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. 29
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) 778-2255
(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
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, 2000 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. Introduction and Summary; Short-Term
Cancellation Right, or "Free Look"; Contract
Forms; Contract Date; Premiums; Allocation of
Premiums; Transfers; Charges and Expenses; 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;
Tax-Qualified Pension Plans; The Fixed-Rate
Option; Other General Contract Provisions;
Voting Rights; Substitution of Series Fund
Shares; Increases in Face Amount; Decreases in
Face Amount; The Prudential Series Fund, Inc.
11. Introduction and Summary; Pruco Life of New
Jersey Variable Appreciable Account
12. Cover Page; Introduction and Summary; The
Prudential Series Fund, Inc.; Sale of the
Contract and Sales Commissions
13. Introduction and Summary; 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. Introduction and Summary; Requirements for
Issuance of a Contract
<PAGE>
N-B-2 ITEM NUMBER LOCATION
- ----------------- --------
15. Introduction and Summary; Premiums; Allocation
of Premiums; Transfers; Dollar Cost Averaging;
The Fixed Rate Option
16. Introduction and Summary; Detailed Information
for 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
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. Introduction and Summary; 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
<PAGE>
N-B-2 ITEM NUMBER LOCATION
- ----------------- --------
40. Not Applicable
41. Sale of the Contract and Sales Commissions
42. Not Applicable
43. Not Applicable
44. Introduction and Summary; 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. Introduction and Summary; Pruco Life of New
Jersey Variable Appreciable Account; The
Prudential Series Fund, Inc.
47. Pruco Life of New Jersey Variable Appreciable
Account; The Prudential Series Fund, Inc.
48. Not Applicable
49. Not Applicable
50. Not Applicable
51. Not Applicable
52. Substitution of Series Fund Shares
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
the Variable Appreciable Life Subaccounts 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>
Pruco Life of New Jersey's
Variable Appreciable Life(R)
Insurance
PROSPECTUS
The Pruco Life of New Jersey
Variable Appreciable
Account
MAY 1, 2000
Pruco Life Insurance Company of New Jersey
<PAGE>
PROSPECTUS
MAY 1, 2000
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
VARIABLE APPRECIABLE ACCOUNT
VARIABLE
APPRECIABLE
LIFE(R)
INSURANCE CONTRACTS
This prospectus describes two forms of an individual variable life insurance
contract (the "Contract") offered by Pruco Life Insurance Company of New Jersey
("Pruco Life of New Jersey", "us", "we", or "our") under the name Variable
APPRECIABLE LIFE(R) Insurance. Pruco Life of New Jersey, a stock life insurance
company, is an indirect, wholly-owned subsidiary of The Prudential Insurance
Company of America ("Prudential"). The first form of the Contract provides a
death benefit that generally remains fixed in an amount you, as the Contract
owner, choose and cash surrender values that vary daily. The second form also
provides cash surrender values that vary daily and a death benefit that will
also vary daily. Under both forms of contract, the death benefit will never be
less than the "face amount" of insurance you choose. There is no guaranteed
minimum cash surrender value.
AS OF MAY 1, 1992, PRUCO LIFE OF NEW JERSEY NO LONGER OFFERED THESE CONTRACTS
FOR SALE.
You may choose to invest your Contract's premiums and its earnings in one or
more of the following ways:
o Invest in one or more of 13 available subaccounts of the Pruco Life of New
Jersey Variable Appreciable Account (the "Account"), each of which invests
in a corresponding portfolio of The Prudential Series Fund, Inc. (the
"Series Fund"):
MONEY MARKET HIGH YIELD BOND PRUDENTIAL JENNISON
DIVERSIFIED BOND STOCK INDEX SMALL CAPITALIZATION STOCK
GOVERNMENT INCOME EQUITY INCOME GLOBAL
CONSERVATIVE BALANCED EQUITY NATURAL RESOURCES
FLEXIBLE MANAGED
o Invest in the FIXED-RATE OPTION, which pays a guaranteed interest rate.
o Invest in the Pruco Life of New Jersey Variable Contract Real Property
Account (the "Real Property Account"), described in a prospectus attached
to this one.
This prospectus describes the Contract generally and the Account. The attached
prospectus for the Series Fund, and the Series Fund's statement of additional
information describe the investment objectives and the risks of investing in the
Series Fund portfolios. Pruco Life of New Jersey may add additional investment
options in the future. Please read this prospectus and keep it for future
reference.
The Securities and Exchange Commission ("SEC") maintains a Web site
(http://www.sec.gov) that contains material incorporated by reference and other
information regarding registrants that file electronically with the SEC.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. 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) 778-2255
APPRECIABLE LIFE is a registered mark of Prudential.
<PAGE>
PROSPECTUS CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INTRODUCTION AND SUMMARY.......................................................................................................1
BRIEF DESCRIPTION OF THE CONTRACT...........................................................................................1
CHARGES.....................................................................................................................1
TYPES OF DEATH BENEFIT......................................................................................................3
PREMIUMS....................................................................................................................3
LAPSE AND GUARANTEE AGAINST LAPSE...........................................................................................3
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.............................................................................................5
VOTING RIGHTS...............................................................................................................6
THE FIXED-RATE OPTION.......................................................................................................6
THE PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT........................................................7
WHICH INVESTMENT OPTION SHOULD BE SELECTED?.................................................................................7
DETAILED INFORMATION FOR CONTRACT OWNERS.......................................................................................8
CHARGES AND EXPENSES........................................................................................................8
REQUIREMENTS FOR ISSUANCE OF A CONTRACT....................................................................................11
SHORT-TERM CANCELLATION RIGHT OR "FREE-LOOK"...............................................................................11
CONTRACT FORMS.............................................................................................................12
CONTRACT DATE..............................................................................................................13
PREMIUMS...................................................................................................................13
ALLOCATION OF PREMIUMS.....................................................................................................15
DOLLAR COST AVERAGING......................................................................................................15
TRANSFERS..................................................................................................................15
REDUCTION OF CHARGES FOR CONCURRENT SALES TO SEVERAL INDIVIDUALS...........................................................16
HOW A CONTRACT'S CASH SURRENDER VALUE WILL VARY............................................................................16
HOW A CONTRACT'S DEATH BENEFIT WILL VARY...................................................................................17
WHEN A CONTRACT BECOMES PAID-UP............................................................................................18
FLEXIBILITY AS TO PAYMENT OF PREMIUMS......................................................................................19
SURRENDER OF A CONTRACT....................................................................................................19
WITHDRAWAL OF EXCESS CASH SURRENDER VALUE..................................................................................20
INCREASES IN FACE AMOUNT...................................................................................................20
DECREASES IN FACE AMOUNT...................................................................................................22
LAPSE AND REINSTATEMENT....................................................................................................22
WHEN PROCEEDS ARE PAID.....................................................................................................23
LIVING NEEDS BENEFIT.......................................................................................................23
ILLUSTRATIONS OF CASH SURRENDER VALUES, DEATH BENEFITS, AND ACCUMULATED PREMIUMS...........................................24
CONTRACT LOANS.............................................................................................................26
REPORTS TO CONTRACT OWNERS.................................................................................................27
OPTIONS ON LAPSE...........................................................................................................27
RIGHT TO EXCHANGE A CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY..........................................................27
SALE OF THE CONTRACT AND SALES COMMISSIONS.................................................................................28
TAX TREATMENT OF CONTRACT BENEFITS.........................................................................................28
TAX-QUALIFIED PENSION PLANS................................................................................................30
LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT PREMIUMS AND BENEFITS........................................................30
OTHER GENERAL CONTRACT PROVISIONS..........................................................................................30
RIDERS.....................................................................................................................31
SUBSTITUTION OF SERIES FUND SHARES.........................................................................................31
STATE REGULATION...........................................................................................................31
EXPERTS....................................................................................................................32
LITIGATION AND REGULATORY PROCEEDINGS......................................................................................32
ADDITIONAL INFORMATION.....................................................................................................32
FINANCIAL STATEMENTS.......................................................................................................33
</TABLE>
<PAGE>
<TABLE>
<S> <C>
DIRECTORS AND OFFICERS........................................................................................................34
FINANCIAL STATEMENTS OF THE VARIABLE APPRECIABLE LIFE SUBACCOUNTS OF PRUCO LIFE OF
NEW JERSEY VARIABLE APPRECIABLE ACCOUNT.......................................................................................A1
FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY............................................................B1
</TABLE>
<PAGE>
INTRODUCTION AND SUMMARY
This Summary provides a brief overview of the more significant aspects of the
Contract. We provide further detail in the subsequent sections of this
prospectus and in the Contract.
BRIEF DESCRIPTION OF THE CONTRACT
AS OF MAY 1, 1992, PRUCO LIFE OF NEW JERSEY NO LONGER OFFERED THESE CONTRACTS
FOR SALE.
The Variable Appreciable Life Insurance Contract (the "Contract") is issued by
Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey", "we",
"us", or "our"). The Contract is a form of flexible premium variable life
insurance. It is based on a Contract Fund, the value of which changes every
business day. The Contract Fund is the total amount credited to a specific
Contract. On any date it is equal to the sum of the amounts invested in the
variable investment options and the fixed-rate option, and the principal amount
of any Contract debt plus any interest earned thereon. Contract debt is the
principal amount of all outstanding loans plus any interest accrued. You will,
however, have to pay a surrender charge if you decide to surrender the Contract
during the first 10 years or 10 years after an increase in the face amount of
insurance.
A broad objective of the Contract is to provide benefits that will increase in
value if favorable investment results are achieved. You may invest premiums in
one or more of the 13 available subaccounts, in the fixed-rate option, or in the
Real Property Account.
Although the value of your Contract Fund will increase if there is favorable
investment performance in the variable investment options you select, investment
returns in the variable investment options are NOT guaranteed. There is a risk
that investment performance will be unfavorable and that the value of your
Contract Fund will decrease. The risk will be different, depending upon which
investment options you choose. See WHICH INVESTMENT OPTION SHOULD BE SELECTED?,
page 7. If you select the fixed-rate option, Pruco Life of New Jersey credits
your account with a declared rate or rates of interest. You assume the risk that
the rate may change, although it will never be lower than an effective annual
rate of 4%.
Variable life insurance contracts are unsuitable as short-term savings vehicles.
Withdrawals and loans may negate any guarantees against lapse (see LAPSE AND
REINSTATEMENT, page 22) and possibly may result in adverse tax consequences. See
TAX TREATMENT OF CONTRACT BENEFITS, page 28.
CHARGES
We deduct certain charges from each premium payment and from the amounts held in
the designated investment options. In addition, Pruco Life of New Jersey makes
additional charges if a Contract lapses or is surrendered during the first 10
Contract years or 10 years after an increase in the face amount of insurance.
All these charges, which are largely designed to cover insurance costs and risks
as well as sales and administrative expenses, are fully described under CHARGES
AND Expenses on page 8. In brief, and subject to that fuller description, the
following diagram outlines the maximum charges which Pruco Life of New Jersey
may make:
-----------------------------------------------------------
| PREMIUM PAYMENT |
-----------------------------------------------------------
|
|
-----------------------------------------------------------
| o less a charge for taxes attributable to premiums |
| o less $2 processing fee |
| o We deduct a sales charge from the Contract Fund of |
| up to 5% of the portion of the premium remaining |
| after deducting the $2 processing fee. |
-----------------------------------------------------------
1
<PAGE>
- --------------------------------------------------------------------------------
NET PREMIUM AMOUNT
o To be invested in one or a combination of:
o The invested portfolios of the Series Fund
o The fixed-rate option
o The Real Property Account
- --------------------------------------------------------------------------------
|
- --------------------------------------------------------------------------------
DAILY CHARGES
o We deduct management fees and expenses from the Series Fund and, if
applicable, from the Real Property assets. See UNDERLYING PORTFOLIO
EXPENSES chart, below, and PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT
REAL PROPERTY ACCOUNT, page 7.
o We deduct a daily mortality and expense risk charge, equivalent to an
annual rate of up to 0.6% from assets in the variable investment
options.
- --------------------------------------------------------------------------------
|
- --------------------------------------------------------------------------------
MONTHLY CHARGES
o We reduce the Contract Fund by a guaranteed minimum death benefit risk
charge of not more than $0.01 per $1,000 of the face amount of
insurance.
o We reduce the Contract Fund by an administrative charge of up to $2.50
per Contract and up to $0.02 per $1,000 of face amount of insurance.
o We deduct a charge for anticipated mortality, with the maximum charge
based on 1980 CSO Tables.
o If the Contract includes riders, we deduct rider charges from the
Contract Fund.
o If the rating class of the insured results in an extra charge, we will
deduct that charge from the Contract Fund.
- --------------------------------------------------------------------------------
|
- --------------------------------------------------------------------------------
POSSIBLE CHARGES
o During the first 10 years or 10 years after an increase in the face
amount of insurance, if the Contract lapses or is surrendered, we assess
a contingent deferred sales charge. The maximum contingent deferred
sales charges are reduced for Contracts that have been inforce for more
than five years.
o During the first 10 years, if the Contract lapses or is surrendered, we
assess a contingent deferred administrative charge; this charge begins
to decline uniformly after the fifth Contract year so that it disappears
on the 10th Contract anniversary.
o We assess an administrative processing charge equal to the lesser of $15
or 2% for each withdrawal of excess cash surrender value.
- --------------------------------------------------------------------------------
|
- --------------------------------------------------------------------------------
UNDERLYING PORTFOLIO EXPENSES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
TOTAL
PORTFOLIO INVESTMENT OTHER CONTRACTUAL TOTAL ACTUAL EXPENSES*
ADVISORY FEE EXPENSES EXPENSES
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market 0.40% 0.02% 0.42% 0.40%
Diversified Bond 0.40% 0.03% 0.43% 0.40%
Government Income 0.40% 0.04% 0.44% 0.44%
Conservative Balanced 0.55% 0.02% 0.57% 0.40%
Flexible Managed 0.60% 0.02% 0.62% 0.40%
High Yield Bond 0.55% 0.05% 0.60% 0.60%
Stock Index 0.35% 0.04% 0.39% 0.39%
Equity Income 0.40% 0.02% 0.42% 0.42%
Equity 0.45% 0.02% 0.47% 0.40%
Prudential Jennison 0.60% 0.03% 0.63% 0.63%
Small Capitalization Stock 0.40% 0.05% 0.45% 0.45%
Global 0.75% 0.09% 0.84% 0.84%
Natural Resources 0.45% 0.12% 0.57% 0.57%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
* 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. Pruco
Life currently makes payments to the following five subaccounts so that
the portfolio expenses indirectly borne by a Contract owner investing in
the Money Market, Diversified Bond, Conservative Balanced, Flexible
Managed, and Equity Portfolios will not exceed 0.4%. No such offset will
be made with respect to the remaining portfolios, which had no
counterparts in the Pruco Life Series Fund, Inc.
TYPES OF DEATH BENEFIT
You choose either of two Contract Forms. Under Contract Form A, the death
benefit remains fixed in amount (unless the Contract becomes paid-up) and only
the cash surrender value will vary with investment experience. Under a newer
version, sold in most jurisdictions beginning in September 1986, the death
benefit may be increased to ensure that the Contract continues to satisfy the
Internal Revenue Code's definition of life insurance. Under Contract Form B,
both the death benefit and the cash surrender value will vary with investment
experience. However, 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. (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.)
PREMIUM PAYMENTS
You have flexibility with respect to the payment of premiums. The Contract sets
forth Scheduled Premiums payable annually, semi-annually quarterly or monthly.
But you are generally permitted, within very broad limits, to pay greater than
Scheduled Premiums. However, the payment of premiums in excess of Scheduled
Premiums may cause the Contract to be classified as a Modified Endowment
Contract for federal income tax purposes. See PREMIUMS, page 13 and TAX
TREATMENT OF CONTRACT BENEFITS, page 28. The net portion of such payments will
promptly be invested in the manner you previously selected. Cash surrender
values will generally be increased whenever premiums are paid, 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.
LAPSE AND GUARANTEE AGAINST LAPSE
As long as you pay Scheduled Premiums 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 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 inforce. See LAPSE AND
REINSTATEMENT, page 22 . 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.
