1a or 10, within the last 12 months: Yes No
a. been treated by a doctor for or had a known heart attack, stroke or cancer other than of the skin? ............ [ ] [ ]
b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? ............. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
18. Premiums payable [ ] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Mon. [ ] Pay. Budg. [ ] Pru-Matic [ ] Gov't. Allot.
- -----------------------------------------------------------------------------------------------------------------------------------
19. Amount paid $ [ ] None (Must be "None" if either 17a or 17b is answered "Yes".)
- -----------------------------------------------------------------------------------------------------------------------------------
20. Is a medical examination to be made on a. the proposed Insured?.................................................. Yes [ ] No [ ]
b. spouse (if proposed for coverage)? .................................... Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
21. If 20a or 20b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until Yes No
the person(s) indicated in 20 have been examined, even if 19 shows that an amount has been paid? ................. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
22. Changes made by the Company.
- -----------------------------------------------------------------------------------------------------------------------------------
- ---------
PLY 53-82 NEW YORK
- --------- Page 1 (Continued on page 2)
</TABLE>
II-181
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Continuation of Part 1 of Application
Complete on all persons named in 1a and 10 if any one of them can have insurance on a non-medical basis.
- -----------------------------------------------------------------------------------------------------------------------------------
23. Height and weight of:
a. Proposed Insured Ht._______ Wt._______ b. Spouse Ht.________ Wt.________ c. Applicant for AWP Ht.________ Wt.________
Has the weight changed more than 10 pounds in the past year? Yes [ ] No [ ] If "Yes", give details in 30.
- -----------------------------------------------------------------------------------------------------------------------------------
24. Has the proposed insured or spouse ever smoked? a. Proposed Insured Yes [ ] No [ ] b. Spouse Yes [ ] No [ ]
If "Yes", give date(s) last smoked: Cigarettes Cigars Pipe
Proposed Insured Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______
Spouse Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______
- -----------------------------------------------------------------------------------------------------------------------------------
25. When was a doctor last consulted by: a. Proposed Insured? b. Spouse? c. Applicant for AWP?
Mo.______ Yr. ______ Mo.______ Yr. ______ Mo.______ Yr. ______
- -----------------------------------------------------------------------------------------------------------------------------------
26. Is any person to be covered now being treated or taking medicine for any condition or disease?.................. Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
27. Has any person to be covered ever: Yes No
a. had any surgery or been advised to have surgery and has not done so?............................................... [ ] [ ]
b. been in a hospital, sanitarium or other institution for observation, rest, diagnosis or treatment?................. [ ] [ ]
c. regularly used or is any such person now using, barbiturates or amphetamines, marijuana or other hallucinatory
drugs, or heroin, opiates or other narcotics, except as prescribed by a doctor? ................................... [ ] [ ]
d. been treated or counseled for alcoholism? ......................................................................... [ ] [ ]
e. had life or health insurance declined, postponed, changed, rated-up or withdrawn? ................................. [ ] [ ]
f. had life or health insurance canceled, or its renewal or reinstatement refused? ................................... [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
28. Other than as shown above, in the past 5 years has any person to be covered: Yes No
a. consulted or been attended or examined by any doctor or other practitioner? ...................................... [ ] [ ]
b. had electrocardiograms, X-rays for diagnosis or treatment, or blood, urine, or other medical tests? .............. [ ] [ ]
c. made claim for or received benefits, compensation, or a pension because of sickness or injury? ................... [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
29. Does any person to be covered now have a known sign of any physical disorder, disease or defect not shown above? Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
30. What are the full details of the answer to 25 and to each part of 23 and 26 thru 29 which is answered "Yes"?
Name & Full names and addresses of
Question No. Illness or other resason Dates and duration of illness doctors and hospitals
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
Those who sign below declare, to the best of their knowledge and belief, that the statements in this application are complete and
true.
When the Company gives a Temporary Insurance Agreement form, PLY 53A-82 NEW YORK, of the same date as this Part 1, coverage will
start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the
full first premium is paid while all persons to be covered are living and their health remains as stated in Part 1. If all these
take place, coverage will start on the contract date. If the Company makes a change as indicated in 22 it will be approved by
acceptance of the contract. But where the law requires written consent for any change in the application, such a change can be made
only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the
Company's rights or needs.
OWNERSHIP: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured,
otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract.
Signature of Proposed Insured (If Age 8 or over)
----------------------------------------------------------------------
Dated at on , 19 Signature of Applicant (If other than proposed Insured)
- ---------------------------------------------------
(City/State) ----------------------------------------------------------------------
Witness (If applicant is a firm or corporation, show that company's name)
- --------------------------------------------------- By
(Licensed agent must witness where required by law) ----------------------------------------------------------------------
(Signature and title of officer signing for that company)
- ---------
PLY 53-82 NEW YORK Page 2
- ---------
</TABLE>
II-182
<PAGE>
- --------------------------------------------------------------------------------
ACKNOWLEDGEMENT
I have received and read a copy of the IMPORTANT NOTICE ABOUT YOUR APPLICATION
FOR INSURANCE.
________________________________
Date
, 19
----------------------------------------
AUTHORIZATION For the Release of Information
To: Any licensed physician, medical practitioner, hospital, clinic or like
facility, insurance company or the Medical Information Bureau, Inc. or other
organization, institution or person.
To determine eligibility for life insurance coverage, I authorize you to give
to PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY and, through it, to its reinsurers
and the Medical Information Bureau, any data or records you may have about me or
my mental or physical health. This also applies to any child proposed for
insurance in the application.
This authorization is valid until two years after the effective date of any
contract issued in connection with this authorization. A photo of this form will
be as valid as the original. (The person who signs this form may have a copy of
it upon request.)
Signature of Proposed Insured (if age 15 or over) otherwise Applicant
- -------------------------------------------------------------------------------
Signature of Spouse (if proposed for coverage)
- -------------------------------------------------------------------------------
- ------
PLY 55 82 NEW YORK
- ------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
IMPORTANT NOTICE ABOUT YOUR APPLICATION FOR INSURANCE
-----------------------------------------------------
Before we can issue a policy we must first underwrite your application. This
means that we evaluate all the information necessary to determine if you qualify
for the insurance.
In addition to the information on the application, a medical examination may be
required. We also ask you to authorize any doctor, hospital or other
organization or person to give us any information which they may have about you
or your mental or physical health.
We may ask for a report from a consumer reporting agency. These reports provide
information about a person's character, residence, activities, general
reputation, personal characteristics and mode of living. The agency may get this
information through interviews with friends, neighbors and associates. Any
person on whom we ask for a report has a right to ask to be interviewed. You may
also get a copy of the report from the consumer reporting agency which completed
it. An agency may keep the information it has about you and disclose it to other
persons. If you would like further information as to the nature and scope of
these reports, it will be provided upon request.
Any information which we obtain about you will be treated as confidential.
However, we may give this information, as necessary, to: your doctor, if we find
a serious health problem which you do not know about; persons conducting
mortality or morbidity studies; and affiliate companies for marketing purposes.
If you ask, we will describe any other circumstances when we may disclose
information about you without your prior authorization.
- ---------
PLY 56-82 NEW YORK
- --------- (Continued on reverse)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
A SUBSIDIARY OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
TEMPORARY INSURANCE AGREEMENT
We, the Company, agree to provide temporary insurance as follows:
1. It will start on the latest of these dates: (a) the date of this agreement,
(b) the date of completion of the initial medical examination agreed to on
each life proposed for coverage, and (c) any date asked for in the
application.
2. This insurance is subject to the terms of the contract applied for.
3. The sum of all death benefits for any person who is to be covered by this
insurance will be the amount asked for on that person or $250,000,
whichever is less.
The temporary insurance will end:
1. When we issue a contract as applied for. It will replace the temporary
insurance.
2. When we issue a contract other than as applied for. It will replace the
temporary insurance if: (a) it is accepted on delivery (this includes
paying at the same time any excess of the correct first premium over the
amount shown below); and (b) the persons who are to be covered are living
when the contract is delivered. If the contract is not accepted on delivery
the temporary insurance will end at once.
3. When you receive our letter telling you that we have rejected the
application or that we will not consider it on a prepaid basis. In any
event, the letter will be deemed to have been received five days after we
mail it.
4. At the end of 60 days if the temporary insurance has not been ended as we
state in 1, 2 or 3. At that time, we will refund any money paid with the
application.
If the temporary insurance ends and no contract takes effect, we will refund the
amount paid with the application.
- ----------
PLY 53A-82 NEW YORK (Continued on reverse) Printed in U.S.A.
- ----------
- -------------------------------------------------------------------------------
II-183
<PAGE>
- -------------------------------------------------------------------------------
Names and addresses of three Friends or Business Associates:
1. Name _______________________________________________________________________
Address ____________________________________________________________________
2. Name _______________________________________________________________________
Address ____________________________________________________________________
- -------------------------------------------------------------------------------
II-184
<PAGE>
- --------------------------------------------------------------------------------
We may also make a brief report to the Medical Information Bureau (MIB) which
provides an information exchange for its member insurance companies. When you
apply for life or health insurance or submit a claim for benefits to any member
company, MIB will, on request, give that company the information in its file. If
you have any questions about any report which MIB may have on you, you may
contact MIB at Post Office Box 105, Essex Station, Boston, MA 02112, (617)
426-3660.
If you have any questions concerning any of the personal information which we
obtain or report, let us know. You have the right to see this information and to
correct, amend or delete any information which may be wrong. We will tell you
how to do this if you ask us.
If we are unable to issue the policy you requested, we will tell you and explain
the reasons.
Thank you for applying to us for insurance.
CORPORATE OFFICE, NEWARK, N.J.
SERVICE OFFICES:
EASTERN HOME OFFICE, SOUTH PLAINFIELD, N.J.
NORTHEASTERN HOME OFFICE, BOSTON, MASS.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We received $_____________ on_________, 19___ from __________________________.
This amount was paid when a life insurance application was signed, on the same
date, in which ____________________________________________ is named as the
proposed Insured. This agreement is issued on the condition that any check,
draft or other order for the payment of money is good and can be collected.
ALL CHECKS MUST BE DRAWN ONLY TO THE COMPANY AND NOT TO ANY OTHER PARTY.
No change may be made in the terms and conditions of this form. No statement
which claims to make such a change will bind the Company.
Field Office Writing Representative (Agent)
_____________________________________________________________
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
CORPORATE OFFICE, NEWARK, N.J.
SERVICE OFFICES:
EASTERN HOME OFFICE, SOUTH PLAINFIELD, N.J.
NORTHEASTERN HOME OFFICE, BOSTON, MASS.
_____________________________________________________________
Note--Unless you get a contract, or your money back within eight weeks from the
date of this agreement, please notify the Company. Give the amount paid, date of
payment, and name of person to whom paid. (Locations are shown above.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. Name _______________________________________________________________________
Address ____________________________________________________________________
Furnished by ___________________________________________________________
(Name of Proposed Insured/Applicant)
Proposed Insured's Expiration Dates: Auto ___________ Homeowners ______________
- --------------------------------------------------------------------------------
II-185
<PAGE>
<TABLE>
<CAPTION>
AGENT'S SUPPLEMENTAL INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
1. Give current and last previous HOME and BUSINESS addresses.
From To Employer No. Street City or Town State
Home
Mo. Yr. Mo. Yr.
Present
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Bus.
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
2. If an Investigative Consumer Report is necessary, is a direct interview desired? .............................. Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
3. What is the total yearly income of: a. Proposed Insured? $ b. Spouse? $
- -----------------------------------------------------------------------------------------------------------------------------------
4. Does more than 50% of the proposed Insured's support come from someone else? Yes [ ] No [ ] If "Yes", give that person's:
Full name Relationship Amt. of Life ins. force $
- -----------------------------------------------------------------------------------------------------------------------------------
5. Who is to pay the premium? (Check one) [ ] Insured [ ] Employer [ ] Spouse [ ] Parent [ ] Other _______________________________
- -----------------------------------------------------------------------------------------------------------------------------------
6 a. Did someone other than you suggest this insurance? Yes [ ] No [ ] If "Yes", state who and what prompted the request?
-----------------------------------------------------------------------------------------------------------------------
b. What was the primary source of the Sales Lead? (Check one)(1) [ ] Policyholder Service (2) [ ] Referred Lead (3) [ ] Cold Call
- -----------------------------------------------------------------------------------------------------------------------------------
7. What Sales Services did you use? (Check appropriate boxes)
a. [ ] FACTOR 1 b. [ ] FACTOR 2 c. [ ] Other CPI d. [ ] CNA e. [ ] FNA f. [ ] Business Security Analysis
g. [ ] Employer's Advisory Service h. [ ] Estate Conservation Service i. [ ] Other __________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
8. Complete if this application is for business insurance: c. Amount of business insurance in force and applied for in all
a. Is firm a: (1) [ ] Sole Proprietorship companies on each officer or member of the firm.
(2) [ ] Partnership (3) [ ] Corporation Name Age Position Inforce Applied for
b. Is proposed Insured: $ $
--------------------------------------------------------------
[ ] Owner of firm (state _______%) [ ] Employee
- -----------------------------------------------------------------------------------------------------------------------------------
9. Do you have, from any source, facts which you have not stated any place else in the application which indicate that
any person named in 1a or 10 of the application may: (Give details of "Yes" answers in "REMARKS".) Yes No
a. replace or change any current insurance or annuity in any company? ............................................ [ ] [ ]
b. have in the last 3 years participated in hazardous sports (such as auto racing or parachuting), or been
arrested for driving recklessly or while intoxicated? ......................................................... [ ] [ ]
c. have frequently drunk to excess, illegally used habit forming drugs or have a record of indictment or
conviction of any crime? ...................................................................................... [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
10. Has the last name of any person named in 1a or 10 of the application been changed in the last 5 years (marriage, Yes No
court order, etc.)? If "Yes", who, and what was the previous last name? [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
11. Are the proposed Insured and agent related? Yes [ ] No [ ] If "Yes", state relationship: [ ] Self [ ] Other ______________
- -----------------------------------------------------------------------------------------------------------------------------------
12. a. Proposed Insured's telephone no. b. Social Security no.
- -----------------------------------------------------------------------------------------------------------------------------------
Complete 13 if proposed Insured is age 0-14
13. Family Name Date of Present Pending Family Name Date of Present Pending
details birth insurance Pru app.? details birth insurance Pru app.?
Father Brothers
---------------------------------------------------------- & Sisters
Mother
- -----------------------------------------------------------------------------------------------------------------------------------
Complete 14 and 15 if dependent children are proposed for coverage (Give details of "Yes" answers in "REMARKS".)
14. Are any children named in 10 of the application: Yes No
a. foster children or children whole legal adoption has not yet been made final? ................................. [ ] [ ]
b. living in a household other than the proposed Insured's or dependent on someone other than the
proposed Insured? ............................................................................................. [ ] [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
15. Are there any other children less than 18 years of age who have not been named in 10 of the application? ..... Yes [ ] No [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION
I certify that (a) on this date I saw the proposed Insured and (b), except as stated in "REMARKS", I am not aware of any information
not shown in the answers to the questions in any Part of this application, that would adversely affect the eligibility,
acceptability or insurability of any person proposed for coverage, I recommend that the Company accept the risks proposed for
coverage.
Date Signature of Writing Representative (Agent) Mgr., Asst. Mgr. or Sales Mgr. must sign if present
when application signed
, 19
- -----------------------------------------------------------------------------------------------------------------------------------
REMARKS:
</TABLE>
II-186
EXHIBIT 1.A.(ll)
XXX XXX XXX PRUCO LIFE INSURANCE COMPANY OF NEW
JERSEY
EASTERN SERVICE OFFICE
XXXXXXXXXXXXXXXXXXXXXXXX BOX 388, FORT WASHINGTON, PA 19034
XXXXXXXXXXXXXXXXXXXXXXXX FOR INSURNCE SERVICE CONTACT YOUR
XXXXXXXXXXXXXXXXXXXXXXXX REPRESENTATIVE.
XXXXXXXXXXXXXXXXXXXXXXXX
X - XXXX (REGION - AGENCY CODE)
NOTICE OF WITHDRAWAL RIGHT
IN ORDER TO COMPLY WITH THE LAWS ADMINISTERED BY THE SECURITIES AND EXCHANGE
COMMISSION, WE ARE SENDING YOU THIS NOTICE. PLEASE READ IT CAREUILY AND KEEP IT
WITH YOUR RECORDS.
YOU HAVE RECENTLY PURCHASED A VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT FROM
PRUCO LIFE. THE BENEFITS OF THIS CONTRACT DEPEND ON THE INVESTMENT EXPERIENCE OF
THE MONEY MARKET, BOND, COMMON STOCK, AGGRESSIVELY MANAGED FLEXIBLE AND
CONSERVATIVELY MANAGED FLEXIBLE SUBACCOUNTS OF PRUCO LIFE'S VARIABLE APPRECIABLE
ACCOUNT. THESE SUBACCOUNTS ARE DESCRIBED IN THE PROSPECTUS THAT WAS GIVEN TO YOU
AT THE TIME OF SALE.
YOU HAVE THE RIGHT TO EXAMINE AND CANCEL THIS CONTRACT. UPON ITS RETURN, YOU ARE
ENTITLED TO A FULL REFUND OF ALL PREMIUMS PAID. (WHERE STATE LAW PERMITS, THE
PRIOR SENTENCE WILL READ: "UPON ITS RETURN, YOU ARE ENTITLED TO A REFUND OF ALL
PREMIUMS PAID, PLUS OR MINUS ANY CHANGE DUE TO INVESTMENT PERFORMANCE IN THE
VALUE OF THE INVESTED PORTIONS OF SUCH PREMIUMS."] THE CANCELLATION DEADLINE IS
THE LATEST OF:
1. 10 DAYS AFTER YOU HAVE RECEIVED THE CONTRACT.
2. 45 DAYS FROM THE DATE YOU COMPLETED PART 1 OF THE APPLICATION.
3. 10 DAYS FROM THE DATE OF DELIVERY OF THIS NOTICE.
IN DETERMINING WHETHER OR NOT TO CANCEL YOUR CONTRACT, YOU SHOULD CONSIDER,
ALONG WITH OTHER FACTORS SUCH AS THE NEEDS AND OTHER REASONS WHICH MOTIVATED YOU
TO PURCHASE THIS CONTRACT, THE PROJECTED COST AND YOUR ABILITY TO MAKE THE
SCHEDULED PREMIUM PAYMENTS AS STATED IN YOUR CONTRACT. PLEASE CONSULT AND REVIEW
THE PROSPECTUS YOU HAVE RECEIVED. THE PROSPECTUS DESCRIBES THE DEDUCTIONS FROM
PREMIUMS BEFORE AMOUNTS ARE ALLOCATED TO THE SUBACCOUNTS MENTIONED ABOVE. THESE
ARE:
- A PER PAYMENT CHARGE OF $2.00
- A DEDUCTION FOR SALES LOAD OF 5%
- A DEDUCTION OF 2.5% FOR PREMIUM TAX
IN ADDITION, THE PROSPECTUS DESCRIBES CERTAIN CHARGES THAT ARE DEDUCTED
PERIODICALLY FROM AMOUNTS ALLOCATED TO THE SUBACCOUNTS. THE PROSPECTUS ALSO
DESCRIBES CHARGES THAT MAY BE ASSESSED UPON SURRENDER.
IF YOU DECIDE TO CANCEL YOUR CONTRACT, COMPLETE THE ENCLOSED FORM AND RETURN IT
ALONG WITH YOUR CONTRACT. THE POSTMARK OF THE RETURNED CONTRACT MUST BE ON OR
BEFORE THE DEADLINE DESCRIBED ABOVE.
II-187
<PAGE>
INSTRUCTIONS
Please read carefully
If, after reading the enclosed notice, you decide to return your contract for
cancellation, you must:
1. Sign and date the bottom portion of this form.
2. Mail this notice together with your contract to:
Pruco Life Insurance Company of New Jersey
Eastern Service Office
Box 388
Fort Washington, Pa. 19034
3. Make certain that the postmark on the envelope is on or before the
latest date permitted for cancellation as described in the enclosed
notice.
4. Check the box at the bottom if you have not yet received your contract
when mailing this form.
To be Filled Out by Owner
To: Pruco Life
Pursuant to the terms of the notice previously furnished me by Pruco Life, I
hereby return the contract numbered below for cancellation and request a full
refund of all premiums paid by me. I release Pruco Life from any claims in
connection with the sale or issuance of this contract, and acknowledge that
Pruco Life's only liability is the refund of the premiums paid for the contract.
[Where state law permits, this paragraph will read: "Pursuant to the terms of
the notice previously furnished me by Pruco Life, I hereby return the contract
numbered below for cancellation and request a refund of all premiums paid by me,
plus or minus any change due to investment performance in the value of the
invested portions of such premiums. I release Pruco Life from any claims in
connection with the sale or issuance of this contract, and acknowledge that
Pruco Life's only liability is the refund of the premiums paid for the contract,
plus or minus any change due to investment performance in the value of the
invested portions of such premiums.")
- ---------------------- ----------------------------------
Date Signature of Contract Owner
----------------------------------
Contract Number
----------------------------------
Name of Insured
(if other than Owner)
______ I have not yet received the contract and, should it
be received, I will return it to Pruco Life.
II-188
EXHIBIT 1.A.(13)(a)
RIDER FOR
INSURED'S WAIVER OF PREMIUM BENEFIT
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
Total Disability Benefit.--We will pay scheduled premiums into the contract for
you on their due dates while the Insured is totally disabled. But this is
subject to all the provisions of this Benefit and of the rest of this contract.
Disability Defined.--When we use the words disability and disabled in this
Benefit we mean total disability and totally disabled. Here is how we define
them: (1) until the Insured has stayed disabled for two years, we mean that he
or she cannot, due to sickness or injury, do any of the duties of his or her
regular occupation; but (2) after the Insured has stayed disabled for two years,
we mean that he or she cannot, due to sickness or injury, do any gainful work
for which he or she is reasonably fitted by education, training, or experience.
Except for what we state in the next sentence, we will at no time regard an
Insured as disabled who is doing gainful work for which he or she is reasonably
fitted by education, training, or experience. We will regard an Insured as
disabled, even if working or able to work, if he or she incurs, during a period
in which premiums are eligible to be waived as we describe below, one of the
following: (1) permanent and complete blindness of both eyes; or (2) severance
of both hands at or above the wrists or both feet at or above the ankles; or (3)
severance of one hand at or above the wrist and one foot at or above the ankle.
Premiums Eligible To Be Paid By Us.--lf the Insured becomes disabled before the
first contract anniversary after his or her 60th birthday and that disability
begins (1) on or after the first contract anniversary after his or her 5th
birthday, if the contract date was before that birthday; or (2) on or after the
contract date, if that date was on or after his or her 5th birthday, we will pay
all scheduled premiums that fall due while he or she stays disabled and before
the contract becomes paid-up.
If the Insured becomes disabled on or after the first contract anniversary after
his or her 6Oth birthday, we will pay only those scheduled premiums that fall
due before the first contract anniversary after his or her 65th birthday and
while he or she stays disabled and before the contract becomes paid-up.
If the Insured becomes disabled on or after the first contract anniversary after
his or her 65th birthday, we will not pay any scheduled premiums that fall due
in that period of disability.
Conditions.--Both of these conditions must be met: (1) The Insured must become
disabled while this contract is in force and not in default past the last day of
the grace period; (2) The Insured must stay disabled for a period of at least
six months while living.
Exceptions.--We will not pay any scheduled premiums if the Insured becomes
disabled from: (1) an injury he causes to himself, or she causes to herself, on
purpose; or (2) sickness or injury due to service on or after the contract date
in the armed forces of any country(ies) at war. The word war means declared or
undeclared war and includes resistance to armed aggression.
Successive Disabilities.--Here is what happens if the Insured has at least one
scheduled premium paid by us while disabled, then gets well so that he or she
resumes making payments, and then becomes disabled again. In this case, we will
not apply the six-month period that would otherwise be required by Condition (2)
and will consider the second period of disability to be part of the first period
unless (1) the Insured has done gainful work, for which he or she is reasonably
fitted, for at least six months between the periods; or (2) the Insured became
disabled the second time from an entirely different cause.
If we do not apply the six-month period required by Condition (2), we also will
not count the days when there was no disability as part of the two year period
when disability means the Insured cannot do any of the duties of his or her
regular occupation.
Notice and Proof of Claim.--Notice and proof of any claim must be given to us
while the Insured is living and disabled, or as soon as reasonably possible. If
notice or proof is not given as soon as reasonably possible, we will not pay any
scheduled premium due more than one year before the date the notice or proof is
given to us. We may require proof at reasonable times that the Insured is still
disabled. After he or she has been disabled for two years, we will not ask for
proof more than once a year. As a part of any proof, we have the right to
require that the Insured be examined at our expense by doctors of our choice.
Recovery from Disability.--We will stop paying scheduled premiums if (1)
disability ends; or (2) we ask for proof that the Insured is disabled and we do
not receive it;
(Continued on Next Page)
AL 100 N
II-189
<PAGE>
(Continued from Preceding Page)
or (3) we require that the Insured be examined and he or she fails to do so.
Benefit Premiums and Charges.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Unscheduled Premiums During Disability.--During a period of disability, even
when we are paying scheduled premiums that fall due, you may make unscheduled
premium payments if you wish, as provided in the Unscheduled Premiums section of
the contract.
Termination.--This Benefit will end and we will make no more scheduled premium
payments for you on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the first contract anniversary after the Insured's
65th birthday, unless the Insured has stayed disabled since before the first
contract anniversary after the 60th birthday;
3. the date the contract is surrendered under its Cash Value Option, if it has
one;
4. the date the contract becomes paid-up; and
5. the date the contract ends for any other reason.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey
By /s/ SPECIMEN SIGNATURE
Secretary
AL 100 N
II-190
EXHIBIT 1.A.(13)(b)
RIDER FOR
APPLICANT'S WAIVER OF PREMIUM BENEFIT
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
DEATH PROVISION
Death Benefit.--We will pay into the contract for you on their due dates those
scheduled premiums that fall due after the applicant's death but before the
benefit termination date which we show in the Contract Data page(s). For us to
do so, we must receive due proof that he or she died (1) before that date and
(2) while this contract is in force and not in default past the last day of the
grace period. But this promise is subject to all the provisions of this Benefit
and of the rest of this contract.
Suicide Exclusion.--If the applicant, whether sane or insane, dies by suicide
within the period that we state in the Suicide Exclusion under General
Provisions and while this Benefit is in force, we will not pay, under this
Benefit, the scheduled premiums we describe above. Instead, we will pay no more
than the sum of the monthly charges deducted for the Benefit divided by .925.
DISABILITY PROVISION
Total Disability Benefit.--Before the benefit termination date, we will pay into
the contract for you on their due dates scheduled premiums that fall due while
the applicant is totally disabled. But this is subject to all the provisions of
this Benefit and of the rest of this contract.
Disability Defined.--When we use the words disability and disabled in this
Benefit we mean total disability and totally disabled. Here is how we define
them: (1) until the applicant has stayed disabled for two years, we mean that he
or she cannot, due to sickness or injury, do any of the duties of his or her
regular occupation; but (2) after the applicant has stayed disabled for two
years, we mean that he or she cannot, due to sickness or injury, do any gainful
work for which he or she is reasonably fitted by education, training, or
experience.
Except for what we state in the next sentence, we will at no time regard an
applicant as disabled who is doing gainful work for which he or she is
reasonably fitted by education, training, or experience. We will regard an
applicant as disabled, even if working or able to work, if he or she incurs,
during a period in which premiums are eligible to be waived as we describe
below, one of the following: (1) permanent and complete blindness of both eyes;
or (2) severance of both hands at or above the wrists or both feet at or above
the ankles; or (3) severance of one hand at or above the wrist and one foot at
or above the ankle.
Premiums Eligible To Be Paid By Us.--lf the applicant becomes disabled before
the first contract anniversary after his or her 65th birthday, we will pay only
those scheduled premiums that fall due (1) while he or she stays disabled; and
(2) before the benefit termination date. If the applicant becomes disabled on or
after (1) the first contract anniversary after his or her 65th birthday, or (2)
the benefit termination date, we will not pay any scheduled premium that falls
due in that period of disability.
Conditions.--Both of these conditions must be met: (1) The applicant must become
disabled while this contract is in force and not in default past the last day of
the grace period. (2) The applicant must stay disabled for a period of at least
six months while living.
Exceptions.--We will not pay any scheduled premium if the applicant becomes
disabled from: (1) an injury he causes to himself, or she causes to herself, on
purpose; or (2) sickness or injury due to service on or after the contract date
in the armed forces of any country(ies) at war. The word war means declared or
undeclared war and includes resistance to armed aggression.
Successive Disabilities.--Here is what happens if the applicant has at least one
scheduled premium paid by us while disabled, then gets well so that premium
payment resumes, and then becomes disabled again. In this case, we will not
apply the six-month period that would otherwise be required by Condition (2) and
will consider the second period of disability to be part of the first period
unless (1) the applicant has done gainful work, for which he or she is
reasonably fitted, for at least six months between the periods; or (2) the
applicant became disabled the second time from an entirely different cause.
If we do not apply the six-month period required by Condition (2), we also will
not count the days when there was no disability as part of the two year period
when disability means the applicant cannot do any of the duties of his or her
regular occupation.