The amount of the Scheduled Premium, for a specific face amount of insurance,
depends upon the insured's sex (except where unisex rates apply), 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).
THE REPLACEMENT OF LIFE INSURANCE IS GENERALLY NOT IN YOUR BEST INTEREST. IN
MOST CASES, IF YOU REQUIRE ADDITIONAL COVERAGE, THE BENEFITS OF YOUR EXISTING
CONTRACT CAN BE PROTECTED BY PURCHASING ADDITIONAL INSURANCE OR A SUPPLEMENTAL
CONTRACT. IF YOU ARE CONSIDERING REPLACING A CONTRACT, YOU SHOULD COMPARE THE
BENEFITS AND COSTS OF SUPPLEMENTING YOUR EXISTING CONTRACT WITH THE BENEFITS AND
COSTS OF PURCHASING ANOTHER CONTRACT AND YOU SHOULD CONSULT A QUALIFIED TAX
ADVISER.
3
<PAGE>
THIS PROSPECTUS WAS ONLY OFFERED IN JURISDICTIONS IN WHICH THE OFFERING WAS
LAWFUL. NO PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH
THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE PRUDENTIAL
SERIES FUND PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION, AND THE
PROSPECTUS FOR THE REAL PROPERTY ACCOUNT.
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", "us",
"we", or "our") 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 an indirect, wholly-owned subsidiary of The
Prudential Insurance Company of America ("Prudential"), a mutual insurance
company founded in 1875 under the laws of the State of New Jersey. Prudential is
currently considering reorganizing itself into a publicly traded stock company
through a process known as "demutualization". On February 10, 1998, Prudential's
Board of Directors authorized management to take preliminary steps necessary to
allow Prudential to demutualize. On July 1, 1998, legislation was enacted in New
Jersey that would permit this conversion to occur and that specified the process
for conversion. Demutualization is a complex process involving development of a
plan of reorganization, adoption of a plan by Prudential's Board of Directors, a
public hearing, voting by qualified policyholders, and regulatory approval.
Prudential is working toward completing this process in 2001 and currently
expects adoption by the Board of Directors to take place in the latter part of
2000. However, there is no certainty that the demutualization will be completed
in this timeframe or that the necessary approvals will be obtained. Also it is
possible that after careful review, Prudential could decide not to demutualize
or could decide to delay its plans.
The plan of reorganization, which has not been fully developed and approved,
would provide the criteria for determining eligibility and the methodology for
allocating shares or other consideration to those who would be eligible.
Generally the amount of shares or other consideration eligible customers would
receive would be based on a number of factors, including types, amounts, and
issue years of the policies. As a general rule, owners of Prudential-issued
insurance policies and annuity contracts would be eligible, provided that their
policies were in force on the date Prudential's Board of Directors adopted a
plan of reorganization, while mutual fund customers and customers of the
Prudential's subsidiaries (such as the Pruco Life insurance companies) would not
be. It has not yet been determined whether any exceptions to that general rule
will be made with respect to policyholders and contractholders of Prudential's
subsidiaries. This does not constitute a proposal, offer, solicitation or
recommendation regarding any plan of reorganization that may be proposed or a
recommendation regarding the ownership of any stock that could be issued in
connection with any such demutualization.
PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
We have established a separate account, the Pruco Life of New Jersey Variable
Appreciable Account (the "Account"), to hold the assets that are associated with
the Contracts. The Account was established on January 13, 1984 under New Jersey
law and 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. 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.
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
4
<PAGE>
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 obligations to Contract owners and beneficiaries arising under the Contract
are general corporate obligations of Pruco Life of New Jersey.
Currently, you may invest in one or a combination of 13 subaccounts. When you
choose a subaccount, we purchase shares of the Series Fund which are held as an
investment for that option. We hold these shares in the Account. We may add
additional subaccounts 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 Insurance Company ("Pruco Life") and Pruco Life of New Jersey, 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.
THE SERIES FUND HAS A SEPARATE PROSPECTUS THAT IS PROVIDED WITH THIS PROSPECTUS.
YOU SHOULD READ THE SERIES FUND PROSPECTUS BEFORE YOU DECIDE TO ALLOCATE ASSETS
TO THE SERIES FUND SUBACCOUNTS. THERE IS NO ASSURANCE THAT THE INVESTMENT
OBJECTIVES OF THE SERIES FUND PORTFOLIOS WILL BE MET.
Listed below are the available portfolios of the Series Fund and their
investment objectives:
o MONEY MARKET PORTFOLIO - The investment objective is maximum current income
consistent with the stability of capital and the maintenance of liquidity.
The Portfolio invests in high quality short-term debt obligations that
mature in 13 months or less.
o DIVERSIFIED BOND PORTFOLIO - The investment objective is a high level of
income over a longer term while providing reasonable safety of capital. The
Portfolio invests primarily in higher grade debt obligations and high
quality money market investments.
o GOVERNMENT INCOME PORTFOLIO - The investment objective is a high level of
income over the longer term consistent with the preservation of capital.
The Portfolio invests primarily in U.S. Government securities, including
intermediate and long-term U.S. Treasury securities and debt obligations
issued by agencies or instrumentalities established by the U.S. Government.
o CONSERVATIVE BALANCED PORTFOLIO - The investment objective is a total
investment return consistent with a conservatively managed diversified
portfolio. The Portfolio invests in a mix of equity securities, debt
obligations and money market instruments.
o FLEXIBLE MANAGED PORTFOLIO - The investment objective is a total investment
return consistent with an aggressively managed diversified portfolio. The
Portfolio invests in a mix of equity securities, debt obligations and money
market instruments.
o HIGH YIELD BOND PORTFOLIO - The investment objective is a high total
return. The Portfolio invests primarily in high yield/high risk debt
securities.
o STOCK INDEX PORTFOLIO - The investment objective is investment results that
generally correspond to the performance of publicly-traded common stocks
generally. The Portfolio attempts to duplicate the price and yield
performance of Standard & Poor's 500 Stock Index (the "S&P 500").
5
<PAGE>
o EQUITY INCOME PORTFOLIO - The investment objective is both current income
and capital appreciation. The Portfolio invests primarily in common stocks
and convertible securities that provide good prospects for returns above
those of the S&P 500 or the NYSE Composite Index.
o EQUITY PORTFOLIO - The investment objective is capital appreciation. The
Portfolio invests primarily in common stocks of major established
corporations as well as smaller companies that offer attractive prospects
of appreciation.
o PRUDENTIAL JENNISON PORTFOLIO - The investment objective is to achieve
long-term growth of capital. The Portfolio invests primarily in equity
securities of major established corporations that offer above average
growth prospects.
o SMALL CAPITALIZATION STOCK PORTFOLIO - The investment objective is
long-term growth of capital. The Portfolio invests primarily in equity
securities of publicly-traded companies with small market capitalization.
o GLOBAL PORTFOLIO - The investment objective is long-term growth of capital.
The Portfolio invests primarily in common stocks (and their equivalents) of
foreign and U.S. companies.
o NATURAL RESOURCES PORTFOLIO - The investment objective is long-term growth
of capital. The Portfolio invests primarily in common stocks and
convertible securities of natural resource companies and securities that
are related to the market value of some natural resource.
Prudential is the investment adviser for the assets of each of the portfolios of
the Series Fund. Prudential's principal business address is 751 Broad Street ,
Newark, New Jersey 07102-3777. Prudential has a Service Agreement with its
wholly-owned subsidiary The Prudential Investment Corporation ("PIC"). The
Service Agreement 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 LLC ("Jennison"). Jennison
furnishes investment advisory services for 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 advisers under the 1940 Act.
As an investment adviser, 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 8.
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. Neither the companies that 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. 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.
VOTING RIGHTS
We are the legal owner of the shares in the Series Fund associated with the
subaccounts. However, we vote the shares in the Series Fund according to voting
instructions we receive from Contract owners. We will mail you a proxy, which is
a form you need to complete and return to us to tell us how you wish us to vote.
When we receive those instructions, we will vote all of the shares we own on
your behalf in accordance with those instructions. We will vote the shares for
which we do not receive instructions and shares that we own, in the same
proportion as the shares for which instructions are received. We may change the
way your voting instructions are calculated if it is required by federal
regulation. 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.
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
6
<PAGE>
THE STAFF OF THE SEC HAS NOT REVIEWED THE DISCLOSURE IN THIS PROSPECTUS RELATING
TO THE FIXED-RATE OPTION. ANY INACCURATE OR MISLEADING DISCLOSURE REGARDING THE
FIXED-RATE OPTION MAY, HOWEVER, BE SUBJECT TO CERTAIN GENERALLY APPLICABLE
PROVISIONS OF FEDERAL SECURITIES LAWS.
You may choose to allocate, either initially or by transfer, all or part of your
Contract Fund to a fixed-rate option. This amount becomes part of Pruco Life of
New Jersey's general account. The general account 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 general account assets. 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%.
Transfers from the fixed-rate option are subject to strict limits. See
TRANSFERS, page 15. The payment of any cash surrender value attributable to the
fixed-rate option may be delayed up to six months. See WHEN PROCEEDS ARE PAID,
page 23.
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.
This account, through a general partnership formed by Prudential and two of its
wholly-owned subsidiaries, Pruco Life of New Jersey and Pruco Life, 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
asset value.
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,
RESTRICTIONS, CHARGES AND EXPENSES, INVESTMENT RISKS, 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. IT 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 OF THE REAL PROPERTY ACCOUNT WILL BE MET.
WHICH INVESTMENT OPTION SHOULD BE SELECTED?
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 different investment risks,
policies, and programs.
You 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. Or, you may want even greater safety of principal
and may prefer the Money Market Portfolio or the fixed-rate option, recognizing
that the level of short-term rates may change rather rapidly. If you are willing
to take risks and possibly achieve a higher total return, you may prefer the
High Yield Bond Portfolio, recognizing that the risks are greater for lower
quality bonds with normally higher yields. You may wish to divide your invested
premium among two or more of the portfolios. You may wish to obtain
diversification by relying on Prudential's judgement for an appropriate asset
mix by choosing one of the Balanced Portfolios. The Real Property Account
permits diversification to your 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.
Your choice should take into account how willing you are to accept investment
risks, how your other assets are invested, and what investment results you may
experience in the future. You should consult your Pruco Life of New Jersey
representative from time to time about choices available to you under the
Contract. Pruco Life of New Jersey
7
<PAGE>
recommends AGAINST frequent transfers among the several options. Experience
generally indicates that "market timing" investing, particularly by
non-professional investors, is likely to prove unsuccessful.
DETAILED INFORMATION FOR CONTRACT OWNERS
CHARGES AND EXPENSES
This section provides a more detailed description of each charge that is
described briefly in the chart on page 4.
In several instances we use 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. If circumstances change,
Pruco Life of New Jersey reserves the right to increase each current charge, up
to the maximum charge, without giving any advance notice.
All of the charges we make, whether deducted from premiums or from the Contract
Fund, are described below:
1. We deduct a charge of $2 from each premium payment to cover the cost
of collecting and processing premiums. Thus, if you pay premiums
annually, you will incur lower aggregate processing charges than those
who pay premiums more frequently. During 1999, 1998, and 1997, Pruco
Life of New Jersey received a total of approximately $331,000,
$808,000, and $874,000, respectively, in processing charges.
2. We deduct a charge of up to 5% from each premium payment for sales
expenses. This charge, often called a "sales load", is deducted to
compensate us for the costs of selling the Contracts, including
commissions, advertising, and the printing and distribution of
prospectuses and sales literature. We will deduct part of this sales
load from each premium received in an amount up to 5% of the portion
of the premium remaining after the $2 administrative charge has been
deducted. We also deduct 5% of each additional premium, whether
scheduled or unscheduled. We will deduct the remainder of the sales
load only if the Contract is surrendered or stays in default past its
days of grace. This second part is called the deferred sales charge.
However, we will not deduct the deferred sales charge for Contracts
that lapse or are surrendered on or after the Contract's 10th
anniversary. The deferred sales charge will be reduced for Contracts
that lapse or are surrendered sometime between the eighth month of the
sixth year and the 10th anniversary. No deferred sales charge is
applicable to the death benefit, no matter when that becomes payable.
For Contracts under which premiums are payable annually, we will
charge the maximum deferred sales charge if the Contract lapses or is
surrendered, until the seventh month of the sixth Contract year or an
increase in the face amount of insurance. Thereafter, the sales charge
will be the maximum charge reduced uniformly until it becomes zero at
the end of the 10th 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 10th anniversary). The following table shows
illustrative deferred sales load charges that will be made when such
Contracts are surrendered or lapse.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
THE DEFERRED SALES CHARGE WILL WHICH IS EQUAL TO THE FOLLOWING
FOR CONTRACTS BE THE FOLLOWING PERCENTAGE PERCENTAGE OF THE SCHEDULED
SURRENDERED DURING 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>
8
<PAGE>
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 five 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 3. 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 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 1999, 1998, and 1997, Pruco Life of New Jersey
received a total of approximately $0, $18,000, and $33,000,
respectively, in sales load charges.
We 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 five 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 your instructions. We may, on a
uniform and non-contractual basis, withdraw or modify this concession,
although we do not currently intend to do so. If you elect to increase
the face amount of your 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 20.
3. We deduct a charge from each premium payment for state and local
premium-based taxes. This charge is equal to 2.5% of the premium
remaining after the $2 processing charge has been deducted. (The 7.5%
deduction referred to on page 15 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
1999, 1998, and 1997, Pruco Life of New Jersey received a total of
approximately $890,000, $1,015,000, and $1,174,000, respectively, in
charges for payment of state premium taxes.
4. On each Monthly date, we reduce the Contract Fund 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
14 years of age or less). Currently this $0.02 per $1,000 charge will
not be greater than $2 per month. We currently waive this $0.02 per
$1,000 charge for Contracts issued after June 1, 1987 on a Pru-Matic
Plan basis. 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. We will not make this charge if your Contract becomes paid-up or
has been continued inforce, after lapse, as variable reduced paid-up
insurance. During 1999, 1998, and 1997, Pruco Life of New Jersey
received a total of approximately $3,096,000, $2,418,000, and
$2,938,000, respectively, in monthly administrative charges.
5. On each Monthly date, we reduce the Contract Fund 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). We deduct this
charge for the risk we assume 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. We do not make this
charge if your Contract becomes paid-up or has been continued inforce,
after lapse, as variable reduced paid-up insurance. During 1999, 1998,
and 1997, Pruco Life of New Jersey received a total of approximately
$209,000, $398,000, and $581,000, respectively, for this risk charge.
9
<PAGE>
6. On each Monthly date, we deduct a mortality charge from the Contract
Fund 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 enable Pruco Life of New Jersey to pay
this larger death benefit. We determine the charge 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: (1) the
insured's sex (except where unisex rates apply); (2) current attained
age; and (3) 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 Tables. We 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. If this occurs, we may
make a lower mortality charge for such persons. We reserve 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
inforce pursuant to an option on lapse. See OPTIONS ON LAPSE, page 27.
If a Contract has a face amount of at least $100,000 and the insured has
met strict underwriting requirements so that the Contract is inforce 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. We deduct a charge for assuming mortality and expense risks. We deduct
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 0.60%. 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 1999, 1998, and 1997, Pruco Life of New Jersey
received a total of approximately $4,878,000, $4,631,000, and
$4,232,000, respectively, in mortality and expense risk charges. This
charge is not assessed against amounts allocated to the fixed-rate
option.
8. We deduct 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) upon lapse or surrender of the
Contract. This charge is made to cover the costs of: (1) processing
applications; (2) conducting medical examinations; (3) determining
insurability and the insured's risk class; and (4) 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 that stay inforce through the end of the Contract's 10th
anniversary (later if additional insurance is added after issue). 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 inforce 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 10th anniversary. During 1999,
1998, and 1997, Pruco Life of New Jersey received a total of
approximately $22,000, $118,000, and $248,000, 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 we currently intend to waive that charge if the
reclassification is effected concurrently with an increase in face
amount.
9. We deduct an administrative processing charge, in connection with each
withdrawal of cash surrender value, which is the lesser of : (a) $15;
and (b) 2% of each withdrawal amount. See WITHDRAWAL OF EXCESS CASH
SURRENDER VALUE, page 20.
10. If the Contract includes riders, we make monthly deductions from the
Contract Fund 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
10
<PAGE>
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 1999, expressed as a
percentage of the average assets during the year, are shown below:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
TOTAL PORTFOLIO EXPENSES
------------------------------------------------------------------------------------------------------------------
TOTAL
PORTFOLIO INVESTMENT OTHER CONTRACTUAL TOTAL ACTUAL
ADVISORY FEE EXPENSES EXPENSES EXPENSES*
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market 0.40% 0.02% 0.42% 0.40%
Diversified Bond 0.40% 0.03% 0.43% 0.40%
Government Income 0.40% 0.04% 0.44% 0.44%
Conservative Balanced 0.55% 0.02% 0.57% 0.40%
Flexible Managed 0.60% 0.02% 0.62% 0.40%
High Yield Bond 0.55% 0.05% 0.60% 0.60%
Stock Index 0.35% 0.04% 0.39% 0.39%
Equity Income 0.40% 0.02% 0.42% 0.42%
Equity 0.45% 0.02% 0.47% 0.40%
Prudential Jennison 0.60% 0.03% 0.63% 0.63%
Small Capitalization Stock 0.40% 0.05% 0.45% 0.45%
Global 0.75% 0.09% 0.84% 0.84%
Natural Resources 0.45% 0.12% 0.57% 0.57%
------------------------------------------------------------------------------------------------------------------
</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. Pruco Life currently makes payments to the following five
subaccounts so that the portfolio expenses indirectly borne by a
Contract owner investing in the Money Market, Diversified Bond,
Conservative Balanced, Flexible Managed, and Equity Portfolios will
not exceed 0.4%. No such offset will be made with respect to the
remaining portfolios, which had no counterparts in the Pruco Life
Series Fund, Inc.
The earnings of the Account are taxed as part of the operations of Pruco Life of
New Jersey. Currently, no charge is being made to the Account for Pruco Life of
New Jersey's federal income taxes. We will review the question of a charge to
the Account for Pruco Life of New Jersey's federal income taxes periodically.
Such a charge may be made in the future 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.
REQUIREMENTS FOR ISSUANCE OF A CONTRACT
As of May 1, 1992, Pruco Life of New Jersey no longer offered these Contracts
for sale. Generally, the minimum initial guaranteed death benefit was $60,000.
However, higher minimums are applied to insureds over the age of 75. Insureds 14
years of age or less could apply for a minimum initial guaranteed death benefit
of $40,000. The Contract was generally issued on insureds below the age of 81.
Before issuing any Contract, Pruco Life of New Jersey required evidence of
insurability which may have included a medical examination. Non-smokers who met
preferred underwriting requirements were 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 have been issued on a "guaranteed issue" basis
and may have a lower minimum initial death benefit than a Contract which was
individually underwritten. These are the current underwriting requirements. We
reserve 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
11
<PAGE>
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
Two forms of the Contract were available. The Scheduled Premium for the Contract
was the same for a given insured, regardless of which Contract Form you chose.
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 investment options you selected, 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 17. 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 16.
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 16 and HOW A CONTRACT'S DEATH BENEFIT WILL VARY,
page 17. 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.
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. This new face amount becomes the new guaranteed minimum death
benefit. 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 18 and HOW A
CONTRACT'S DEATH BENEFIT WILL VARY, page 17. 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 8. The automatic
increase in the face amount of insurance may affect the level of future premium
payments you can make without causing the Contract to be classified as a
Modified Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 28.
You should consult your tax adviser and Pruco Life of New Jersey representative
before making unscheduled premium payments.
Contract owners 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 Contract owner with a minimum face amount Form A Contract cannot
make withdrawals. Contract owners of Form B Contracts will not incur a surrender
charge for a withdrawal and are not restricted if they purchased a minimum size
Contract. See WITHDRAWAL OF EXCESS CASH SURRENDER VALUE, page 20.
Under the original versions of these Contracts, there are other distinctions
between the Contract Forms. Contract Form A will become paid-up more rapidly
than a comparable Form B Contract. But Contract 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 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 17. 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.
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<PAGE>
CONTRACT DATE
The Contract Date will ordinarily be the later of the application date and the
medical examination date. Under certain circumstances, we allowed the Contract
to be back-dated, but only to a date not earlier than six months prior to the
application date. This may be advantageous for some Contract owners as a lower
issue age may result in lower current charges. For a Contract that is backdated,
we will credit the initial premium as of the date of receipt and will deduct any
charges due on or before that date.
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 you pay premiums 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 8) 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. If you pay premiums other than monthly, we will notify
you about three weeks before each due date, that a premium is due. If you pay
premiums monthly, we will send to you each year a book with 12 coupons that will
serve as a reminder. You may change the frequency of premium payments with Pruco
Life of New Jersey's consent.
You 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 Premium Plan on Contracts
issued after June 1, 1987 will have reduced current monthly expense charges. See
item 4 under CHARGES AND EXPENSES, page 8. You 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 was 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. Under the original
version of the Contracts, if investment experience has been favorable enough,
the Contract may become paid-up before or by the premium change date. We reserve
the right not to accept any further premium payments on a paid-up Contract. We
will tell you what the amount of your second premium will be.
The Contracts include a premium change date, with Scheduled Premiums potentially
increasing after that date to a second premium amount. Thus, you are provided
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:
13
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
$60,000 FACE AMOUNT $100,000 FACE AMOUNT
PREFERRED STANDARD PREFERRED STANDARD
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MALE, AGE 35
AT ISSUE $ 554.80 $ 669.40 $ 902.00 $1,093.00
- ------------------------------------------------------------------------------------------------------
FEMALE, AGE 45
AT ISSUE $ 698.80 $ 787.60 $1,142.00 $1,290.00
- ------------------------------------------------------------------------------------------------------
MALE, AGE 55
AT ISSUE $1,556.20 $1,832.20 $2,571.00 $3,031.00
- ------------------------------------------------------------------------------------------------------
</TABLE>
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.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
$60,000 FACE AMOUNT $100,000 FACE AMOUNT
- ------------------------------------------------------------------------------------------------------
MONTHLY ANNUAL MONTHLY ANNUAL
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MALE, AGE 35
AT ISSUE $ 50.00 $ 554.80 $ 80.00 $ 902.00
- ------------------------------------------------------------------------------------------------------
FEMALE, AGE 45
AT ISSUE $ 62.60 $ 698.80 $101.00 $1,142.00
- ------------------------------------------------------------------------------------------------------
MALE, AGE 55
AT ISSUE $136.40 $1,556.20 $224.00 $2,571.00
- ------------------------------------------------------------------------------------------------------
</TABLE>
You may select a higher contemplated premium than the Scheduled Premium. We will
bill you for the chosen premium. In general, the regular payment of higher
premiums will result in higher cash surrender values and, at least under Form B,
in higher death benefits. Under the original version of the Contracts, such
payments may also provide a means of obtaining a paid-up Contract earlier than
if only Scheduled Premiums are paid.
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 inforce 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 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 17. The term "Contract Fund" refers
generally to the total amount invested under the Contract and is defined under
CHARGES AND EXPENSES on page 8. 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 17. 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 two years'
Scheduled Premiums or the average of all premiums paid over the last five years
will generally be allowed.
The payment of premiums substantially in excess of Scheduled Premiums may cause
the Contract to be classified as a Modified Endowment Contract. If this happens,
loans and other distributions which otherwise would not be taxable events may be
subject to federal income taxation. See TAX TREATMENT OF CONTRACT BENEFITS, page
28.
14
<PAGE>
ALLOCATION OF PREMIUMS
The initial premium, after we deduct applicable charges, is 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 all subsequent premiums, are placed in the selected
investment option[s] on the date of receipt at a Home Office. A $2 per payment
processing charge and a deduction of up to 7.5% to cover certain charges 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 you previously designated. 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 4:00
p.m. Eastern time on each day during which the New York Stock Exchange is open.
Provided the Contract is not in default, you may change the way in which
subsequent premiums are allocated by giving written notice to a Home Office or
by telephoning a Home Office, provided you are enrolled to use the Telephone
Transfer System. There is no charge for reallocating future premiums among the
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 331/3% cannot. Of course, the total allocation of all selected
investment options must equal 100%.
DOLLAR COST AVERAGING
Under the Dollar Cost Averaging ("DCA") feature, either fixed dollar amounts or
a percentage of the amount you designate under the DCA option will be
transferred periodically from the DCA Money Market subaccount into other
subaccounts 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
and must be 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. Subject
to the limitations on premium payments and transfers, you may allocate or
transfer amounts to the DCA account after DCA has been established and as long
as the DCA account has a positive balance. In addition, if you pay premiums on
an annual or semi-annual basis and you have 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
If the Contract is not in default, or if the Contract is inforce as variable
reduced paid-up insurance (see OPTIONS ON LAPSE, page 27), you 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 without charge. All or a
portion of the amount credited to a subaccount may be transferred.
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. You may transfer amounts by proper written notice to a
Home Office or by telephone, provided you are enrolled to use the Telephone
Transfer System. You will automatically be enrolled to use the Telephone
Transfer System unless the Contract is jointly owned or if you elect not
15
<PAGE>
to have this privilege. Telephone transfers may not be available on Contracts
that are assigned, see ASSIGNMENT, page 30 , depending on the terms of the
assignment.
We will use reasonable procedures, such as asking you to provide certain
personal information provided on your application for insurance, to confirm that
instructions given by telephone are genuine. We will not be held liable for
following telephone instructions that we reasonably believe to be genuine. Pruco
Life of New Jersey cannot guarantee that you will be able to get through to
complete a telephone transfer during peak periods such as periods of drastic
economic or market change.
Only one transfer from the fixed-rate option will be permitted during each
Contract year and only during the 30-day period beginning on the Contract
anniversary. The maximum amount which may be transferred out of the fixed-rate
option each year is the greater of: (a) 25% of the amount in the fixed-rate
option, and (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. Pruco Life of New Jersey may change these
limits 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.
We 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 27) to exchange his or her policy for a comparable
Variable APPRECIABLE LIFE Contract with the same Contract Date, Scheduled
Premiums, and Contract Fund without charge.
The Contract was not designed for professional market timing organizations,
other organizations, or individuals using programmed, large, or frequent
transfers. A pattern of exchanges that coincides with a "market timing" strategy
may be disruptive to the subaccounts and will be discouraged. If such a pattern
were to be found, we may be required to modify the transfer procedures,
including but not limited to refusing transfer requests of an agent under a
power of attorney on behalf of more than one Contract owner.
REDUCTION OF CHARGES FOR CONCURRENT SALES TO SEVERAL INDIVIDUALS
We 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 we believe 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
Your Contract has a cash surrender value which may be obtained 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 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] designated by the owner. Thereafter, the Contract Fund
value changes daily, reflecting increases or decreases in:
16
<PAGE>
(1) the value of the securities in which the assets of the subaccount[s] have
been invested;
(2) the investment performance of the Real Property Account if that option has
been selected;
(3) interest credited on amounts allocated to the fixed-rate option;
(4) the daily asset charge for mortality and expense risk equal to 0.001639% of
the assets of the subaccount[s] of the Account; and
(5) 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. Also illustrated is what the death benefit would be under Form
B Contracts given the stated assumptions. The tables also 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 described earlier, 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 will not become paid-up.
1. ORIGINAL CONTRACTS:
(A) 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 8) regardless of the payment of additional
premiums or the investment results of the selected investment options,
unless the Contract becomes paid-up. See WHEN A CONTRACT BECOMES PAID-UP,
page 18. The death benefit does reflect a deduction for the amount of any
Contract debt. See CONTRACT LOANS, page 26.
(B) 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:
(1) you paid only Scheduled Premiums;
(2) you paid Scheduled Premiums when due;
(3) your selected investment options earned a net return at a uniform
rate of 4% per year;
(4) we deducted full mortality charges based upon the 1980 CSO Table;
(5) we deducted maximum sales load and expense charges; and
(6) 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.
17
<PAGE>
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 lesser 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 inforce because Scheduled Premiums have been paid, the
death benefit will not fall below the initial face amount stated in the
Contract. The death benefit will also reflect a deduction for the amount of any
Contract debt. See CONTRACT LOANS, page 26. Any unfavorable investment
experience must subsequently be offset before favorable investment results or
greater than Scheduled Premiums will increase the death benefit.
You may also increase or decrease the face amount of your Contract, subject to
certain conditions. See INCREASES IN FACE AMOUNT, page 20 and DECREASES IN FACE
AMOUNT, page 22.
2. REVISED CONTRACTS:
Under the revised Contracts issued since September 1986, the death benefit will
be calculated as follows:
(A) 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.
(B) 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.
<TABLE>
<CAPTION>
- -------------------------------------------------------------- -----------------------------------------------------------
INCREASE IN INSURANCE INCREASE IN
MALE NET SINGLE AMOUNT PER $1 FEMALE NET SINGLE INSURANCE
ATTAINED PREMIUM INCREASE IN CONTRACT ATTAINED PREMIUM AMOUNT PER $1
AGE FUND AGE INCREASE IN
CONTRACT
FUND
- -------------------------------------------------------------- -----------------------------------------------------------
<S> <C> <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 average of all premiums paid over the last five
years will generally be allowed.
You may also increase or decrease the face amount of your Contract, subject to
certain conditions. See INCREASES IN FACE AMOUNT, page 20 and DECREASES IN FACE
AMOUNT, page 22.
WHEN A CONTRACT BECOMES PAID-UP
Under the original Contracts, it is possible that favorable investment
experience, either alone or with greater than Scheduled Premium payments, will
cause the Contract Fund to increase. The Contract Fund may increase to the point
where no further premium payments are 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 are
needed. We reserve 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 31. The revised Contracts will not become paid-up.
18
<PAGE>
We guarantee that the death benefit of a paid-up Contract then inforce will not
be reduced by the investment experience of the investment options 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 8) 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 becomes paid-up prior to
that anniversary, Pruco Life of New Jersey will, instead of declaring the
Contract to be paid-up, increase the death benefit by the amount necessary to
keep the Contract inforce 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 large enough to pay the charges due under
the Contract without causing the Contract to lapse. See LAPSE AND REINSTATEMENT,
page 22. In general, we 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 increase the
Contract Fund and make 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 you make premium payments substantially
in excess of Scheduled Premiums. Such payments may cause the Contract to be
classified as a Modified Endowment Contract. The federal income tax laws,
discussed more fully under TAX TREATMENT OF CONTRACT BENEFITS, page 28, 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. You should consult your own tax adviser and Pruco Life of New Jersey
representative before making a large premium payment.
SURRENDER OF A CONTRACT
You may surrender your Contract, in whole or in part, for its cash surrender
value or a fixed reduced paid-up insurance benefit 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 inforce on the
same terms as the original Contract except that premiums and cash surrender
values will be proportionately reduced. The reduction is based upon the face
amount of insurance. The Contract's face amount of insurance must be at least
equal to the minimum face amount applicable to the insured's Contract. See
REQUIREMENTS FOR ISSUANCE OF A CONTRACT, page 8. 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, you must deliver or mail the
Contract 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 28.
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WITHDRAWAL OF EXCESS CASH SURRENDER VALUE
You may surrender your Contract, in whole or in part, for its cash surrender
value. This is available only before the Contract becomes paid up and avoids
splitting the Contract into two Contracts. You may make a partial withdrawal
only if the following conditions are satisfied. The basic limiting condition is
that you may make a withdrawal 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. You may make no more than four withdrawals in a
Contract year, and there is a fee equal to the lesser of $15 or 2% for each
withdrawal. You may only repay an amount withdrawn as a scheduled or unscheduled
premium, which is subject to the Contract charges. Upon request, we will tell
you how much you may withdraw. Withdrawal of part of the cash surrender value
may have tax consequences. See TAX TREATMENT OF CONTRACT BENEFITS, page 28.