(Continued on Next Page)
AL 150 N
II-191
<PAGE>
(Continued from Preceding Page)
Notice and Proof of Claim.--Notice and proof of any claim must be given to us
while the applicant is living and disabled, or as soon as reasonably possible.
If notice or proof is not given as soon as reasonably possible, we will not pay
any scheduled premium due more than one year before the date the notice or proof
is given to us. We may require proof at reasonable times that the applicant is
still disabled. After he or she has been disabled for two years, we will not ask
for proof more than once a year. As a part of any proof, we have the right to
require that the applicant be examined at our expense by doctors of our choice.
Recovery from Disability.--We will stop paying scheduled premiums if (1)
disability ends; or (2) we ask for proof that the applicant is disabled and we
do not receive it; or (3) we require that the applicant be examined and he or
she fails to do so.
MISCELLANEOUS PROVISIONS
Reinstatement.--If this contract is reinstated, it will not include this Benefit
on the life of the applicant unless we are given any facts we need to satisfy us
that he or she is insurable for the Benefit.
Misstatement of Age or Sex.--If the applicant's stated age or sex or both are
not correct, here is what we will do. We will change each benefit and any amount
payable to what the premiums and charges would have bought for the correct age
and sex.
Benefit Premiums and Charges.--We show the premiums for this Benefit under the
List of Supplementary Benefits in the Contract Data pages, and these premiums
are included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and charges stop on the earlier of (1) the first contract
anniversary after the Insured's 24th birthday, and (2) the last contract
anniversary before the benefit termination date.
Unscheduled Premiums During Disability.--You may make unscheduled premium
payments if you wish, as provided in the Unscheduled Premiums section of the
contract, even when we are paying scheduled premiums that fall due during a
period of the applicants' disability or because of the applicants' death.
Termination.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day that is the last premium due date before the benefit
termination date we show on the Contract Data page(s);
3. the date the contract is surrendered under its Cash Value Option, if it has
one; and
4. the date the contract becomes paid-up; and
5. the date the contract ends for any other reason.
Further, if you ask us in writing in the premium period, we will cancel the
Benefit as of the date to which premiums are paid. Contract premiums due then
and later will be reduced accordingly.
This Supplementary Benefit rider
attached to this contract on Contract Date
Pruco Life Insurance Company of New Jersey
By /s/ [SPECIMEN]
Secretary
AL 150 N
II-192
EXHIBIT 1.A.(13)(c)
RIDER FOR
INSURED'S ACCIDENTAL DEATH BENEFIT
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
Benefit.--We will pay the amount of this Benefit that we show on the Contract
Data page(s) for the Insured's accidental loss of life. But our payment is
subject to all the provisions of the Benefit and of the rest of this contract.
Manner of Payment.--We will include in the proceeds of this contract any payment
under this Benefit.
Conditions.--Both of these conditions must be met: (1) We must receive due proof
that the Insured's death was the direct result, independent of all other causes,
of accidental bodily injury that occurred on or after the contract date. (2) The
death must occur (a) no more than 90 days after the injury; and (b) while the
contract is in force.
Exclusions.--We will not pay under this Benefit for death caused or contributed
to by: (1) suicide or attempted suicide while sane or insane; or (2) infirmity
or disease of mind or body or treatment for it; or (3) any infection other than
one caused by an accidental cut or wound.
Even if death is caused by accidental bodily injury, we will not pay for it
under this Benefit if it is caused or contributed to by: (1) service in the
armed forces of any country(ies) at war; or (2) war or any act of war; or (3)
travel by, or descent from, any aircraft if the Insured had any duties or acted
in any capacity other than as a passenger at any time during the flight. But we
will ignore (3) if all these statements are true of the aircraft: (a) It has
fixed wings and a permitted gross takeoff weight of at least 75,000 pounds. (b)
It is operated by an air carrier that is certificated under the laws of the
United States or Canada to carry passengers to or from places in those
countries. (c) It is not being operated for any armed forces for training or
other purposes. As used here, the word aircraft includes rocket craft or any
other vehicle for flight in or beyond the earth's atmosphere. The word war means
declared or undeclared war and includes resistance to armed aggression.
Benefit Premiums and Charges.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have no cash
value.
Termination.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the date the contract is surrendered under its Cash Value Option, if it has
one; and
3. the date the contract ends for any other reason.
Further, if you ask us in writing we will cancel the Benefit as of the first
monthly date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
This Supplementary Benefit rider
attached to this contract on Contract Date
Pruco Life Insurance Company of New Jersey
By /s/ SPECIMEN SIGNATURE
Secretary
AL 110 N
II-193
EXHIBIT 1.A.(13)(d)
RIDER FOR
LEVEL TERM INSURANCE BENEFIT ON LIFE OF INSURED
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract if it is listed there.
Benefit.--We will pay an amount under this Benefit if we receive due proof that
the Insured died (1) in the term period for the Benefit; and (2) while this
contract is in force and not in default beyond the last day of the grace
period. Any proceeds under this contract that may arise from the Insured's
death will include this amount. But our payment is subject to all the provisions
of the Benefit and of the rest of this contract.
We show the amount of term insurance on the Contract Data page(s). We also show
the term period for the Benefit there. It starts on the contract date, which we
show on the first page. The anniversary at the end of the term period is part of
that period.
CONVERSION TO ANOTHER PLAN OF INSURANCE
Right to Convert.--You may be able to exchange this Benefit for a new contract
of life insurance on the Insured's life in either this company or The
Prudential Insurance Company of America. In any of these paragraphs, when we use
the phrase the company we mean whichever of these companies may issue the new
contract. When we use the phrase new contract we mean the contract for which
this benefit may be exchanged. You will not have to prove that the Insured is
insurable.
Conditions.--Your right to make this exchange is subject to all these
conditions: (1) You must ask for the exchange in writing and in a form that
meets our needs. (2) You must send this contract to us to be endorsed. (3) We
must have your request and the contract at our Service Office while the Benefit
is in force and before the end of its term period.
The new contract will not take effect unless the premiun for it is paid while
the Insured is living and within 31 days after its contract date. If the premium
is paid as we state, it will be deemed that: (i) the insurance under the new
contract took effect on its contract date; and (2) this Benefit ended just
before that contract date.
Contract Date.--The date of the new contract will be the date you ask for in
your request. But it may not be more than 61 days after the date of your
request. It may not be after the end of the term period for the Benefit. And it
may not be more than 31 days before we have your request at our Service Office.
Contract Specifications.--The new contract will be in the same or an equivalent
rating class as this contract. The company will set the issue age and the
premiums for the new contract in accord with its regular rules in use on the
date of the new contract.
The new contract may call for annual premiums. If the company agrees, you will
be able to have premiums fall due more often.
The contract may be any one of the following:
1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued
by The Prudential Insurance Company of America. Its face amount will be the
amount you ask for in your request. But it cannot be less than $10,000 or more
than the amount of term insurance for this Benefit.
2. A Variable Life contract, if Pruco Life is regularly issuing such contracts
at that time. Its face amount will be the amount you ask for in your request.
But it cannot be less than $25,000 or more than the amount of term insurance
for this Benefit.
3. An Appreciable Life contract, or a Variable Appreciable Life contract, if
Pruco Life Insurance Company of New Jersey is regularly issuing such contracts
at that time. Its face amount will be the amount you ask for in your request.
But it cannot be less than $50,000 or more than the amount of term insurance for
this Benefit.
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next two paragraphs. If this contract has a benefit for
paying scheduled premiums in the event of disability and the company would
include a benefit for waiving or paying premiums in other contracts like the new
contract, the company will put such a benefit in the new contract. The benefit,
if any, in the new contract will be the same one, with the same provisions,
that the company puts in other contracts like it on its contract date. In this
paragraph, when we use the phrase other contracts like it, we mean contracts the
company would regularly issue on the same plan and for the same rating class,
amount, issue age and sex.
(Continued on Next Page)
AL 131 N
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<PAGE>
CONVERSION TO ANOTHER PLAN OF INSURANCE (Continued)
Such a benefit that would have been allowed under this contract, and that would
otherwise be allowed under the new contract, will not be denied just because
disability started before the contract date of the new contract. But any
premium to be waived or paid for that disability under the new contract must be
at the scheduled premium frequency that was in effect for this contract when
the disability started.
No premium will be waived or paid for disability under the new contract unless
it has such a benefit in the event of disability. This will be so even if
scheduled premiums have been paid by us for disability under this contract.
Changes.--You may be able to have this Benefit changed to a new contract of life
insurance other than in accord with the requirements for exhange that we state
above. Or you may be able to exchange this Benefit for an increase in the amount
of insurance under this contract. But any change may be made only if the company
consents, and will be subject to conditions and charges that are then
determined.
MISCELLANEOUS PROVISIONS
Benefit Premium's and Charges.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the contract anniversary at the end
of the term period for this Benefit.
If the Contract Becomes Paid-Up.--If the contract becomes paid-up we will
deduct from the contract fund the present value at that time of future charges
for this Benefit, discounted at a rate we set from time to time but no less than
4% a year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The cash value for this Benefit will be the net value
on the date of surrender of the paid-up insurance. But, within 30 days after a
contract anniversary, the net cash value will not be less than it was on that
anniversary. We base this net cash value on the Insured's age and sex. The
Insured's age at any time will be his or her age last birthday on the contract
date plus the length of time since that date. We use the Commissioners 1980
Standard Ordinary Mortality Table. We use continuous functions based on age last
birthday. We use an effective interest rate of 4% a year.
Termination.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit take effect under any contract value options provision
that may be in the contract;
2. the end of the last day before the contract date of any other contract (a)
for which the Benefit is exchanged, or (b) to which the Benefit is changed;
3. the date the contract is surrendered under its Cash Value Option, if it has
one; and
4. the date the oontract ends for any other reason,
Further, if you ask us in writing, we will cancel the Benefit as of the first
monthly date on or after we receive your request. Contract premiums and
monthly charges due then and later will be reduced accordingly.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey
By /s/ SPECIMEN SIGNATURE
Secretary
AL 131 N
II-195
EXHIBIT 1.A.(13)(e)
RIDER FOR
TERM INSURANCE BENEFIT ON LIFE OF INSURED--DECREASING AMOUNT
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
Benefit.--We will pay an amount under this Benefit if we receive due proof that
the Insured died (1) in the term period for the Benefit; and (2) while this
contract is in force and not in default beyond the last day of the grace period.
Any proceeds under this contract that may arise from the Insured's death will
include this amount. But our payment is subject to all the provisions of the
Benefit and of the rest of this contract.
We will use the table below to compute the amount we will pay. We show the
Initial Amount of Term Insurance under this Benefit on the Contract Data
page(s). We also show the term period for the Benefit there. It starts on the
contract date, which we show on the first page. The anniversary at the end of
the term period is part of that period.
TABLE OF AMOUNTS OF INSURANCE
Amounts Payable.--We show here the amount we will pay for each $1,000 of Initial
Amount of Term Insurance if death occurs in the contract year ending with the
anniversary shown.
----------------------------------------------------------------
ANNIVERSARY AMOUNT ANNIVERSARY AMOUNT
----------------------------------------------------------------
1 $1,000 12 $706
2 986 13 658
3 970 14 603
4 951 15 543
5 931 16 475
6 909 17 400
7 883 18 316
8 855 19 222
9 824 20 200
10 789 BENEFIT EXPIRES
11 750 ON 20TH ANNIVERSARY
----------------------------------------------------------------
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AL 130 N
II-196
<PAGE>
(Continued from Preceding Page)
CONVERSION TO ANOTHER PLAN OF INSURANCE
Right to Convert.--You may be able to exchange this Benefit for a new contract
of life insurance on the Insured's life in either this company or The Prudential
Insurance Company of America. In any of these paragraphs, when we use the phrase
the company we mean whichever of these companies may issue the new contract.
When we use the phrase new contract we mean the contract for which this benefit
may be exchanged. You will not have to prove that the Insured is insurable.
Conditions.--Your right to make this exchange is subject to all these
conditions: (1) The amount we would have paid under this Benefit if the Insured
had died just before the contract date of the new contract must be large enough
to meet the minimum for a new contract, as we describe under Contract
Specifications. (2) You must ask for the exchange in writing and in a form that
meets our needs. (3) You must send this contract to us to be endorsed. (4) We
must have your request and the contract at our Service Office while the Benefit
is in force and at least five years before the end of its term period.
The new contract will not take effect unless the premium for it is paid while
the Insured is living and within 31 days after its contract date. If the premium
is paid as we state, it will be deemed that: (1) the insurance under the new
contract took effect on its contract date; and (2) this Benefit ended just
before that contract date.
Contract Date.--The date of the new contract will be the date you ask for in
your request. But it may not be more than 61 days after the date of your
request. It may not be less than five years before the end of the term period
for the Benefit. And it may not be more than 31 days before we have your request
at our Service Office.
Contract Specifications.--The new contract will be in the same or an equivalent
rating class as this contract. The company will set the issue age and the
premiums for the new contract in accord with its regular rules in use on the
date of the new contract.
The new contract may call for annual premiums. If the company agrees, you will
be able to have premiums fall due more often.
The contract may be any one of the following:
1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued
by The Prudential Insurance Company of America. Its face amount will be the
amount you ask for in your request. But it cannot be less than $10,000 or more
than 80% of the amount we would have paid under this Benefit if the Insured had
died just before the contract date of the new contract. (Since $10,000 is 80% of
$12,500. the amount we would have paid must be at least $12,500 for this
exchange to be possible.)
2. A contract like the one to which this Benefit is attached, if Pruco Life is
regularly issuing such contracts at that time. Its face amount will be the
amount you ask for in your request. But it cannot be less than $50,000 or more
than 80% of the amount we would have paid under the Benefit if the Insured had
died just before the contract date of the new contract. (Since $50,000 is 80% of
$62,500, the amount we would have paid must be at least $62,500 for this
exchange to be possible.)
3. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company at that time for $25,000 or more. Its face amount will be the
amount you ask for in your request. But it cannot be less than $25,000 or more
than 80% of the amount we would have paid under the Benefit if the Insured had
died just before the contract date of the new contract. (Since $25,000 is 80% of
$31,250, the amount we would have paid must be at least $31,250 for this
exchange to be possible.)
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next two paragraphs. If this contract has a benefit for
paying scheduled premiums in the event of disability and the company would
include a benefit for waiving or paying premiums in other contracts like the new
contract, the company will put such a benefit in the new contract. The benefit,
if any, in the new contract will be the same one, with the same provisions, that
the company puts in other contracts like it on its contract date. In this
paragraph, when we use the phrase other contracts like it, we mean contracts the
company would regularly issue on the same plan and for the same rating class,
amount, issue age and sex.
Such a benefit that would have been allowed under this contract, and that would
otherwise be allowed under the new contract, will not be denied just because
disability started before the contract date of the new contract. But any premium
to be waived or paid for that disability under the new contract must be at the
scheduled premium frequency that was in effect for this contract when the
disability started.
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AL 130 N
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<PAGE>
(Continued from Preceding Page)
No premium will be waived or paid for disability under the new Contract unless
it has such a benefit in the event of disabiIity. This will be so even if
scheduled premiums have been paid by us for disability under this contract.
Changes.--You may be able to have this Benefit changed to a new contract of life
insurance other than in accord with the requirements for exchange that we state
above. Or you may be able to exchange this Benefit for an increase in the amount
of insurance under this contract. But any change may be made only if the company
consents, and will be subject to conditions and charges that are then
determined.
MISCELLANEOUS PROVISIONS
Benefit Premiums and Charges.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages. and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the contract anniversary at the end
of the term period for this Benefit.
If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The cash value for this Benefit will be the net value
on the date of surrender of the paid-up insurance. But, within 30 days after a
contract anniversary, the net cash value will not be less than it was on that
anniversary. We base this net cash value on the insured's age and sex. The
insured's age at any time will be his or her age last birthday on the contract
date plus the length of time since that date. We use the Commissioners 1980
Standard Ordinary Mortality Table. We use continuous functions based on age last
birthday. We use an effective interest rate of 4% a year.
Termination.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the last day before the contract date of any other contract (a)
for which the Benefit is exchanged, or (b) to which the Benefit is changed;
3. the date the contract is surrendered under its Cash Value Option, if it has
one; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the Benefit as of the first
monthly date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
This Supplementary Benefit rider
attached to this contract on Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN SIGNATURE
Secretary
AL 130 N
II-198
EXHIBIT 1.A.(13)(f)
RIDER FOR
INTERIM TERM INSURANCE BENEFIT
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
Benefit.--We will pay the beneficiary an amount under this Benefit if we receive
due proof that the Insured died on or after the date of the Benefit but before
the contract date. But our payment is subject to the provisions of the Benefit
and of the rest of this contract. The amount of the Benefit is equal to the
amount of insurance provided by the contract on the contract date. We show the
contract date and the date of the Benefit on the Contract Data page(s).
Changes in Contract Provisions.--This contract has a Suicide Exclusion and an
Incontestability provision. In each of them, we refer to a period of time that
extends from the issue date. But for each of them we will count the time from
the date of this Benefit, not from the issue date.
This contract might have a benefit for the payment of scheduled premiums by us
in the event of disability; it might have one that provides accidental death
coverage. If so, we might refer in either or both of those benefits to the
contract date. But we will use the date of this Benefit, not the contract date.
The first scheduled contract premium is due on the contract date. We will grant
31 days of grace for paying it. This will be so even though we state otherwise
under Grace Period.
Except for the changes we describe above, all the provisions of this contract
will be in effect on and after the contract date if the Insured is then living,
as if the contract did not have this Benefit. The Benefit will not make any
contract value that may be provided by the contract available any sooner.
Benefit Premium.--We show the premium for this Benefit on the Contract Data
page(s). This premium is to be paid on or before the date of the Benefit. It is
not the scheduled premium for the contract. Neither the Benefit nor the premium
for it provides any insurance or changes premiums payable, on or after the
contract date.
Premium Adjustment.--The Insured might die before the contract date. If so, we
will return that part of the premium for this Benefit that is more than was
needed to pay for the Benefit through the date of death. We will add the amount
we return to the amount we would otherwise pay under the Benefit.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN SIGNATURE
Secretary
AL 160 N
II-199
EXHIBIT 1.A.(13)(g)
RIDER FOR
OPTION TO PURCHASE ADDITIONAL INSURANCE
ON LIFE OF INSURED
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
BENEFIT.--You have the right under this Benefit to buy more insurance on the
Insured's life in either this company or The Prudential Insurance Company of
America. You may do this for certain normal option dates and advance option
dates, as we explain below. You will not have to prove that the Insured is
insurable. We will provide term insurance for a period before any advance option
dates as we state under Term Insurance below. But these promises are subject to
all the provisions of the Benefit and of the rest of this contract.
In any of these paragraphs when we use the phrase the company we mean whichever
of these companies may issue the new contract.
NORMAL OPTION DATES.--These are the anniversaries of this contract on which the
Insured's attained age is 25, 28, 31, 34, 37, 40, 43, 46, 49 and 52.
You may buy a new contract for each normal option date if these four statements
apply: (1) You have not used your right for that date by buying a new contract
on an advance option date (we explain this below). (2) The Insured signs an
application for the new contract, and you sign it, too, if you are not the
Insured. (3) We receive the application and the first premium, less the premium
credit that we describe below, at our Service Office not more than 31 days after
the normal option date. (4) On the normal option date, or, if later, the date we
receive the application, the Insured is living and this contract is in force and
not in default past its days of grace. The new contract will take effect on the
later of those two dates. That date will be its contract date.
Your right to buy the new contract will end on the 31st day after the normal
option date. But this will not change your right to buy a new contract for any
later normal or advance option date.
ADVANCE OPTION DATES.--Except as we state in the next paragraph, an advance
option date is the date three months after any of these events:
1. The Insured's marriage.
2. While the Insured is living, the birth of a live child of the Insured for
whom the Insured accepts legal responsibility.
3. The Insured's legal adoption of a child.
But the event must take place (1) on or after the later of the date of this
contract and the date of Part l of its application; and (2) not later than the
date that is one month before the contract anniversary on which the Insured's
attained age is 52. If the event takes place less than three months before that
anniversary, the related advance option date will be that anniversary and not
the date three months after the event.
You may buy a new contract for each advance option date if these four statements
apply: (1) The Insured signs an application for the new contract, and you sign
it, too, if you are not the Insured. (2) We receive the application and the
first premium, less the premium credit that we describe below, at our Service
Office not later than the advance option date. (3) The Insured is living on the
advance option date. (4) This contract is in force on that date and not in
default past its days of grace. The new contract will take effect on the advance
option date. That will be its contract date.
Your right to buy the new contract will end on the advance option date. But this
will not change your right to buy a new contract for any later normal or advance
option date.
Each time you buy a new contract for an advance option date, you will have used
your right to buy a new contract for the next normal option date, if any, for
which you could otherwise have bought one. But even if you have used your right
to buy for all normal option dates, advance option dates may still occur as we
state above. If the company lets you combine two or more new contracts you can
buy under this Benefit into one, you will use your right to buy new contracts
for the same number of future normal option dates as if the new contracts had
not been combined.
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AL 140 N
II-200
<PAGE>
(Continued from Preceding Page)
TERM INSURANCE.--For each event that gives rise to an advance option date, we
will provide term insurance on the Insured's life, as long as this contract is
in force. The term insurance will be automatic. There is no need to ask for it.
Its amount will be the option amount. We will pay that amount if the Insured
dies on or after the date of the event but before (1) the advance option date;
or (2) the date this Benefit ends, if sooner. We will include it in the proceeds
of this contract. But if this contract limits or excludes war or aviation risks,
the term insurance will limit or exclude them in the same way.
CONTRACT SPECIFICATIONS.--The new contract you buy for a normal option date or
advance option date will be in the same or an equivalent rating class as this
contract.
If this contract limits or excludes war or aviation risks, the company will have
the right to limit or exclude them in the new contract, too. If the company does
so, the provision in the new contract will be the same one the company puts in
other contracts like the new one on its contract date. The company will set the
issue age and the premiums for the new contract in accord with its regular rules
in use on the date of the new contract.
The new contract may call for annual premiums. If the company agrees, you will
be able to have premiums fall due more often.
If the option amount for this Benefit which we show in the Contract Data pages
is less than $25,000, the new contract may be one we describe in paragraph 1
below. If the option amount is $25,000 or more, the new contract can be one we
describe in either of paragraphs 1 and 2.
1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued
by The Prudential Insurance Company of America. Its face amount will be the
amount you ask for in your request. But it cannot be less than $10,000, or more
than the option amount for this Benefit.
2. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company at that time for $25,000 or more. Its face amount will be the
amount you ask for in your request. But it cannot be less than $25,000 or more
than the option amount for this Benefit.
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next three paragraphs. If this contract has a benefit for
paying scheduled premiums in the event of disability and the company would
include a benefit for waiving or paying premiums in other contracts like the new
contract, the company will put such a benefit in the new contract.
Such a benefit, that would have been allowed under this contract and that would
otherwise be allowed under the new contract, will not be denied just because
disability started before the contract date of the new contract. But any premium
to be waived or paid for that disability under the new contract must be at the
scheduled premium frequency that was in effect for this contract when the
disability started.
No premium will be waived or paid for disability under the new contract unless
it has such a benefit in the event of disability. This will be so even if
scheduled premiums have been paid by us for disability under this contract.
If this contract has an accidental death benefit, and the company would
regularly issue contracts like the new contract with either that benefit or an
accidental death and dismemberment benefit, the company will put that kind of
benefit in the new contract, as stated in General below. But (1) you must ask
for it when you apply for the new contract; and (2) the amount of any accidental
death benefit in the new contract will not be more than the face amount of the
new contract.
GENERAL.--Any benefit for waiving or paying premiums in event of disability and
any accidental death benefit or accidental death and dismemberment benefit in
the new contract will be the same one, with the same provisions,
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AL 140 N
II-201
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(Continued from Preceding Page)
that the company puts in other contracts like it on its contract date. In any of
these paragraphs, when we use the phrases other contracts like it and other
contracts like the new contract, we mean contracts the company would regularly
issue on the same plan and for the same rating class, amount, issue age and sex.
CHANGES.--On a normal or advance option date you may be able to buy a new
contract of life insurance other than in accord with the requirements that we
state above. Or you may be able to use the option to increase the amount of
insurance under this contract. But either may be done only if the company
consents, and will be subject to conditions and charges that are then
determined.
PREMIUM CREDIT.--A premium credit will be allowed on the first premium for the
new contract, if it is of a kind described in paragraph 1 or 2 above. The credit
will be at least $1 for each full $1,000 of face amount of the new contract. If
(1) the new contract calls for premiums to be paid more often than annually; and
(2) the credit would be more than that first premium, you may choose to have
premiums paid less often to get the full credit.
BENEFIT PREMIUMS AND CHARGES.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund. The premiums for this Benefit stop on the contract anniversary on
which the Insured's attained age is 52.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Reductions in the Contract Data pages. The charges for this Benefit will stop
on the contract anniversary on which the Insured's attained age is 52.
IF THE CONTRACT BECOMES PAID-UP.--If the contract becomes paid-up before
attained age 52 we will deduct from the contract fund the present value at that
time of future charges for this Benefit, discounted at a rate we set from time
to time, but no less than 4% a year. The Benefit will remain in force until the
earliest of the dates in paragraphs 2, 3 and 4 under Termination below, but
thereafter we will make no deductions from the contract fund to pay for it. The
Benefit will have no cash value.
TERMINATION.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the 31st day after the contract anniversary on which the Insured's attained
age is 52;
3. the date the contract is surrendered under its Cash Value Option, if it has
one; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the Benefit as of the first
monthly date on or after which we receive your request. Contract premiums due
then and later will be reduced accordingly.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN SIGNATURE
Secretary
AL 140 N
II-202
EXHIBIT 1.A.(13)(h)
RIDER FOR
TERM INSURANCE BENEFIT ON LIFE OF INSURED SPOUSE--DECREASING AMOUNT
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
BENEFIT.--We will pay an amount under this Benefit if we receive due proof that
the insured spouse died (1) in the term period for the Benefit; and (2) while
this contract is in force and not in default beyond the last day of the grace
period. We will pay this amount to the beneficiary for insurance payable upon
the insured spouse's death. But our payment is subject to all the provisions of
the Benefit and of the rest of this contract. The phrase insured spouse means
the Insured's spouse named in the application for this contract.
We will use the table below to compute the amount we will pay. We show the
Initial Amount of Term Insurance under this Benefit on the Contract Data
page(s). We also show the term period for the Benefit there. It starts on the
contract date, which we show on the first page. The anniversary at the end of
the term period is part of that period.
TABLE OF AMOUNTS OF INSURANCE
AMOUNTS PAYABLE.--We show here the amount we will pay for each $1,000 of Initial
Amount of Term Insurance if death occurs in the contract year ending with the
anniversary shown.
------------------------------------------------------------------------
ANNIVERSARY AMOUNT ANNIVERSARY AMOUNT
------------------------------------------------------------------------
1 $1,000 12 $706
2 986 13 658
3 970 14 603
4 951 15 543
5 931 16 475
6 909 17 400
7 883 18 316
8 855 19 222
9 824 20 200
10 789 BENEFIT EXPIRES
11 750 ON 20TH ANNIVERSARY
------------------------------------------------------------------------
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AL 180 N
II-203
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PAID-UP lNSURANCE ON DEATH OF INSURED
PAID-UP INSURANCE ON LIFE OF INSURED SPOUSE.--The Insured might die (1) in the
term period for this Benefit; (2) while this contract is in force and not in
default past the last day of the grace period; and (3) while the insured spouse
is living. In this case, the insurance on the life of the insured spouse under
the Benefit will become paid-up term insurance for decreasing amounts. We will
compute these amounts from the Table of Amounts of Insurance. While the paid-up
insurance is in effect, the contract will remain in force until the end of the
term period for the Benefit. The paid-up insurance will have cash values but no
loan value.
If this Benefit becomes paid-up, it may be surrendered for its net cash value.
This will be the net value on the date of surrender of the paid-up insurance.
But, within 30 days after a contract anniversary, the net cash value will not be
less than it was on that anniversary. We base this net cash value on the insured
spouse's age and sex. The insured spouse's age at any time will be his or her
age last birthday on the contract date plus the length of time since that date.
We use the Commissioners 1980 Standard Ordinary Mortality Table. We use
continuous functions based on age last birthday. We use an effective interest
rate of 4% a year.
We will usually pay any cash value promptly. But we have the right to postpone
paying it for up to six months. If we do so for more than 30 days, we will pay
interest at the rate of 3% a year. If we are asked for the values which apply,
we will furnish them.
CONVERSION TO ANOTHER PLAN OF INSURANCE
RIGHT TO CONVERT.--While the Insured is living, you may be able to exchange this
Benefit for a new contract of life insurance on the life of the insured spouse
in either this company or The Prudential Insurance Company of America. In any of
these paragraphs, when we use the phrase the company we mean whichever of these
companies may issue the new contract. And where we use the phrase new contract
we mean the contract for which the Benefit may be exchanged. You will not have
to prove that the insured spouse is insurable.