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. A partial withdrawal will not be permitted under a Form A Contract
if it would result in a new face amount less than the minimum face amount
applicable to the insured's Contract. See REQUIREMENTS FOR ISSUANCE OF A
CONTRACT, page 8. It is important to note, however, that if the face amount is
decreased, the Contract might be classified as a Modified Endowment Contract.
See TAX TREATMENT OF CONTRACT BENEFITS, page 28. Before making any withdrawal
which causes a decrease in face amount, you should consult your tax adviser 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 applicable surrender charges, based upon the
percentage reduction in face amount. We will send replacement Contract pages
showing the new face amount, new tabular values and, if applicable, a new table
of surrender charges to owners of a Form A Contract who make a partial
withdrawal.
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, the Contract
may lapse even if Scheduled Premiums continue to be paid when due. This is
because, Pruco Life of New Jersey treats withdrawals as a return of premium for
purposes of determining whether a lapse has occurred. Withdrawals from paid up
Contracts may result in an increased mortality charge.
INCREASES IN FACE AMOUNT
You may increase the amount of your insurance 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. It differs in the following respects:
(1) the minimum permissible increase is $25,000, while the minimum for a new
Contract was $60,000;
(2) monthly fees are lower because only a single $2.50 per month administrative
charge is made rather than two;
(3) 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;
(4) 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
(5) the Contract will lapse or become paid-up as a unit, unlike the case if two
separate Contracts are purchased.
Despite these differences, 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.
You may elect to increase the face amount of your Contract no earlier than the
first anniversary of the Contract. The following conditions must be met:
(1) You must ask for the increase in writing on an appropriate form;
(2) The amount of the increase in face amount must be at least $25,000;
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(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, you 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) You 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; and
(8) If between the Contract Date and the date that your requested increase in
face amount would take effect, Pruco Life of New Jersey has changed any of
the bases on which benefits and charges are calculated for newly issued
Contracts, then we have 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 for a non-smoker, 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. You have 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 you select for the recomputation. We will
tell you the amount of the required payment. You should also note that an
increase in face amount could cause the Contract to be classified as a Modified
Endowment Contract. See TAX TREATMENT OF CONTRACT BENEFITS, page 28. Therefore,
before increasing the face amount, you should consult your own tax adviser and
Pruco Life of New Jersey representative.
Provided the increase is approved, the new insurance will take effect once Pruco
Life of New Jersey receives the proper forms, any medical evidence necessary to
underwrite the additional insurance and any amount needed by the company.
We will supply you with pages showing the increased face amount, the effective
date of the increase, and the recomputed items described earlier. The pages will
also describe how the face amount increase 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 30) will run from the effective date of
the increase.
Pruco Life of New Jersey will assess, 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, you should not elect to increase the face amount of your
Contract if you are contemplating a total or partial surrender or a decrease in
the face amount of insurance.
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 8. 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 to the premiums paid after the increase only after the
premiums so allocated exceed five scheduled annual premiums for the increase.
Thus, a Contract 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.
If you elect to increase the face amount of your Contract, you will receive a
"free-look" right and a right to convert to a fixed-benefit contract, which will
apply only to the increase in face amount, not the entire Contract. These rights
are comparable to the rights afforded to the purchaser of a new Contract. See
SHORT-TERM CANCELLATION RIGHT OR "FREE-LOOK", page 11 and RIGHT TO EXCHANGE A
CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY, page 27.
The "free-look" right allows a Contract to 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
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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.
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
SHORT-TERM CANCELLATION RIGHT OR "FREE-LOOK", page 11 and RIGHT TO EXCHANGE A
CONTRACT FOR A FIXED-BENEFIT INSURANCE POLICY, page 27.
DECREASES IN FACE AMOUNT
As explained earlier, you may effect a partial surrender of a Contract (see
SURRENDER OF A CONTRACT, page 19) or a partial withdrawal of excess cash
surrender value (see WITHDRAWAL OF EXCESS CASH SURRENDER VALUE, page 20). You
also have the option of decreasing the face amount (which is also the guaranteed
minimum death benefit) of your Contract without withdrawing any cash surrender
value. Contract owners who conclude that, because of changed circumstances, the
amount of insurance is greater than needed will 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). Your Contract Fund value, however, will be reduced by deduction of a
proportionate part of the 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. A decrease will not be permitted if
it 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 8. A reduction will not be permitted if it causes the Contract to
fail to qualify as "life insurance" for purposes of section 7702 of the Internal
Revenue Code. A Contract is no longer eligible for the Select Rating if the face
amount is reduced below $100,000.
It is important to note, however, that if the face amount is decreased there is
a danger that the Contract might be classified as a Modified Endowment Contract.
See TAX TREATMENT OF CONTRACT BENEFITS, page 28. Before making any withdrawal
which causes a decrease in face amount, you should consult your own tax adviser
and Pruco Life of New Jersey representative.
LAPSE AND REINSTATEMENT
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 inforce 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.
In addition, even if a Scheduled Premium is not paid, the Contract will remain
inforce 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 inforce, 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
inforce 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
28.
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A Contract that has lapsed may be reinstated within three 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 27.
WHEN PROCEEDS ARE PAID
We will generally pay any death benefit, cash surrender value, loan proceeds or
partial withdrawal within seven 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, we 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: (1) the
New York Stock Exchange is closed for other than a regular holiday or weekend;
(2) trading is restricted by the SEC; or (3) 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 inforce as extended term
insurance, we expect to pay the cash surrender value promptly upon request.
However, we have the right to delay payment of such cash surrender value for up
to six months (or a shorter period if required by applicable law). We will pay
interest of at least 3% a year if we delay such a payment for more than 30 days
(or a shorter period if required by applicable law).
LIVING NEEDS BENEFIT
The LIVING NEEDS BENEFIT(REGISTERED) is available under the Contract. It may be
added to Contracts at issue and there is no charge for adding the benefit to a
Contract. However, an administrative charge (not to exceed $150) will be made at
the time the LIVING NEEDS BENEFIT is paid.
The LIVING NEEDS BENEFIT allows you 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. You should consult with a Pruco Life of New Jersey representative 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 six 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 six 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.
NURSING HOME OPTION. This option is available after the insured has been
confined to an eligible nursing home for six 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 two),
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.
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.
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.
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You should consider whether adding this settlement option is appropriate in your
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 LIVING NEEDS BENEFIT is excluded from income 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). You should consult a
qualified tax adviser before electing to receive this benefit. Receipt of a
LIVING NEEDS BENEFIT payment may also affect your eligibility for certain
government benefits or entitlements.
ILLUSTRATIONS OF CASH SURRENDER VALUES, DEATH BENEFITS, AND ACCUMULATED PREMIUMS
The following four tables show how a Contract's death benefit and cash surrender
values change with the investment performance of the Account. They are
"hypothetical" because they are based, in part, upon several assumptions which
are described below. All four tables assume the following:
o a Contract with a face amount of $60,000 bought by a 35 year old male,
non-smoker, with no extra risks or substandard ratings, and no extra
benefit riders added to the Contract.
o the Scheduled Premium of $554.80 is paid on each Contract anniversary and
no loans are taken.
o the Contract Fund has been invested in equal amounts in each of the 13
available portfolios of the Series Fund and no portion of the Contract Fund
has been allocated to the fixed-rate option or the Real Property Account.
The 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 tables reflect values applicable to both revised and original Contracts.
However, these values are not applicable to the original Contracts where the
death benefit has been increased to the Contract Fund divided by the net single
premium.
The first table (page T1) assumes a Form A Contract has been purchased and the
second table (page T2) assumes a Form B Contract has been purchased. Both assume
the current charges will continue for the indefinite future. Moreover, these
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 CHARGES AND EXPENSES, page 8. 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 we do not
currently intend to withdraw or modify these reductions in charges or additions
to the Contract Fund, we reserve the right to do so.
The third and fourth tables (pages T3 and T4) assume that Form A and Form B
Contracts have been purchased, respectively, and the maximum contractual charges
have been made from the beginning. Neither reflect the waiver of the front-end
sales load nor the monthly additions to the Contract Fund that further reduce
the cost of insurance charge.
Finally, there are four assumptions, shown separately, about the average
investment performance of the portfolios. The first is that there will be a
uniform 0% gross rate of return with the average value of the Contract Fund
uniformly adversely affected by very unfavorable investment performance. The
other three assumptions are that investment performance will be at a uniform
gross annual rate of 4%, 8% and 12%. Actual returns will fluctuate from year to
year. In addition, death benefits and cash surrender values would be different
from those shown if investment returns averaged 0%, 4%, 8% and 12% but
fluctuated from those averages throughout the years. Nevertheless, these
assumptions help show how the Contract values change with investment experience.
The first column in the following four tables (pages T1 through T4) shows the
Contract year. The second column, to provide context, shows what the aggregate
amount would be if the Scheduled Premiums had been invested to earn interest,
after taxes, at 4% compounded annually. The next four columns show the death
benefit payable in each of the years shown for the four different assumed
investment returns. The last four columns show the cash surrender value payable
in each of the years shown for the four different assumed investment returns.
The cash surrender values in the first 10 years reflect the surrender charges
that would be deducted if the Contract were surrendered in those years.
A gross return (as well as the net return) is shown at the top of each column.
The gross return represents the combined effect of investment income and capital
gains and losses, realized or unrealized, of the portfolios before any reduction
is made for investment advisory fees or other Series Fund expenses. The net
return reflects average total
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annual expenses of the 13 portfolios of 0.49%, and the daily deduction from the
Contract Fund of 0.60% per year. Thus, based on the above assumptions, gross
investment returns of 0%, 4%, 8% and 12% are the equivalent of net investment
returns of -1.09%, 2.91%, 6.91% and 10.91%, respectively. The actual fees and
expenses of the portfolios associated with a particular Contract may be more or
less than 0.49% and will depend on which subaccounts are selected. The death
benefits and cash surrender values shown reflect the deduction of all expenses
and charges both from the Series Fund and under the Contract.
Your Pruco Life of New Jersey representative can provide you with a hypothetical
illustration for your own age, sex and rating class.
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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) (4)
USING CURRENT SCHEDULE OF CHARGES
<TABLE>
<CAPTION>
Death Benefit (2)(3) Cash Surrender Value (2)(3)
------------------------------------------------- ----------------------------------------------------
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 (4) (-1.09% Net) (2.91% Net) (6.91% Net) (10.91% Net) (-1.09% Net) (2.91% Net) (6.91% Net) (10.91% 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 $ 226 $ 274 $ 323 $ 375
3 $ 1,801 $60,000 $60,000 $ 60,000 $ 60,000 $ 527 $ 621 $ 720 $ 825
4 $ 2,450 $60,000 $60,000 $ 60,000 $ 60,000 $ 820 $ 974 $ 1,141 $ 1,322
5 $ 3,125 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,102 $ 1,330 $ 1,586 $ 1,870
6 $ 3,827 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,513 $ 1,832 $ 2,197 $ 2,616
7 $ 4,557 $60,000 $60,000 $ 60,000 $ 60,000 $ 1,939 $ 2,363 $ 2,864 $ 3,453
8 $ 5,317 $60,000 $60,000 $ 60,000 $ 60,000 $ 2,353 $ 2,899 $ 3,561 $ 4,361
9 $ 6,106 $60,000 $60,000 $ 60,000 $ 60,000 $ 2,755 $ 3,439 $ 4,291 $ 5,350
10 $ 6,927 $60,000 $60,000 $ 60,000 $ 60,000 $ 3,147 $ 3,984 $ 5,057 $ 6,428
15 $11,553 $60,000 $60,000 $ 60,000 $ 60,000 $ 4,494 $ 6,416 $ 9,258 $ 13,465
20 $17,182 $60,000 $60,000 $ 60,000 $ 60,000 $ 5,426 $ 8,952 $ 15,035 $ 25,565
25 $24,029 $60,000 $60,000 $ 60,000 $ 85,622 $ 5,694 $11,400 $ 23,034 $ 46,275
30 (Age 65) $32,361 $60,000 $60,000 $ 60,000 $132,557 $ 4,924 $13,455 $ 34,384 $ 80,841
35 $49,748 $60,000 $60,000 $ 74,482 $203,082 $16,904 $21,925 $ 50,556 $137,844
40 $70,902 $60,000 $60,000 $ 97,318 $310,266 $27,908 $31,137 $ 72,424 $230,900
45 $96,639 $60,000 $60,000 $126,761 $475,643 $38,160 $41,626 $101,578 $381,151
</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.
(4) For a hypothetical gross investment return of 0%, the second Scheduled
Premium will be $3,399.91. For a gross return of 4%, the second Scheduled
Premium will be $1,842.04. 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>
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) (4)
USING CURRENT SCHEDULE OF CHARGES
<TABLE>
<CAPTION>
Death Benefit (2)(3) Cash Surrender Value (2)(3)
------------------------------------------------- ----------------------------------------------------
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 (4) (-1.09% Net) (2.91% Net) (6.91% Net) (10.91% Net) (-1.09% Net) (2.91% Net) (6.91% Net) (10.91% Net)
------ -------------- ------------ ----------- ----------- ----------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 577 $60,000 $60,016 $ 60,033 $ 60,050 $ 0 $ 0 $ 0 $ 0
2 $ 1,177 $60,000 $60,031 $ 60,081 $ 60,132 $ 225 $ 273 $ 322 $ 373
3 $ 1,801 $60,000 $60,048 $ 60,147 $ 60,251 $ 526 $ 619 $ 718 $ 823
4 $ 2,450 $60,000 $60,066 $ 60,232 $ 60,413 $ 818 $ 971 $ 1,138 $ 1,318
5 $ 3,125 $60,000 $60,086 $ 60,340 $ 60,622 $ 1,100 $ 1,327 $ 1,581 $ 1,863
6 $ 3,827 $60,000 $60,137 $ 60,500 $ 60,916 $ 1,511 $ 1,827 $ 2,190 $ 2,606
7 $ 4,557 $60,000 $60,193 $ 60,689 $ 61,273 $ 1,936 $ 2,357 $ 2,854 $ 3,438
8 $ 5,317 $60,000 $60,254 $ 60,910 $ 61,702 $ 2,350 $ 2,892 $ 3,547 $ 4,340
9 $ 6,106 $60,000 $60,322 $ 61,164 $ 62,211 $ 2,752 $ 3,430 $ 4,272 $ 5,319
10 $ 6,927 $60,000 $60,398 $ 61,457 $ 62,810 $ 3,143 $ 3,972 $ 5,032 $ 6,385
15 $ 11,553 $60,000 $61,166 $ 63,956 $ 68,075 $ 4,509 $ 6,407 $ 9,197 $ 13,316
20 $ 17,182 $60,000 $62,460 $ 68,351 $ 78,503 $ 5,465 $ 8,921 $14,812 $ 24,964
25 $ 24,029 $60,000 $64,663 $ 75,649 $ 97,961 $ 5,761 $11,252 $22,238 $ 44,549
30 (Age 65) $ 32,361 $60,510 $68,399 $ 87,302 $133,008 $ 5,010 $12,899 $31,802 $ 77,508
35 $ 51,884 $62,448 $68,227 $ 89,837 $195,651 $16,750 $22,529 $44,139 $132,800
40 $ 75,637 $63,521 $69,177 $ 97,040 $300,408 $27,131 $32,787 $60,650 $223,563
45 $104,537 $64,227 $71,826 $111,244 $462,718 $35,966 $43,564 $82,982 $370,794
</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.
(4) For a hypothetical gross investment return of 0%, the second Scheduled
Premium will be $3,401.07. For a gross return of 4%, the second Scheduled
Premium will be $2,221.30. 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>
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) (4)
USING MAXIMUM CONTRACTUAL CHARGES
<TABLE>
<CAPTION>
Death Benefit (2)(3) Cash Surrender Value (2)(3)
------------------------------------------------- ----------------------------------------------------
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 (4) (-1.09% Net) (2.91% Net) (6.91% Net) (10.91% Net) (-1.09% Net) (2.91% Net) (6.91% Net) (10.91% 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 $ 723 $ 869 $ 1,028 $ 1,202
5 $ 3,125 $60,000 $60,000 $60,000 $ 60,000 $ 970 $ 1,186 $ 1,428 $ 1,698
6 $ 3,827 $60,000 $60,000 $60,000 $ 60,000 $1,312 $ 1,611 $ 1,955 $ 2,350
7 $ 4,557 $60,000 $60,000 $60,000 $ 60,000 $1,664 $ 2,058 $ 2,524 $ 3,075
8 $ 5,317 $60,000 $60,000 $60,000 $ 60,000 $1,996 $ 2,498 $ 3,109 $ 3,852
9 $ 6,106 $60,000 $60,000 $60,000 $ 60,000 $2,309 $ 2,931 $ 3,711 $ 4,686
10 $ 6,927 $60,000 $60,000 $60,000 $ 60,000 $2,601 $ 3,355 $ 4,328 $ 5,582
15 $ 11,553 $60,000 $60,000 $60,000 $ 60,000 $3,150 $ 4,728 $ 7,108 $ 10,690
20 $ 17,182 $60,000 $60,000 $60,000 $ 60,000 $2,886 $ 5,514 $10,234 $ 18,658
25 $ 24,029 $60,000 $60,000 $60,000 $ 60,000 $1,284 $ 5,066 $13,432 $ 31,500
30 (Age 65) $ 32,361 $60,000 $60,000 $60,000 $ 85,420 $ 0 $ 2,288 $16,235 $ 52,094
35 $ 58,960 $60,000 $60,000 $60,000 $122,416 $3,958 $11,137 $28,064 $ 83,091
40 $ 91,322 $60,000 $60,000 $60,075 $173,275 $6,104 $18,472 $44,708 $128,951
45 $130,695 $60,000 $60,000 $83,553 $243,785 $ 0 $22,502 $66,954 $195,355
</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.
(4) 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
$2,226.73; 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>
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) (4)
USING MAXIMUM CONTRACTUAL CHARGES
<TABLE>
<CAPTION>
Death Benefit (2)(3) Cash Surrender Value (2)(3)
------------------------------------------------- ----------------------------------------------------
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 (4) (-1.09% Net) (2.91% Net) (6.91% Net) (10.91% Net) (-1.09% Net) (2.91% Net) (6.91% Net) (10.91% 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 $ 278 $ 327
3 $ 1,801 $60,000 $60,000 $60,072 $ 60,172 $ 459 $ 548 $ 643 $ 743
4 $ 2,450 $60,000 $60,000 $60,120 $ 60,292 $ 721 $ 866 $ 1,025 $ 1,197
5 $ 3,125 $60,000 $60,000 $60,182 $ 60,450 $ 967 $ 1,182 $ 1,423 $ 1,691
6 $ 3,827 $60,000 $60,000 $60,258 $ 60,649 $1,310 $ 1,607 $ 1,948 $ 2,339
7 $ 4,557 $60,000 $60,000 $60,350 $ 60,895 $1,661 $ 2,053 $ 2,515 $ 3,060
8 $ 5,317 $60,000 $60,000 $60,459 $ 61,192 $1,993 $ 2,492 $ 3,096 $ 3,830
9 $ 6,106 $60,000 $60,000 $60,585 $ 61,546 $2,306 $ 2,924 $ 3,693 $ 4,654
10 $ 6,927 $60,000 $60,000 $60,731 $ 61,963 $2,599 $ 3,348 $ 4,306 $ 5,538
15 $ 11,553 $60,000 $60,000 $61,786 $ 65,240 $3,148 $ 4,719 $ 7,027 $ 10,481
20 $ 17,182 $60,000 $60,000 $63,510 $ 71,379 $2,884 $ 5,503 $ 9,971 $ 17,840
25 $ 24,029 $60,000 $60,000 $66,056 $ 82,021 $1,281 $ 5,052 $12,644 $ 28,609
30 (Age 65) $ 32,361 $60,000 $60,000 $69,517 $ 99,598 $ 0 $ 2,269 $14,017 $ 44,098
35 $ 58,960 $60,000 $60,000 $72,204 $117,021 $3,955 $11,094 $26,506 $ 71,324
40 $ 91,322 $60,000 $60,000 $77,694 $153,188 $6,101 $18,408 $41,304 $114,002
45 $130,695 $60,000 $60,000 $87,111 $221,243 $ 0 $22,391 $58,849 $177,291
</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.
(4) 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
$2,947.35; for a gross return of 12% the premium after age 65 will be
$1,272.04. 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
You may borrow from Pruco Life of New Jersey an amount up to the current loan
value of your 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, we will, on a non-contractual basis,
increase the loan value by permitting you 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. A Contract in default has no loan value.
If you request a loan you may choose one of two interest rates. You may elect to
have interest charges accrued daily at a fixed effective annual rate of 5.5%.
Alternatively, you may elect a variable interest rate that changes from time to
time. You may switch from the fixed to variable interest loan provision, or
vice-versa, with Pruco Life of New Jersey's consent.
If you elect 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 two months before the calendar month of
the Contract anniversary; (2) 5%; or (3) the rate permitted 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 1999 ranged from 6.76% to 7.93%.
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 Contract debt is the principal amount of all outstanding loans plus any
interest accrued thereon. If at any time your Contract debt exceeds your
Contract Fund, Pruco Life of New Jersey will notify you of its intent to
terminate the Contract in 61 days, within which time you may repay all or enough
of the loan to keep the Contract inforce. If you fail to keep the Contract
inforce, the amount of unpaid Contract debt will be treated as a distribution
which may be taxable. See LAPSE AND REINSTATEMENT, page 22 and TAX TREATMENT OF
CONTRACT BENEFITS - PRE-DEATH DISTRIBUTIONS, page 29.
When a loan is made, an amount equal to the loan proceeds is transferred out of
the applicable investment options. The reduction is generally made in the same
proportions as the value that 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 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, we credit such amounts at 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
applies.
A loan will not affect the amount of the premiums due. If the death benefit
becomes 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.
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. Loan repayments are allocated to the investment options proportionately
based on their balances at the time of the loan repayment.
Loans from Modified Endowment Contracts may be treated for tax purposes as
distributions of income. See TAX TREATMENT OF CONTRACT BENEFITS, page 28.
26
<PAGE>
REPORTS TO CONTRACT OWNERS
Once each Contract year (except where the Contract is inforce as fixed extended
term insurance), Pruco Life of New Jersey will send you a statement that
provides certain information pertinent to your own Contract. This statement will
detail values, transactions made, and specific Contract data that apply only to
your particular Contract. On request, you 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.
You 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
portfolio.
OPTIONS ON LAPSE
If your Contract does lapse, it will still provide some benefits. You can
receive the cash surrender value by making a request of Pruco Life of New Jersey
prior to the end of the 61 day grace period. You may also choose one of the
three forms of insurance described below for which no further premiums are
payable.
1. FIXED EXTENDED TERM INSURANCE. With two exceptions explained below, if you
do 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, 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 inforce. This benefit
is known as extended term insurance. If you request, we will tell you 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,
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 18.
Variable reduced paid-up insurance has a loan privilege identical to that
available on premium paying Contracts. See CONTRACT LOANS, page 26.
Acquisition of reduced paid-up insurance may result in your Contract
becoming a Modified Endowment Contract. See TAX TREATMENT OF CONTRACT
BENEFITS, page 28.
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
three months of the date of default; it will be available to such Contract
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. You 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 we receive 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 inforce, or the net value of any
reduced paid-up insurance then inforce, less any Contract debt. Surrender
of your Contract may have tax consequences. See TAX TREATMENT OF CONTRACT
BENEFITS, page 28.
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
27
<PAGE>
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.
You may 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 two years of any increase in face amount with respect to
the amount of the increase. This is done without regard to the otherwise
applicable limit of four transfers per year. See TRANSFERS, page 15. 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. Generally, 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 751 Broad
Street, Newark, New Jersey 07102-3777. The Contract was sold by registered
representatives of Prusec who are also authorized by state insurance departments
to do so. The Contract may also have been 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 10th 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 three years of service may be paid on a different
basis. Representatives who met certain productivity, profitability, and
persistency standards with regard to the sale of the Contract may 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 8.
TAX TREATMENT OF CONTRACT BENEFITS
This summary provides general information on the federal income tax treatment of
the Contract. It is not a complete statement of what the federal income taxes
will be in all circumstances. It is based on current law and interpretations,
which may change. It does not cover state taxes or other taxes. It is not
intended as tax advice. You should consult your own qualified tax adviser for
complete information and advice.
TREATMENT AS LIFE INSURANCE. The Contract must meet certain requirements to
qualify as life insurance for tax purposes. These requirements include certain
definitional tests and rules for diversification of the Contract's investments.
For further information on the diversification requirements, see TAXATION OF THE
FUND in the statement of additional information for the Series Fund.
28
<PAGE>
We believe we have taken adequate steps to ensure that the Contract qualifies as
life insurance for tax purposes. Generally speaking, this means that:
o you will not be taxed on the growth of the funds in the Contract,
unless you receive a distribution from the Contract,
o the Contract's death benefit will be income tax free to your
beneficiary.
Although we believe that the Contract should qualify as life insurance for tax
purposes, there are some uncertainties, particularly because the Secretary of
Treasury has not yet issued permanent regulations that bear on this question.
Accordingly, we reserve the right to make changes -- which will be applied
uniformly to all Contract owners after advance written notice -- that we deem
necessary to ensure that the Contract will qualify as life insurance.
PRE-DEATH DISTRIBUTIONS. The tax treatment of any distribution you receive
before the insured's death depends on whether the Contract is classified as a
Modified Endowment Contract.
CONTRACTS NOT CLASSIFIED AS MODIFIED ENDOWMENT CONTRACTS.
o If you surrender the Contract or allow it to lapse, you will be
taxed on the amount you receive in excess of the premiums you paid
less the untaxed portion of any prior withdrawals. For this
purpose, you will be treated as receiving any portion of the cash
surrender value used to repay Contract debt. The tax consequences
of a surrender may differ if you take the proceeds under an income
payment settlement option.
o Generally, you will be taxed on a withdrawal to the extent the
amount you receive exceeds the premiums you paid for the Contract
less the untaxed portion of any prior withdrawals. However, under
some limited circumstances, in the first 15 Contract years, all or
a portion of a withdrawal may be taxed if the Contract Fund
exceeds the total premiums paid less the untaxed portions of any
prior withdrawals, even if total withdrawals do not exceed total
premiums paid.
o Extra premiums for optional benefits and riders generally do not
count in computing the premiums paid for the Contract for the
purposes of determining whether a withdrawal is taxable.
o Loans you take against the Contract are ordinarily treated as debt
and are not considered distributions subject to tax.
MODIFIED ENDOWMENT CONTRACTS.
o The rules change if the Contract is classified as a Modified
Endowment Contract. The Contract could be classified as a Modified
Endowment Contract if premiums substantially in excess of
Scheduled Premiums are paid or a decrease in the face amount of
insurance is made (or a rider removed). The addition of a rider or
an increase in the face amount of insurance may also cause the
Contract to be classified as a Modified Endowment Contract. You
should first consult a qualified tax adviser and your Pruco Life
of New Jersey representative if you are contemplating any of these
steps.
o If the Contract is classified as a Modified Endowment Contract,
then amounts you receive under the Contract before the insured's
death, including loans and withdrawals, are included in income to
the extent that the Contract Fund before surrender charges exceeds
the premiums paid for the Contract increased by the amount of any
loans previously included in income and reduced by any untaxed
amounts previously received other than the amount of any loans
excludable from income. An assignment of a Modified Endowment
Contract is taxable in the same way. These rules also apply to
pre-death distributions, including loans and assignments, made
during the two-year period before the time that the Contract
became a Modified Endowment Contract.
o Any taxable income on pre-death distributions (including full
surrenders) is subject to a penalty of 10 percent unless the
amount is received on or after age 59 1/2, on account of your
becoming disabled or as a life annuity. It is presently unclear
how the penalty tax provisions apply to Contracts owned by
businesses.
29
<PAGE>
All Modified Endowment Contracts issued by us to you during the same
calendar year are treated as a single Contract for purposes of applying
these rules.
WITHHOLDING. You must affirmatively elect that no taxes be withheld from a
pre-death distribution. Otherwise, the taxable portion of any amounts you
receive will be subject to withholding. You are not permitted to elect out of
withholding if you do not provide a social security number or other taxpayer
identification number. You may be subject to penalties under the estimated tax
payment rules if your withholding and estimated tax payments are insufficient to
cover the tax due.
OTHER TAX CONSIDERATIONS. If you transfer or assign the Contract to someone
else, there may be gift, estate and/or income tax consequences. If you transfer
the Contract to a person two or more generations younger than you (or designate
such a younger person as a beneficiary), there may be Generation Skipping
Transfer tax consequences. Deductions for interest paid or accrued on Contract
debt or on other loans that are incurred or continued to purchase or carry the
Contract may be denied. Your individual situation or that of your beneficiary
will determine the federal estate taxes and the state and local estate,
inheritance and other taxes due if you or the insured dies.
BUSINESS-OWNED LIFE INSURANCE. If a business, rather than an individual, is the
owner of the Contract, there are some additional rules. Business Contract owners
generally cannot deduct premium payments. Business Contract owners generally
cannot take tax deductions for interest on Contract debt 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 these loans is limited to a prescribed interest rate and a maximum aggregate
loan amount of $50,000 per key insured person. The corporate alternative minimum
tax also applies to business-owned life insurance. This is an indirect tax on
additions to the Contract Fund or death benefits received under business-owned
life insurance policies.
TAX-QUALIFIED PENSION PLANS
You may acquire the Contract to fund a retirement plan that qualifies for tax
favored treatment under the Internal Revenue Code. We will issue such a Contract
with a minimum face amount of $10,000, and with increases and decreases in face
amount in minimum increments of $10,000. The monthly charge for anticipated
mortality costs and the Scheduled Premiums will be the same for male and female
insureds of a particular age and underwriting classification, as required for
insurance and annuity contracts sold to tax-qualified pension plans. We will
give illustrations showing premiums and charges if you wish to fund a
tax-qualified pension plan. Only certain riders are available for a Contract
issued in connection with a tax-qualified pension plan. Fixed reduced paid-up
insurance and payment of the cash surrender value are the only options on lapse
available for a Contract issued in connection with a tax-qualified pension plan.
See LAPSE AND REINSTATEMENT, page 22. Finally, a Contract issued in connection
with a tax-qualified pension plan may not invest in the Real Property Account.
You should consult a qualified tax adviser before purchasing a Contract in
connection with a tax-qualified pension plan to confirm, among other things, the
suitability of the Contract for your particular plan.
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 differ under Contracts issued on males
and females of the same age. 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 who purchased
a Contract should consult their legal advisers to determine whether a Contract
based on sex-distinct actuarial tables is consistent with Title VII of the Civil
Rights Act of 1964 or other applicable law.
OTHER GENERAL CONTRACT PROVISIONS
ASSIGNMENT. This Contract may not be assigned if the assignment would violate
any federal, state or local law or regulation. Generally, the Contract may not
be assigned to another insurance company or to an employee benefit plan without
Pruco Life of New Jersey's consent. Pruco Life of New Jersey assumes no
responsibility for the validity or sufficiency of any assignment. We will not be
obligated to comply with any assignment unless we receive a copy at a Home
Office.
30
<PAGE>
BENEFICIARY. You designate and name your beneficiary in the application.
Thereafter, you 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. We will not contest the Contract after it has been inforce
during the insured's lifetime for two years from the issue date except when any
change is made in the Contract that requires Pruco Life of New Jersey's approval
and would increase our liability. We will not contest such change after it has
been in effect for two years during the lifetime of the insured.
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 such benefit will be based on what the most recent
charge for mortality would have provided at the correct age and sex.
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.
SUICIDE EXCLUSION. If the insured dies by suicide within two years from the
effective date of an increase in the face amount of insurance, we will pay, as
to the increase in amount, no more than the sum of the Scheduled Premiums
attributable to the increase.
RIDERS
Contract owners may be able to obtain extra fixed benefits, which may require an
additional premium. These optional insurance benefits will be described in what
is known as a "rider" to the Contract. Charges applicable to the riders will be
deducted from the Contract Fund on each Monthly date.