CONDITIONS.--Your right to make this exchange is subject to all these
conditions: (1) The amount we would have paid under this Benefit if the insured
spouse had died just before the contract date of the new contract must be large
enough to meet the minimum for a new contract, as we describe under Contract
Specifications. (2) You must ask for the exchange in writing and in a form that
meets our needs. (3) You must send this contract to us to be endorsed. (4) We
must have your request and the contract at our Service Office while the Benefit
is in force and at least five years before the end of its term period.
The new contract will not take effect unless the premium for it is paid while
the insured spouse is living and within 31 days after its contract date. If the
premium is paid as we state, it will be deemed that: (1) the insurance under the
new contract took effect on its contract date; and (2) this Benefit ended just
before that contract date.
CONTRACT DATE.--The date of the new contract will be the date you ask for in
your request. But it may not be more than 61 days after the date of your
request. It may not be less than five years before the end of the term period
for the Benefit. And it may not be more than 31 days before we have your request
at our Service Office.
CONTRACT SPECIFICATIONS.--The new contract will be in the standard or equivalent
rating class. The company will set the issue age and the premiums for the new
contract in accord with its regular rules in use on the date of the new
contract.
The new contract may call for annual premiums. If the company agrees, you will
be able to have premiums fall due more often.
The contract may be any one of the following:
1. A Life Paid Up at Age 85 plan. In this case the new contract will be
issued by The Prudential Insurance Company of America. Its face amount will be
the amount you ask for in your request. But it cannot be less than $10,000 or
more than 80% of the amount we would have paid under this Benefit if the insured
spouse had died just before the contract date of the new contract. (Since
$10,000 is 80% of $12,500, the amount we would have paid must be at least
$12,500 for this exchange to be possible.)
2. A contract like the one to which this Benefit is attached, if Pruco Life
Insurance Cdmpany is regularly issuing such contracts at that time. Its face
amount will be the amount you ask for in your request. But it cannot be less
than $50,000 or more than 80% of the amount we would have paid under the Benefit
if the insured spouse had died just before the contract date of the new
contract. (Since $50,000 is 80% of $62,500, the amount we would have paid must
be at least $62,500 for this exchange to be possible.)
(Continued on Next Page)
AL 180 N
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<PAGE>
(Continued from Preceding Page)
3. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company at that time for $25,000 or more. Its face amount will be the
amount you ask for in your request. But it cannot be less than $25,000 or more
than 80% of the amount we would have paid under the Benefit if the insured
spouse had died just before the contract date of the new contract. (Since
$25,000 is 80% of $31,250, the amount we would have paid must be at least
$31,250 for this exchange to be possible.)
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next paragraph. If the company would include in other
contracts like the new contract a benefit for waiving or paying premiums in the
event of disability, here is what the company will do. Even though this contract
does not have such a benefit on the life of the insured spouse, the company will
put it in the new contract on his or her life. The benefit, if any, in the new
contract will be the same one, with the same provisions, that the company puts
in other contracts like it on its contract date. In this paragraph, when we use
the phrase other contracts like it, we mean contracts the company would
regularly issue on the same plan and for the same rating class, amount, issue
age and sex.
No premium will be waived or paid by us for disability under the new contract
unless the disability started on or after its contract date. And no premium will
be waived or paid by us for disability under a new contract unless it has a
benefit for waiving or paying premiums in the event of disability. This will be
so even if scheduled premiums have been paid by us under this contract.
CHANGES.--You may be able to have this Benefit changed to a new contract of life
insurance other than in accord with the requirements for exchange that we state
above. But any change may be made only if the company consents, and will be
subject to conditions and charges that are then determined.
MISCELLANEOUS PROVISIONS
OWNERSHIP AND CONTROL.--Unless we endorse this contract to say otherwise, while
the Insured is living the owner alone may exercise all ownership and control of
this contract. This includes, but is not limited to, these rights: (1) to assign
the contract; and (2) to change any subsequent owner. A request for such a
change must be in writing to us at our Service Office and in a form that meets
our needs. The change will take effect only when we endorse the contract to show
it.
Unless we endorse this contract to say otherwise: (1) while any insurance is in
force after the Insured's death, the owner of the contract will be the insured
spouse; and (2) the owner alone will be entitled to (a) any contract benefit and
value, and (b) the exercise of any right and privilege granted by the contract
or by us. But any insurance payable upon the Insured's death will be payable to
the beneficiary for that insurance.
BENEFICIARY.--The word beneficiary where we use it in this contract without
qualification means the beneficiary for insurance payable upon the death of the
Insured.
Unless we endorse this contract to say otherwise, the beneficiary for insurance
payable upon the death of the insured spouse will be the Insured if living,
otherwise the estate of the insured spouse.
The beneficiary for insurance payable upon the death of the insured spouse
may be changed. The request must be in writing and in a form that meets our
needs. It will take effect only when we file it at our Service Office; this will
be after the contract is sent to us to be endorsed, if we ask for it. Then any
previous beneficiary's interest in such insurance will end as of the date of the
request. It will end then even if the insured spouse is not living when we file
the request. Any beneficiary's interest is subject to the rights of any assignee
of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated.
MISSTATEMENT OF AGE OR SEX.--If the insured spouse's stated age or sex or both
are not correct, we will change each benefit and any amount payable to what the
premiums and charges would have bought for the correct age and sex.
SUICIDE EXCLUSION.--If the insured spouse, whether sane or insane, dies by
suicide within the period which we state in the Suicide Exclusion under General
Provisions and while this Benefit is in force, we will not pay the amount we
describe under Benefit above. Instead, we will pay no more than the sum of the
monthly charges deducted for this Benefit to the date of death divided by .925.
We will make that payment in one sum.
REINSTATEMENT.--If this contract is reinstated, it will not include the
insurance that we provide under this Benefit on the life of the insured spouse
unless we are given any facts we need to satisfy us that the insured spouse is
insurable for the Benefit.
(Continued on Next Page)
AL 180 N
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<PAGE>
(Continued from Preceding Page)
CONTRACT VALUE OPTIONS.--If this contract has a Contract Value Options
provision, it will apply only during the Insured's lifetime. Any extended or
reduced paid-up insurance that may be described there is on the life of the
Insured only.
CONTRACT LOANS.--If this contract has a Loans provision, we will not consider
any contract debt when we determine the amount payable, if any, at the death of
the insured spouse.
INCONTESTABILITY.--Except for default, we will not contest this Benefit after it
has been in force during the insured spouse's lifetime for two years from the
issue date.
BENEFIT PREMIUMS AND CHARGES.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the earliest of (1) the death of
the insured, (2) the death of the spouse, and (3) the contract anniversary at
the end of the term period for this Benefit.
IF THE CONTRACT BECOMES PAID-UP.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The basis for determining the net cash value will be
as we state in the second paragraph under Paid-up Insurance above.
TERMINATION.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the last day before the contract date of any other contract (a)
for which the Benefit is exchanged, or (b) to which the Benefit is changed;
3. the date the contract is surrendered under its Cash Value Option, if it has
one, or the paid-up insurance, if any, under the Benefit is surrendered; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the Benefit as of the first
monthly date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN SIGNATURE
Secretary
AL 180 N
II-206
EXHIBIT 1.A.(13)(i)
RIDER FOR
LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
BENEFIT.--We will pay an amount under this Benefit if we receive due proof that
a dependent child died (1) before the term insurance provided by the Benefit on
his or her life ends; and (2) while this contract is in force and not in default
past the last day of the grace period. But our payment is subject to all the
provisions of the Benefit and of the rest of this contract.
The phrase dependent child means the Insured's child, stepchild or legally
adopted child who (1) has reached the 15th day of life; and (2) has not reached
the first contract anniversary after his or her 25th birthday; and either (3) is
named in the application for this contract and on the date of the application
has not reached his or her 18th birthday; or (4) is acquired by the Insured
after the date of the application but before the child's 18th birthday.
We show the amount of term insurance under this Benefit on the Contract Data
page(s). The insurance on each dependent child's life will end on the earlier
of: (1) the day before the first contract anniversary after the child's 25th
birthday; and (2) the day before the first contract anniversary after the
Insured's 65th birthday.
PAID-UP INSURANCE ON DEATH OF INSURED
PAID-UP INSURANCE ON DEPENDENT CHILDREN.--The Insured might die while this
contract is in force and not in default past the last day of the grace period.
In this case, any term insurance provided by this Benefit on a dependent child's
life will become paid-up term insurance. While this paid-up insurance is in
effect, the contract will remain in force. The paid-up insurance will have cash
values but no loan value.
If this Benefit becomes paid-up, it may be surrendered for its net cash value.
This will be the net value on the date of surrender of the paid-up insurance.
But, within 30 days after a contract anniversary, the net cash value will not
be less than it was on that anniversary. To compute this net cash value, we use
the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous
functions based on age last birthday. We use an effective interest rate of 4% a
year.
We will usually pay any cash value promptly. But we have the right to postpone
paying it for up to six months. If we do so for more than 30 days, we will pay
interest at the rate of 3% a year. If we are asked for the values which apply,
we will furnish them.
CONVERSION OF INSURANCE ON DEPENDENT CHILDREN
RIGHT TO CONVERT.--If the insurance on a dependent child ends as we state in the
last paragraph under Benefit above, that child may be able to obtain a new
contract of life insurance on his or her life, in either this company or The
Prudential Insurance Company of America. In any of these paragraphs, when we use
the phrase the company we mean whichever of these companies may issue the new
contract. It will not be necessary to prove that the child is insurable.
CONDITIONS.--The right to obtain a new contract is subject to all these
conditions: (1) The insurance on the child must end while this contract is in
force and not in default past the last day of the grace period. (2) The amount
of the new contract must meet the minimum as we describe under Contract
Specifications. (3) We must have a written application for the new contract at
our Service Office no later than the date the insurance on the child ends.
The new contract will not take effect unless the premium for it is paid while
the child is living and within 31 days after its contract date. If the premium
is paid as we state, it will be deemed that the insurance under the new contract
took effect on its contract date.
(Continued on Next Page)
AL 182 N
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<PAGE>
(Continued from Preceding Page)
CONTRACT DATE.--The date of the new contract will be the day after the date the
insurance on the dependent child ends.
CONTRACT SPECIFICATIONS.--The new contract will be in the standard or an
equivalent rating class. The company will set the issue age and the premiums for
the new contract in accord with its regular rules in use on the date of the new
contract.
The new contract may call for annual premiums. If the company agrees, the owner
of the new contract will be able to have premiums fall due more often.
The contract may be any one of the following:
1. A contract like the one to which this Benefit is attached, if Pruco Life
Insurance Company is regularly issuing such contracts at that time. Its face
amount will be the amount asked for in your request. But it cannot be less than
$50,000 or more than five times the amount of insurance on the child's life
under the Benefit.
2. A Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age
for the new contract is less than 15 years). In this case the new contract will
be issued by The Prudential Insurance Company of America. Its face amount will
be the amount asked for in your request. But it cannot be less than $5,000 or
more than five times the amount of insurance on the child's life under this
Benefit.
3. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company at that time for $25,000 or more. Its face amount will be the
amount you ask for in your request. But it cannot be less than $25,000 or more
than five times the amount of insurance on the child's life under the Benefit.
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next paragraph. If the company would include in other
contracts like the new contract a benefit for waiving or paying premiums in the
event of disability, here is what the company will do. Even though this contract
does not have such a benefit on the life of that child, the company will put it
in the new contract on his or her life. The benefit, if any, in the new contract
will be the same one, with the same provisions, that the company puts in other
contracts like it on its contract date. In this paragraph, when we use the
phrase other contracts like it, we mean contracts the company would regularly
issue on the same plan and for the same rating class, amount, issue age and sex.
No premium will be waived or paid by us for disability under the new contract
unless the disability started on or after its contract date. And no premium will
be waived or paid by us for disability under a new contract unless it has a
benefit for waiving or paying premiums in the event of disability. This will be
so even if scheduled premiums have been paid by us under this contract.
CHANGES.--If the insurance on a dependent child ends as we state in the last
paragraph under Benefit above, that child may be able to obtain a new contract
of life insurance other than in accord with the requirements we state in this
form. But this kind of change may be made only if the company consents and will
be subject to conditions and charges that are then determined.
MISCELLANEOUS PROVISIONS
BENEFICIARY.--The word beneficiary where we use it in this contract without
qualification means the beneficiary for insurance payable upon the death of the
Insured.
Unless we endorse this contract to say otherwise, these two statements will
apply: (1) The beneficiary for insurance payable upon the death of a dependent
child will be the Insured if living, otherwise the beneficiary for this
insurance named in the application. (2) If no such beneficiary is living when
insurance under this Benefit becomes payable, we will make the payment in one
sum to the estate of the later to die of the Insured and such beneficiary.
The beneficiary for insurance payable upon the death of a dependent child may be
changed. The request must be in writing and in a form that meets our needs. It
will take effect only when we file it at our Service Office; this will be after
the contract is sent to us to be endorsed, if we ask for it. Then any previous
beneficiary's interest in such insurance will end as of the date of the request.
It will end then even if the child is not living when we file the request. Any
beneficiary's interest is subject to the rights of any assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated.
(Continued on Next Page)
AL 182 N
II-208
<PAGE>
(Continued from Preceding Page)
REINSTATEMENT.--If this contract is reinstated, it will not include the
insurance that we provide under this Benefit on the dependent children unless
you give us any facts we need to satisfy us that each child who is to be insured
on or within 15 days after the date of reinstatement is insurable for the
Benefit. If you do not give us the facts we need for any child, the Benefit may
be reinstated if all the other conditions are met to reinstate the contract. But
you must send the contract to us to be endorsed to show that the child is not
insured under the Benefit.
CONTRACT VALUE OPTIONS.--If this contract has a Contract Value Options
provision, it will apply only during the Insured's lifetime. Any extended or
reduced paid-up insurance that may be described there is on the life of the
Insured only.
CONTRACT LOANS.--If this contract has a Loans provision, we will not consider
any contract debt when we determine the amount payable, if any, at the death of
a dependent child.
INCONTESTABILITY.--Except for non-payment of premium, we will not contest this
Benefit with respect to the insurance on any dependent child's life after it has
been in force during the child's lifetime for two years from the issue date.
BENEFIT PREMIUMS AND CHARGES.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the earliest of the death of the
Insured and the first contract anniversary after the Insured's 65th Brithday.
IF THE CONTRACT BECOMES PAID-UP.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The net cash value will be the present value at that
time of the future monthly charges that would then remain to be paid under this
Benefit if the contract had not become paid-up.
TERMINATION.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the first contract anniversary after the Insured's
65th birthday;
3. the date the contract is surrendered under its Cash Value Option, if it has
one, or the paid-up insurance, if any, under the Benefit is surrendered; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing in the premium period, we will cancel the
Benefit as of the first monthly date on or after we receive your request.
Contract premiums and monthly charges due then and later will be reduced
accordingly.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN SIGNATURE
Secretary
AL 182 N
II-209
EXHIBIT 1.A.(13)(j)
RIDER FOR
LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
BENEFIT.--We will pay an amount under this Benefit if we receive due proof that
a dependent child died (1) before the term insurance provided by the Benefit on
his or her life ends; and (2) while this contract is in force and not in default
past the last day of the grace period. But our payment is subject to all the
provisions of the Benefit and of the rest of this contract.
The phrase dependent child means the Insured's child, stepchild or legally
adopted child who (1) has reached the 15th day of life; and (2) has not reached
the first contract anniversary after his or her 25th birthday; and either (3)
just before the contract date of this contract was insured under the earlier
contract from which this contract was exchanged or changed; or (4) is acquired
by the Insured on or after the date of this contract but before the child's 18th
birthday.
We show the amount of term insurance under this Benefit on the Contract Data
page(s). The insurance on each dependent child's life will end on the earlier
of: (1) the day before the first contract anniversary after the child's 25th
birthday; and (2) the day before the first contract anniversary after the
Insured's 65th birthday.
PAID-UP INSURANCE ON DEATH OF INSURED
PAID-UP INSURANCE ON DEPENDENT CHILDREN.--The Insured might die while this
contract is in force and not in default past the last day of the grace period.
In this case, any term insurance provided by this Benefit on a dependent child's
life will become paid-up term insurance. While this paid-up insurance is in
effect, the contract will remain in force. The paid-up insurance will have cash
values but no loan value.
If this Benefit becomes paid-up, it may be surrendered for its net cash value.
This will be the net value on the date of surrender of the paid-up insurance.
But, within 30 days after a contract anniversary, the net cash value will not be
less than it was on that anniversary. To compute this net cash value, we use the
Commissioners 1980 Standard Ordinary Mortality Table. We use continuous
functions based on age last birthday. We use an effective interest rate of 4% a
year.
We will usually pay any cash value promptly. But we have the right to postpone
paying it for up to six months. If we do so for more than 30 days, we will pay
interest at the rate of 3% a year. If we are asked for the values which apply,
we will furnish them.
CONVERSION OF INSURANCE ON DEPENDENT CHILDREN
RIGHT TO CONVERT.--If the insurance on a dependent child ends as we state in the
last paragraph under Benefit above, that child may be able to obtain a new
contract of life insurance on his or her life, in either this company or The
Prudential Insurance Company of America. In any of these paragraphs, when we use
the phrase the company we mean whichever of these companies may issue the new
contract. It will not be necessary to prove that the child is insurable.
CONDITIONS.--The right to obtain a new contract is subject to all these
conditions: (1) The insurance on the child must end while this contract is in
force and not in default past the last day of the grace period. (2) The amount
of the new contract must meet the minimum as we describe under Contract
Specifications. (3) We must have a written application for the new contract at
our Service Office no later than the date the insurance on the child ends.
The new contract will not take effect unless the premium for it is paid while
the child is living and within 31 days after its contract date. If the premium
is paid as we state, it will be deemed that the insurance under the new contract
took effect on its contract date.
(Continued on Next Page)
AL 184 N
II-210
<PAGE>
(Continued from Preceding Page)
CONTRACT DATE.--The date of the new contract will be the day after the date the
insurance on the dependent child ends.
CONTRACT SPECIFICATIONS.--The new contract will be in the standard or an
equivalent rating class. The company will set the issue age and the premiums for
the new contract in accord with its regular rules in use on the date of the new
contract.
The new contract may call for annual premiums. If the company agrees, the owner
of the new contract will be able to have premiums fall due more often.
The contract may be any one of the following:
1. A contract like the one to which this Benefit is attached, if Pruco Life
Insurance Company is regularly issuing such contracts at that time. Its face
amount will be the amount asked for in your request. But it cannot be less than
$50,000 or more than five times the amount of insurance on the child's life
under the Benefit.
2. A Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age
for the new contract is less than 15 years). In this case the new contract will
be issued by The Prudential Insurance Company of America. Its face amount will
be the amount asked for in your request. But it cannot be less than $5,000 or
more than five times the amount of isurance on the child's life under this
Benefit.
3. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company at that time for $25,000 or more. Its face amount will be the
amount you ask for in your request. But it cannot be less than $25,000 or more
than five times the amount of insurance on the child's life under the Benefit.
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next paragraph. If the company would include in other
contracts like the new contract a benefit for waiving or paying premiums in the
event of disability, here is what the company will do. Even though this contract
does not have such a benefit on the life of that child, the company will put it
in the new contract on his or her life. The benefit, if any, in the new contract
will be the same one, with the same provisions, that the company puts in other
contracts like it on its contract date. In this paragraph, when we use the
phrase other contracts like it, we mean contracts the company would regularly
issue on the same plan and for the same rating class, amount, issue age and sex.
No premium will be waived or paid by us for disability under the new contract
unless the disability started on or after its contract date. And no premium will
be waived or paid by us for disability under a new contract unless it has a
benefit for waiving or paying premiums in the event of disability. This will be
so even if scheduled premiums have been paid by us under this contract.
CHANGES.--If the insurance on a dependent child ends as we state in the last
paragraph under Benefit above, that child may be able to obtain a new contract
of life insurance other than in accord with the requirements we state in this
form. But this kind of change may be made only if the company consents and will
be subject to conditions and charges that are then determined.
MISCELLANEOUS PROVISIONS
BENEFICIARY.--The word beneficiary where we use it in this contract without
qualification means the beneficiary for insurance payable upon the death of the
Insured.
Unless we endorse this contract to say otherwise, these two statements will
apply: (1) The beneficiary for insurance payable upon the death of a dependent
child will be the Insured if living, otherwise the beneficiary for insurance
payable upon the death of the Insured. (2) If no such beneficiary is living when
insurance under this Benefit becomes payable, we will make the payment in one
sum to the estate of the later to die of the Insured and such beneficiary.
The beneficiary for insurance payable upon the death of a dependent child may be
changed. The request must be in writing and in a form that meets our needs. It
will take effect only when we file it at our Service Office; this will be after
the contract is sent to us to be endorsed, if we ask for it. Then any previous
beneficiary's interest in such insurance will end as of the date of the request.
It will end then even if the child is not living when we file the request. Any
beneficiary's interest is subject to the rights of any assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated.
(Continued on Next Page)
AL 184 N
II-211
<PAGE>
(Continued from Preceding Page)
REINSTATEMENT.--If this contract is reinstated, it will not include the
insurance that we provide under this Benefit on the dependent children unless
you give us any facts we need to satisfy us that each child who is to be insured
on or within 15 days after the date of reinstatement is insurable for the
Benefit. If you do not give us the facts we need for any child, the Benefit may
be reinstated if all the other conditions are met to reinstate the contract. But
you must send the contract to us to be endorsed to show that the child is not
insured under the Benefit.
CONTRACT VALUE OPTIONS.--If this contract has a Contract Value Options
provision, it will apply only during the Insured's lifetime. Any extended or
reduced paid-up insurance that may be described there is on the life of the
Insured only.
CONTRACT LOANS.--If this contract has a Loans provision, we will not consider
any contract debt when we determine the amount payable, if any, at the death of
a dependent child.
INCONTESTABILITY.--Except for non-payment of premium, we will not contest this
Benefit with respect to the insurance on any dependent child's life after it has
been in force during the child's lifetime for two years from (1) the date the
level term insurance benefit on dependent children began under the earliest
contract; or, if later, (2) the date of any rider that added the child for
coverage under any such earlier contract. But, in any case, if there was a later
reinstatement of any such earlier contract, then the two years will start on the
date of the most recent reinstatement.
BENEFIT PREMIUMS AND CHARGES.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the earliest of the death of the
Insured and the first contract anniversary after the Insured's 65th Birthday.
IF THE CONTRACT BECOMES PAID-UP.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The net cash value will be the present value at that
time of the future monthly charges that would then remain to be paid under this
Benefit if the contract had not become paid-up.
TERMINATION.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the first contract anniversary after the Insured's
65th birthday;
3. the date the contract is surrendered under its Cash Value Option, if it has
one, or the paid-up insurance, if any, under the Benefit is surrendered; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing in the premium period, we will cancel the
Benefit as of the first monthly date on or after we receive your request.
Contract premiums and monthly charges due then and later will be reduced
accordingly.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN SIGNATURE
Secretary
AL 184 N
II-212
EXHIBIT 1.A.(13)(k)
RIDER FOR
LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
BENEFIT.--We will pay an amount under this Benefit if we receive due proof that
a dependent child died (1) before the term insurance provided by the Benefit on
his or her life ends; and (2) while this contract is in force and not in default
past the last day of the grace period. But our payment is subject to all the
provisions of the Benefit and of the rest of this contract.
The phrase dependent child means the Insured's child, stepchild or legally
adopted child who (1) has reached the 15th day of life; and (2) has not reached
the first contract anniversary after his or her 25th birthday; and either (3) is
named in the request for change which is attached to and made a part of this
contract, and on the date of the request has not reached his or her 18th
birthday; or (4) is acquired by the Insured after the date of the request but
before the child's 18th birthday.
We show the amount of term insurance under this Benefit on the Contract Data
page(s). The insurance on each dependent child's life will end on the earlier
of: (1) the day before the first contract anniversary after the child's 25th
birthday; and (2) the day before the first contract anniversary after the
Insured's 65th birthday.
PAID-UP INSURANCE ON DEATH OF INSURED
PAID-UP INSURANCE ON DEPENDENT CHILDREN.--The Insured might die while this
contract is in force and not in default past the last day of the grace period.
In this case, any term insurance provided by this Benefit on a dependent child's
life will become paid-up term insurance. While this paid-up insurance is in
effect, the contract will remain in force. The paid up insurance will have cash
values but no loan value.
If this Benefit becomes paid-up, it may be surrendered for its net cash value.
This will be the net value on the date of surrender of the paid-up insurance.
But, within 30 days after a contract anniversary, the net cash value will not be
less than it was on that anniversary. To compute this net cash value, we use the
Commissioners 1980 Standard Ordinary Mortality Table. We use continuous
functions based on age last birthday. We use an effective interest rate of 4% a
year.
We will usually pay any cash value promptly. But we have the right to postpone
paying it for up to six months. If we do so for more than 30 days, we will pay
interest at the rate of 3% a year. If we are asked for the values which apply,
we will furnish them.
CONVERSION OF INSURANCE ON DEPENDENT CHILDREN
RIGHT TO CONVERT.--If the insurance on a dependent child ends as we state in the
last paragraph under Benefit above, that child may be able to obtain a new
contract of life insurance on his or her life, in either this company or The
Prudential Insurance Company of America. In any of these paragraphs, when we use
the phrase the company we mean whichever of these companies may issue the new
contract. It will not be necessary to prove that the child is insurable.
CONDITIONS.--The right to obtain a new contract is subject to all these
conditions: (1) The insurance on the child must end while this contract is in
force and not in default past the last day of the grace period. (2) The amount
of the new contract must meet the minimum as we describe under Contract
Specifications. (3) We must have a written application for the new contract at
our Service Office no later than the date the insurance on the child ends.
The new contract will not take effect unless the premium for it is paid while
the child is living and within 31 days after its contract date. If the premium
is paid as we state, it will be deemed that the insurance under the new contract
took effect on its contract date.
(Continued on Next Page)
AL 185 N
II-213
<PAGE>
(Continued from Preceding Page)
CONTRACT DATE.--The date of the new contract will be the day after the date the
insurance on the dependent child ends.
CONTRACT SPECIFICATIONS.--The new contract will be in the standard or an
equivalent rating class. The company will set the issue age and the premiums for
the new contract in accord with its regular rules in use on the date of the new
contract.
The new contract may call for annual premiums. If the company agrees, the owner
of the new contract will be able to have premiums fall due more often.
The contract may be any one of the following:
1. A contract like the one to which this Benefit is attached, if Pruco Life
Insurance Company is regularly issuing such contracts at that time. Its face
amount will be the amount asked for in your request. But it cannot be less than
$50,000 or more than five times the amount of insurance on the child's life
under the Benefit.
2. A Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age
for the new contract is less than 15 years). In this case the new contract will
be issued by The Prudential Insurance Company of America. Its face amount will
be the amount asked for in your request. But it cannot be less than $5,000 or
more than five times the amount of insurance on the child's life under this
Benefit.
3. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company at that time for $25,000 or more. Its face amount will be the
amount you ask for in your request. But it cannot be less than $25,000 or more
than five times the amount of insurance on the child's life under the Benefit.
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next paragraph. If the company would include in other
contracts like the new contract a benefit for waiving or paying premiums in the
event of disability, here is what the company will do. Even though this contract
does not have such a benefit on the life of that child, the company will put it
in the new contract on his or her life. The benefit, if any, in the new contract
will be the same one, with the same provisions, that the company puts in other
contracts like it on its contract date. In this paragraph, when we use the
phrase other contracts like it, we mean contracts the company would regularly
issue on the same plan and for the same rating class, amount, issue age and sex.
No premium will be waived or paid by us for disability under the new contract
unless the disability started on or after its contract date. And no premium will
be waived or paid by us for disability under a new contract unless it has a
benefit for waiving or paying premiums in the event of disability. This will be
so even if scheduled premiums have been paid by us under this contract.
CHANGES.--If the insurance on a dependent child ends as we state in the last
paragraph under Benefit above, that child may be able to obtain a new contract
of life insurance other than in accord with the requirements we state in this
form. But this kind of change may be made only if the company consents and will
be subject to conditions and charges that are then determined.
MISCELLANEOUS PROVISIONS
BENEFICIARY.--The word beneficiary where we use it in this contract without
qualification means the beneficiary for insurance payable upon the death of the
Insured.
Unless we endorse this contract to say otherwise, the beneficiary for insurance
payable upon the death of a dependent child will be the Insured if living,
otherwise the estate of the Insured.
The beneficiary for insurance payable upon the death of a dependent child may be
changed. The request must be in writing and in a form that meets our needs. It
will take effect only when we file it at our Service Office; this will be after
the contract is sent to us to be endorsed, if we ask for it. Then any previous
beneficiary's interest in such insurance will end as of the date of the request.
It will end then even if the child is not living when we file the request. Any
beneficiary's interest is subject to the rights of any assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated.
(Continued on Next Page)
AL 185 N
II-214
<PAGE>
(Continued from Preceding Page)
REINSTATEMENT.--If this contract is reinstated, it will not include the
insurance that we provide under this Benefit on the dependent children unless
you give us any facts we need to satisfy us that each child who is to be insured
on or within 15 days after the date of reinstatement is insurable for the
Benefit. If you do not give us the facts we need for any child, the Benefit may
be reinstated if all the other conditions are met to reinstate the contract. But
you must send the contract to us to be endorsed to show that the child is not
insured under the Benefit.
CONTRACT VALUE OPTIONS.--If this contract has a Contract Value Options
provision, it will apply only during the Insured's lifetime. Any extended or
reduced paid-up insurance that may be described there is on the life of the
Insured only.
CONTRACT LOANS.--If this contract has a Loans provision, we will not consider
any contract debt when we determine the amount payable, if any, at the death of
a dependent child.
INCONTESTABILITY.--Except for non-payment of premium, we will not contest this
Benefit with respect to the insurance on any dependent child's life after it has
been in force during the child's lifetime for two years from the issue date.
BENEFIT PREMIUMS AND CHARGES.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the earliest of the death of the
Insured and the first contract anniversary after the Insured's 65th Birthday.
IF THE CONTRACT BECOMES PAID-UP.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The net cash value will be the present value at that
time of the future monthly charges that would then remain to be paid under this
Benefit if the contract had not become paid-up.
TERMINATION.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the first contract anniversary after the Insured's
65th birthday;
3. the date the contract is surrendered under its Cash Value Option, if it has
one, or the paid-up insurance, if any, under the Benefit is surrendered; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing in the premium period, we will cancel the
Benefit as of the first monthly date on or after we receive your request.
Contract premiums and monthly charges due then and later will be reduced
accordingly.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN SIGNATURE
Secretary
AL 185 N
II-215
EXHIBIT 1.A.(13)(l)
ENDORSEMENTS
(Only we can endorse this contract.)
This endorsement is attached to and made a part of this contract on the contract
date:
This rider applies only if the Insured dies by suicide within two years from the
issue date and our liability is limited as we state for suicide in the General
Provisions. If this occurs, any provision for paid-up insurance on the life of
any other person who was, until the Insured died, insured under this contract
will not apply.
Instead, any such person will then have the right to buy a new contract of life
insurance either from us or from an affiliate of ours. The new contract will be
subject to conditions and charges that are then determined, in accord with
regular rules in effect at the time. Its amount will not be less than the
greater of (1) the amount of insurance on that person's life under this
contract, and (2) the lowest amount offered for the plan of insurance to be
provided by the new contract. And proof that the person is insurable will not be
required, unless the new contract is to provide either an increased amount of
insurance or a benefit that did not apply to that person under this contract.
Pruco Life Insurance Company of New Jersey,
By /s/ ISABELLE L. KIRCHNER
Secretary
- ---------
PLY 5--82 Printed in U.S.A.
- ---------
II-216
EXHIBIT 1.A.(13)(m)
ENDORSEMENTS
(Only we can endorse this contract.)
This endorsement is attached to and made a part of this contract on the contract
date:
In this contract, we use the phrase the insured spouse. When we do, we mean the
Insured's spouse who is named for coverage in the request for change, even
though we state otherwise elsewhere in the contract. The request for change
resulted in our issuing the contract; it is attached to and made a part of the
contract.
Pruco Life Insurance Company of New Jersey,
By /s/ ISABELLE L. KIRCHNER
Secretary
- ---------
PLY 6--82 Printed in U.S.A.
- ---------
II-217
EXHIBIT 1.A(13)(p)
[ ] Pruco Life Insurance Company
[ ] Pruco Life Insurance Company of New Jersey
Insured Rider for Policy No.
_______________________________________ ____________________________________
TERMINATION OF BENEFIT
We agree that the benefit______________________________________________________
_________________________________ , will end as of____________________________.
Then all references in this contract to that benefit will no longer apply. The
premium for that benefit will not be payable on or after that date.
RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
Signed for the Company,
By /s/ SPECIMEN
Secretary
Date Attest
--------------------------------------------------
- -----------
PLIY 24--82 Printed in U.S.A.
- -----------
II-218
EXHIBIT 1.A.(13)(q)
Pruco Life Insurance Company of New Jersey
| Insured |Rider for Policy No.
| |
| John Doe | XX XXX XXX
|_____________________________________ |______________________________________
VARIABLE REDUCED PAID-UP INSURANCE
This contract is no longer in force on a premium paying basis. It is being kept
in force as variable reduced paid-up insurance on the Insured's life, as we
state under Contract Value Options in the contract.
The new amount of insurance and its effective date are shown in the attached
Table of Values. Unless otherwise stated in the Table, any contract debt was
deducted when we computed the net cash value that was used to provide the
reduced paid-up insurance.
The cash value of the variable reduced paid-up insurance will continue to vary
according to the investment results in the separate account. There is no
guaranteed minimum cash value under this option.
The death benefit under this option may change from day to day, but it will
never be less than the amount determined as of the day of default. The death
benefit will increase if investment results are in excess of the assumed rate or
mortality charges lower than the maximum rate. The death benefit will decrease
if investment results are less than the assumed rate, but it will not decrease
below the amount determined on the day of default.
As of the effective date shown in the Table each of these items no longer
applies: (1) the Tabular Contract Fund Values and Tabular Cash Values shown on
page 4 in the contract; (2) any Supplementary Benefits or other extra benefits
that were made a part of the contract by rider or endorsement; and (3) any
provisions of the contract that do not apply to the reduced paid-up insurance.
If this contract is reinstated, the contract fund that applies upon
reinstatement is as we state under Premium Payment and Reinstatement. The cash
value and net cash value will be as we state under Contract Value Options.
The attached Table shows values at the ends of contract years. If we need to
compute values at some time during a contract year, we will count the time since
the start of the year. We will let you know the values for other durations if
you ask for them.
| RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
|
| Pruco Life Insurance Company,
|
| By /s/ [SPECIMEN]
| Secretary
|
| Date June 1, 1985 Attest M. Smith
|___________________________________________________
- -----------
PLIY 47--84
- -----------
II-219
EXHIBIT 1.A.(13)(r)
Pruco Life Insurance Company of New Jersey
| Insured | Rider for Policy No.
| |
| John Doe | XX XXX XXX
|_____________________________________ |______________________________________
AVIATION RISK EXCLUSION
CONDITIONS OF EXCLUSION.--We will pay the limited payment we describe below, and
not what we would otherwise pay, if (1) the Insured dies as a result of travel
by, or descent from, any aircraft; and (2) the Insured had any duties or acted
in any capacity other than as a passenger at any time during the flight.
But this Exclusion will not apply if all these statements are true of the
aircraft: (1) It has fixed wings and a permitted gross takeoff weight of at
least 75,000 pounds. (2) It is operated by an air carrier that is certificated
under the laws of the United States or Canada to carry passengers to or from
places in those countries. (3) It is not being operated for any armed forces for
training or other purposes.
As used here, the word aircraft includes rocket craft or any other vehicle for
flight in or beyond the earth's atmosphere.
LIMITED PAYMENT.--The limited payment will be (1) the sum of the premiums that
were paid for this contract minus any expense and insurance charges made for
insurance coverage on persons other than the Insured, minus (2) any contract
debt adjusted for unearned loan interest, minus (3) any partial surrenders made
under the contract (including surrender charges). But if the reserve for the
contract, when computed as we state under Reserves, is greater than the amount
we describe here, the limited payment will be equal to the reserve. Also, the
limited payment will never be more than we would have paid if this Exclusion
were not in the contract.
The limited payment will be payable to the beneficiary for insurance otherwise
payable upon the Insured's death.
PAID-UP AND OTHER INSURANCE ON THE INSURED'S LIFE.--This Exclusion also applies
to any paid-up insurance on the Insured that takes effect in accord with any
such provision that may be in the contract. We will put this Exclusion in any
contract on the Insured's life to which you change, or for which you exchange,
this contract or any of its benefits.
PAID-UP INSURANCE ON OTHER PERSONS. This contract might include insurance on the
life of someone other than the Insured. And it might have a provision that makes
that insurance paid-up if the Insured dies. This Exclusion will not affect any
such provision.
EFFECT OF INCONTESTABILITY.--In any case where this Exclusion applies, the
Incontestability provision of this contract will not be deemed to make us pay
more than as we state under Limited Payment.
RESERVES.--We might have to compute a reserve to find the limited payment. If
so, the reserve will be equal to the contract value on the date of the Insured's
death less any contract debt adjusted for unearned loan interest.
| RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
|
| Pruco Life Insurance Company of New Jersey,
|
| By /s/ [SPECIMEN]
| Secretary
|
| Date December 1, 1984 Attest M. Smith
|___________________________________________________
- -----------
PLIY 48--84
- -----------
II-220
EXHIBIT 1.A.(13)(s)
Pruco Life Insurance Company of New Jersey
| Insured | Rider for Policy No.
| |
| John Doe | XX XXX XXX
|_____________________________________ |______________________________________
MILITARY AVIATION RISK EXCLUSION
CONDITIONS OF EXCLUSION.--We will pay the limited payment we describe below, and
not what we would otherwise pay, if (1) the Insured dies as a result of travel
by, or descent from, any aircraft operated by or for any armed forces; and (2)
the Insured had any duties or acted in any capacity other than as a passenger at
any time during the flight. As used here, the word aircraft includes rocket
craft or any other vehicle for flight in or beyond the earth's atmosphere.
LIMITED PAYMENT.--The limited payment will be (1) the sum of the premiums that
were paid for this contract minus any expense and insurance charges made for
insurance coverage on persons other than the Insured, minus (2) any contract
debt adjusted for unearned loan interest, minus (3) any partial surrenders made
under the contract (including surrender charges). But if the reserve for the
contract, when computed as we state under Reserves, is greater than the amount
we describe here, the limited payment will be equal to the reserve. Also, the
limited payment will never be more than we would have paid if this Exclusion
were not in the contract.
The limited payment will be payable to the beneficiary for insurance otherwise
payable upon the Insured's death.
PAID-UP AND OTHER INSURANCE ON THE INSURED'S LIFE.--This Exclusion also applies
to any paid-up insurance on the Insured that takes effect in accord with any
such provision that may be in the contract. We will put this Exclusion in any
contract on the Insured's life to which you change, or for which you exchange,
this contract or any of its benefits.
PAID-UP INSURANCE ON OTHER PERSONS.--This contract might include insurance on
the life of someone other than the Insured. And it might have a provision that
makes that insurance paid-up if the Insured dies. This Exclusion will not affect
any such provision.
EFFECT OF INCONTESTABILITY.--In any case where this Exclusion applies, the
Incontestability provision of this contract will not be deemed to make us pay
more than as we state under Limited Payment.
RESERVES.--We might have to compute a reserve to find the limited payment. If
so, the reserve will be equal to the contract value on the date of the Insured's
death less any contract debt adjusted for unearned loan interest.
| RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
|
| Pruco Life Insurance Company of New Jersey,
|
| By /s/ [SPECIMEN]
| Secretary
|
| Date December 1, 1984 Attest M. Smith
|___________________________________________________
- -----------
PLIY 49--84
- -----------
II-221
EXHIBIT 1.A.(13)(t)
Pruco Life Insurance Company of New Jersey
| Insured | Rider for Policy No.
| |
| John Doe | XX XXX XXX
|_____________________________________ |______________________________________
WAR RISK EXCLUSION
CONDITIONS OF EXCLUSION.--We will pay the limited payment we describe below, and
not what we would otherwise pay, if the Insured's death results from any one or
more of the following causes: (1) war; (2) any act of war; or (3) the special
hazards due to service in the armed forces of any country(ies).
But this Exclusion will not apply unless all these conditions exist: (1) The
cause of death occurs while the Insured is in the armed forces of any
country(ies) at war. (2) The cause of death occurs while the Insured is outside
the Home Areas. (3) The death occurs (a) outside the Home Areas, or (b) within
six months after the Insured's return to the Home Areas while in such forces or
within six months after the end of service in such forces, whichever is earlier.
As used here, the word war means declared or undeclared war and includes
resistance to armed aggression. The phrase Home Areas means the fifty states of
the United States of America, the District of Columbia, The Commonwealth of
Puerto Rico, The Virgin Islands of the United States, or Canada.
LIMITED PAYMENT.--The limited payment will be (1) the sum of the premiums that
were paid for this contract minus any expense and insurance charges made for
insurance coverage on persons other than the Insured, minus (2) any contract
debt adjusted for unearned loan interest, minus (3) any partial surrenders made
under the contract (including surrender charges). But if the reserve for the
contract, when computed as we state under Reserves, is greater than the amount
we describe here, the limited payment will be equal to the reserve. Also, the
limited payment will never be more than we would have paid if this Exclusion
were not in the contract.
The limited payment will be payable to the beneficiary for insurance otherwise
payable upon the Insured's death.
PAID-UP AND OTHER INSURANCE ON THE INSURED'S LIFE.--This Exclusion also applies
to any paid-up insurance on the Insured that takes effect in accord with any
such provision that may be in the contract. We will put this Exclusion in any
contract on the Insured's life to which you change, or for which you exchange,
this contract or any of its benefits.
PAID-UP INSURANCE ON OTHER PERSONS.--This contract might include insurance on
the life of someone other than the Insured. And it might have a provision that
makes that insurance paid-up if the Insured dies. This Exclusion will not affect
any such provision.
EFFECT OF INCONTESTABILITY.--In any case where this Exclusion applies, the
Incontestability provision of this contract will not be deemed to make us pay
more than as we state under Limited Payment.
RESERVES.--We might have to compute a reserve to find the limited payment. If
so, the reserve will be equal to the contract value on the date of the Insured's
death less any contract debt adjusted for unearned loan interest.
Rider attached to and made a part of this contract
on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN
Secrerary
- -----------
PLIY 50--84
- -----------
II-222
EXHIBIT 1.A.(13)(u)
[ ] Pruco Life Insurance Company
[X] Pruco Life Insurance Company of New Jersey
Insured Rider for Policy No.
John Doe XX XXX XXX
_______________________________________ ____________________________________
This contract is issued as a conversion from an earlier contract.
The period we state under Incontestability in this contract will start on the
date coverage of this Insured began under the earlier contract. But if that
contract was reinstated before the date of this contract, for each reinstatement
we will have the right to use as a basis for a contest of this contract the
statements that were made in the application for reinstatement. The period
during which we will have that right will be the period we state under
Incontestability in this contract; it will start on the date of the
reinstatement.
The period we state under Suicide Exclusion in this contract will start on the
date coverage of this Insured began under the earlier contract.
RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
ON THE CONTRACT DATE
Signed for the Company,
By /s/ [SPECIMEN]
Secretary
- -----------
PLIY 20--82 Printed in U.S.A.
- -----------
II-223
EXHIBIT 1.A.(13)(v)
[ ] Pruco Life Insurance Company
[X] Pruco Life Insurance Company of New Jersey
Insured Rider for Policy No.
John Doe XX XXX XXX
_______________________________________ ____________________________________
This contract is issued as a conversion from an earlier contract.
The period we state under Incontestability in this contract will start on the
issue date of the earlier contract. But if that contract was reinstated before
the date of this contract, for each reinstatement we will have the right to use
as a basis for a contest of this contract the statements that were made to us at
the time. The period during which we will have that right will be the period we
state under Incontestability in this contract; it will start on the date of the
reinstatement.
The period we state under Suicide Exclusion in this contract will start on the
issue date of the earlier contract.
RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
ON THE CONTRACT DATE
Signed for the Company,
By /s/ [SPECIMEN]
Secretary
- -----------
PLIY 29--82 Printed in U.S.A.
- -----------
II-224
EXHIBIT 1.A.(13)(x)
ENDORSEMENTS
(Only we can endorse this contract.)
ALTERATION OF TEXT
The provisions of this policy entitled "Interest Charge" and "Effect of a Loan"
are replaced at issue by the following:
INTEREST CHARGE.--We will charge interest daily on any loan. Interest is due on
each contract anniversary, or when the loan is paid back if that comes first. If
interest is not paid when due, it will become part of the loan. Then we will
start to charge interest on it, too.
The loan interest rate is the annual rate we set from time to time. The rate
will never be greater than is permitted by law. It will change only on a
contract anniversary.
Before the start of each contract year, we will determine the loan interest rate
we can charge for that contract year.
To do this, we will first find the rate that is the greater of (1) The Published
Monthly Average (which we describe below) for the calendar month ending two
months before the calendar month of the contract anniversary; and (2) the
assumed rate of return for this contract, plus 1%.
If that greater rate is at least 1/2% more than the loan interest rate we had
set for the current contract year, we have the right to increase the loan
interest rate by at least 1/2%, up to that greater rate. If it is at least 1/2%
less, we will decrease the loan interest rate to be no more than the greater
rate. We will not change that loan interest rate by less than 1/2%.
When you make a loan we will tell you the initial interest rate for the loan. We
will send you a notice if there is to be an increase in the rate.
The Published Monthly Average means:
1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as
published by Moody's Investors Service, Inc. or any successor to that service;
or
2. If that average is no longer published, a substantially similar average,
established by the insurance regulator where this contract is delivered.
Example 1: Suppose the contract date is in 1987. Six months before the
anniversary in 1996 you borrow $1,000 out of a $4,000 loan value. Assume we
charge 8% a year. Three months later, but still three months before the
anniversary, we will have charged about $20 interest. This amount will be a few
cents more or less than $20 since some months have more days than others. The
interest will not be due until the anniversary unless the loan is paid back
sooner. The loan will still be $1,000. The contract debt will be $1,020, since
contract debt includes interest charged but not yet due. On the anniversary in
1996 we will have charged about $40 interest. The interest will then be due.
Example 2: Suppose the $40 interest in example 3 is paid on the anniversary. The
loan and contract debt will each become $1,000 right after the payment.
Example 3: Suppose the $40 interest in example 3 is not paid on the anniversary.
The interest will become part of the loan, and we will begin to charge interest
on it, too. The loan and contract debt will each become $1,040.
The provision of this policy entitled "Effect of a Loan" is amended at issue by
the addition of this statement:
Any reference in the provision entitled "Effect of a Loan" to "4% a year" is
replaced by "1% less than the loan interest rate for the contract year."
RIDER ATTACHED TO AND MADE A PART OF THIS
CONTRACT ON THE CONTRACT DATE
Pruco Life Insurance Company of New Jersey,
By /s/ [SPECIMEN]
Secretary
- -----------
PLIY 51--84
- -----------
II-225
EXHIBIT 1.A.(13)(y)
PRUCO LIFE INSURANCE COMPANY
This endorsement is attached to and made a part of the contract on the contract
date.
OPTION TO INCREASE OR DECREASE FACE AMOUNT
INCREASE IN FACE AMOUNT
Right to Increase Face Amount.--On or after the first contract anniversary, but
no earlier than January 1, 1987 in any event, you may be able to increase
the face amount of this contract. The effective date of the increase will
be the date you choose in your request, but see "Effective Date of
Increase" below. The increased face amount will be the amount you choose,
but see "Conditions" below.
Conditions.--Your right to increase face amount is subject to all these
conditions:
(1) You must ask for the increase in writing on a form which meets our
needs.
(2) The amount of the immediate increase in face amount must be at least
$25,000. This contract may be one that was issued below age 15, where
the initial face amount increases by 50% at age 21. (See "Increase in
Face Amount at Age 21 for Contracts Issued at Age 14 or Lower" on page
6.) If so, when a request for increase is made before age 21, it is the
amount of the immediate increase in face amount which must be at least
$25,000.
(3) The insured must give us any facts we need to satisfy us that he or she
is then insurable for the amount of increase.
(4) If we request, you must send us the contract to be endorsed.
(5) The contract must not be paid-up or in defauit on the effective date of
the increase. We must not be waiving or paying premiums on the
effective date of the increase because of the disability of the
insured, or of the applicant in the case of a contract which was issued
below age 15. Nor may the contract be in the six month waiting period
after the beginning of disability, required before disability benefits
begin.
(6) You must pay a premium as determined by us, at the time of the
increase.
II-226
<PAGE>
-2-
(7) More than one increase may be made in a contract year only with our
consent.
(8) Between the contract date and the effective date requested by you for
the increase, we may have changed any of the bases for determining
benefits or computing charges for newly issued contracts of the same
kind. If so, we have the right to deny the request for increase.
Recomputations.--When you request an increase in face amount, we will recompute
the scheduled premiums, deferred sales and underwriting charges, tabular
values and monthly deductions from the contract fund for the contract. You
may, if permitted by applicable state law, decide whether you want us to
recompute these amounts as of the last previous or next following contract
anniversary. The amount of payment required on the date of increase,
(condition 6 above,) will depend upon the anniversary you choose for
recomputing. We will tell you the amount of payment required for each
anniversary.
Effective Date of Increase.--The effective date of increase will be the date you
choose or, if later, the date when we have all of the following: your
properly completed request, any required evidence of the insurability of
the insured, and the required payment. (See Conditions 1, 3, and 6 above.)
Evidence of Increase.--Upon an increase in face amount we will send you
endorsement pages for your contract or endorse your contract ourselves,
(see Condition 4 above,) with pages which provide the recomputed amounts
mentioned above and describe how the increase in face amount affects other
contract provisions.
Suicide Exclusion and Incontestability.--Upon an increase in face amount, the
period stated in the Suicide Exclusion and Incontestability provisions on
page __ will begin, for the amount of increase, on the effective date of
the increase and not on the contract date or on other earlier date(s) which
may apply to any previous increase(s).
Right to Cancel Contract and Exchange of Contract.--Upon an increase in face
amount, these rights, described on the cover of this contract and on page
___, will apply to the amount of the increase. The periods within which you
may exercise your Right to Cancel will, for the amount of increase in face
amount only, run from the last to occur of (1) 45 days after you sign the
request for the increase; (2) 10 days after receipt of the endorsement or
endorsed contract; and (3) 10 days after receipt of the Notice of
Withdrawal Right as it pertains
II-227
<PAGE>
-3-
to the increase in face amount. When we receive your request to cancel,
the increase in face amount will be canceled from the start and we will
promptly give you back the total premiums paid for and since the increase
which can be attributed to the increase. Charges deducted since the
increase will be recomputed as though there had been no increase. Scheduled
premiums, deferred sales and underwriting charges, tabular values and
monthly deductions will be restored to what they would have been if there
were no increase.
The right to exchange as described under Exchange of Contract on page ___
will exist for the amount of the increase for 24 months after the effective
date of the increase.
Exercise of Contract Value Options After Increase in Face Amount.--If the
contract is in default past its days of grace or is surrendered after one
or more increases in face amount, here is what we will do. In computing the
net cash value to be paid on surrender or to be used in determining the
period of extended insurance or amount of variable reduced paid-up
insurance, (see Contract Value Options, page ___,) any surrender used in
the calculation will be the sum of: (a) the surrender charge that would
have applied in this situation if there had been no increase in face
amount; and (b) the surrender charge(s) that would have applied if each
increase in face amount had been achieved by the issuance of a new contract
that is in default past its days of grace or is being surrendered. For the
purposes of making this calculation all premiums paid after an increase in
face amount are deemed to have been made in part in payment for the face
amount of the contract not considering any increase(s) in face amount, and
in part in payment for each increase, in the same proportion as the portion
of the scheduled premium that applies to each of these parts.
DECREASE IN FACE AMOUNT
Right to Decrease Face Amount.--On or after the first contract anniversary, but
no earlier than January 1, 1987 in any event, you may be able to decrease
the face amount of this contract. The effective date of the decrease will
be the first monthly date after you ask for the decrease on a form which
meets our needs.
Conditions.--Your right to decrease face amount is subject to all these
conditions:
(1) You must ask for the decrease in writing on a form which meets our
needs.
II-228
<PAGE>
-4-
(2) The amount of the decrease in face amount must be at least $10,000, and
may not reduce the face amount to less than $50,000. This contract may
be one that was issued below age 15, where the initial face amount
increases by 50% at age 21. (See "increase in Face Amount at Age 21 for
Contracts Issued at Age 14 or Lower" on page 6.) If so, when a request
for decrease is made before age 21, it may not reduce the face amount
immediately after the decrease to less than $33,333.
(3) If we request, you must send us the contract to be endorsed.
(4) The contract must not be paid-up or in default past its days of grace
on the effective date of the decrease.
(5) More than one decrease may be made in a contract year only with our
consent.
(6) The amount of the decrease in face amount may not be so great as to
cause the contract to fail to qualify as life insurance under
provisions of the Internal Revenue Code.
Effect of Decrease.--A decrease made in accord with this provision will decrease
the face amount of the contract without a corresponding reduction in the
contract fund. This differs from a partial withdrawal (see page ___) which
(reduces both face amount and contract fund). At present this will require
a separate form for each type of VAL (reduces the contract fund but not the
face amount).
A $15 processing fee is charged when a decrease is made. You may choose to
pay the charge in cash, but if not, it will be deducted from the contract
fund. The contract fund will also be reduced by the amount of any surrender
charge that may apply to the decrease.
A decrease in face amount will cause proportionate reductions in scheduled
premiums, tabular values, any remaining schedule of surrender charges, the
monthly charges for administration, mortality risk and cost of expected
mortality, and any charge for extra rating class. There may also be a
reduction in any charge for extra benefits, if the amount of such benefits
are affected by the decrease.
II-229
<PAGE>
-5-
Evidence of Decrease.--Upon decrease in face amount we will send you endorsement
pages for your contract or endorse your contract ourselves, (see Condition
3 above,) with pages which provide the recomputed amounts mentioned above
and described how the decrease in face amount affects other contract
provisions.
II-230
EXHIBIT 1.A.(13)(z)(i)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Insured Rider for Policy No.
SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE
ONE MONTH TERM INSURANCE
MONTHLY TERM INSURANCE.--Under this rider, we will provide monthly term
insurance on the Insured's life. We will do this during any Contract Month which
begins on a Monthly Date on which the contract is not in default.
You will not have to prove to us that the Insured is insurable to continue this
insurance from month to month provided the rider has not ended as described in
the Termination section. We make these promises subject to all the provisions of
this rider and of the rest of this contract.
The amount of insurance provided by this rider is included in the Basic Amount
as modified by this rider (see Table of Basic Amounts). The insurance for any
contract month will start on the Monthly Date which begins that Contract Month;
it will end at the end of the day before the next Monthly Date.
We will deduct the charge for monthly term insurance under this rider from the
contract fund. The charge will be no more than the amount we describe under
Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under
Current Rates.
TABLE OF AMOUNTS OF INSURANCE
TABULAR AMOUNTS.--We show here the tabular amount of insurance for each $1,000
of Initial Amount of Term Insurance if death occurs in the contract year that
begins when the insured is the attained age shown. The tabular amount of
insurance at any time is equal to the appropriate amount shown below times the
number of $1,000's of Initial Amount of Term Insurance, including any fraction,
shown on the Contract Data page(s).
Example: Suppose the Initial Amount of Term Insurance is $100,500. The number of
$1,000's of Initial Amount of Term Insurance is 100.5. The tabular amount of
insurance is $100,500 at attained age 70 and $50,250 at attained age 86.
<TABLE>
<CAPTION>
ATTAINED AGE TABULAR AMOUNT PAYABLE ATTAINED AGE TABULAR AMOUNT PAYABLE
<S> <C> <C> <C>
80 and below 1000 90 300
81 900 91 250
82 800 92 200
83 700 93 175
84 600 94 150
85 550 95 125
86 500 96 100
87 450 97 75
88 400 98 50
89 350 99 25
</TABLE>
(Continued on Next Page)
VALA 500 N
II-231
<PAGE>
(Continued from Preceding Page)
TARGET AMOUNT.--We compute the Target Amount on each Monthly Date. It will be
the larger of the amounts in (1) and (2), where
(1) is the tabular amount of insurance under this rider;
(2) is the amount of insurance, but not more than the Initial Amount of Term
Insurance, that can be provided at then current rates (which we describe under
Current Rates) by a charge equal to the maximum guaranteed charge for the
tabular amount of insurance under this rider.
RIDER PREMIUMS AND CHARGES.--We show the premiums for this rider in the Contract
Data pages, and these premiums are included in the Scheduled Premiums shown in
these pages. From each premium payment, we make the deductions shown under
Schedule of Expense Charges in these pages; the balance is the invested premium
amount which is added to the contract fund. We will deduct from the contract
fund on each Monthly Date, for the insurance we provide under this rider, a
charge for any portion of the basic amount which exceeds the contract fund and
for which we do not otherwise charge under the terms of the contract or under
the terms any extra benefit other than this rider.
MAXIMUM GUARANTEED CHARGES.--The maximum guaranteed charges per $1,000 of
Initial Amount of Term Insurance are included in the Schedule of Monthly
Deductions in the Contract Data pages. The amount we deduct on a Monthly Date
will not be more than this charge multiplied by the number of $1,000's of
Initial Amount of Term Insurance.
CURRENT RATES.--From time to time we will set the current rates based on the
Insured's rating class, sex and attained age for the insurance we provide under
this rider. They will not be more than the maximum guaranteed rates. We will set
rates based on our expectations as to future experience. At least once every
five years, but not more often than once a year, we will consider the need to
change the rates. We will change them only if we do so for all riders like this
one dated in the same year as this one.
MISCELLANEOUS PROVISIONS
GENERAL.--Where there is no conflict with this rider, the provisions of this
contract will also apply to the rider.
PAID-UP CONTRACT.--The Paid-up Contract section of the contract is amended by
adding the following sentence. In no event will this contract become fully
paid-up prior to the termination of rider VALA 500 N.