One rider pays certain premiums into the Contract 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 certain premiums into the Contract 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 and 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 extra benefits 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 18.
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.
SUBSTITUTION OF SERIES FUND SHARES
Although Pruco Life of New Jersey believes it to be unlikely, it is possible
that in the Judgement 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.
31
<PAGE>
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 of Pruco Life of New Jersey as of December 31, 1999 and
1998 and for each of the three years in the period ended December 31, 1999 and
the financial statements of the Account as of December 31, 1999 and for each of
the three years in the period then ended included in this prospectus have been
so included in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting. PricewaterhouseCoopers LLP's principal business address
is 1177 Avenue of the Americas, New York, New York 10036.
Actuarial matters included in this prospectus have been examined by Pamela A.
Schiz, FSA, MAAA, Actuarial Director of Prudential, whose opinion is filed as an
exhibit to the registration statement.
LITIGATION AND REGULATORY PROCEEDINGS
We are subject to legal and regulatory actions in the ordinary course of our
businesses, including class actions. Pending legal regulatory actions include
proceedings specific to our practices and proceedings generally applicable to
business practices in the industries in which we operate. In certain of these
lawsuits, large and/or indeterminate amounts are sought, including punitive or
exemplary damages.
In particular, Pruco Life of New Jersey and Prudential have been subject to
substantial regulatory actions and civil litigation involving individual life
insurance sales practices. In 1996, Prudential, on behalf of itself and many of
its life insurance subsidiaries including Pruco Life of New Jersey, entered into
settlement agreements with relevant insurance regulatory authorities and
plaintiffs in the principal life insurance sales practices class action lawsuit
covering policyholders of individual permanent life insurance policies issued in
the United States from 1982 to 1995. Pursuant to the settlements, the companies
agreed to various changes to their sales and business practices controls and a
series of fines, and are in the process of distributing final remediation relief
to eligible class members. In many instances, claimants have the right to
"appeal" the decision to an independent reviewer. The bulk of such appeals were
resolved in 1999, and the balance is expected to be addressed in 2000. As of
January 31, 2000, Prudential and/or Pruco Life of New Jersey remained a party to
two putative class actions and approximately 158 individual actions relating to
permanent life insurance policies issued in the United States between 1982 and
1995. Additional suits may be filed by individuals who opted out of the
settlements. While the approval of the class action settlement is now final,
Prudential and Pruco Life of New Jersey remain subject to oversight and review
by insurance regulators and other regulatory authorities with respect to their
sales practices and the conduct of the remediation program. The U.S. District
Court has also retained jurisdiction as to all matters relating to the
administration, consummation, enforcement and interpretation of the settlements.
Prudential has indemnified Pruco Life of New Jersey for any liabilities incurred
in connection with sales practices litigation covering policyholders of
individual permanent life insurance policies issued in the United States from
1982 to 1995.
In 1999, 1998, 1997 and 1996, Prudential recorded provision in its Consolidated
Statements of Operations of $100 million, $1,150 million, $2,030 million and
$1,125 million, respectively, to provide for estimated remediation costs, and
additional sales practices costs including related administrative costs,
regulatory fines, penalties and related payments, litigation costs and
settlements, including settlements associated with the resolution of claims of
deceptive sales practices asserted by policyholders who elected to "opt-out" of
the class action settlement and litigate their claims against Prudential
separately, and other fees and expenses associated with the resolution of sales
practices issues.
ADDITIONAL INFORMATION
Pruco Life of New Jersey has filed a registration statement 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
32
<PAGE>
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 Public Reference Section at 450 Fifth Street, N.W., Washington,
D.C. 20549, or by telephoning (800) SEC-0330, upon payment of a prescribed fee.
Further information may also be obtained from Pruco Life of New Jersey. Its
address and telephone number are set forth on the inside front cover of this
prospectus.
FINANCIAL STATEMENTS
The financial statements of the Account should be distinguished from the
financial statements of Pruco Life of New Jersey which should be considered only
as bearing upon the ability of Pruco Life of New Jersey to meet its obligations
under the Contracts.
33
<PAGE>
DIRECTORS AND OFFICERS
The directors and major officers of Pruco Life of New Jersey, listed with their
principal occupations during the past five years, are shown below.
DIRECTORS OF PRUCO LIFE OF NEW JERSEY
JAMES J. AVERY, JR., Chairman and Director - President, Prudential Individual
Life Insurance since 1998; 1997 to 1998: Senior Vice President, Chief Actuary
and CFO, Prudential Individual Insurance Group; 1995 to 1997: President,
Prudential Select.
WILLIAM M. BETHKE, Director - Chief Investment Officer, Prudential since 1997;
prior to 1997: President, Prudential Capital Markets Group.
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.
ESTHER H. MILNES, President and Director - Vice President and Chief Actuary,
Prudential Individual Life Insurance since 1999; prior to 1999: Vice President
and Actuary, Prudential Individual Insurance Group.
DAVID R. ODENATH, JR., Director - President, Prudential Investments since 1999;
prior to 1999; Senior Vice President and Director of Sales, Investment
Consulting Group, PaineWebber.
I. EDWARD PRICE, Vice Chairman and Director - Senior Vice President and Actuary,
Prudential Individual Life Insurance since 1998; 1995 to 1998: Senior Vice
President and Actuary, Prudential Individual Insurance Group.
OFFICERS WHO ARE NOT DIRECTORS
C. EDWARD CHAPLIN, Treasurer - Vice President and Treasurer, Prudential since
1995.
JAMES C. DROZANOWSKI, Senior Vice President - Vice President, Operations and
Systems, Prudential Individual Financial Services since 1998; 1996 to 1998: Vice
President and Operations Executive, Prudential Individual Insurance Group; 1995
to 1996: President, Credit Card Division, Chase Manhattan Bank.
CLIFFORD E. KIRSCH, Chief Legal Officer and Secretary - Chief Counsel, Variable
Products, Prudential Law Department since 1995.
SHIRLEY H. SHAO, Senior Vice President and Chief Actuary - Vice President and
Associate Actuary, Prudential since 1996; prior to 1996: Vice President and
Assistant Actuary, Prudential Corporate Risk Management.
DENNIS G. SULLIVAN, Vice President and Chief Accounting Officer - Vice President
and Deputy Controller, Prudential since 1998; 1997 to 1998: Vice President and
Controller, ContiFinancial Corporation; prior to 1997: Director, Salomon
Brothers.
The business address of all directors and officers of Pruco Life of New Jersey
is 213 Washington Street, Newark, New Jersey 07102-2992.
PLNJ directors and officers are elected annually.
34
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF THE
VARIABLE APPRECIABLE LIFE SUBACCOUNTS
OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF NET ASSETS
December 31, 1999
SUBACCOUNTS
------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in The Prudential Series Fund, Inc.
Portfolios at net asset value [Note 3] ....... $ 7,473,027 $ 23,340,683 $ 193,971,356 $ 246,446,762 $ 115,373,893
Receivable from (Payable to) Pruco
Life of New Jersey [Note 2] .................. (52,351) (2,743) (39,548) 5,862 10,073
----------- ------------ ------------- ------------- -------------
Net Assets ..................................... $ 7,420,676 $ 23,337,940 $ 193,931,808 $ 246,452,624 $ 115,383,966
=========== ============ ============= ============= =============
NET ASSETS, representing:
Equity of contract owners [Note 4] ............. $ 7,420,676 $ 23,337,940 $ 193,931,808 $ 246,452,624 $ 115,383,966
----------- ------------ ------------- ------------- -------------
$ 7,420,676 $ 23,337,940 $ 193,931,808 $ 246,452,624 $ 115,383,966
=========== ============ ============= ============= =============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A1
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
HIGH SMALL
YIELD STOCK EQUITY NATURAL GOVERNMENT PRUDENTIAL CAPITALIZATION
BOND INDEX INCOME RESOURCES GLOBAL INCOME JENNISON STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ------------ ------------- ------------- ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 32,097,556 $ 84,394,710 $ 11,892,035 $ 2,422,968 $ 84,715,059 $ 1,165,465 $ 25,369,217 $ 49,035,908
(463) 8,257 1,252 6,348 19,516 81 7,181 76,038
- ------------ ------------- ------------- ------------ ------------ ----------- ------------ ------------
$ 32,097,093 $ 84,402,967 $ 11,893,287 $ 2,429,316 $ 84,734,575 $ 1,165,546 $ 25,376,398 $ 49,111,946
============ ============= ============= ============ ============ =========== ============ ============
$ 32,097,093 $ 84,402,967 $ 11,893,287 $ 2,429,316 $ 84,734,575 $ 1,165,546 $ 25,376,398 $ 49,111,946
- ------------ ------------- ------------- ------------ ------------ ----------- ------------ ------------
$ 32,097,093 $ 84,402,967 $ 11,893,287 $ 2,429,316 $ 84,734,575 $ 1,165,546 $ 25,376,398 $ 49,111,946
============ ============= ============= ============ ============ =========== ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A2
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF THE
VARIABLE APPRECIABLE LIFE SUBACCOUNTS
OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF OPERATIONS
For the years ended December 31, 1999, 1998 and 1997
SUBACCOUNTS
------------------------------------------------------------------------------------
MONEY MARKET DIVERSIFIED BOND
PORTFOLIO PORTFOLIO
--------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
---------- --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income ........................... $ 362,423 $ 376,466 $ 390,865 $ 0 $ 1,518,983 $ 1,730,646
---------- --------- --------- ----------- ----------- -----------
EXPENSES
Charges to contract owners for assuming
mortality risk and expense risk [Note 5A] 44,562 43,083 44,046 144,104 147,669 140,877
Reimbursement for excess expenses
[Note 5D] ................................ (1,825) (1,102) (1,630) (6,334) (5,945) (5,701)
---------- --------- --------- ----------- ----------- -----------
NET EXPENSES ................................ 42,737 41,981 42,416 137,770 141,724 135,176
---------- --------- --------- ----------- ----------- -----------
NET INVESTMENT INCOME (LOSS) ................ 319,686 334,485 348,449 (137,770) 1,377,259 1,595,470
---------- --------- --------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions received .... 0 0 0 67,535 88,872 276,650
Realized gain (loss) on shares
redeemed .............................. 0 0 0 41,756 65,294 70,032
Net change in unrealized gain (loss)
on investments ........................ 0 0 0 (295,317) 22,951 (154,839)
---------- --------- --------- ----------- ----------- -----------
NET GAIN (LOSS) ON INVESTMENTS .............. 0 0 0 (186,026) 177,117 191,843
---------- --------- --------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ................................ $ 319,686 $ 334,485 $ 348,449 $ (323,796) $ 1,554,376 $ 1,787,313
========== ========= ========= =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A3
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY FLEXIBLE MANAGED CONSERVATIVE BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------ ------------------------------------------- ------------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 3,250,226 $ 3,479,231 $ 3,958,383 $ 11,143 $ 10,349,173 $ 10,897,673 $ 4,689,573 $ 4,872,397 $ 4,982,357
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1,150,889 1,143,923 1,028,832 1,509,261 2,116,233 2,184,985 718,530 713,776 665,939
(158,561) (166,679) (133,380) (544,224) (767,447) (793,096) (190,933) (183,772) (163,989)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
992,328 977,244 895,452 965,037 1,348,786 1,391,889 527,597 530,004 501,950
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
2,257,898 2,501,987 3,062,931 (953,894) 9,000,387 9,505,784 4,161,976 4,342,393 4,480,407
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
22,859,279 20,675,751 9,847,752 2,827,339 27,434,444 56,731,648 658,398 6,925,741 11,925,141
5,681,025 4,685,572 3,605,717 1,322,321 8,721,978 2,974,960 787,439 594,578 961,056
(9,060,032) (12,015,861) 19,914,304 14,382,751 (22,408,120) (11,688,757) 1,388,838 329,870 (4,407,263)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
19,480,272 13,345,462 33,367,773 18,532,411 13,748,302 48,017,851 2,834,675 7,850,189 8,478,934
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 21,738,170 $ 15,847,449 $ 36,430,704 $ 17,578,517 $ 22,748,689 $ 57,523,635 $ 6,996,651 $ 12,192,582 $ 12,959,341
============ ============ ============ ============ ============ ============ =========== ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A4
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF THE
VARIABLE APPRECIABLE LIFE SUBACCOUNTS
OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF OPERATIONS
For the years ended December 31, 1999, 1998 and 1997
SUBACCOUNTS
-------------------------------------------------------------------------------------
HIGH YIELD BOND STOCK INDEX
PORTFOLIO PORTFOLIO
--------------------------------------- ------------------------------------------
1999 1998 1997 1999 1998 1997
---------- ------------- --------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income ........................... $ 85,549 $ 1,994,015 $ 568,574 $ 767,914 $ 540,470 $ 188,173
---------- ------------- --------- ------------ ------------ -----------
EXPENSES
Charges to contract owners for assuming
mortality risk and expense risk [Note 5A] 193,583 97,586 35,704 443,707 207,744 73,231
Reimbursement for excess expenses
[Note 5D] ................................ 0 0 0 0 0 0
---------- ------------- --------- ------------ ------------ -----------
NET EXPENSES ................................ 193,583 97,586 35,704 443,707 207,744 73,231
---------- ------------- --------- ------------ ------------ -----------
NET INVESTMENT INCOME (LOSS) ................ (108,034) 1,896,429 532,870 324,207 332,726 114,942
---------- ------------- --------- ------------ ------------ -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions received .... 0 0 0 976,749 1,074,502 412,169
Realized gain (loss) on shares
redeemed .............................. (217,380) (173,650) 32,615 4,605,818 1,754,137 260,629
Net change in unrealized gain (loss)
on investments ........................ 1,589,321 (2,569,803) 171,940 8,162,150 11,731,008 2,468,185
---------- ------------- --------- ------------ ------------ -----------
NET GAIN (LOSS) ON INVESTMENTS .............. 1,371,941 (2,743,453) 204,555 13,744,717 14,559,647 3,140,983
---------- ------------- --------- ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ................................ $1,263,907 $ (847,024) $ 737,425 $ 14,068,924 $ 14,892,373 $ 3,255,925
========== ============= ========= ============ ============ ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A5
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY INCOME NATURAL RESOURCES GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------- ------------------------------------------ -----------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ----------- ------------ ----------- ----------- ---------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 273,914 $ 327,421 $ 237,992 $ 14,639 $ 21,538 $ 46,870 $ 295,800 $ 490,032 $ 69,248
- ----------- ------------ ----------- ----------- ---------- ------------ ------------ ------------ -----------
71,439 74,057 53,801 12,695 15,493 51,833 411,889 140,140 31,924
0 0 0 0 0 0 0 0 0
- ----------- ------------ ----------- ----------- ---------- ------------ ------------ ------------ -----------
71,439 74,057 53,801 12,695 15,493 51,833 411,889 140,140 31,924
- ----------- ------------ ----------- ----------- ---------- ------------ ------------ ------------ -----------
202,475 253,364 184,191 1,944 6,045 (4,963) (116,089) 349,892 37,324
- ----------- ------------ ----------- ----------- ---------- ------------ ------------ ------------ -----------
1,332,460 721,671 998,911 0 148,927 638,495 518,662 2,640,161 352,331
244,341 117,016 52,359 (57,207) (134,568) 1,747,030 1,889,924 32,172 32,176
(422,725) (1,610,976) 1,459,574 823,662 (469,228) (2,682,906) 25,916,670 7,149,778 (672,740)