BASIC AMOUNT.--While this rider remains in force, the Table of Basic Amounts in
the contract is replaced with the table that follows. We have made this change
so the contract and this rider together will comply with Section 7702 of the
Internal Revenue Code of 1954 as amended.
VALA 500 N
II-232
<PAGE>
(Continued from Preceding Page)
TABLE OF BASIC AMOUNTS
When the proceeds arise from the Insured's death:
And The Contract Is Then The Basic Amount Is: And We Adjust The
In Force: Basic Amount For:
on a premium paying the larger of: (1) the face contract debt (see
basis and not in default amount (see paqe 3), plus the page 15), plus any
past its days of grace Target Amount described in charges due in the
rider VALA 500 N; and (2) the days of grace
amount of insurance provided (see page 8).
by the contract fund at the
net single premium rate; plus
the amount of any extra
benefits other than those
provided under rider VALA 500 N.
as variable reduced the amount of variable reduced contract debt.
paid-up insurance paid-up insurance (see page 13)
(see page 13)
as extended insurance the amount of term insurance, nothing.
(see page 13) if the Insured dies in the
term (see page 13); otherwise
zero.
UNSCHEDULED PREMIUMS.--The second paragraph of the Unscheduled Premiums
provision is amended by adding the following sentence: Or if we determine at any
time that the amount of insurance provided by the contract fund at the net
single premium rate exceeds the face amount, plus the Target Amount, then, we
have the right to refuse to accept further premium payments, or to limit the
amount or frequency of premium payments thereafter.
TERMINATION.--This rider will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the anniversary on which the Insured's attained age
is 100;
3. the date the contract is surrendered under its Cash Value Option; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the rider as of the first
Monthly Date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
ON THE CONTRACT DATE
Pruco Life Insurance Company of New Jersey,
By
Secretary
VALA 500 N
II-233
<PAGE>
CONTRACT DATA
INSURED'S SEX AND ISSUE AGE M-35
RATING CLASS STANDARD-SMOKER
INSURED JOHN DOE XX XXX XXX POLICY NUMBER
FACE AMOUNT $50,000 JUL 1, 1986 CONTRACT DATE
CONTRACT
PREMIUM PERIOD LIFE JUL 1, 2016 CHANGE DATE
AGENCY R-NK 1
BENEFICIARY WIFE, LIFE, WIFE
LIST OF CONTRACT MINIMUMS
THE MINIMUM PREMIUM IS $25.
LIST OF SUPPLEMENTARY BENEFITS
(EACH BENEFIT IS DESCRIBED IN THE FORM THAT
BEARS THE NUMBER SHOWN FOR IT).
VALA 500 N MONTHLY RENEWABLE TERM INSURANCE
INITIAL AMOUNT OF TERM INSURANCE IS $100,000--
**** END OF LIST ****
SCHEDULE OF PREMIUMS
PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE
AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE.
SCHEDULED PREMIUMS ARE $XXX.XX EACH
CHANGING ON JULY 1, 1987 TO $XXX.XX EACH
CHANGING ON JULY 1, 1988 TO $XXX.XX EACH
CHANGING ON JULY 1, 1989 TO $XXX.XX EACH
CHANGING ON JULY 1, 1990 TO $XXX.XX EACH
CHANGING ON JULY 1, 1991 TO $XXX.XX EACH
CHANGING ON JULY 1, 1992 TO $XXX.XX EACH
CHANGING ON JULY 1, 1993 TO $XXX.XX EACH
CHANGING ON JULY 1, 1994 TO $XXX.XX EACH
CHANGING ON JULY 1, 1995 TO $XXX.XX EACH
CHANGING ON JULY 1, 1996 TO $XXX.XX EACH
CHANGING ON JULY 1, 1997 TO $XXX.XX EACH
CHANGING ON JULY 1, 1998 TO $XXX.XX EACH
CHANGING ON JULY 1, 1999 TO $XXX.XX EACH
CHANGING ON JULY 1, 2000 TO $XXX.XX EACH
CHANGING ON JULY 1, 2001 TO $XXX.XX EACH
CHANGING ON JULY 1, 2002 TO $XXX.XX EACH
CONTRACT DATA CONTINUED ON NEXT PAGE
Paqe 3(84)VA-N
II-234
<PAGE>
CHANGING ON JULY 1, 2003 TO $XXX.XX EACH
CHANGING ON JULY 1, 2004 TO $XXX.XX EACH
CHANGING ON JULY 1, 2005 TO $XXX.XX EACH
CHANGING ON JULY 1, 2006 TO $XXX.XX EACH
CHANGING ON JULY 1, 2007 TO $XXX.XX EACH
CHANGING ON JULY 1, 2006 TO $XXX.XX EACH
CHANGING ON JULY 1, 2009 TO $XXX.XX EACH
CHANGING ON JULY 1, 2010 TO $XXX.XX EACH
CHANGING ON JULY 1, 2011 TO $XXX.XX EACH
CHANGING ON JULY 1 2012 TO $XXX.XX EACH
CHANGING ON JULY 1, 2013 TO $XXX.XX EACH
CHANGING ON JULY 1, 2014 TO $XXX.XX THEREAFTER
CONTRACT PREMIUMS INCLUDE THE PREMIUMS FOR THE FOLLOWING SUPPLEMENTARY BENEFITS:
PREMIUMS FOR BENEFIT VALA 500 N ARE $XXX.XX EACH
CHANGING ON JULY 1, 1987 TO $ 195.00 EACH
CHANGING ON JULY 1, 1988 TO $ 210.00 EACH
CHANGING ON JULY 1, 1989 TO $ 229.00 EACH
CHANGING ON JULY 11 1990 TO $ 247.00 EACH
CHANGING ON JULY 1, 1991 TO $ 335.00 EACH
CHANGING ON JULY 1, 1992 TO $ 364.00 EACH
CHANGING ON JULY 1, 1993 TO $ 395.00 EACH
CHANGING ON JULY 1, 1994 TO $ 428.00 EACH
CHANGING ON JULY 1, 1995 TO $ 464.00 EACH
CHANGING ON JULY 1, 1996 TO $ 503.00 EACH
CHANGING ON JULY 1, 1997 TO $ 544.00 EACH
CHANGING ON JULY 1, 1998 TO $ 588.00 EACH
CHANGING ON JULY 1, 1999 TO $ 635.00 EACH
CHANGING ON JULY 1, 2000 TO $ 687.00 EACH
CHANGING ON JULY 1, 2001 TO $ 745.00 EACH
CHANGING ON JULY 1, 2002 TO $ 812.00 EACH
CHANGING ON JULY 1, 2003 TO $ 887.00 EACH
CHANGING ON JULY 1, 2004 TO $ 973.00 EACH
CHANGING ON JULY 1, 2005 TO $1067.00 EACH
CHANGING ON JULY 1, 2006 TO $1169.00 EACH
CHANGING ON JULY 1, 2007 TO $1277.00 EACH
CHANGING ON JULY 1, 2008 TO $1391.00 EACH
CHANGING ON JULY 1, 2009 TO $1513.00 EACH
CHANGING ON JULY 1, 2010 TO $1647.00 EACH
CHANGING ON JULY 1, 2011 TO $1796.00 EACH
CHANGING ON JULY 1, 2012 TO $1946.00 EACH
CHANGING ON JULY 1, 2013 TO $2154.00 EACH
CHANGING ON JULY 1, 2014 TO $2368.00 EACH
CHANGING ON JULY 1, 2015 TO $2604.00 EACH
CHANGING ON JULY 1, 2016 TO $2860.00 EACH
CHANGING ON JULY 1, 2017 TO $3133.00 EACH
CHANGING ON JULY 1, 2018 TO $3425.00 EACH
CHANGING ON JULY 1, 2019 TO $3738.00 EACH
CHANGING ON JULY 1, 2020 TO $4085.00 EACH
CHANGING ON JULY 1, 2021 TO $4477.00 EACH
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3A(84)VA-N
II-235
<PAGE>
CHANGING ON JULY 1, 2022 TO $4927.00 EACH
CHANGING ON JULY 1, 2023 TO $5445.00 EACH
CHANGING ON JULY 1, 2024 TO $6032.00 EACH
CHANGING ON JULY 1, 2025 TO $6680.00 EACH
CHANGING ON JULY 1, 2026 TO $7376.00 EACH
CHANGING ON JULY 1, 2027 TO $8110.00 EACH
CHANGING ON JULY 1, 2028 TO $8874.00 EACH
CHANGING ON JULY 1, 2029 TO $9675.00 EACH
CHANGING ON JULY 1, 2030 TO $10540.00 EACH
CHANGING ON JULY 1, 2031 TO $15293.00 EACH
*****END OF SCHEDULE*****
SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS
FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00.
FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%. AFTER DEDUCTION OF THIS AMOUNT,
THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.)
*****END OF SCHEDULE*****
SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND
THE MONTHLY ADMINISTRATION CHARGE IS $5.50. THE MONTHLY CHARGE TO GUARANTEE THE
MINIMUM DEATH BENEFIT IS $1.50.
MONTHLY DEDUCTIONS FOR ANY SUPPLEMENTARY BENEFITS CONSIST OF A FIXED CHARGE PLUS
AN AMOUNT THAT DEPENDS ON THE INSURANCE PROVIDED BY RIDER VALA 500 N.
MONTHLY DEDUCTIONS FOR SUPPLEMENTAL BENEFIT VALA 500 N ARE BASED ON THE NUMBER
OF UNITS OF INSURANCE, INCLUDING ANY FRACTION, ON THE MONTHLY DATE AND THE
MONTHLY RATE PER UNIT OF INSURANCE. THE NUMBER OF UNITS OF INSURANCE IS EQUAL TO
THE INSURANCE PROVIDED BY RIDER VALA 500 N DIVIDED BY THE TABULAR AMOUNT OF
INSURANCE PER S1,000 OF INITIAL AMOUNT OF TERM INSURANCE. THE DEDUCTION MAY BE
ADJUSTED AS DESCRIBED IN RIDER VALA 500 N.
MAXIMUM MONTHLY
FIXED RATE PER UNIT OF
MONTHLY DEDUCTIONS ARE CHARGE INSURANCE
- ---------------------- ------ ----------------
CHANGING ON JULY 1, 1987 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1988 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1989 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1990 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1991 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1992 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1993 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1994 TO XX.XX .XXXXX
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3B(84)VA-N
II-236
<PAGE>
CHANGING ON JULY 1, 1995 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1996 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1997 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1998 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1999 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2000 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2001 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2002 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2003 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2004 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2005 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2006 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2007 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2008 TO XX.XX .XSXXX
CHANGING ON JULY 1, 2009 TO XX.XX .XXSSX
CHANGING ON JULY 1, 2010 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2011 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2012 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2013 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2014 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2015 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2016 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2017 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2018 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2019 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2020 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2021 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2022 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2023 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2024 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2025 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2026 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2027 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2028 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2029 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2030 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2031 TO XX.XX .XXXXX
*****END OF SCHEDULE*****
Page 3C(84)VA-N
II-237
EXHIBIT 1.A.(13)(z)(ii)
PRUCO LIFE INSURANCE COMPANY of New Jersey
Insured Rider for Policy No.
SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE
ONE MONTH TERM INSURANCE
MONTHLY TERM INSURANCE.--Under this rider, we will provide monthly term
insurance on the Insured's life. We will do this during any Contract Month which
begins on a Monthly Date on which the contract is not in default.
You will not have to prove to us that the Insured is insurable to continue this
insurance from month to month provided the rider has not ended as described in
the Termination section. We make these promises subject to all the provisions of
this rider and of the rest of this contract.
The amount of insurance during any Contract Month will be the Target Amount
(which we describe under Target Amount) for that Contract Month. The insurance
will start on the Monthly Date which begins that Contract Month; it will end at
the end of the day before the next Monthly Date. Any proceeds under this
contract that may arise from the Insured's death while this rider is in force
will include the Target Amount.
We will deduct the charge for monthly term insurance under this rider from the
contract fund. The charge will be no more than the amount we describe under
Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under
Current Rates.
TABLE OF AMOUNTS OF INSURANCE
TABULAR AMOUNTS.--We show here the tabular amount of insurance for each $1,000
of Initial Amount of Term Insurance if death occurs in the contract year that
begins when the insured is the attained age shown. The tabular amount of
insurance at any time is equal to the appropriate amount shown below times the
number of $1,000's of Initial Amount of Term Insurance, including any fraction,
shown on the Contract Data page(s).
Example: Suppose the Initial Amount of Term Insurance is $100,500. The number of
$1,000's of Initial Amount of Term Insurance is 100.5. The tabular amount of
insurance is $100,500 at attained age 70 and $50,250 at attained age 86.
<TABLE>
<CAPTION>
ATTAINED AGE TABULAR AMOUNT PAYABLE ATTAINED AGE TABULAR AMOUNT PAYABLE
<S> <C> <C> <C>
80 and below 1000 90 300
81 900 91 250
82 800 92 200
83 700 93 175
84 600 94 150
85 550 95 125
86 500 96 100
87 450 97 75
88 400 98 50
89 350 99 25
</TABLE>
(Continued on Next Page)
VALB 500 N
II-238
<PAGE>
(Continued from Preceding Page)
TARGET AMOUNT.--We compute the Target Amount on each Monthly Date. It will be
the larger of the amounts in (1) and (2), where:
(1) is the tabular amount of insurance under this rider; and
(2) is the amount of insurance, but not more than the Initial Amount of Term
Insurance, that would be provided at then current rates (which we describe under
Current Rates) by a charge equal to the maximum guaranteed charge for the
tabular amount of insurance under this rider.
RIDER PREMIUMS AND CHARGES.--We show the premiums for this rider in the Contract
Data pages, and these premiums are included in the Scheduled Premiums shown in
these pages. From each premium payment, we make the deductions shown under
Schedule of Expense Charges in these pages; the balance is the invested premium
amount which is added to the contract fund.
MAXIMUM GUARANTEED CHARGES.--The maximum guaranteed charges per $1,000 of
Initial Amount of Term Insurance are included in the Schedule of Monthly
Deductions in the Contract Data pages. The amount we deduct on a Monthly Date
will not be more than this charge multiplied by the number of $1,000's of
Initial Amount of Term Insurance.
CURRENT RATES.--From time to time we will set the current rates based on the
Insured's rating class, sex and attained age for the insurance we provide under
this rider. They will not be more than the maximum guaranteed rates. We will set
rates based on our expectations as to future experience. At least once every
five years, but not more often than once a year, we will consider the need to
change the rates. We will change them only if we do so for all riders like this
one dated in the same year as this one.
MISCELLANEOUS PROVISIONS
GENERAL.--Where there is no conflict with this rider, the provisions of this
contract will also apply to the rider.
PAID-UP CONTRACT.--The Paid-up Contract section of the contract is amended by
adding the following sentence. In no event will this contract become fully
paid-up prior to the termination of rider VALB 500.
BASIC AMOUNT.--While this rider remains in force, the Table of Basic Amounts in
the contract is replaced with the table that follows. We have made this change
so the contract and this rider together will comply with Section 7702 of the
Internal Revenue Code of 1954 as amended. We will deduct from the contract fund
on each Monthly Date a charge for any portion of the basic amount which exceeds
the contract fund and for which we do not otherwise charge under the terms of an
extra benefit. We will deem this portion of the basic amount, and the charge for
it, to be made under the terms of the contract and not under this rider.
VALB 500 N
II-239
<PAGE>
(Continued from Preceding Page)
TABLE OF BASIC AMOUNTS
When the proceeds arise from the Insured's death:
And The Contract Is In Force:
on a premium paying basis and not in default past its days of grace
Then The Basic Amount Is:
the larger of: (1) the face amount (see page 3), plus any excess of the
contract fund (see page 10) over the tabular contract fund (see page 12),
plus the Target Amount described in rider VALB 500 N; and (2) the amount of
insurance provided by the contract fund at the net single premium rate;
plus the amount of any extra benefits other than those provided under Rider
VALB 500 N.
And We Adjust The Basic Amount For:
contract debt (see page 15), plus any charges due in the days of grace (see
page 8).
contract debt.
nothing.
UNSCHEDULED PREMIUMS.--The second paragraph of the Unscheduled Premiums
provision is amended by adding the following sentence: Or if we determine at any
time that the amount of insurance provided by the contract fund at the net
single premium rate exceeds the face amount, plus any excess of the contract
fund over the tabular contract fund, plus the Target Amount, then, we have the
right to refuse to accept further premium payments, or to limit the amount or
frequency of premium payments thereafter.
TERMINATION.--This rider will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the anniversary on which the Insured's attained age
is 100;
3. the date the contract is surrendered under its Cash Value Option; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the rider as of the first
Monthly Date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
ON THE CONTRACT DATE
Pruco Life Insurance Company of New Jersey,
By
Secretary
VALB 500 N
II-240
<PAGE>
CONTRACT DATA
INSURED'S SEX AND ISSUE AGE M-35
RATING CLASS NON-SMOKER
INSURED JOHN DOE XX XXX XXX POLICY NUMBER
FACE AMOUNT $50,000 JUL 1, 1986 CONTRACT DATE
CONTRACT
PREMIUM PERIOD LIFE JUL 1, 2016 CHANGE DATE
AGENCY R-NK 1
BENEFICIARY WIFE, LIFE, WIFE
LIST OF CONTRACT MINIMUMS
THE MINIMUM PREMIUM IS $25.
LIST OF SUPPLEMENTARY BENEFITS
(EACH BENEFIT IS DESCRIBED IN THE FORM THAT
BEARS THE NUMBER SHOWN FOR IT).
VALB 500 N MONTHLY RENEWABLE TERM INSURANCE
INITIAL AMOUNT OF TERM INSURANCE IS $100,000--
***** END OF LIST *****
SCHEDULE OF PREMIUMS
PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE
AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE.
SCHEDULED PREMIUMS ARE $XXX.XX EACH
CHANGING ON JULY 1, 1987 TO $XXX.XX EACH
CHANGING ON JULY 1, 1988 TO $XXX.XX EACH
CHANGING ON JULY 1, 1989 TO $XXX.XX EACH
CHANGING ON JULY 1, 1990 TO $XXX.XX EACH
CHANGING ON JULY 1, 1991 TO $XXX.XX EACH
CHANGING ON JULY 1, 1992 TO $XXX.XX EACH
CHANGING ON JULY 1, 1993 TO $XXX.XX EACH
CHANGING ON JULY 1, 1994 TO $XXX.XX EACH
CHANGING ON JULY 1, 1995 TO $XXX.XX EACH
CHANGING ON JULY 1, 1996 TO $XXX.XX EACH
CHANGING ON JULY 1, 1997 TO $XXX.XX EACH
CHANGING ON JULY 1, 1998 TO $XXX.XX EACH
CHANGING ON JULY 1, 1999 TO $XXX.XX EACH
CHANGING ON JULY 1, 2000 TO $XXX.XX EACH
CHANGING ON JULY 1, 2001 TO $XXX.XX EACH
CHANGING ON JULY 1, 2002 TO $XXX.XX EACH
CONTRACT DATA CONTINUED ON NEXT PAGE
Paqe 3(84)VB-N
II-241
<PAGE>
CHANGING ON JULY 1, 2003 TO $XXX.XX EACH
CHANGING ON JULY 1, 2004 TO $XXX.XX EACH
CHANGING ON JULY 1, 2005 TO $XXX.XX EACH
CHANGING ON JULY 1, 2006 TO $XXX.XX EACH
CHANGING ON JULY 1, 2007 TO $XXX.XX EACH
CHANGING ON JULY 1, 2008 TO $XXX.XX EACH
CHANGING ON JULY 1, 2009 TO $XXX.XX EACH
CHANGING ON JULY 1, 2010 TO $XXX.XX EACH
CHANGING ON JULY 1, 2011 TO $XXX.XX EACH
CHANGING ON JULY 1 2012 TO $XXX.XX EACH
CHANGING ON JULY 1, 2013 TO $XXX.XX EACH
CHANGING ON JULY 1, 2014 TO $XXX.XX THEREAFTER
CONTRACT PREMIUMS INCLUDE THE PREMIUMS FOR THE FOLLOWING SUPPLEMENTARY BENEFITS:
PREMIUMS FOR BENEFIT VALB 500 N ARE $XXX.XX EACH
CHANGING ON JULY 1, 1987 TO $ 195.00 EACH
CHANGING ON JULY 1, 1988 TO $ 210.00 EACH
CHANGING ON JULY 1, 1989 TO $ 229.00 EACH
CHANGING ON JULY 11 1990 TO $ 247.00 EACH
CHANGING ON JULY 1, 1991 TO $ 335.00 EACH
CHANGING ON JULY 1, 1992 TO $ 364.00 EACH
CHANGING ON JULY 1, 1993 TO $ 395.00 EACH
CHANGING ON JULY 1, 1994 TO $ 428.00 EACH
CHANGING ON JULY 1, 1995 TO $ 464.00 EACH
CHANGING ON JULY 1, 1996 TO $ 503.00 EACH
CHANGING ON JULY 1, 1997 TO $ 544.00 EACH
CHANGING ON JULY 1, 1998 TO $ 588.00 EACH
CHANGING ON JULY 1, 1999 TO $ 635.00 EACH
CHANGING ON JULY 1, 2000 TO $ 687.00 EACH
CHANGING ON JULY 1, 2001 TO $ 745.00 EACH
CHANGING ON JULY 1, 2002 TO $ 812.00 EACH
CHANGING ON JULY 1, 2003 TO $ 887.00 EACH
CHANGING ON JULY 1, 2004 TO $ 973.00 EACH
CHANGING ON JULY 1, 2005 TO $1067.00 EACH
CHANGING ON JULY 1, 2006 TO $1169.00 EACH
CHANGING ON JULY 1, 2007 TO $1277.00 EACH
CHANGING ON JULY 1, 2008 TO $1391.00 EACH
CHANGING ON JULY 1, 2009 TO $1513.00 EACH
CHANGING ON JULY 1, 2010 TO $1647.00 EACH
CHANGING ON JULY 1, 2011 TO $1796.00 EACH
CHANGING ON JULY 1, 2012 TO $1946.00 EACH
CHANGING ON JULY 1, 2013 TO $2154.00 EACH
CHANGING ON JULY 1, 2014 TO $2368.00 EACH
CHANGING ON JULY 1, 2015 TO $2604.00 EACH
CHANGING ON JULY 1, 2016 TO $2860.00 EACH
CHANGING ON JULY 1, 2017 TO $3133.00 EACH
CHANGING ON JULY 1, 2018 TO $3425.00 EACH
CHANGING ON JULY 1, 2019 TO $3738.00 EACH
CHANGING ON JULY 1, 2020 TO $4085.00 EACH
CHANGING ON JULY 1, 2021 TO $4477.00 EACH
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3A(84)VB-N
II-242
<PAGE>
CHANGING ON JULY 1, 2022 TO $ 4927.00 EACH
CHANGING ON JULY 1, 2023 TO $ 5445.00 EACH
CHANGING ON JULY 1, 2024 TO $ 6032.00 EACH
CHANGING ON JULY 1, 2025 TO $ 6680.00 EACH
CHANGING ON JULY 1, 2026 TO $ 7376.00 EACH
CHANGING ON JULY 1, 2027 TO $ 8110.00 EACH
CHANGING ON JULY 1, 2028 TO $ 8874.00 EACH
CHANGING ON JULY 1, 2029 TO $ 9675.00 EACH
CHANGING ON JULY 1, 2030 TO $10540.00 EACH
CHANGING ON JULY 1, 2031 TO $15293.00 EACH
*****END OF SCHEDULE*****
SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS
FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00.
FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%. AFTER DEDUCTION OF THIS AMOUNT,
THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.)
*****END OF SCHEDULE*****
SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND
THE MONTHLY ADMINISTRATION CHARGE IS $5.50. THE MONTHLY CHARGE TO GUARANTEE THE
MINIMUM DEATH BENEFIT IS $1.50.
MONTHLY DEDUCTIONS FOR ANY SUPPLEMENTARY BENEFITS CONSIST OF A FIXED CHARGE PLUS
AN AMOUNT THAT DEPENDS ON THE INSURANCE PROVIDED BY DEFINED IN RIDER VALB 500 N.
MONTHLY DEDUCTIONS FOR SUPPLEMENTAL BENEFIT VALB 500 N ARE BASED ON THE NUMBER
OF UNITS OF INSURANCE, INCLUDING ANY FRACTION, ON THE MONTHLY DATE AND THE
MONTHLY RATE PER UNIT OF INSURANCE. THE NUMBER OF UNITS OF INSURANCE IS EQUAL TO
THE INSURANCE PROVIDED BY RIDER VALB 500 N DIVIDED BY THE TABULAR AMOUNT OF
INSURANCE PER S1,000 OF INITIAL AMOUNT OF TERM INSURANCE. THE DEDUCTION MAY BE
ADJUSTED AS DESCRIBED IN RIDER VALB 500 N.
MAXIMUM MONTHLY
FIXED RATE PER UNIT OF
MONTHLY DEDUCTIONS ARE CHARGE INSURANCE
- ---------------------- ------ ----------------
CHANGING ON JULY 1, 1987 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1988 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1989 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1990 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1991 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1992 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1993 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1994 TO XX.XX .XXXXX
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3B(84)VB-N
II-243
<PAGE>
CHANGING ON JULY 1, 1995 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1996 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1997 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1998 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1999 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2000 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2001 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2002 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2003 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2004 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2005 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2006 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2007 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2008 TO XX.XX .XSXXX
CHANGING ON JULY 1, 2009 TO XX.XX .XXSSX
CHANGING ON JULY 1, 2010 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2011 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2012 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2013 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2014 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2015 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2016 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2017 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2018 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2019 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2020 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2021 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2022 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2023 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2024 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2025 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2026 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2027 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2028 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2029 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2030 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2031 TO XX.XX .XXXXX
*****END OF SCHEDULE*****
Page 3C(84)VB-N
II-244
EXHIBIT 1.A.(13)(z)(iii)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Insured Rider for Policy No.
SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE
ONE MONTH TERM INSURANCE
MONTHLY TERM INSURANCE.--Under this rider, we will provide monthly term
insurance on the Insured's life. We will do this during any Contract Month which
begins on a Monthly Date on which the contract is not in default and on which
the Insured's attain age is less than 70.
You will not have to prove to us that the Insured is insurable to continue this
insurance from month to month provided the rider has not ended as described in
the Termination section. We make these promises subject to all the provisions of
this rider and of the rest of this contract.
The amount of insurance provided by this rider is included in the Basic Amount
as modified by this rider (see Table of Basic Amounts). The insurance for any
contract month will start on the Monthly Date which begins that Contract Month;
it will end at the end of the day before the next Monthly Date.
We will deduct the charge for montly term insurance under this rider from the
contract fund. The charge will be no more than the amount we describe under
Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under
Current Rates.
TARGET AMOUNT.--We compute the Target Amount on each Monthly Date. It is equal
to the Initial Amount of Term Insurance.
RIDER PREMIUMS AND CHARGES.--We show the premiums for this rider in the Contract
Data pages, and these premiums are included in the Scheduled Premiums shown in
these pages. From each premium payment, we make the deductions shown under
Schedule of Expense Charges in these pages; the balance is the invested premium
amount which is added to the contract fund. We will deduct from the contract
fund on each Monthly Date, for the insurance we provide under this rider, a
charge for any portion of the basic amount which exceeds the contract fund and
for which we do not otherwise charge under the terms of the contract or under
the the terms any extra benefit other than this rider.
Rider premiums and monthly charges, stop on the contract anniversary on which
the Insured's attained age is 70.
MAXIMUM GUARANTEED CHARGES.--The maximum guaranteed charges per $1,000 of
Initial Amount of Term Insurance are included in the Schedule of Monthly
Deductions in the Contract Data pages. The amount we deduct on a Monthly Date
will not be more than this charge multiplied by the number of $1,000's of
Initial Amount of Term Insurance.
CURRENT RATES.--From time to time we will set the current rates based on the
Insured's rating class, sex and attained age for the insurance we provide under
this rider. They will not be more than the maximum guaranteed rates. We will set
rates based on our expectations as to future experience. At least once every
five years, but not more often than once a year, we will consider the need to
change the rates. We will change them only if we do so for all riders like this
one dated in the same year as this one.
AUTOMATIC INCREASE IN AMOUNT OF INSURANCE.--If this rider is in force on the day
before the anniversary on which the Insured's attained age is 70, we will
exchange this rider for an increase in the amount of insurance under this
contract. You will not have to prove that the Insured is insurable. The increase
will take effect on the contract anniversary on which the Insured's attained age
is 70.
MISCELLANEOUS PROVISIONS
GENERAL.--Where there is no conflict with this rider, the provisions of this
contract will also apply to the rider.
PAID-UP CONTRACT.--The Paid-up Contract section of the contract is amended by
adding the following sentence. In no event will this contract become fully
paid-up prior to the termination of rider VALA 500Y.
BASIC AMOUNT.--While this rider remains in force, the Table of Basic Amounts in
the contract is replaced with the table that follows. We have made this change
so the contract and this rider together will comply with Section 7702 of the
Internal Revenue Code of 1954 as amended.
(Continued on Next Page)
VALA 500 Y
II-245
<PAGE>
(Continued from Preceding Page)
TABLE OF BASIC AMOUNTS
When the proceeds arise from the Insured's death:
And The Contract Is Then The Basic Amount Is: And We Adjust The
In Force: Basic Amount For:
on a premium paying the larger of: (1) the face contract debt (see
basis and not in default amount (see page 3), plus the page 15), plus any
past its days of grace Target Amount described in charges due in the
rider VALA 500 Y; and (2) the days of grace
amount of insurance provided (see page 8).
by the contract fund at the
net single premium rate; plus
the amount of any extra
benefits other than those
provided under rider VALA 500 Y.
as variable reduced the amount of variable reduced contract debt.
paid-up insurance paid-up insurance (see page 13)
(see page 13)
as extended insurance the amount of term insurance, nothing.
(see page 13) if the Insured dies in the
term (see page 13); otherwise
zero
UNSCHEDULED PREMIUMS.--The second paragraph of the Unscheduled Premiums
provision is amended by adding the following sentence: Or if we determine at any
time that the amount of insurance provided by the contract fund at the net
single premium rate exceeds the face amount, plus the Target Amount, then, we
have the right to refuse to accept further premium payments, or to limit the
amount or frequency of premium payments thereafter.
TERMINATION.--This rider will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the anniversary on which the Insured's attained age
is 70;
3. the date the contract is surrendered under its Cash Value Option; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the rider as of the first
Monthly Date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT
ON THE CONTRACT DATE
Pruco Life Insurance Company of New Jersey,
By
Secretary
VALA 500 Y
II-246
<PAGE>
Page 3(84)VA-Y
CONTRACT DATA
INSURED'S SEX AND ISSUE AGE M-35
RATING CLASS NONSMOKER
INSURED JOHN DOE XX XXX XXX POLICY NUMBER
FACE AMOtINT $50,000 JUL 1, 1986 CONTRACT DATE
CONTRACT
PREMIUM PERIOD LIFE JUL 1, 2016 CHANGE DATE
AGENCY R-NK 1
BENEFICIARY WIFE, LIFE, WIFE
LIST OF CONTRACT MINIMUMS
THE MINIMUM PREMIUM IS $25.
LIST OF SUPPLEMENTARY BENEFITS
(EACH BENEFIT IS DESCRIBED IN THE FORM THAT BEARS THE NUMBER SHOWN FOR IT).
VALA 500 Y MONTHLY REVEWABLE TERM INSURANCE
INITIAL AMOUNT OF TERM INSURANCE IS $100,000--
***** END OF LIST *****
SCHEDULE OF PREMIUMS
PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE CONTRACT DATE
AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE.
SCHEDULED PREMIUMS ARE $XXX.XX EACH
CHANGING ON JULY 1, 1987 TO $XXX.XX EACH
CHANGING ON JULY 1, 1988 TO $XXX.XX EACH
CHANGING ON JULY 1, 1989 TO $XXX.XX EACH
CHANGING ON JULY 1, 1990 TO $XXX.XX EACH
CHANGING ON JULY 1, 1991 TO $XXX.XX EACH
CHANGING ON JULY 1, 1992 TO $XXX.XX EACH
CHANGING ON JULY 1, 1993 TO $XXX.XX EACH
CHANGING ON JULY 1, 1994 TO $XXX.XX EACH
CHANGING ON JULY 1, 1995 TO $XXX.XX EACH
CHANGING ON JULY 1, 1996 TO $XXX.XX EACH
CHANGING ON JULY 1, 1997 TO $XXX.XX EACH
CHANGING ON JULY 1, 1998 TO $XXX.XX EACH
CHANGING ON JULY 1, 1999 TO $XXX.XX EACH
CHANGING ON JULY 1, 2000 TO $XXX.XX EACH
CHANGING ON JULY 1, 2001 TO $XXX.XX EACH
CHANGING ON JULY 1, 2002 TO $XXX.XX EACH
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3(84)VA-Y
II-247
<PAGE>
CHANGING ON JULY 1, 2003 TO $XXX.XX EACH
CHANGING ON JULY 1, 2004 TO $XXX.XX EACH
CHANGING ON JULY 1, 2005 TO $XXX.XX EACH
CHANGING ON JULY 1, 2006 TO $XXX.XX EACH
CHANGING ON JULY 1, 2007 TO $XXX.XX EACH
CHANGING ON JULY 1, 2008 TO $XXX.XX EACH
CHANGING ON JULY 1, 2009 TO $XXX.XX EACH
CHANGING ON JULY 1, 2010 TO $XXX.XX EACH
CHANGING ON JULY 1, 2011 TO $XXX.XX EACH
CHANGING ON JULY 1, 2012 TO $XXX.XX EACH
CHANGING ON JULY 1, 2013 TO $XXX.XX EACH
CHANGING ON JULY 1, 2014 TO $XXX.XX THEREAFTER
CONTRACT PREMIUMS INCLUDE THE PREMIUMS FOR THE FOLLOWING SUPPLEMENTARY BENEFITS:
PREMIUMS FOR BENEFIT VALA 500 Y ARE $XXX.XX EACH
CHANGING ON JULY 1, 1987 TO $ 195.00 EACH
CHANGING ON JULY 1, 1988 TO $ 210.00 EACH
CHANGING ON JULY 1, 1989 TO $ 229.00 EACH
CHANGING ON JULY 1, 1990 TO $ 247.00 EACH
CHANGING ON JULY 1, 1991 TO $ 335.00 EACH
CHANGING ON JULY 1, 1992 TO $ 364.00 EACH
CHANGING ON JULY 1, 1993 TO $ 395.00 EACH
CHANGING ON JULY 1, 1994 TO $ 428.00 EACH
CHANGING ON JULY 1, 1995 TO $ 464.00 EACH
CHANGING ON JULY 1, 1996 TO $ 503.00 EACH
CHANGING ON JULY 1, 1997 TO $ 544.00 EACH
CHANGING ON JULY 11 1998 TO $ 588.00 EACH
CHANGING ON JULY 1, 1999 TO $ 635.00 EACH
CHANGING ON JULY 1, 2000 TO $ 687.00 EACH
CHANGING ON JULY 1, 2001 TO $ 745.00 EACH
CHANGING ON JULY 1, 2002 TO $ 812.00 EACH
CHANGING ON JULY 1, 2003 TO $ 887.00 EACH
CHANGING ON JULY 1, 2004 TO $ 973.00 EACH
CHANGING ON JULY 1, 2005 TO $1067.00 EACH
CHANGING ON JULY 1, 2006 TO $1169.00 EACH
CHANGING ON JULY 1, 2007 TO $1277.00 EACH
CHANGING ON JULY 1, 2008 TO $1391.00 EACH
CHANGING ON JULY 1, 2009 TO $1513.00 EACH
CHANGING ON JULY 1, 2010 TO $1647.00 EACH
CHANGING ON JULY 1, 2011 TO $1796.00 EACH
CHANGING ON JULY 1, 2012 TO $1946.00 EACH
CHANGING ON JULY 1, 2013 TO $2154.00 EACH
CHANGING ON JULY 1, 2014 TO $2368.00 EACH
CHANGING ON JULY 1, 2015 TO $2604.00 EACH
CHANGING ON JULY 1, 2016 TO $2860.00 EACH
CHANGING ON JULY 1, 2017 TO $3133.00 EACH
CHANGING ON JULY 1, 2018 TO $3425.00 EACH
CHANGING ON JULY 1, 2019 TO $3738.00 EACH
CHANGING ON JULY 1, 2020 TO $4085.00 EACH
*****END OF SCHEDULE*****
PAGE 3A(84)VA-Y
II-248
<PAGE>
SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS
FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00.
FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%. AFTER DEDUCTION OF THIS AMOUNT,
THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.)
*****END OF SCHEDULE*****
SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND
THE MONTHLY ADMINISTRATION CHARGE IS $5.50. THE MONTHLY CHARGE TO GUARANTEE
THE MINIMUM DEATH BENEFIT IS $1.50.
MONTHLY DEDUCTIONS FOR ANY SUPPLEMENTARY BENEFITS CONSIST OF A FIXED CHARGE PLUS
AN AMOUNT THAT DEPENDS ON THE INSURANCE DEFINED IN RIDER VALA 500 Y.
MONTHLY DEDUCTIONS FOR SUPPLEMENTAL BENEFIT VALA 500 Y ARE BASED ON THE NUMBER
OF UNITS OF INSURANCE, INCLUDING ANY FRACTION, ON THE MONTHLY DATE AND THE
MONTHLY RATE PER UNIT OF INSURANCE. THE NUMBER OF UNITS OF INSURANCE IS EQUAL TO
THE INSURANCE PROVIDED BY RIDER VALA 500 Y DIVIDED BY THE TABULAR AMOUNT OF
INSURANCE PER $1,000 OF INITIAL AMOUNT OF TERM INSURANCE. THE DEDUCTION MAY BE
ADJUSTED AS DESCRIBED IN RIDER VALA 500 Y.
MAXIMUM MONTHLY
FIXED RATE PER UNIT OF
MONTHLY DEDUCTIONS ARE CHARGE INSURANCE
CHANGING ON JULY 1, 1987 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1988 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1989 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1990 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1991 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1992 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1993 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1994 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1995 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1996 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1997 TO XX.XX .XXXXX
CHANGING ON JULY 1, 1998 TO XX XX .XXXXX
CHANGING ON JULY 1, 1999 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2000 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2001 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2002 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2003 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2004 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2005 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2006 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2007 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2008 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2009 TO XX.XX .XXXXX
CONTRACT DATA CONTINUED ON NEXT PAGE
PAGE 3B(84)VB-Y
II-249
<PAGE>
CONTRACT DATA CONTINUED
CHANGING ON JULY 1, 2010 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2011 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2012 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2013 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2014 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2015 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2016 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2017 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2018 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2019 TO XX.XX .XXXXX
CHANGING ON JULY 1, 2020 TO XX.XX .XXXXX
*****END OF SCHEDULE*****
Page 3C(84)VB-Y
II-250
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
Insured Rider for Policy No.
SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE
ONE MONTH TERM INSURANCE
MONTHLY TERM INSURANCE.--Under this rider, we will provide monthly term
insurance on the Insured's life. We will do this during any Contract Month which
begins on a Monthly Date on which the contract is not in default and on which
the Insured's attained age is less than 70.
You will not have to prove to us that the Insured is insurable to continue this
insurance from month to month provided the rider has not ended as described in
the Termination section. We make these promises subject to all the provisions of
this rider and of the rest of this contract.
The amount of insurance during any Contract Month will be the Target Amount
(which we describe under Target Amount) for that Contract Month. The insurance
will start on the Monthly Date which begins that Contract Month; it will end
at the end of the day before the next Monthly Date. Any proceeds under this
contract that may arise from the Insured's death while this rider is in force
will include the Target Amount.
We will deduct the charge for monthly term insurance under this rider from the
contract fund. The charge will be no more than the amount we describe under
Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under
Current Rates.
TARGET AMOUNT.--We compute the Target Amount on each Monthly Date. It is equal
to the Initial Amount of Term Insurance.
RIDER PREMIUMS AND CHARGES.--We show the premiums for this rider in the Contract
Data pages, and these premiums are included in the Scheduled Premiums shown in
these pages. From each premium payment, we make the deductions shown under
Schedule of Expense Charges in these pages; the balance is the invested premium
amount which is added to the contract fund.
Rider premiums and monthly charges stop on the contract anniversary on which the
insured's attained age is 70.
MAXIMUM GUARANTEED CHARGES.--The maximum guaranteed charges per $1,000 of
Initial Amount of Term Insurance are included in the Schedule of Monthly
Deductions in the Contract Data pages. The amount we deduct on a Monthly Date
will not be more than this charge multiplied by the number of $1,0O0's of
initial Amount of Term Insurance.
CURRENT RATES.--From time to time we will set the current rates based on the
Insured's rating class, sex and attained age for the insurance we provide under
this rider. They will not be more than the maximum guaranteed rates. We will set
rates based on our expectations as to future experience. At least once every
five years, but not more often than once a year, we will consider the need to
change the rates. We will change them only if we do so for all riders like this
one dated in the same year as this one.
AUTOMATIC INCREASE IN AMOUNT OF INSURANCE.--If this rider is in force on the day
before the anniversary on which the Insured's attained age is 70, we will
exchange this rider for an increase in the amount of insurance under this
contract. You will not have to prove that the Insured is insurable. The increase
will take effect on the contract anniversary on which the Insured's attained age
is 70.
MISCELLANEOUS PROVISIONS
GENERAL.--Where there is no conflict with this rider, the provisions of this
contract will also apply to the rider.
PAID-UP CONTRACT.--The Paid-up Contract section of the contract is amended by
adding the following sentence. In no event will this contract become fully
paid-up prior to the termination of rider VALB 500Y.
BASIC AMOUNT.--While this rider remains in force, the Table of Basic Amounts in
the contract is replaced with the table that follows. We have made this change
so the contract and this rider together will comply with Section 7702 of the
Internal Revenue Code of 1954 as amended. We will deduct from the contract fund
an each Monthly Date a charge for any portion of the basic amount which exceeds
the contract fund and for which we do not other wise charge under the terms of
an extra benefit. We will deem this portion of the basic amount, and the charge
for it, to be made under the terms of the contract and not under this rider.
(Continued on Next Page)
VALB 500 Y
II-251
<PAGE>
<TABLE>
<CAPTION>
(Continued from Preceding Page)
TABLE OF BASIC AMOUNTS
When the proceeds arise from the Insured's death:
<S> <C> <C>
And The Contract Is In Force: Then The Basic Amount Is: And We Adjust The Basic
Amount For:
on a premium paying basis and not the larger of: (1) the face amount (see contract debt (see page 15),
in default past its days of grace page 3), plus any excess of the contract plus any charges due in the
fund (see page 10) over the tabular days of grace (see page 8).
contract fund (see page 12), plus the
Target Amount described in rider VALB
5OOY; and (2) the amount of insurance
provided by the contract fund at the net
single premium rate; plus the amount of
any extra benefits other than those
provided under Rider VALB 5OOY.
as variable reduced paid-up the amount of variable reduced paid-up contract debt.
insurance (see page 13) insurance (see page 13)
as extended insurance (see the amount of term insurance, if the nothing.
page 13) Insured dies in the term (see page 13);
other wise zero
</TABLE>
UNSCHEDULED PREMIUMS.--The second paragraph of the Unscheduled Premiums
provision is amended by adding the following sentence: Or if we determine at any
time that the amount of insurance provided by the contract fund at the net
single premium rate exceeds the face amount, plus any excess of the contract
fund over the tabular contract fund, plus the Target Amount, then, we have the
right to refuse to accept further premium payments, or to limit the amount or
frequency of premium payments thereafter.
TERMINATION--This rider will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the anniversary on which the Insured's attained age
is 70;
3. the date the contract is surrendered under its Cash Value Option; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the rider as of the first
Monthly Date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT ON THE CONTRACT DATE
Pruco Life Insurance Company of New Jersey,
By
Secretary
VALB 500 Y
II-252
<PAGE>
CONTRACT DATA
INSURED'S SEX AND ISSUE AGE M-35
RATING CLASS NON-SMOKER
INSURED JOHN DOE XX XXX XXX POLICY NUMBER
FACE AMOUNT $50,000 JUL 1, 1986 CONTRACT DATE
CONTRACT
PREMIUM PERIOD LIFE JUL 1, 2016 CHANGE DATE
AGENCY R-NK 1
BENEFICIARY WIFE, LIFE, WIFE
LIST OF CONTRACT MINIMUMS
THE MINIMUM PREMIUM IS $25.
LIST OF SUPPLEMENTARY BENEFITS
(EACH BENEFIT IS DESCRIBED IN THE FORM THAT BEARS THE NUMBER SHOWN FOR IT).
VALB 500 Y MONTHLY RENEWABLE TERM INSURANCE
INITIAL AMOUNT OF TERM INSURANCE IS $100,000--
***** END OF LIST *****
SCHEDULE OF PREMIUMS
PLANNED PAYMENT DATES OF SCHEDULED PREMIUMS OCCUR ON THE
CONTRACT DATE AND AT INTERVALS OF 12 MONTHS AFTER THAT DATE.
SCHEDULED PREMIUMS ARE $XXX.XX EACH
CHANGING ON JULY 1, 1987 TO $XXX.XX EACH
CHANGING ON JULY 1, 1988 TO $XXX.XX EACH
CHANGING ON JULY 1, 1989 TO $XXX.XX EACH
CHANGING ON JULY 1, 1990 TO $XXX.XX EACH
CHANGING ON JULY 1, 1991 TO $XXX.XX EACH
CHANGING ON JULY 1, 1992 TO $XXX.XX EACH
CHANGING ON JULY 1, 1993 TO $XXX.XX EACH
CHANGING ON JULY 1, 1994 TO $XXX.XX EACH
CHANGING ON JULY 1, 1995 TO $XXX.XX EACH
CHANGING ON JULY 1, 1996 TO $XXX.XX EACH
CHANGING ON JULY 1, 1997 TO $XXX.XX EACH
CHANGING ON JULY 1, 1998 TO $XXX.XX EACH
CHANGING ON JULY 1, 1999 TO $XXX.XX EACH
CHANGING ON JULY 1, 2000 TO $XXX.XX EACH
CHANGING ON JULY 1, 2001 TO $XXX.XX EACH
CHANGING ON JULY 1, 2002 TO $XXX~XX EACH
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3(84)VB-Y
II-253
<PAGE>
CHANGING ON JULY 1, 2003 TO $XXX.XX EACH
CHANGING ON JULY 1, 2004 TO $XXX.XX EACH
CHANGING ON JULY 1, 2005 TO $XXX.XX EACH
CHANGING ON JULY 1, 2006 TO $XXX.XX EACH
CHANGING ON JULY 1, 2007 TO $XXX.XX EACH
CHANGING ON JULY 1, 2008 TO $XXX.XX EACH
CHANGING ON JULY 1, 2009 TO $XXX.XX EACH
CHANGING ON JULY 1, 2010 TO $XXX.XX EACH
CHANGING ON JULY 1, 2011 TO $XXX.XX EACH
CHANGING ON JULY 1, 2012 TO $XXX.XX EACH
CHANGING ON JULY 1, 2013 TO $XXX.XX EACH
CHANGING ON JULY 1, 2014 TO $XXX.XX THEREAFTER
CONTRACT PREMIUMS INCLUDE THE PREMIUMS FOR THE FOLLOWING SUPPLEMENTARY BENEFITS:
PREMIUMS FOR BENEFIT VALB 500 Y ARE $XXX.XX EACH
CHANGING ON JULY 1, 1987 TO $ 195.00 EACH
CHANGING ON JULY 1, 1988 TO $ 210.00 EACH
CHANGING ON JULY 1, 1989 TO $ 229.00 EACH
CHANGING ON JULY 1, 1990 TO $ 247.00 EACH
CHANGING ON JULY 11 1991 TO $ 335.00 EACH
CHANGING ON JULY 1, 1992 TO $ 364.00 EACH
CHANGING ON JULY 1, 1993 TO $ 395.00 EACH
CHANGING ON JULY 1, 1994 TO $ 428.00 EACH
CHANGING ON JULY 1, 1995 TO $ 464.00 EACH
CHANGING ON JULY 1, 1996 TO $ 503.00 EACH
CHANGING ON JULY 11 1997 TO $ 544.00 EACH
CHANGING ON JULY 1, 1998 TO $ 588.00 EACH
CHANGING ON JULY 1, 1999 TO $ 635.00 EACH
CHANGING ON JULY 1, 2000 TO $ 687.00 EACH
CHANGING ON JULY 1, 2001 TO $ 745.00 EACH
CHANGING ON JULY 1, 2002 TO $ 812.00 EACH
CHANGING ON JULY 1, 2003 TO $ 887.00 EACH
CHANGING ON JULY 1, 2004 TO $ 973.00 EACH
CHANGING ON JULY 1, 2005 TO $1067.00 EACH
CHANGING ON JULY 1, 2006 TO $1169.00 EACH
CHANGING ON JULY 1, 2007 TO $1277.00 EACH
CHANGING ON JULY 1, 2008 TO $1391.00 EACH
CHANGING ON JULY 1, 2009 TO $1513.00 EACH
CHANGING ON JULY 1, 2010 TO $1647.00 EACH
CHANGING ON JULY 1, 2011 TO $1796.00 EACH
CHANGING ON JULY 1, 2012 TO $1946.00 EACH
CHANGING ON JULY 1, 2013 TO $2154.00 EACH
CHANGING ON JULY 1, 2014 TO $2368.00 EACH
CHANGING ON JULY 1, 2015 TO $2604.00 EACH
CHANGING ON JULY 1, 2016 TO $2860.00 EACH
CHANGING ON JULY 1, 2017 TO $3133.00 EACH
CHANGING ON JULY 1, 2018 TO $3425.00 EACH
CHANGING ON JULY 1, 2019 TO $3738.00 EACH
CHANGING ON JULY 1, 2020 TO $4085.00 EACH
*****END OF SCHEDULE*****
Page 3A (84)VB-Y
II-254
<PAGE>
SCHEDULE OF EXPENSE CHARGES FROM PREMIUM PAYMENTS
FROM EACH PREMIUM PAID WE DEDUCT A PER-PAYMENT PROCESSING CHARGE OF $2.00.
FROM THE REMAINDER WE DEDUCT A CHARGE OF 7.5%. AFTER DEDUCTION OF THIS AMOUNT,
THE BALANCE IS THE INVESTED PREMIUM AMOUNT (SEE PAGE 11.)
*****END OF SCHEDULE*****
SCHEDULE OF MONTHLY DEDUCTIONS FROM CONTRACT FUND
THE MONTHLY ADMINISTRATION CHARGE IS $5.50. THE MONTHLY CHARGE TO GUARANTEE THE
MINIMUM DEATH BENEFIT IS $1.50.
MONTHLY DEDUCTIONS FOR ANY SUPPLEMENTARY BENEFITS CONSIST OF A FIXED CHARGE PLUS
AN AMOUNT THAT DEPENDS ON THE INSURANCE DEFINED IN RIDER VALB 500 Y.
MONTHLY DEDUCTIONS FOR SUPPLEMENTAL BENEFIT VALB 500 Y ARE BASED ON THE NUMBER
OF UNITS OF INSURANCE, INCLUDING ANY FRACTION, ON THE MONTHLY DATE AND THE
MONTHLY RATE PER UNIT OF INSURANCE. THE NUMBER OF UNITS OF INSURANCE IS EQUAL TO
THE INSURANCE PROVIDED BY RIDER VALB 500 Y DIVIDED BY THE TABULAR AMOUNT OF
INSURANCE PER $1~000 OF INITIAL AMOUNT OF INSURANCE. THE DEDUCTION MAY BE
ADJUSTED AS DESCRIBED IN RIDER VALB 500 Y.
MAXIMUM MONTHLY
FIXED RATE PER UNIT OF
MONTHLY DEDUCTIONS ARE CHARGE INSURANCE
- ---------------------- ------ ----------------
CHANGING ON JULY 1, 1987 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1988 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1989 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1990 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1991 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1992 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1993 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1994 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1995 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1996 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1997 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1998 TO XX.XX o XXXXX
CHANGING ON JULY 1, 1999 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2000 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2001 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2002 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2003 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2004 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2005 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2006 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2007 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2008 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2009 TO XX.XX o XXXXX
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3B(84)VB-Y
II-255
<PAGE>
CONTRACT DATA CONTINUED
CHANGING ON JULY 1, 2010 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2011 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2012 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2013 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2014 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2015 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2016 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2017 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2018 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2019 TO XX.XX o XXXXX
CHANGING ON JULY 1, 2020 TO XX.XX o XXXXX
*****END OF SCHEDULE*****
Page 3C(84)VB-Y
II-256
EXHIBIT 1.A.(13)(aa)
RIDER FOR TERM INSURANCE BENEFIT
ON LIFE OF INSURED--DECREASING AMOUNT AFTER THREE YEARS
Read the list of Supplementary Benefits on the Contract Data page(s).
This benefit is a part of this contract only if it is listed there.
BENEFIT.--We will pay an amount under this Benefit if we receive due proof that
the Insured died (1) in the term period for the Benefit; and (2) while this
contract is in force and not in default beyond the last day of the grace period.
Any proceeds under this contract that may arise from the Insured's death will
include this amount. But our payment is subject to all the provisions of the
Benefit and of the rest of this contract.
We will use the table below to compute the amount we will pay. We show the
Initial Amount of Term Insurance under this Benefit on the Contract Data
page(s). We also show the term period for the Benefit there. It starts on the
contract date, which we show on the first page. The anniversary at the end of
the term period is part of that period.
TABLE OF AMOUNTS OF INSURANCE
AMOUNTS PAYABLE.--We show here the amount we will pay, based on the Insured's
issue age, for each $1,000 of Initial Amount of Term Insurance if death occurs
in the contract year ending with the anniversary shown.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ----------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 18 19 20 21 22 23 24 25 26 27 28
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 978 977 977 976 976 975 974 974 973 972 971
5 956 955 953 952 951 950 949 947 946 944 943
6 933 932 930 929 927 925 923 921 919 917 914
7 911 909 907 905 902 900 897 895 892 889 886
8 889 886 884 881 878 875 872 868 865 861 857
9 867 864 860 857 854 850 846 842 838 833 829
10 844 841 837 833 829 825 821 816 811 806 800
11 822 818 814 810 805 800 795 789 784 778 771
12 800 795 791 786 780 775 769 763 757 750 743
13 778 773 767 762 756 750 744 737 730 722 714
14 756 750 744 738 732 725 718 710 703 694 686
15 733 727 721 714 707 700 692 684 676 667 657
16 711 705 698 690 683 675 667 658 649 639 629
17 689 682 674 667 659 650 641 632 622 611 600
18 667 659 651 643 634 625 615 605 595 583 571
19 644 636 628 619 610 600 590 579 568 556 543
20 622 614 605 595 585 575 564 553 540 528 514
21 600 591 581 571 561 550 538 526 513 500 486
22 578 568 558 548 537 525 513 500 486 472 457
23 556 545 535 524 512 500 487 474 459 444 429
24 533 523 512 500 488 475 462 447 432 417 400
25 511 500 488 476 463 450 436 421 405 389 371
26 489 477 465 452 439 425 410 395 378 361 343
27 467 454 442 429 415 400 385 368 351 333 314
28 445 432 419 405 390 375 359 342 324 306 286
29 422 409 395 381 366 350 333 316 297 278 257
30 400 386 372 357 341 325 308 289 270 250 229
31 378 364 349 333 317 300 282 263 243 222 200
32 356 341 325 310 293 275 256 237 216 200 200
33 333 318 302 286 268 250 231 210 200 200 200
34 311 295 279 262 244 225 205 200 200 200 200
35 289 273 256 238 220 200 200 200 200 200 200
- ----------------------------------------------------------------------------------------------------------------------
(Table Continued on Next Page)
</TABLE>
AL 136 N
II-257
<PAGE>
<TABLE>
<CAPTION>
(Table Continued from Preceding Page)
- ----------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ----------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 18 19 20 21 22 23 24 25 26 27 28
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
36 $267 $250 $232 $214 $200 $200 $200 $200 $200 $200 $200
37 245 227 209 200 200 200 200 200 200 200 200
38 222 204 200 200 200 200 200 200 200 200 *
39 200 200 200 200 200 200 200 200 200 *
40 200 200 200 200 200 200 200 200 *
41 200 200 200 200 200 200 200 *
42 200 200 200 200 200 200 *
43 200 200 200 200 200 *
44 200 200 200 200 *
45 200 200 200 *
46 200 200 *
47 200 *
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ----------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 29 30 31 32 33 34 35 36 37 38 39 40 41 42
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 l000
3 1000 1000 1000 1000 l000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 971 970 969 968 967 966 964 963 962 960 958 957 955 952
5 941 939 938 935 933 931 929 926 923 920 917 913 909 905
6 912 909 906 903 900 897 893 889 885 880 875 870 864 857
7 882 879 875 871 867 862 857 852 846 840 833 826 818 810
8 853 849 844 839 833 828 821 815 808 800 792 783 773 762
9 824 818 813 806 800 793 786 778 769 760 750 739 727 714
10 794 788 781 774 767 759 750 741 731 720 708 696 682 667
11 765 758 750 742 733 724 714 704 692 680 667 652 636 619
12 735 727 719 710 700 690 679 667 654 640 625 609 591 571
13 706 697 688 677 667 655 643 630 615 600 583 565 546 524
14 676 667 656 645 633 621 607 593 577 560 542 522 500 476
15 647 636 625 613 600 586 571 556 538 520 500 478 455 429
16 618 606 594 581 567 552 536 518 500 480 458 435 409 381
17 588 576 563 548 533 517 500 481 462 440 417 391 364 333
18 559 546 531 516 500 483 464 444 423 400 375 348 318 286
19 529 515 500 484 467 448 429 407 385 360 333 304 273 238
20 500 485 469 452 433 414 393 370 346 320 292 261 227 200
21 471 455 438 419 400 379 357 333 308 280 250 217 200 200
22 441 424 406 387 367 345 322 296 269 240 208 200 200 200
23 412 394 375 355 333 310 286 259 231 200 200 200 200 200
24 382 364 344 323 300 276 250 222 200 200 200 200 200 *
25 353 333 313 290 267 241 214 200 200 200 200 200 *
26 324 303 281 258 233 207 200 200 200 200 200 *
27 294 273 250 226 200 200 200 200 200 200 *
28 265 243 219 200 200 200 200 200 200 *
29 235 212 200 200 200 200 200 200 *
30 206 200 200 200 200 200 200 *
31 200 200 200 200 200 200 *
32 200 200 200 200 200 *
33 200 200 200 200 *
34 200 200 200 *
35 200 200 *
36 200 *
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- ----------------------------------------------------------------------------------------------------------------------
(Table Continued on Next Page)
</TABLE>
AL 136 N
II-258
<PAGE>
<TABLE>
<CAPTION>
(Table Continued from Preceding Page)
- -----------------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- -----------------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 43 44 45 46 47 48 49 50 51 52 53 54 55
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 950 947 944 941 938 933 929 923 917 909 900 889 875
5 900 895 889 882 875 867 857 846 833 818 800 778 750
6 850 842 833 824 813 800 786 769 750 727 700 667 625
7 800 789 778 765 750 733 714 692 667 636 600 556 500
8 750 737 722 706 688 667 643 615 583 545 500 444 375
9 700 684 667 647 625 600 571 538 500 455 400 333 250
10 650 632 611 588 563 533 500 462 417 364 300 222 200
11 600 579 556 529 500 467 429 385 333 273 200 200 *
12 550 526 500 471 438 400 357 308 250 200 200 *
13 500 474 444 412 375 333 286 231 200 200 *
14 450 421 389 353 313 267 214 200 200 *
15 400 368 333 294 250 200 200 200 *
16 350 316 278 235 200 200 200 *
17 300 263 222 200 200 200 *
18 250 211 200 200 200 *
19 200 200 200 200 *
20 200 200 200 *
21 200 200 *
22 200 *
</TABLE>
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- -------------------------------------------------------------------------------
CONVERSION TO ANOTHER PLAN OF INSURANCE
RIGHT TO CONVERT.--You may be able to exchange this Benefit for a new contract
of life insurance on the Insured's life in either this company or The Prudential
Insurance Company of America. In any of these paragraphs, when we use the phrase
the company we mean whichever of these companies may issue the new contract.