- ----------- ------------ ----------- ----------- ---------- ------------ ------------ ------------ -----------
1,154,076 (772,289) 2,510,844 766,455 (454,869) (297,381) 28,325,256 9,822,111 (288,233)
- ----------- ------------ ----------- ----------- ---------- ------------ ------------ ------------ -----------
$ 1,356,551 $ (518,925) $ 2,695,035 $ 768,399 $ (448,824) $ (302,344) $ 28,209,167 $ 10,172,003 $ (250,909)
=========== ============ =========== =========== ========== ============ ============ ============ ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A6
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF THE
VARIABLE APPRECIABLE LIFE SUBACCOUNTS
OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF OPERATIONS
For the years ended December 31, 1999, 1998 and 1997
SUBACCOUNTS
--------------------------------------------------------------------------------
GOVERNMENT INCOME PRUDENTIAL JENNISON
PORTFOLIO PORTFOLIO
-------------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income ............................. $ 0 $ 71,608 $ 67,982 $ 22,451 $ 10,621 $ 5,371
---------- ---------- --------- ----------- ----------- ---------
EXPENSES
Charges to contract owners for assuming
mortality risk and expense risk [Note 5A] ... 7,006 7,102 6,199 81,659 29,296 13,312
Reimbursement for excess expenses
[Note 5D] ................................... 0 0 0 0 0 0
---------- ---------- --------- ----------- ----------- ---------
NET EXPENSES .................................. 7,006 7,102 6,199 81,659 29,296 13,312
---------- ---------- --------- ----------- ----------- ---------
NET INVESTMENT INCOME (LOSS) .................. (7,006) 64,506 61,783 (59,208) (18,675) (7,941)
---------- ---------- --------- ----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions received ...... 0 0 0 970,020 104,664 171,556
Realized gain (loss) on shares
redeemed ................................ 8,020 9,957 1,429 108,823 27,074 16,410
Net change in unrealized gain (loss)
on investments .......................... (42,696) 12,979 26,401 4,732,816 1,492,381 364,364
---------- ---------- --------- ----------- ----------- ---------
NET GAIN (LOSS) ON INVESTMENTS ................ (34,676) 22,936 27,830 5,811,659 1,624,119 552,330
---------- ---------- --------- ----------- ----------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS .................................. $ (41,682) $ 87,442 $ 89,613 $ 5,752,451 $ 1,605,444 $ 544,389
========== ========== ========= =========== =========== =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A7
<PAGE>
SUBACCOUNTS (CONTINUED)
- ----------------------------------------------
SMALL CAPITALIZATION STOCK
PORTFOLIO
- ----------------------------------------------
1999 1998 1997
------------ ------------ -----------
$ 0 $ 104,052 $ 24,119
------------ ------------ -----------
259,511 77,224 23,017
0 0 0
------------ ------------ -----------
259,511 77,224 23,017
------------ ------------ -----------
(259,511) 26,828 1,102
------------ ------------ -----------
906,707 1,437,423 489,979
260,478 (67,192) 10,773
6,174,691 954,110 160,250
------------ ------------ -----------
7,341,876 2,324,341 661,002
------------ ------------ -----------
$ 7,082,365 $ 2,351,169 $ 662,104
============ ============ ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
A8
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF THE
VARIABLE APPRECIABLE LIFE SUBACCOUNTS
OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1999, 1998 and 1997
SUBACCOUNTS
-------------------------------------------------------------------------------------
MONEY MARKET DIVERSIFIED BOND
PORTFOLIO PORTFOLIO
----------------------------------------- ------------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) .............. $ 319,686 $ 334,485 $ 348,449 $ (137,770) $ 1,377,259 $ 1,595,470
Capital gains distributions received ...... 0 0 0 67,535 88,872 276,650
Realized gain (loss) on shares redeemed ... 0 0 0 41,756 65,294 70,032
Net change in unrealized gain (loss) on
investments ............................. 0 0 0 (295,317) 22,951 (154,839)
----------- ----------- ----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS ................................ 319,686 334,485 348,449 (323,796) 1,554,376 1,787,313
----------- ----------- ----------- ------------ ------------ ------------
PREMIUM PAYMENTS AND OTHER
OPERATING TRANSFERS
Contract Owner Net Payments ............... 18,255 362,297 505,183 485,236 1,209,116 1,404,553
Policy Loans .............................. (182,692) (147,149) (409,790) (553,832) (529,009) (473,054)
Policy Loan Repayments and Interest ....... 204,337 265,406 140,076 509,659 421,496 409,993
Surrenders, Withdrawals and
Death Benefits .......................... (433,849) (627,277) (550,152) (1,188,933) (1,336,342) (1,502,838)
Net Transfers From (To) Other
Subaccounts or Fixed Rate Option ........ 252,166 538,372 (156,879) (351,534) 682,202 194,525
Withdrawal and Other Charges .............. (231,397) (246,028) (301,944) (571, 355) (621,531) (732,626)
----------- ----------- ----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
PREMIUM PAYMENTS
AND OTHER OPERATING
TRANSFERS ................................. (373,180) 145,621 (773,506) (1,670,759) (174,068) (699,447)
----------- ----------- ----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET
ASSETS RETAINED IN THE
ACCOUNT [Note 7] .......................... 0 (15,018) (99,078) 0 (2,680) (57,377)
----------- ----------- ----------- ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS .................................... (53,494) 465,088 (524,135) (1,994,555) 1,377,628 1,030,489
NET ASSETS
Beginning of year ......................... 7,474,170 7,009,082 7,533,217 25,332,495 23,954,867 22,924,378
----------- ----------- ----------- ------------ ------------ ------------
End of year ............................... $ 7,420,676 $ 7,474,170 $ 7,009,082 $ 23,337,940 $ 25,332,495 $ 23,954,867
=========== =========== =========== ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A9
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY FLEXIBLE MANAGED CONSERVATIVE BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------ ------------------------------------------ ------------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 2,257,898 $ 2,501,987 $ 3,062,931 $ (953,894) $ 9,000,387 $ 9,505,784 $ 4,161,976 $ 4,342,393 $ 4,480,407
22,859,279 20,675,751 9,847,752 2,827,339 27,434,444 56,731,648 658,398 6,925,741 11,925,141
5,681,025 4,685,572 3,605,717 1,322,321 8,721,978 2,974,960 787,439 594,578 961,056
(9,060,032) (12,015,861) 19,914,304 14,382,751 (22,408,120) (11,688,757) 1,388,838 329,870 (4,407,263)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
21,738,170 15,847,449 36,430,704 17,578,517 22,748,689 57,523,635 6,996,651 12,192,582 12,959,341
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
484,980 8,768,106 10,298,271 4,963,270 19,460,603 22,730,005 2,955,315 8,965,691 10,313,838
(5,865,015) (6,477,542) (6,145,354) (7,384,636) (7,974,049) (7,849,567) (2,889,851) (3,015,778) (3,213,273)
5,452,661 4,223,794 3,591,634 7,010,849 5,598,233 5,129,697 2,927,288 1,976,521 2,156,195
(7,992,313) (9,891,027) (10,093,245) (10,727,647) (13,996,390) (15,259,724) (5,619,206) (6,131,547) (6,793,526)
(3,629,986) (1,215,581) 678,473 (4,161,991) (144,967,979) (2,359,588) (2,179,539) (1,292,182) (1,375,131)
(5,119,578) (5,422,744) (6,160,863) (9,811,225) (11,055,099) (12,720,067) (4,974,621) (5,312,571) (6,059,806)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(16,669,251) (10,014,994) (7,831,084) (20,111,380) (152,934,681) (10,329,244) (9,780,614) (4,809,866) (4,971,703)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
0 (132,641) (149,464) 0 (177,182) (219,866) 0 (8,012) (508,220)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
5,068,919 5,699,814 28,450,156 (2,532,863) (130,363,174) 46,974,525 (2,783,963) 7,374,704 7,479,418
188,862,889 183,163,075 154,712,919 248,985,487 379,348,661 332,374,136 118,167,929 110,793,225 103,313,807
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$193,931,808 $188,862,889 $183,163,075 $246,452,624 $248,985,487 $379,348,661 $115,383,966 $118,167,929 $110,793,225
============ ============ ============ ============ ============ ============ ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A10
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF THE
VARIABLE APPRECIABLE LIFE SUBACCOUNTS
OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1999, 1998 and 1997
SUBACCOUNTS
---------------------------------------------------------------------------------------
HIGH YIELD BOND STOCK INDEX
PORTFOLIO PORTFOLIO
------------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) ............ $ (108,034) $ 1,896,429 $ 532,870 $ 324,207 $ 332,726 $ 114,942
Capital gains distributions received .... 0 0 0 976,749 1,074,502 412,169
Realized gain (loss) on shares redeemed . (217,380) (173,650) 32,615 4,605,818 1,754,137 260,629
Net change in unrealized gain (loss) on
investments ........................... 1,589,321 (2,569,803) 171,940 8,162,150 11,731,008 2,468,185
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS .............................. 1,263,907 (847,024) 737,425 14,068,924 14,892,373 3,255,925
------------ ------------ ------------ ------------ ------------ ------------
PREMIUM PAYMENTS AND OTHER
OPERATING TRANSFERS
Contract Owner Net Payments ............. 247,400 356,982 469,592 836,738 (458,592) 919,468
Policy Loans ............................ (145,200) (163,296) (201,423) (768,138) (528,435) (466,875)
Policy Loan Repayments and Interest ..... 288,800 167,408 118,870 641,476 429,300 254,143
Surrenders, Withdrawals and
Death Benefits ........................ (164,918) (501,296) (305,958) (1,093,052) (1,117,895) (558,323)
Net Transfers From (To) Other
Subaccounts or Fixed Rate Option ...... (3,734,139) 29,637,732 130,175 (6,699,608) 50,128,317 2,108,397
Deferred Sales and Other Charges ........ (332,102) (283,352) (265,639) (876,437) (637,808) (474,579)
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
PREMIUM PAYMENTS
AND OTHER OPERATING
TRANSFERS ............................... (3,840,159) 29,214,178 (54,383) (7,959,021) 47,814,887 1,782,231
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS RETAINED IN THE
ACCOUNT [Note 7] ........................ 0 (60,128) 3,000 0 687,255 22,000
------------ ------------ ------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS .............................. (2,576,252) 28,307,026 686,042 6,109,903 63,394,515 5,060,156
NET ASSETS
Beginning of year ....................... 34,673,345 6,366,319 5,680,277 78,293,064 14,898,549 9,838,393
------------ ------------ ------------ ------------ ------------ ------------
End of year ............................. $ 32,097,093 $ 34,673,345 $ 6,366,319 $ 84,402,967 $ 78,293,064 $ 14,898,549
============ ============ ============ ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A11
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------------
EQUITY INCOME NATURAL RESOURCES GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------- ------------------------------------------ -----------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 202,475 $ 253,364 $ 184,191 $ 1,944 $ 6,045 $ (4,963) $ (116,089) $ 349,892 $ 37,324
1,332,460 721,671 998,911 0 148,927 638,495 518,662 2,640,161 352,331
244,341 117,016 52,359 (57,207) (134,568) 1,747,030 1,889,924 32,172 32,176
(422,725) (1,610,976) 1,459,574 823,662 (469,228) (2,682,906) 25,916,670 7,149,778 (672,740)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1,356,551 (518,925) 2,695,035 768,399 (448,824) (302,344) 28,209,167 10,172,003 (250,909)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
93,369 625,273 636,376 170,488 228,273 269,446 (1,977,776) (404,538) 296,914
(299,074) (348,765) (321,220) (71,684) (84,877) (114,171) (156,604) (117,217) (119,989)
310,105 211,308 165,506 80,720 66,313 82,408 170,944 65,209 60,528
(501,214) (642,033) (413,503) (91,237) (290,597) (163,191) (19,903) (359,688) (118,830)
(548,343) 1,663,734 1,464,170 (238,572) (615,297) (9,107,762) (5,578,438) 47,651,150 5,040,462
(331,274) (356,431) (325,521) (76,851) (96,836) (150,388) (418,808) (207,310) (125,863)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(1,276,431) 1,153,086 1,205,808 (227,136) (793,021) (9,183,658) (7,980,585) 46,627,606 5,033,222
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
0 12,012 (21,017) 0 216 (286,509) 0 99,132 37,702
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
80,120 646,173 3,879,826 541,263 (1,241,629) (9,772,511) 20,228,582 56,898,741 4,820,015
11,813,167 11,166,994 7,287,168 1,888,053 3,129,682 12,902,193 64,505,993 7,607,252 2,787,237
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 11,893,287 $ 11,813,167 $ 11,166,994 $ 2,429,316 $ 1,888,053 $ 3,129,682 $ 84,734,575 $ 64,505,993 $ 7,607,252
============ ============ ============ ============ ============ ============ ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A12
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF THE
VARIABLE APPRECIABLE LIFE SUBACCOUNTS
OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1999, 1998 and 1997
SUBACCOUNTS
-------------------------------------------------------------------------------------
GOVERNMENT INCOME PRUDENTIAL JENNISON
PORTFOLIO PORTFOLIO
------------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) .............. $ (7,006) $ 64,506 $ 61,783 $ (59,208) $ (18,675) $ (7,941)
Capital gains distributions received ...... 0 0 0 970,020 104,664 171,556
Realized gain (loss) on shares redeemed ... 8,020 9,957 1,429 108,823 27,074 16,410
Net change in unrealized gain (loss) on
investments ............................. (42,696) 12,979 26,401 4,732,816 1,492,381 364,364
------------ ------------ ------------ ------------ ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS ................................ (41,682) 87,442 89,613 5,752,451 1,605,444 544,389
------------ ------------ ------------ ------------ ----------- -----------
PREMIUM PAYMENTS AND OTHER
OPERATING TRANSFERS
Contract Owner Net Payments ............... 34,276 83,309 95,220 918,991 350,999 221,934
Policy Loans .............................. (71,671) (35,201) (33,563) (541,040) (186,693) (95,540)
Policy Loan Repayments and Interest ....... 75,137 21,815 24,319 423,520 207,729 33,699
Surrenders, Withdrawals and
Death Benefits .......................... (34,096) (89,934) (53,713) (548,558) (263,749) (53,534)
Net Transfers From (To) Other
Subaccounts or Fixed Rate Option ........ (202,102) 277,254 13,639 12,249,824 2,831,858 976,677
Deferred Sales and Other Charges .......... (41,852) (42,276) (46,930) (318,494) (156,276) (85,689)
------------ ------------ ------------ ------------ ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
PREMIUM PAYMENTS
AND OTHER OPERATING
TRANSFERS ................................. (240,308) 214,967 (1,028) 12,184,243 2,783,868 997,547
------------ ------------ ------------ ------------ ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RETAINED IN THE
ACCOUNT [Note 7] .......................... 0 (2,774) (15,772) 0 (7,320) (34,235)
------------ ------------ ------------ ------------ ----------- -----------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ................................ (281,990) 299,635 72,813 17,936,694 4,381,992 1,507,701
NET ASSETS
Beginning of year ......................... 1,447,536 1,147,901 1,075,088 7,439,704 3,057,712 1,550,011
------------ ------------ ------------ ------------ ----------- -----------
End of year ............................... $ 1,165,546 $ 1,447,536 $ 1,147,901 $ 25,376,398 $ 7,439,704 $ 3,057,712
============ ============ ============ ============ =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
</TABLE>
A13
<PAGE>
SUBACCOUNTS (CONTINUED)
- ----------------------------------------------
SMALL CAPITALIZATION STOCK
PORTFOLIO
- ----------------------------------------------
1999 1998 1997
- ------------ ------------ ------------
$ (259,511) $ 26,828 $ 1,102
906,707 1,437,423 489,979
260,478 (67,192) 10,773
6,174,691 954,110 160,250
- ------------ ------------ ------------
7,082,365 2,351,169 662,104
- ------------ ------------ ------------
(885,497) (128,202) 173,384
(101,211) (80,146) (104,117)
114,167 53,994 24,181
(55,230) (115,378) (24,327)
16,521,836 17,433,339 5,676,081
(259,459) (112,420) (55,147)
- ------------ ------------ ------------
15,334,606 17,051,187 5,690,055
- ------------ ------------ ------------
0 (78,796) 13,962
- ------------ ------------ ------------
22,416,971 19,323,560 6,366,121
26,694,975 7,371,415 1,005,294
- ------------ ------------ ------------
$ 49,111,946 $ 26,694,975 $ 7,371,415
============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20
A14
<PAGE>
NOTES TO FINANCIAL STATEMENTS OF THE
VARIABLE APPRECIABLE LIFE SUBACCOUNTS
OF PRUCO LIFE OF NEW JERSEY VARIABLE APPRECIABLE ACCOUNT
DECEMBER 31, 1999
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. Proceeds from the purchases of Pruco Life
of New Jersey Variable Appreciable Life ("VAL"), Pruco Life of New
Jersey PRUvider Variable Appreciable Life ("PRUvider") and, effective
November 10, 1999, Pruco Life of New Jersey Pruselect III ("PSEL III")
contracts are invested in the Account.
The Account is registered under the Investment Company Act of 1940, as
amended, as a unit investment trust. There are eighteen subaccounts
within the Account. VAL contracts offer the option to invest in thirteen
of these subaccounts, 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
contract owners existing at that date will continue to be received by
the Account.
At December 31, 1999, there were no balances pertaining to PruSelect III
in the subaccounts investing in the Series Fund or the non-Prudential
administered funds.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are prepared in conformity with
accounting principles generally accepted in the United States ( "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.
Receivable from (Payable to) Pruco Life of New Jersey--At times, Pruco
Life of New Jersey may owe an amount to or expect to receive an amount
from the Account primarily related to processing contract owner
payments, surrenders, withdrawals and death benefits. This amount is
reflected in the Account's Statements of Net Assets as either a
receivable from or payable to Pruco Life of New Jersey. The receivable
and or payable does not have an effect on the contract owner's account
or the related unit value.
A15
<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 (rounded) of each portfolio held by the subaccounts of
the Account and the aggregate cost of investments in such shares at
December 31, 1999 were as follows:
<TABLE>
<CAPTION>
PORTFOLIOS
-----------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Number of shares (rounded): 747,303 2,131,569 6,711,812 13,970,904 7,511,321
Net asset value per share: $ 10.00 $ 10.95 $ 28.90 $ 17.64 $ 15.36
Cost: $ 7,473,027 $ 22,886,755 $ 147,783,464 $ 224,296,992 $ 106,500,171
<CAPTION>
PORTFOLIOS (CONTINUED)
-----------------------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES GLOBAL
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Number of shares (rounded): 4,268,292 1,898,644 609,223 139,411 2,734,508
Net asset value per share: $ 7.52 $ 44.45 $ 19.52 $ 17.38 $ 30.98
Cost: $ 32,591,158 $ 58,429,400 $ 11,183,919 $ 2,217,965 $ 51,938,586
<CAPTION>
PORTFOLIOS (CONTINUED)
----------------------------------------------
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
INCOME JENNISON STOCK
------------ ------------ --------------
<S> <C> <C> <C>
Number of shares (rounded): 100,906 783,242 3,017,594
Net asset value per share: $ 11.55 $ 32.39 $ 16.25
Cost: $ 1,160,230 $ 18,635,716 $ 41,662,735
</TABLE>
A16
<PAGE>
NOTE 4: CONTRACT OWNER UNIT INFORMATION
Outstanding contract owner units (rounded), unit values and total value of
contract owner equity at December 31, 1999 were as follows:
<TABLE>
<CAPTION>
SUBACCOUNTS
----------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Contract Owner Units Outstanding
(VAL - rounded) ........................ 3,690,079 7,796,622 24,051,887 45,581,573 25,613,699
Unit Value (VAL) ......................... $ 2.01098 $ 2.99334 $ 8.06306 $ 5.10277 $ 4.13896
------------ ------------ ------------- ------------- -------------
Contract Owner Equity (VAL) .............. $ 7,420,676 $ 23,337,940 $ 193,931,808 $ 232,592,282 $ 106,014,078
------------ ------------ ------------- ------------- -------------
Contract Owner Units Outstanding
(PRUvider - rounded) ................... N/A N/A N/A 3,960,460 3,221,133
Unit Value (PRUvider) .................... N/A N/A N/A $ 3.49968 $ 2.90888
------------ ------------ ------------- ------------- -------------
Contract Owner Equity (PRUvider) ......... N/A N/A N/A $ 13,860,342 $ 9,369,888
------------ ------------ ------------- ------------- -------------
Contract Owner Units Outstanding
(PSEL III - rounded) ................... 0 0 0 0 0
Unit Value (PSEL III) .................... $ 1.00775 $ 0.99424 $ 1.05287 $ 1.03671 $ 1.02714
------------ ------------ ------------- ------------- -------------
Contract Owner Equity (PSEL III) ......... $ 0 $ 0 $ 0 $ 0 $ 0
------------ ------------ ------------- ------------- -------------
TOTAL CONTRACT OWNER EQUITY .............. $ 7,420,676 $ 23,337,940 $ 193,931,808 $ 246,452,624 $ 115,383,966
============ ============ ============= ============= =============
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------------------------------------------
HIGH
YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Contract Owner Units Outstanding
(VAL - rounded) ........................ 12,926,323 13,607,807 2,525,607 773,224 32,733,240
Unit Value (VAL) ......................... $ 2.48308 $ 6.20254 $ 4.70908 $ 3.14180 $ 2.58864
------------ ------------ ------------- ------------- -------------
Contract Owner Equity (VAL) .............. $ 32,097,093 $ 84,402,967 $ 11,893,287 $ 2,429,316 $ 84,734,575
------------ ------------ ------------- ------------- -------------
Contract Owner Units Outstanding
(PRUvider - rounded) ................... N/A N/A N/A N/A N/A
Unit Value (PRUvider) .................... N/A N/A N/A N/A N/A
------------ ------------ ------------- ------------- -------------
Contract Owner Equity (PRUvider) ......... N/A N/A N/A N/A N/A
------------ ------------ ------------- ------------- -------------
Contract Owner Units Outstanding
(PSEL III - rounded) ................... 0 0 0 N/A 0
Unit Value (PSEL III) .................... $ 1.02134 $ 1.07712 $ 1.07537 $ N/A $ 1.20743
------------ ------------ ------------- ------------- -------------
Contract Owner Equity (PSEL III) ......... $ 0 $ 0 $ 0 $ N/A $ 0
------------ ------------ ------------- ------------- -------------
TOTAL CONTRACT OWNER EQUITY .............. $ 32,097,093 $ 84,402,967 $ 11,893,287 $ 2,429,316 $ 84,734,575
============ ============ ============= ============= =============
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------------
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
INCOME JENNISON STOCK
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ---------------
<S> <C> <C> <C>
Contract Owner Units Outstanding
(VAL - rounded) ........................ 560,985 7,043,717 25,114,648
Unit Value (VAL) ......................... $ 2.07768 $ 3.60270 $ 1.95551
------------ ------------ -------------
Contract Owner Equity (VAL) .............. $ 1,165,546 $ 25,376,398 $ 49,111,946
------------ ------------ -------------
Contract Owner Units Outstanding
(PRUvider - rounded) ................... N/A N/A N/A
Unit Value (PRUvider) .................... N/A N/A N/A
------------ ------------ -------------
Contract Owner Equity (PRUvider) ......... N/A N/A N/A
------------ ------------ -------------
Contract Owner Units Outstanding
(PSEL III rounded) ..................... N/A 0 N/A
Unit Value (PSEL III) .................... $ N/A $ 1.16040 $ N/A
------------ ------------ -------------
Contract Owner Equity (PSEL III) ......... $ N/A $ 0 $ N/A
------------ ------------ -------------
TOTAL CONTRACT OWNER EQUITY .............. $ 1,165,546 $ 25,376,398 $ 49,111,946
============ ============ =============
</TABLE>
A17
<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%, 0.90% and 0.20%, are applied daily against the net
assets representing equity of VAL, PRUvider and PruSelect III contract
owners held in each subaccount, respectively. Mortality risk is that
contract owners may not live as long as estimated and expense risk is
that the cost of issuing and administering the policies may exceed
related charges by Pruco Life of New Jersey.
B. Deferred Sales Charge
A deferred sales charge is imposed upon surrenders of certain VAL and
PRUvider 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.
C. Partial Withdrawal Charge
A charge is imposed by Pruco Life of New Jersey on partial withdrawals
of the cash surrender value. A charge equal to the lesser of $15 or 2%
and $25 or 2% will be made in connection with each partial withdrawal
of the cash surrender value of a VAL or PRUvider contract and
PruSelect III contract, respectively.
D. Expense Reimbursement
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
Conservative Balanced Portfolios of the Series Fund.
E. Cost of Insurance and Other Related Charges
Contract owner contributions are subject to certain deductions prior
to being invested in the Account. The deductions are for (1)
transaction costs which are deducted from each premium payment to
cover premium collection and processing costs; (2) state premium
taxes; (3) sales charges which are deducted in order to compensate
Pruco Life of New Jersey for the cost of selling the contract.
Contracts are also subject to monthly charges for the costs of
administering the contract and to compensate Pruco Life of New Jersey
for the guaranteed minimum death benefit risk.
NOTE 6: TAXES
Pruco Life of New Jersey is taxed as a "life insurance company" as
defined by the Internal Revenue Code and the results of operations of
the Account form a part of Prudential's consolidated federal tax
return. Under current federal law, no federal income taxes are payable
by the Account. As such, no provision for tax liability has been
recorded in these financial statements.
A18
<PAGE>
NOTE 7: NET INCREASE (DECREASE) IN NET ASSETS RETAINED IN THE ACCOUNT
The increase (decrease) in net assets retained in the Account represents
the net contributions (withdrawals) of Pruco Life of New Jersey to (from)
the Account. Effective October 13, 1998 Pruco Life of New Jersey no longer
maintains a position in the account. Previously, Pruco Life of New Jersey
maintained a position in the Account for liquidity purposes including unit
purchases and redemptions, fund share transactions and expense processing.
NOTE 8: UNIT ACTIVITY
Transactions in units (including transfers among subaccounts), for the
years ended December 31, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------------------------------
MONEY DIVERSIFIED
MARKET BOND
PORTFOLIO PORTFOLIO
---------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 1,394,252 1,651,137 1,852,551 1,817,938 3,461,354 957,470
Contract Owner
Redemptions: (1,583,513) (1,575,664) (2,279,240) (2,374,019) (3,523,454) (1,208,781)
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------------------------------------
FLEXIBLE
EQUITY MANAGED
PORTFOLIO PORTFOLIO
---------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 1,053,096 4,007,348 2,872,723 2,928,417 16,398,289 7,728,571
Contract Owner
Redemptions: (3,213,126) (5,431,230) (4,155,330) (6,981,728) (51,572,419) (10,193,317)
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------------------------------------
CONSERVATIVE HIGH YIELD
BALANCED BOND
PORTFOLIO PORTFOLIO
---------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 2,742,649 3,568,780 4,308,577 10,923,909 33,003,985 415,705
Contract Owner
Redemptions: (5,207,302) (4,841,159) (5,775,601) (12,518,142) (21,070,995) (440,795)
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------------------------------------
STOCK EQUITY
INDEX INCOME
PORTFOLIO PORTFOLIO
---------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 10,650,541 25,612,492 1,448,957 214,150 724,545 651,898
Contract Owner
Redemptions: (12,168,789) (14,154,931) (982,534) (494,521) (492,449) (352,895)
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------------------------------------
NATURAL
RESOURCES GLOBAL
PORTFOLIO PORTFOLIO
---------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 152,344 172,330 349,998 31,717,854 84,626,033 3,871,182
Contract Owner
Redemptions: (251,204) (490,320) (3,470,654) (35,712,959) (53,280,086) (575,706)
</TABLE>
A19
<PAGE>
NOTE 8: UNIT ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------------------------------------
GOVERNMENT PRUDENTIAL
INCOME JENNISON
PORTFOLIO PORTFOLIO
---------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 144,899 265,519 122,074 4,934,733 1,808,411 862,419
Contract Owner
Redemptions: (257,810) (169,863) (126,446) (810,425) (520,419) (284,443)
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------
SMALL
CAPITALIZATION
STOCK
PORTFOLIO
----------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Contract Owner
Contributions: 24,413,256 30,167,243 3,736,657
Contract Owner
Redemptions: (14,590,716) (19,034,719) (264,851)
</TABLE>
NOTE 9: PURCHASES AND SALES OF INVESTMENTS
The aggregate costs of purchases and proceeds from sales of investments in
the Series Fund for the year ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
PORTFOLIOS
-----------------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
-------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Purchases $ 2,157,046 $ 285,296 $ 343,856 $ 1,048,953 $ 583,087
Sales $ (2,520,612) $ (2,091,082) $ (17,965,888) $ (22,131,232) $ (10,901,371)
<CAPTION>
PORTFOLIOS (CONTINUED)
-----------------------------------------------------------------------------------------
HIGH YIELD STOCK EQUITY NATURAL
BOND INDEX INCOME RESOURCES GLOBAL
-------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Purchases $ 780,770 $ 9,032,528 $ 401,468 $ 256,013 $ 701,472
Sales $ (4,814,050) $ (17,443,512) $ (1,750,590) $ (502,192) $ (9,113,462)
<CAPTION>
PORTFOLIOS (CONTINUED)
----------------------------------------------------
SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
INCOME JENNISON STOCK
-------------- ------------- -------------
<S> <C> <C> <C>
Purchases $ 288,886 $ 12,573,470 $ 21,029,426
Sales $ (536,282) $ (478,067) $ (6,030,370)
</TABLE>
NOTE 10: 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. There were no net premium payments for the
year ended December 31, 1999. Equity of contract owners in that subaccount
at December 31, 1999 includes approximately $199.1 million owned by
Prudential in the Small Capitalization Stock, High Yield Bond, Global and
Stock Index Subaccounts.
A20
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Contract Owners of the Variable Appreciable Life Subaccounts 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 the subaccounts (Money Market
Portfolio, Diversified Bond Portfolio, Equity Portfolio, Flexible Managed
Portfolio, Conservative Balanced Portfolio, High Yield Bond Portfolio, Stock
Index Portfolio, Equity Income Portfolio, Natural Resources Portfolio, Global
Portfolio, Government Income Portfolio, Prudential Jennison Portfolio and Small
Capitalization Stock Portfolio) of the Pruco Life of New Jersey Variable
Appreciable Account at December 31, 1999, the results of each of their
operations and the changes in each of their net assets for each of the three
years in the period then ended, in conformity with accounting principles
generally accepted in the United States. 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 auditing standards generally accepted in the United States, 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 fund shares owned at December 31, 1999, provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
March 17, 2000
A21
<PAGE>
VARIABLE
APPRECIABLE
LIFE(R)
INSURANCE
Variable Appreciable Life(R) was issued by Pruco Life Insurance Company of New
Jersey, 213 Washington Street, Newark, NJ 07102-2992 and offered through Pruco
Securities Corporation, 751 Broad Street, Newark, NJ 07102-3777, both
subsidiaries of The Prudential Insurance Company of America, 751 Broad Street,
Newark, NJ 07102-3777. Appreciable Life is a registered mark of Prudential.
[LOGO] PRUDENTIAL
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 Washington Street, Newark, NJ 07102-2992
Telephone 800 778-2255
VAL-2 Ed. 5/2000 CAT# 64696FY
<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 ("Pruco Life 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 of New Jersey.
UNDERTAKING WITH RESPECT TO INDEMNIFICATION
The Registrant, in conjunction with certain affiliates, maintains insurance on
behalf of any person who is or was a trustee, director, officer, employee, or
agent of the Registrant, or who is or was serving at the request of the
Registrant as a trustee, director, officer, employee or agent of such other
affiliated trust or corporation, against any liability asserted against and
incurred by him or her arising out of his or her position with such trust or
corporation.
New Jersey, being the state or organization of Pruco Life of New Jersey, permits
entities organized under its jurisdiction to indemnify directors and officers
with certain limitations. The relevant provisions of New Jersey law permitting
indemnification can be found in Section 14A:3-5 of the New Jersey Statutes
Annotated. The text of Pruco Life of New Jersey's By-law, Article V, which
relates to indemnification of officers and directors, is incorporated by
reference to Exhibit 1.A.(6)(c) to its Form S-6, Registration No. 333-85117,
filed August 13, 1999.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") 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 83 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. PricewaterhouseCoopers LLP, independent accountants.
2. Clifford E. Kirsch, Esq.
3. Pamela 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 7)
(2) Not