And where we use the phrase new contract we mean the contract for which the
Benefit may be exchanged. You will not have to prove that the Insured is
insurable.
CONDITIONS.--Your right to make this exchange is subject to all these
conditions: (1) The amount we would have paid under this Benefit if the Insured
had died just before the contract date of the new contract must be large enough
to meet the minimum for a new contract, as we describe under Contract
Specifications. (2) You must ask for the exchange in writing and in a form that
meets our needs. (3) You must send this contract to us to be endorsed. (4) We
must have your request and the contract at our Service Office while the Benefit
is in force and at least five years before the end of its term period.
The new contract will not take effect unless the premium for it is paid while
the Insured is living and within 31 days after its contract date. If the premium
is paid as we state, it will be deemed that: (1) the insurance under the new
contract took effect on its contract date; and (2) this Benefit ended just
before that contract date.
CONTRACT DATE.--The date of the new contract will be the date you ask for in
your request. But it may not be more than 61 days after the date of your
request. It may not be less than five years before the end of the term period
for the Benefit. And it may not be more than 31 days before we have your request
at our Service Office.
CONTRACT SPECIFICATIONS.--The new contract will be in the same rating class as
this contract. The company will set the issue age and the premiums for the new
contract in accord with its regular rules in use on the date of the new
contract.
(Continued on Next Page)
AL 136 N
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<PAGE>
(Continued from Preceding Page)
The new contract may call for annual premiums. If the company agrees, you will
be able to have premiums fall due more often.
The contract may be any one of the following:
1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued
by The Prudential Insurance Company of America. Its face amount will be the
amount you ask for in your request. But it cannot be less than $10,000 or more
than 80% of the amount we would have paid under this Benefit if the Insured had
died just before the contract date of the new contract. (Since $10,000 is 80%
of $12,500, the amount we would have paid must be at least $12,500 for this
exchange to be possible.)
2. A contract like the one to which this Benefit is attached, if Pruco Life is
regularly issuing such contracts at that time. Its face amount will be the
amount you ask for in your request. But it cannot be less than $50,000 or more
than 80% of the amount we would have paid under the Benefit if the Insured had
died just before the contract date of the new contract. (Since $50,000 is 80% of
$62,500, the amount we would have paid must be at least $62,500 for this
exchange to be possible.)
3. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company of New Jersey at that time for $25,000 or more. Its face
amount will be the amount you ask for in your request. But it cannot be less
than $25,000 or more than 80% of the amount we would have paid under the Benefit
if the Insured had died just before the contract date of the new contract.
(Since $25,000 is 80% of $31,250, the amount we would have paid must be at least
$31,250 for this exchange to be possible.)
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next two paragraphs. If this contract has a benefit for
paying scheduled premiums in the event of disability and the company would
include a benefit for waiving or paying premiums in other contracts like the new
contract, the company will put such a benefit in the new contract. The benefit,
if any, in the new contract will be the same one, with the same provisions,
that the company puts in other contracts like it on its contract date. In this
paragraph, when we use the phrase other contracts like it, we mean contracts the
company would regularly issue on the same plan and for the same rating class,
amount, issue age and sex.
Such a benefit that would have been allowed under this contract, and that would
otherwise be allowed under the new contract, will not be denied just because
disability started before the contract date of the new contract. But any premium
to be waived or paid for that disability under the new contract must be at the
scheduled premium frequency that was in effect for this contract when the
disability started.
No premium will be waived or paid for disability under the new contract unless
it has such a benefit in the event of disability. This will be so even if
scheduled premiums have been paid by us for disability under this contract.
CHANGES.--You may be able to have this Benefit changed to a new contract of life
insurance other than in accord with the requirements for exchange that we state
above. Or you may be able to exchange this Benefit for an increase in the amount
of insurance under this contract. But any change may be made only if the company
consents, and will be subject to conditions and charges that are then
determined.
MISCELLANEOUS PROVISIONS
BENEFIT PREMIUMS AND CHARGES.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the contract anniversary at the end
of the term period for this Benefit.
IF THE CONTRACT BECOMES PAID-UP.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The cash value for this Benefit will be the net value
on the date of surrender of the paid-
(Continued on Next Page)
AL 136 N
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<PAGE>
(Continued from Preceding Page)
up insurance. But, within 30 days after a contract anniversary, the net cash
value will not be less than it was on that anniversary. We base this net cash
value on the Insured's age and sex. The insured's age at any time will be his or
her age last birthday on the contract date plus the length of time since that
date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use
continuous functions based on age last birthday. We use an effective interest
rate of 4% a year.
TERMINATION.--This benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the last day before the contract date of any other contract (a)
for which the Bnefit is exchanged, or (b) to which the benefit is changed;
3. the date the contract is surrendered under its Cash Value Option, if it has
one; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the Benefit as of the first
monthly date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
THIS SUPPLEMENTARY BENEFIT RIDER
ATTACHED TO THIS CONTRACT ON THE CONTRACT DATE
Pruco Life Insurance Company of New Jersey,
By /s/ ISABELLE L. KIRCHNER
Secretary
AL 136 N
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EXHIBIT 1.A.(13)(bb)
RIDER FOR
TERM INSURANCE BENEFIT ON LIFE OF INSURED SPOUSE
DECREASING AMOUNT AFTER THREE YEARS
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
BENEFIT.--We will pay an amount under this Benefit if we receive due proof that
the insured spouse died (1) in the term period for the Benefit; and (2) while
this contract is in force and not in default beyond the last day of the grace
period. We will pay this amount to the beneficiary for insurance payable upon
the insured spouse's death. But our payment is subject to all the provisions of
the Benefit and of the rest of this contract. The phrase insured spouse means
the Insured's spouse named in the application for this contract.
We will use the table below to compute the amount we will pay. We show the
Initial Amount of Term Insurance under this Benefit on the Contract Data
page(s). We also show the term period for the Benefit there. It starts on the
contract date, which we show on the first page. The anniversary at the end of
the term period is part of that period.
TABLE OF AMOUNTS OF INSURANCE
AMOUNTS PAYABLE.--We show here the amount we will pay, based on the insured
spouse's issue age, for each $1,000 of Initial Amount of Term Insurance if death
occurs in the contract year ending with the anniversary shown.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 18 19 20 21 22 23 24 25 26 27 28 29 30 31
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 978 977 977 976 976 975 974 974 973 972 971 971 970 969
5 956 955 953 952 951 950 949 947 946 944 943 941 939 938
6 933 932 930 929 927 925 923 921 919 917 914 912 909 906
7 911 909 907 905 902 900 897 895 892 889 886 882 879 875
8 889 886 884 881 878 875 872 868 865 861 857 853 849 844
9 867 864 860 857 854 850 846 842 838 833 829 824 818 813
10 844 841 837 833 829 825 821 816 811 806 800 794 788 781
11 822 818 814 810 805 800 795 789 784 778 771 765 758 750
12 800 795 791 786 780 775 769 763 757 750 743 735 727 719
13 778 773 767 762 756 750 744 737 730 722 714 706 697 688
14 756 750 744 738 732 725 718 710 703 694 686 676 667 656
15 733 727 721 714 707 700 692 684 676 667 657 647 636 625
16 711 705 698 690 683 675 667 658 649 639 629 618 606 594
17 689 682 674 667 659 650 641 632 622 611 600 588 576 563
18 667 659 651 643 634 625 615 605 595 583 571 559 546 531
19 644 636 628 619 610 600 590 579 568 556 543 529 515 500
20 622 614 605 595 585 575 564 553 540 528 514 500 485 469
- ------------------------------------------------------------------------------------------------------------------------
(Table Continued on Next Page)
</TABLE>
AL 181 N
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<PAGE>
<TABLE>
<CAPTION>
(Table Continued from Preceding Page)
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 18 19 20 21 22 23 24 25 26 27 28 29 30 31
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 $600 $591 $581 $571 $561 $550 $538 $526 $513 $500 $486 $471 $455 $438
22 578 568 558 548 537 525 513 500 486 472 457 441 424 406
23 556 545 535 524 512 500 487 474 459 444 429 412 394 375
24 533 523 512 500 488 475 462 447 432 417 400 382 364 344
25 511 500 488 476 463 450 436 421 405 389 371 353 333 313
26 489 477 465 452 439 425 410 395 378 361 343 324 303 281
27 467 454 442 429 415 400 385 368 351 333 314 294 273 250
28 445 432 419 405 390 375 359 342 324 306 286 265 243 219
29 422 409 395 381 366 350 333 316 297 278 257 235 212 200
30 400 386 372 357 341 325 308 289 270 250 229 206 200 200
31 378 364 349 333 317 300 282 263 243 222 200 200 200 200
32 356 341 325 310 293 275 256 237 216 200 200 200 200 200
33 333 318 302 286 268 250 231 210 200 200 200 200 200 200
34 311 295 279 262 244 225 205 200 200 200 200 200 200 200
35 289 273 256 238 220 200 200 200 200 200 200 200 200 *
36 267 250 232 214 200 200 200 200 200 200 200 200 *
37 245 227 209 200 200 200 200 200 200 200 200 *
38 222 204 200 200 200 200 200 200 200 200 *
39 200 200 200 200 200 200 200 200 200 *
40 200 200 200 200 200 200 200 200 *
41 200 200 200 200 200 200 200 *
42 200 200 200 200 200 200 *
43 200 200 200 200 200 *
44 200 200 200 200 *
45 200 200 200 *
46 200 200 *
47 200 *
48 *
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 32 33 34 35 36 37 38 39 40 41 42 43 44 45
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 968 967 966 964 963 962 960 958 957 955 952 950 947 944
5 935 933 931 929 926 923 920 917 913 909 905 900 895 889
6 903 900 897 893 889 885 880 875 870 864 857 850 842 833
7 871 867 862 857 852 846 840 833 826 818 810 800 789 778
8 839 833 828 821 815 808 800 792 783 773 762 750 737 722
9 806 800 793 786 778 769 760 750 739 727 714 700 684 667
10 774 767 759 750 741 731 720 708 696 682 667 650 632 611
11 742 733 724 714 704 692 680 667 652 636 619 600 579 556
12 710 700 690 679 667 654 640 625 609 591 571 550 526 500
13 677 667 655 643 630 615 600 583 565 546 524 500 474 444
14 645 633 621 607 593 577 560 542 522 500 476 450 421 389
15 613 600 586 571 556 538 520 500 478 455 429 400 368 333
16 581 567 552 536 518 500 480 458 435 409 381 350 316 278
- -----------------------------------------------------------------------------------------------------------------------
(Table Continued on Next Page)
</TABLE>
AL 181 N
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<PAGE>
<TABLE>
<CAPTION>
(Table Continued from Preceding Page)
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 32 33 34 35 36 37 38 39 40 41 42 43 44 45
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
17 $548 $533 $517 $500 $481 $462 $440 $417 $391 $364 $333 $300 $263 $222
18 516 500 483 464 444 423 400 375 348 318 286 250 211 200
19 484 467 448 429 407 385 360 333 304 273 238 200 200 200
20 452 433 414 393 370 346 320 292 261 227 200 200 200 200
21 419 400 379 357 333 308 280 250 217 200 200 200 200 *
22 387 367 345 322 296 269 240 208 200 200 200 200 *
23 355 333 310 286 259 231 200 200 200 200 200 *
24 323 300 276 250 222 200 200 200 200 200 *
25 290 267 241 214 200 200 200 200 200 *
26 258 233 207 200 200 200 200 200 *
27 226 200 200 200 200 200 200 *
28 200 200 200 200 200 200 *
29 200 200 200 200 200 *
30 200 200 200 200 *
31 200 200 200 *
32 200 200 *
33 200 *
34 *
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 46 47 48 49 50 51 52 53 54 55
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 941 938 933 929 923 917 909 900 889 875
5 882 875 867 857 846 833 818 800 778 750
6 824 813 800 786 769 750 727 700 667 625
7 765 750 733 714 692 667 636 600 556 500
8 706 688 667 643 615 583 545 500 444 375
9 647 625 600 571 538 500 455 400 333 250
10 588 563 533 500 462 417 364 300 222 200
11 529 500 467 429 385 333 273 200 200 *
12 471 438 400 357 308 250 200 200 *
13 412 375 333 286 231 200 200 *
14 353 313 267 214 200 200 *
15 294 250 200 200 200 *
16 235 200 200 200 *
17 200 200 200 *
18 200 200 *
19 200 *
20 *
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- ------------------------------------------------------------------------------------------------------------------------
(Continued on Next Page)
</TABLE>
AL 181 N
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<PAGE>
(Continued from Preceding Page)
PAID-UP INSURANCE ON DEATH OF INSURED
PAID-UP INSURANCE ON LIFE OF INSURED SPOUSE.--The Insured might die (1) in the
term period for this Benefit; (2) while this contract is in force and not in
default past the last day of the grace period; and (3) while the insured spouse
is living. In this case, the insurance on the life of the insured spouse under
the Benefit will become paid-up term insurance for decreasing amounts. We will
compute these amounts from the Table of Amounts of Insurance. While the paid-up
insurance is in effect, the contract will remain in force until the end of the
term period for the Benefit. The paid-up insurance will have cash values but no
loan value.
If this Benefit becomes paid-up, it may be surrendered for its net cash value.
This will be the net value on the date of surrender of the paid-up insurance.
But, within 30 days after a contract anniversary, the net cash value will not be
less than it was on that anniversary. We base this net cash value on the insured
spouse's age and sex. The insured spouse's age at any time will be his or her
age last birthday on the contract date plus the length of time since that date.
We use the Commissioners 1980 Standard Ordinary Mortality Table. We use
continuous functions based on age last birthday. We use an effective interest
rate of 4% a year.
We will usually pay any cash value promptly. But we have the right to postpone
paying it for up to six months. If we do so for more than 30 days, we will pay
interest at the rate of 3% a year. If we are asked for the values which apply,
we will furnish them.
CONVERSION TO ANOTHER PLAN OF INSURANCE
RIGHT TO CONVERT.--While the Insured is living, you may be able to exchange this
Benefit for a new contract of life insurance on the life of the insured spouse
in either this company or The Prudential Insurance Company of America. In any of
these paragraphs, when we use the phrase the company we mean whichever of these
companies may issue the new contract. And where we use the phrase new contract
we mean the contract for which the Benefit may be exchanged. You will not have
to prove that the insured spouse is insurable.
CONDITIONS.--Your right to make this exchange is subject to all these
conditions: (1) The amount we would have paid under this Benefit if the insured
spouse had died just before the contract date of the new contract must be large
enough to meet the minimum for a new contract, as we describe under Contract
Specifications. (2) You must ask for the exchange in writing and in a form that
meets our needs. (3) You must send this contract to us to be endorsed. (4) We
must have your request and the contract at our Service Office while the Benefit
is in force and at least five years before the end of its term period.
The new contract will not take effect unless the premium for it is paid while
the insured spouse is living and within 31 days after its contract date. If the
premium is paid as we state, it will be deemed that: (1) the insurance under the
new contract took effect on its contract date; and (2) this Benefit ended just
before that contract date.
CONTRACT DATE.--The date of the new contract will be the date you ask for in
your request. But it may not be more than 61 days after the date of your
request. It may not be less than five years before the end of the term period
for the Benefit. And it may not be more than 31 days before we have your request
at our Service Office.
CONTRACT SPECIFICATIONS.--The new contract will be in the standard or equivalent
rating class. The company will set the issue age and the premiums for the new
contract in accord with its regular rules in use on the date of the new
contract.
The new contract may call for annual premiums. If the company agrees, you will
be able to have premiums fall due more often.
The contract may be any one of the following:
1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued
by The Prudential Insurance Company of America. Its face amount will be the
amount you ask for in your request. But it cannot be less than $10,000 or more
than 80% of the amount we would have paid under this Benefit if the insured
spouse had died just before the contract date of the new contract. (Since
$10,000 is 80% of $12,500, the amount we would have paid must be at least
$12,500 for this exchange to be possible.)
2. A contract like the one to which this Benefit is attached, if Pruco Life
Insurance Company is regularly issuing such contracts at that time. Its face
amount will be the amount you ask for in your request. But it cannot be less
than $50,000 or more than 80% of the amount we would have paid under the Benefit
if the insured spouse had died just before the contract date of the new
contract. (Since $50,000 is 80% of $62,500, the amount we would have paid must
be at least $62,500 for this exchange to be possible.)
(Continued on Next Page)
AL 181 N
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<PAGE>
(Continued from Preceding Page)
3. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company at that time for $25,000 or more. Its face amount will be the
amount you ask for in your request. But it cannot be less than $25,000 or more
than 80% of the amount we would have paid under the Benefit if the insured
spouse had died just before the contract date of the new contract. (Since
$25,000 is 80% of $31,250, the amount we would have paid must be at least
$31,250 for this exchange to be possible.)
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next paragraph. If the company would include in other
contracts like the new contract a benefit for waiving or paying premiums in the
event of disability, here is what the company will do. Even though this contract
does not have such a benefit on the life of the insured spouse, the company will
put it in the new contract on his or her life. The benefit, if any, in the new
contract will be the same one, with the same provisions, that the company puts
in other contracts like it on its contract date. In this paragraph, when we use
the phrase other contracts like it, we mean contracts the company would
regularly issue on the same plan and for the same rating class, amount, issue
age and sex.
No premium will be waived or paid by us for disability under the new contract
unless the disability started on or after its contract date. And no premium will
be waived or paid by us for disability under a new contract unless it has a
benefit for waiving or paying premiums in the event of disability. This will be
so even if scheduled premiums have been paid by us under this contract.
Changes.--You may be able to have this Benefit changed to a new contract of life
insurance other than in accord with the requirements for exchange that we state
above. But any change may be made only if the company consents, and will be
subject to conditions and charges that are then determined.
MISCELLANEOUS PROVISIONS
Ownership and Control.--Unless we endorse this contract to say otherwise, while
the Insured is living the owner alone may exercise all ownership and control of
this contract. This includes, but is not limited to, these rights: (1) to assign
the contract; and (2) to change any subsequent owner. A request for such a
change must be in writing to us at our Service Office and in a form that meets
our needs. The change will take effect only when we endorse the contract to
show it.
Unless we endorse this contract to say otherwise: (1) while any insurance is in
force after the Insured's death, the owner of the contract will be the insured
spouse; and (2) the owner alone will be entitled to (a) any contract benefit and
value, and (b) the exercise of any right and privilege granted by the contract
or by us. But any insurance payable upon the Insured's death will be payable to
the beneficiary for that insurance.
Beneficiary.--The word beneficiary where we use it in this contract without
qualification means the beneficiary for insurance payable upon the death of the
Insured.
Unless we endorse this contract to say otherwise, the beneficiary for insurance
payable upon the death of the insured spouse will be the Insured if living,
otherwise the estate of the insured spouse.
The beneficiary for insurance payable upon the death of the insured spouse may
be changed. The request must be in writing and in a form that meets our needs.
It will take effect only when we file it at our Service Office; this will be
after the contract is sent to us to be endorsed, if we ask for it. Then any
previous beneficiary's interest in such insurance will end as of the date of the
request. It will end then even if the insured spouse is not living when we file
the request. Any beneficiary's interest is subject to the rights of any assignee
of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated.
Misstatement of Age or Sex.--If the insured spouse's stated age or sex or both
are not correct, we will change each benefit and any amount payable to what the
premiums and charges would have bought for the correct age and sex.
The Schedule of Premiums may show that premiums change or stop on a certain
date. We may have used that date because the insured spouse would attain a
certain age on that date. If we find that the issue age for the insured spouse
was wrong, we will correct that date.
Suicide Exclusion.--If the insured spouse, whether sane or insane, dies by
suicide within the period which we state in the Suicide Exclusion under General
Provisions and while this Benefit is in force, we will not pay the amount we
describe under Benefit above. Instead, we will pay no more than the sum of the
monthly charges deducted for this Benefit to the date of death divided by .925.
We will make that payment in one sum.
Reinstatement.--If this contract is reinstated, it will not include the
insurance that we provide under this Benefit on the life of the insured spouse
unless we are given any facts we need to satisfy us that the insured spouse is
insurable for the Benefit.
(Continued on Next Page)
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<PAGE>
(Continued from Preceding Page)
Contract Value Options.--If this contract has a Contract Value Options
provision, it will apply only during the Insured's lifetime. Any extended or
reduced paid-up insurance that may be described there is on the life of the
Insured only.
Contract Loans.--If this contract has a Loans provision, we will not consider
any contract debt when we determine the amount payable, if any, at the death of
the insured spouse.
Incontestability.--Except for default, we will not contest this Benefit after it
has been in force during the insured spouse's lifetime for two years from the
issue date.
Benefit Premiums and Charges.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the earliest of (1) the death of
the insured, (2) the death of the spouse, and (3) the contract anniversary at
the end of the term period for this Benefit.
If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The basis for determining the net cash value will be
as we state in the second paragraph under Paid-up Insurance above.
Termination.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the last day before the contract date of any other contract (a)
for which the Benefit is exchanged, or (b) to which the Benefit is changed;
3. the date the contract is surrendered under its Cash Value Option, if it has
one, or the paid-up insurance, if any, under the Benefit is surrendered; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the Benefit as of the first
monthly date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
This Supplementary Benefit Rider
Attached to this Contract on the Contract Date
Pruco Life Insurance Company
By /s/ SPECIMEN
Secretary
Printed in U.S.A.
AL 181 N
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EXHIBIT 1.A(13)(cc)
RIDER FOR
TERM INSURANCE BENEFIT ON LIFE OF INSURED SPOUSE
DECREASING AMOUNT AFTER THREE YEARS
Read the list of Supplementary Benefits on the Contract Data page(s).
This Benefit is a part of this contract only if it is listed there.
Benefit.--We will pay an amount under this Benefit if we receive due proof that
the insured spouse died (1) in the term period for the Benefit; and (2) while
this contract is in force and not in default beyond the last day of the grace
period. We will pay this amount to the beneficiary for insurance payable upon
the insured spouse's death. But our payment is subject to all the provisions of
the Benefit and of the rest of this contract. The phrase insured spouse means
the insured's spouse named in the application for this contract.
We will use the table below to compute the amount we will pay. We show the
Initial Amount of Term Insurance under this Benefit on the Contract Data
page(s). We also show the term period for the Benefit there. It starts on the
contract date, which we show on the first page. The anniversary at the end of
the term period is part of that period.
TABLE OF AMOUNTS OF INSURANCE
Amounts Payable.--We show here the amount we will pay, based on the insured
spouse's issue age, for each $1,000 of Initial Amount of Term Insurance if death
occurs in the contract year ending with the anniversary shown.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 18 19 20 21 22 23 24 25 26 27 28 29 30 31
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 978 977 977 976 976 975 974 974 973 972 971 971 970 969
5 956 955 953 952 951 950 949 947 946 944 943 941 939 938
6 933 932 930 929 927 925 923 921 919 917 914 912 909 906
7 911 909 907 905 902 900 897 895 892 889 886 882 879 875
8 889 886 884 881 878 875 872 868 865 861 857 853 849 844
9 867 864 860 857 854 850 846 842 838 833 829 824 818 813
10 844 841 837 833 829 825 821 816 811 806 800 794 788 781
11 822 818 814 810 805 800 795 789 784 778 771 765 758 750
12 800 795 791 786 780 775 769 763 757 750 743 735 727 719
13 778 773 767 762 756 750 744 737 730 722 714 706 697 688
14 756 750 744 738 732 725 718 710 703 694 686 676 667 656
15 733 727 721 714 707 700 692 684 676 667 657 647 636 625
16 711 705 698 690 683 675 667 658 649 639 629 618 606 594
17 689 682 674 667 659 650 641 632 622 611 600 588 576 563
18 667 659 651 643 634 625 615 605 595 583 571 559 546 531
19 644 636 628 619 610 600 590 579 568 556 543 529 515 500
20 622 614 605 595 585 575 564 553 540 528 514 500 485 469
- ------------------------------------------------------------------------------------------------------------------------
(Table Continued on Next Page)
</TABLE>
AL 181 Y
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<PAGE>
<TABLE>
<CAPTION>
(Table Continued from Preceding Page)
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 18 19 20 21 22 23 24 25 26 27 28 29 30 31
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 $600 $591 $581 $571 $561 $550 $538 $526 $513 $500 $486 $471 $455 $438
22 578 568 558 548 537 525 513 500 486 472 457 441 424 406
23 556 545 535 524 512 500 487 474 459 444 429 412 394 375
24 533 523 512 500 488 475 462 447 432 417 400 382 364 344
25 511 500 488 476 463 450 436 421 405 389 371 353 333 313
26 489 477 465 452 439 425 410 395 378 361 343 324 303 281
27 467 454 442 429 415 400 385 368 351 333 314 294 273 250
28 445 432 419 405 390 375 359 342 324 306 286 265 243 219
29 422 409 395 381 366 350 333 316 297 278 257 235 212 200
30 400 386 372 357 341 325 308 289 270 250 229 206 200 200
31 378 364 349 333 317 300 282 263 243 222 200 200 200 200
32 356 341 325 310 293 275 256 237 216 200 200 200 200 200
33 333 318 302 286 268 250 231 210 200 200 200 200 200 200
34 311 295 279 262 244 225 205 200 200 200 200 200 200 200
35 289 273 256 238 220 200 200 200 200 200 200 200 200 *
36 267 250 232 214 200 200 200 200 200 200 200 200 *
37 245 227 209 200 200 200 200 200 200 200 200 *
38 222 204 200 200 200 200 200 200 200 200 *
39 200 200 200 200 200 200 200 200 200 *
40 200 200 200 200 200 200 200 200 *
41 200 200 200 200 200 200 200 *
42 200 200 200 200 200 200 *
43 200 200 200 200 200 *
44 200 200 200 200 *
45 200 200 200 *
46 200 200 *
47 200 *
48 *
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 32 33 34 35 36 37 38 39 40 41 42 43 44 45
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 968 967 966 964 963 962 960 958 957 955 952 950 947 944
5 935 933 931 929 926 923 920 917 913 909 905 900 895 889
6 903 900 897 893 889 885 880 875 870 864 857 850 842 833
7 871 867 862 857 852 846 840 833 826 818 810 800 789 778
8 839 833 828 821 815 808 800 792 783 773 762 750 737 722
9 806 800 793 786 778 769 760 750 739 727 714 700 684 667
10 774 767 759 750 741 731 720 708 696 682 667 650 632 611
11 742 733 724 714 704 692 680 667 652 636 619 600 579 556
12 710 700 690 679 667 654 640 625 609 591 571 550 526 500
13 677 667 655 643 630 615 600 583 565 546 524 500 474 444
14 645 633 621 607 593 577 560 542 522 500 476 450 421 389
15 613 600 586 571 556 538 520 500 478 455 429 400 368 333
16 581 567 552 536 518 500 480 458 435 409 381 350 316 278
- -----------------------------------------------------------------------------------------------------------------------
(Table Continued on Next Page)
</TABLE>
AL 181 Y
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<PAGE>
<TABLE>
<CAPTION>
(Table Continued from Preceding Page)
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 32 33 34 35 36 37 38 39 40 41 42 43 44 45
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
17 $548 $533 $517 $500 $481 $462 $440 $417 $391 $364 $333 $300 $263 $222
18 516 500 483 464 444 423 400 375 348 318 286 250 211 200
19 484 467 448 429 407 385 360 333 304 273 238 200 200 200
20 452 433 414 393 370 346 320 292 261 227 200 200 200 200
21 419 400 379 357 333 308 280 250 217 200 200 200 200 *
22 387 367 345 322 296 269 240 208 200 200 200 200 *
23 355 333 310 286 259 231 200 200 200 200 200 *
24 323 300 276 250 222 200 200 200 200 200 *
25 290 267 241 214 200 200 200 200 200 *
26 258 233 207 200 200 200 200 200 *
27 226 200 200 200 200 200 200 *
28 200 200 200 200 200 200 *
29 200 200 200 200 200 *
30 200 200 200 200 *
31 200 200 200 *
32 200 200 *
33 200 *
34 *
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ISSUE AGE
- ------------------------------------------------------------------------------------------------------------------------
ANNIVER-
SARY 46 47 48 49 50 51 52 53 54 55
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000 $1000
2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
3 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
4 941 938 933 929 923 917 909 900 889 875
5 882 875 867 857 846 833 818 800 778 750
6 824 813 800 786 769 750 727 700 667 625
7 765 750 733 714 692 667 636 600 556 500
8 706 688 667 643 615 583 545 500 444 375
9 647 625 600 571 538 500 455 400 333 250
10 588 563 533 500 462 417 364 300 222 200
11 529 500 467 429 385 333 273 200 200 *
12 471 438 400 357 308 250 200 200 *
13 412 375 333 286 231 200 200 *
14 353 313 267 214 200 200 *
15 294 250 200 200 200 *
16 235 200 200 200 *
17 200 200 200 *
18 200 200 *
19 200 *
20 *
*NO AMOUNT PAYABLE IF DEATH OCCURS
IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.
- ------------------------------------------------------------------------------------------------------------------------
(Table Continued on Next Page)
</TABLE>
AL 181 Y
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<PAGE>
(Continued from Preceding Page)
PAID-UP INSURANCE ON DEATH OF INSURED
Paid-up Insurance on Life of Insured Spouse.--The Insured might die (1) in the
term period for this Benefit; (2) while this contract is in force and not in
default past the last day of the grace period; and (3) while the insured spouse
is living. In this case, the insurance on the life of the insured spouse under
the Benefit will become paid-up term insurance for decreasing amounts. We will
compute these amounts from the Table of Amounts of Insurance. While the paid-up
insurance is in effect, the contract will remain in force until the end of the
term period for the Benefit. The paid-up insurance will have cash values but no
loan value.
If this Benefit becomes paid-up, it may be surrendered for its net cash value.
This will be the net value on the date of surrender of the paid-up insurance.
But, within 30 days after a contract anniversary, the net cash value will not be
less than it was on that anniversary. We base this net cash value on the insured
spouse's age and sex. The insured spouse's age at any time will be his or her
age last birthday on the contract date plus the length of time since that date.
We use the Commissioners 1980 Standard Ordinary Mortality Table. We use
continuous functions based on age last birthday. We use an effective interest
rate of 4% a year.
We will usually pay any cash value promptly. But we have the right to postpone
paying it for up to six months. If we do so for more than 30 days, we will pay
interest at the rate of 3% a year. If we are asked for the values which apply,
we will furnish them.
CONVERSION TO ANOTHER PLAN OF INSURANCE
Right to Convert.--While the Insured is living, you may be able to exchange this
Benefit for a new contract of life insurance on the life of the insured spouse
in either this company or The Prudential Insurance Company of America. In any of
these paragraphs, when we use the phrase the company we mean whichever of these
companies may issue the new contract. And where we use the phrase new contract
we mean the contract for which the Benefit may be exchanged. You will not have
to prove that the insured spouse is insurable.
Conditions.--Your right to make this exchange is subject to all these
conditions: (1) The amount we would have paid under this Benefit if the insured
spouse had died just before the contract date of the new contract must be large
enough to meet the minimum for a new contract, as we describe under Contract
Specifications. (2) You must ask for the exchange in writing and in a form that
meets our needs. (3) You must send this contract to us to be endorsed. (4) We
must have your request and the contract at our Service Office while the Benefit
is in force and at least five years before the end of its term period.
The new contract will not take effect unless the premium for it is paid while
the insured spouse is living and within 31 days after its contract date. If the
premium is paid as we state, it will be deemed that: (1) the insurance under the
new contract took effect on its contract date; and (2) this Benefit ended just
before that contract date.
Contract Date.--The date of the new contract will be the date you ask for in
your request. But it may not be more than 61 days after the date of your
request. It may not be less than five years before the end of the term period
for the Benefit. And it may not be more than 31 days before we have your request
at our Service Office.
Contract Specifications.--The new contract will be in the standard or equivalent
rating class. The company will set the issue age and the premiums for the new
contract in accord with its regular rules in use on the date of the new
contract.
The new contract may call for annual premiums. If the company agrees, you will
be able to have premiums fall due more often.
The contract may be any one of the following:
1. A Life Paid Up at Age 85 plan. In this case the new contract will be issued
by The Prudential Insurance Company of America. Its face amount will be the
amount you ask for in your request. But it cannot be less than $10,000 or more
than 80% of the amount we would have paid under this Benefit if the insured
spouse had died just before the contract date of the new contract. (Since
$10,000 is 80% of $12,500, the amount we would have paid must be at least
$12,500 for this exchange to be possible.)
2. A contract like the one to which this Benefit is attached, if Pruco Life
Insurance Company is regularly issuing such contracts at that time. Its face
amount will be the amount you ask for in your request. But it cannot be less
than $50,000 or more than 80% of the amount we would have paid under the Benefit
if the insured spouse had died just before the contract date of the new
contract. (Since $50,000 is 80% of $62,500, the amount we would have paid must
be at least $62,500 for this exchange to be possible.)
(Continued on Next Page)
AL 181 Y
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<PAGE>
(Continued from Preceding Page)
3. A contract of life insurance of a kind regularly being issued by Pruco Life
Insurance Company at that time for $25,000 or more. Its face amount will be the
amount you ask for in your request. But it cannot be less than $25,000 or more
than 80% of the amount we would have paid under the Benefit if the insured
spouse had died just before the contract date of the new contract. (Since
$25,000 is 80% of $31,250, the amount we would have paid must be at least
$31,250 for this exchange to be possible.)
The new contract will not have Supplementary Benefits other than as we describe
in this and in the next paragraph. If the company would include in other
contracts like the new contract a benefit for waiving or paying premiums in the
event of disability, here is what the company will do. Even though this contract
does not have such a benefit on the life of the insured spouse, the company will
put it in the new contract on his or her life. The benefit, if any, in the new
contract will be the same one, with the same provisions, that the company puts
in other contracts like it on its contract date. In this paragraph, when we use
the phrase other contracts like it, we mean contracts the company would
regularly issue on the same plan and for the same rating class, amount, issue
age and sex.
No premium will be waived or paid by us for disability under the new contract
unless the disability started on or after its contract date. And no premium will
be waived or paid by us for disability under a new contract unless it has a
benefit for waiving or paying premiums in the event of disability. This will be
so even if scheduled premiums have been paid by us under this contract.
Changes.--You may be able to have this Benefit changed to a new contract of life
insurance other than in accord with the requirements for exchange that we state
above. But any change may be made only if the company consents, and will be
subject to conditions and charges that are then determined.
MISCELLANEOUS PROVISIONS
Ownership and Control.--Unless we endorse this contract to say otherwise, while
the Insured is living the owner alone may exercise all ownership and control of
this contract. This includes, but is not limited to, these rights: (1) to assign
the contract; and (2) to change any subsequent owner. A request for such a
change must be in writing to us at our Service Office and in a form that meets
our needs. The change will take effect only when we endorse the contract to
show it.
Unless we endorse this contract to say otherwise: (1) while any insurance is in
force after the Insured's death, the owner of the contract will be the insured
spouse; and (2) the owner alone will be entitled to (a) any contract benefit and
value, and (b) the exercise of any right and privilege granted by the contract
or by us. But any insurance payable upon the Insured's death will be payable to
the beneficiary for that insurance.
Beneficiary.--The word beneficiary where we use it in this contract without
qualification means the beneficiary for insurance payable upon the death of the
Insured.
Unless we endorse this contract to say otherwise, the beneficiary for insurance
payable upon the death of the insured spouse will be the Insured if living,
otherwise the estate of the insured spouse.
The beneficiary for insurance payable upon the death of the insured spouse may
be changed. The request must be in writing and in a form that meets our needs.
It will take effect only when we file it at our Service Office; this will be
after the contract is sent to us to be endorsed, if we ask for it. Then any
previous beneficiary's interest in such insurance will end as of the date of the
request. It will end then even if the insured spouse is not living when we file
the request. Any beneficiary's interest is subject to the rights of any assignee
of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated.
Misstatement of Age or Sex.--If the insured spouse's stated age or sex or both
are not correct, we will change each benefit and any amount payable to what the
premiums and charges would have bought for the correct age and sex.
The Schedule of Premiums may show that premiums change or stop on a certain
date. We may have used that date because the insured spouse would attain a
certain age on that date. If we find that the issue age for the insured spouse
was wrong, we will correct that date.
Suicide Exclusion.--If the insured spouse, dies by suicide within the period
which we state in the Suicide Exclusion under General Provisions and while this
Benefit is in force, we will not pay the amount we describe under Benefit above.
Instead, we will pay no more than the sum of the monthly charges deducted for
this Benefit to the date of death divided by .925. We will make that payment in
one sum.
(Continued on Next Page)
AL 181 Y
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<PAGE>
(Continued from Preceding Page)
Reinstatement.--If this contract is reinstated, it will not include the
insurance that we provide under this Benefit on the life of the insured spouse
unless we are given any facts we need to satisfy us that the insured spouse is
insurable for the Benefit.
Contract Value Options.--If this contract has a Contract Value Options
provision, it will apply only during the Insured's lifetime. Any extended or
reduced paid-up insurance that may be described there is on the life of the
Insured only.
Contract Loans.--If this contract has a Loans provision, we will not consider
any contract debt when we determine the amount payable, if any, at the death of
the insured spouse.
Incontestability.--Except for default, we will not contest this Benefit after it
has been in force during the insured spouse's lifetime for two years from the
issue date.
Benefit Premiums and Charges.--We show the premiums for this Benefit under List
of Supplementary Benefits in the Contract Data pages, and these premiums are
included in the Scheduled Premiums shown in these pages. From each premium
payment, we make the deductions shown under Schedule of Expense Charges in these
pages and the balance is the invested premium amount which is added to the
contract fund.
The monthly charge for this Benefit is deducted on each monthly date from the
contract fund. The amount of that charge is included in the Schedule of Monthly
Deductions in the Contract Data pages.
Benefit premiums and monthly charges stop on the earliest of (1) the death of
the insured, (2) the death of the spouse, and (3) the contract anniversary at
the end of the term period for this Benefit.
If the Contract Becomes Paid-up.--If the contract becomes paid-up we will deduct
from the contract fund the present value at that time of future charges for this
Benefit, discounted at a rate we set from time to time but no less than 4% a
year. The Benefit will remain in force, but thereafter we will make no
deductions from the contract fund to pay for it. The Benefit will have cash
values but no loan value. The basis for determining the net cash value will be
as we state in the second paragraph under Paid-up Insurance above.
Termination.--This Benefit will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the last day before the contract date of any other contract (a)
for which the Benefit is exchanged, or (b) to which the Benefit is changed;
3. the date the contract is surrendered under its Cash Value Option, if it has
one, or the paid-up insurance, if any, under the Benefit is surrendered; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing, we will cancel the Benefit as of the first
monthly date on or after we receive your request. Contract premiums and monthly
charges due then and later will be reduced accordingly.
This Supplementary Benefit rider
attached to this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ ISABELLE L. KIRCHNER
Secretary
AL 181 Y
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EXHIBIT 1.A(13)(dd)
ENDORSEMENTS
(Only we can endorse this contract.)
This endorsement is attached to and made a part of this contract on the contract
date:
Any reference, in any provision of this contract, to the sex of any person will
be ignored except for the purpose of identification. For any settlement payable
for the lifetime of one or more payees, the female rates we show in the contract
will apply to both male and female payees.
The provision of this policy entitled "Basis of Computation" is replaced by the
following:
BASIS OF COMPUTATION
Mortality Tables Described.--Except for what we say in the next paragraph, we
base all net premiums and net values to which we refer in this contract on the
Insured's issue age and on the length of time since the contract date. We use
the Commissioners 1980 Standard Ordinary Mortality Table B and continuous
functions based on age last birthday.
For extended insurance, we base net premiums and net value on the Commissioners
1980 Extended Term Insurance Table B.
Interest Rate.--For all net premiums and net values to which we refer in this
contract we use an effective rate of 4% a year.
Exclusions.--When we compute net values we exclude the value of any
Supplementary Benefits and any other extra benefits added by rider to this
contract.
Values After 20 Contract Years.--Tabular cash values not shown on page 4 will be
the net level reserves, taking into account modified premiums. To compute them,
we will use the mortality table and interest rate we describe above. There will
be the same exclusions.
Minimum Legal Values.--The cash, loan and other values in this contract are at
least as large as those set by law where it is delivered. Where required, we
have given the insurance regulator a detailed statement of how we compute values
and benefits.
The provision of this contract entitled AUTOMATIC BENEFIT is replaced at issue
by the following:
AUTOMATIC BENEFIT
When the contract is in default, it will stay in force as reduced paid-up
insurance.
Pruco Life Insurance Company of New Jersey,
By /s/ ISABELLE L. KIRCHNER
-----------------------------
Secretary
- -----------
PLIY 90--86
- -----------
II-274
EXHIBIT 1.A(13)(ee)(i)
SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE
ONE MONTH TERM INSURANCE
Monthly Term Insurance.--Under this rider, we will provide monthly term
insurance on the Insured's life. We will do this during any Contract Month which
begins on a Monthly Date on which the contract is not in default.
You will not have to prove to us that the Insured is insurable to continue this
insurance from month to month provided the rider has not ended as described in
the Termination section. We make these promises subject to all the provisions of
this rider and of the rest of this contract.
The amount of insurance provided by this rider is included in the Basic Amount
as modified by this rider (see Table of Basic Amounts). The insurance for any
contract month will start on the Monthly Date which begins that Contract Month;
it will end at the end of the day before the next Monthly Date.
We will deduct the charge for the insurance we provide under this rider from the
contract fund. The charge will be no more than the amount we describe under
Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under
Current Rates.
TABLE OF AMOUNTS OF INSURANCE
Tabular Amounts.--We show here the tabular amount of insurance for each $1,000
of Initial Amount of Term Insurance if death occurs in the contract year that
begins when the Insured is the attained age shown. The tabular amount of
insurance at any time is equal to the appropriate amount shown below times the
number of $1,000's of Initial Amount of Term Insurance, including any fraction,
shown on the Contract Data page(s).
Example: Suppose the Initial Amount of Term Insurance is $100,500. The number of
$1,000's of Initial Amount of Term Insurance is 100.5. The tabular amount of
insurance is $100,500 at attained age 70 and $50,250 at attained age 86.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
ATTAINED AGE TABULAR AMOUNT PAYABLE ATTAINED AGE TABULAR AMOUNT PAYABLE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
80 and below 1000 90 300
81 900 91 250
82 800 92 200
83 700 93 175
84 600 94 150
85 550 95 125
86 500 96 100
87 450 97 75
88 400 98 50
89 350 99 25
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(Continued on Next Page)
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<PAGE>
(Continued from Preceding Page)
Target Amount.--We compute the Target Amount on each Monthly Date. It will be
the larger of the amounts in (1) and (2), where
(1) is the tabular amount of insurance under this rider;
(2) is the amount of insurance, but not more than the Initial Amount of Term
Insurance, that can be provided at then current rates (which we describe under
Current Rates) by a charge equal to the maximum guaranteed charge for the
tabular amount of insurance under this rider.
Rider Premiums and Charges.--We show the premiums for this rider in the Contract
Data pages, and these premiums are included in the Schedule of Premiums shown in
these pages. From each premium payment, we make the deductions shown under
Schedule of Expense Charges From Premium Payments in these pages; the balance is
the invested premium amount which is added to the contract fund. We will deduct
from the contract fund on each Monthly Date, for the insurance we provide under
this rider, a charge for any portion of the basic amount which exceeds the
contract fund and for which we do not otherwise charge under the terms of the
contract or under the terms any extra benefit other than this rider.
Maximum Guaranteed Charges.--The maximum guaranteed charges per $1,000 of
Initial Amount of Term Insurance are included in the Schedule of Monthly
Deductions from Contract Fund in the Contract Data pages. These rates apply to
the insurance we provide under this rider. The amount we deduct on a Monthly
Date for the Target Amount will not be more than this charge multiplied by the
number of $1,000's of Initial Amount of Term Insurance.
Current Rates.--From time to time we will set the current rates for the
insurance we provide under this rider based on the Insured's rating class, sex
and attained age. They will not be more than the maximum guaranteed rates. We
will set rates based on our expectations as to future experience. At least once
every five years, but not more often than once a year, we will consider the need
to change the rates. We will change them only if we do so for all riders like
this one dated in the same year as this one.
MISCELLANEOUS PROVISIONS
General.--Where there is no conflict with this rider, the provisions of this
contract will also apply to the rider.
Death Benefit.--While this rider remains in force, the following two changes to
the contract apply. The definition of the insurance amount is amended by
deleting item (2), "the contract fund divided by the net single premium per $1
at the Insured's attained age on that date." The Table of Basic Amounts in the
contract is replaced with the table that follows. We have made these changes so
the contract and this rider together will comply with Section 7702 of the
Internal Revenue Code of 1954 as amended.
AL 500A N
II-276
<PAGE>
(Continued from Preceding Page)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
TABLE OF BASIC AMOUNTS
- -----------------------------------------------------------------------------------------------------------------------------
When the proceeds arise from the Insured's death:
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
And The Contract Is In Force: Then The Basic Amount Is: And We Adjust The Basic
Amount For:
- -----------------------------------------------------------------------------------------------------------------------------
and not in default past its the larger of: (1) the insurance amount, contract debt, plus any charges due in
days of grace plus the Target Amount described in rider the days of grace.
AL 500A N; and (2) the contract fund divided
by the net single premium per $1 at the
Insured's attained age on that date; plus the
amount of any extra benefits other than those
provided under rider AL 500A N.
- -----------------------------------------------------------------------------------------------------------------------------
as variable reduced paid-up the amount of variable reduced paid-up contract debt.
insurance insurance
- -----------------------------------------------------------------------------------------------------------------------------
as extended insurance the amount of term insurance, if the nothing.
Insured dies in the term; otherwise zero
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Termination.--This rider will end on the earliest of:
1. the end of the last day of grace if the contract is in default; it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the anniversary on which the Insured's attained age
is 100;
3. the date the contract is surrendered under its Cash Value Option; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing and we agree, we will cancel the rider as of
the first Monthly Date on or after we receive your request. Contract premiums
and monthly charges due then and later will be reduced accordingly.
Rider attached to and made a part of this contract
on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN
-------------------
Secretary
AL 500A N
II-277
EXHIBIT 1.A(13)(ee)(ii)
SUPPLEMENTARY MONTHLY RENEWABLE NON-CONVERTIBLE
ONE MONTH TERM INSURANCE
Monthly Term Insurance.--Under this rider, we will provide monthly term
insurance an the Insured's life. We will do this during any Contract Month which
begins on a Monthly Date on which the contract is not in default and on which
the Insured's attained age is less than 70.
You will not have to prove to us that the Insured is insurable to continue this
insurance from month to month provided the rider has not ended as described in
the Termination section. We make these promises subject to all the provisions of
this rider and of the rest of this contract.
The amount of insurance provided by this rider is included in the Basic Amount
as modified by this rider (see Table of Basic Amounts). The insurance for any
contract month will start on the Monthly Date which begins that Contract Month;
it will end at the end of the day before the next Monthly Date.
We will deduct the charge for the insurance we provide under this rider from the
contract fund. The charge will be no more than the amount we describe under
Maximum Guaranteed Charges. We may deduct a smaller charge as we describe under
Current Rates.
Target Amount.--The Target Amount is the Initial Amount of Term Insurance, which
we show in the Contract Data pages.
RIDER PREMIUMS AND CHARGES.--We show the premiums for this rider in the Contract
Data pages, and these premiums are included in the Schedule of Premiums shown in
these pages. From each premium payment, we make the deductions shown under
Schedule of Expense Charges from Premium Payments in these pages; the balance is
the invested premium amount which is added to the contract fund. We will deduct
from the contract fund on each Monthly Date, for the insurance we provide under
this rider, a charge for any portion of the Basic Amount which exceeds the
contract fund and for which we do not otherwise charge under the terms of the
contract or under the terms of any extra benefit other than this rider.
Rider premiums and monthly charges stop on the contract anniversary on which the
Insured's attained age is 70.
Maximum Guaranteed Charges.--The maximum guaranteed charges per $1,000 of
insurance are included in the Schedule of Monthly Deductions from the Contract
Fund in the Contract Data pages. These rates apply to the insurance we provide
under this rider.
Current Rates.--From time to time we will set the current rates for the
insurance we provide under this rider. They will be based on the Insured's
rating class, sex and attained age. They will not be more than the maximum
guaranteed rates. We will set rates based on our expectations as to future
experience. At least once every five years, but not more often than once a year,
we will consider the need to change the rates. We will change them only if we do
so for all riders like this one dated in the same year as this one.
Continuation of Coverage at Attained Age 70.--As we state under Termination,
this rider will end at the end of the day before the anniversary on which the
Insured's attained age is 70, if it has not ended before then. If the rider does
end in this way, you may continue the coverage on the Insured's life by means of
either an increase in the face amount of this contract or the purchase of a new
contract. You will not have to prove that the Insured is insurable.
1. Automatic Increase in Face Amount. If this rider is in force on the day
before the anniversary on which the Insured's attained age is 70, and if we
would permit an increase at that time under our then current rules, we will
automatically increase the face amount of the contract. The amount of the
increase will be the Initial Amount of Term Insurance under this rider. The
increase will be in the same rating class as this rider. It will take effect on
the contract anniversary on which the Insured's attained age is 70. We will set
the premium for the increase in accord with our regular rules in use on the
effective date of the increase and based on the Insured's sex and attained age.
2. Purchase of a New Contract. If this rider is in force as described in 1
above, but we would not permit an increase at that time, you will be able to
obtain a new contract of insurance on the Insured's life. The new contract will
be on the Life Paid Up at age 85 plan. It will be issued by The Prudential
Insurance Company of America. It will be in the same rating class as this rider.
Its face amount will be the difference between the Basic Amount under this
contract on the day before the anniversary on which the Insured's attained age
is 70 and the Basic Amount on that anniversary. It will not have any
Supplementary Benefits. The premiums will be set by The Prudential using its
rules in effect on the contract date. The new contract will not take effect
unless the premium for it is paid while the Insured is living and within 31 days
after its contract date. If the premium is paid as we state, it will be deemed
that the insurance under the new contract took effect on its contract date.
(Continued on Next Page)
AL 500A Y
II-278
<PAGE>
MISCELLANEOUS PROVISIONS
General.--Where there is no conflict with this rider, the provisions of this
contract will also apply to the rider.
Death Benefit.--While this rider remains in force, the following two changes to
the contract apply. The definition of the insurance amount is amended by
deleting item (2), "the contract fund divided by the net single premium per $1
at the Insured's attained age on that date." The Table of Basic Amounts in the
contract is replaced with the table that follows. We have made these changes so
the contract and this rider together will comply with Section 7702 of the
Internal Revenue Code of 1954 as amended.
- --------------------------------------------------------------------------------
TABLE OF BASIC AMOUNTS
- --------------------------------------------------------------------------------
When the proceeds arise from the Insured's death:
- --------------------------------------------------------------------------------
And The Contract Is Then The Basic Amount Is: And We Adjust The
In Force: Basic Amount For:
- --------------------------------------------------------------------------------
and not in default the larger of: (1) the insurance contract debt,
past its days of amount, plus the Target Amount plus any charges
grace described in rider AL 500A Y; and due in the days
(2) the contract fund divided by of grace.
the net single premium per $1 at
the Insured's attained age; plus
the amount of any extra benefits
arising from the Insured's death
other than those provided under
rider AL 500A Y.
- --------------------------------------------------------------------------------
as reduced paid-up the amount of reduced contract debt.
insurance paid-up insurance
- --------------------------------------------------------------------------------
as extended insurance the amount of term insurance, nothing.
if the Insured dies in the
term; otherwise zero
- --------------------------------------------------------------------------------
Termination.--This rider will end on the earliest of:
1. the end of the last day of grace if the contract is in default: it will not
continue if a benefit takes effect under any contract value options provision
that may be in the contract;
2. the end of the day before the anniversary on which the Insured's attained age
is 70;
3. the date the contract is surrendered under its Cash Value Option; and
4. the date the contract ends for any other reason.
Further, if you ask us in writing and we agree, we will cancel the rider as of
the first Monthly Date on or after we receive your request. Contract premiums
and monthly charges due then and later will be reduced accordingly.
Rider attached to and made a part of this contract
on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ SPECIMEN
------------------------------
Secretary
AL 500A Y
II-279
Exhibit 3
April 25, 1997
Pruco Life Insurance Company
of New Jersey
213 Washington Street
Newark, New Jersey 07102-2992
Gentlemen:
In my capacity as Chief Legal Officer and Assistant Secretary of Pruco Life
Insurance Company of New Jersey ("Pruco Life of New Jersey"), I have reviewed
the establishment on January 13, 1984 of Pruco Life of New Jersey Variable
Appreciable Account (the "Account") by the Executive Committee of the Board of
Directors of Pruco Life of New Jersey as a separate account for assets
applicable to certain variable life insurance contracts, pursuant to the
provisions of Section 17B:28-7 of the Revised Statutes of New Jersey. I am
responsible for oversight of the preparation and review of the Registration
Statements on Form S-6, as amended, filed by Pruco Life of New Jersey with the
Securities and Exchange Commission (Registration No. 2-89780 and Registration
No. 33-57186) under the Securities Act of 1933 for the registration of certain
variable appreciable life insurance contracts issued with respect to the
Account.
I am of the following opinion:
(1) Pruco Life of New Jersey was duly organized under the laws of
New Jersey and is a validly existing corporation.
(2) The Account has been duly created and is validly existing as a
separate account pursuant to the aforesaid provisions of New
Jersey law.
(3) The portion of the assets held in the Account equal to the
reserve and other liabilities for variable benefits under the
variable appreciable life insurance contracts is not chargeable
with liabilities arising out of any other business Pruco Life of
New Jersey may conduct.
(4) The variable appreciable life insurance contracts are legal and
binding obligations of Pruco Life of New Jersey in accordance
with their terms.
In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as I judged to be necessary or
appropriate.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/
- ---------------------------
Clifford E. Kirsch
II-280
Exhibit 6
April 25, 1997
Pruco Life Insurance Company of New Jersey
213 Washington Street
Newark, New Jersey 07102-2992
To Pruco Life Insurance Company of New Jersey:
This opinion is furnished in connection with the registration by Pruco Life
Insurance Company of New Jersey of variable appreciable life insurance contracts
("Contracts") under the Securities Act of 1933. The prospectus included in
Post-Effective Amendment No. 25 to Registration Statement No. 2-89780 on Form
S-6 describes the Contracts. I have reviewed the two Contract forms and I have
participated in the preparation and review of the Registration Statement and
Exhibits thereto. In my opinion:
(1) The illustrations of cash surrender values and death benefits
included in the section of the prospectus entitled
"Illustrations", based on the assumptions stated in the
illustrations, are consistent with the provisions of the
respective forms of the Contracts. The rate structure of the
Contracts has not been designed so as to make the relationship
between premiums and benefits, as shown in the illustrations,
appear more favorable to a prospective purchaser of a Contract
for male age 35 than to prospective purchasers of Contracts on
males of other ages or on females.
(2) The illustration of the effect of a Contract loan on the cash
surrender value included in the section entitled "Contract
Loans", based on the assumptions stated in the illustration, is
consistent with the provisions of the Form A Contract.
(3) The illustrations of the effect of an increase in the Contract
fund on the increase in insurance amount shown in the section
entitled "Revised Contracts" (How a Contract's Death Benefits
will Vary") are consistent with the provisions of the Revised
Form A and Form B Contracts.
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
prospectus.
Very truly yours,
/s/
- -----------------------------
Pam A. Schiz, FSA, MAAA
Actuarial Director
The Prudential Insurance Company of America
II-281
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
Article 6 of Regulation S-X
Pruco Life of New Jersey Variable Appreciable Account
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 552,973
<INVESTMENTS-AT-VALUE> 662,984
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 662,984
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 36,522
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 662,984
<DIVIDEND-INCOME> 20,185
<INTEREST-INCOME> 0
<OTHER-INCOME> 53,109
<EXPENSES-NET> 2,616
<NET-INVESTMENT-INCOME> 17,569
<REALIZED-GAINS-CURRENT> 4,438
<APPREC-INCREASE-CURRENT> 7,405
<NET-CHANGE-FROM-OPS> 82,520
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 76,896
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
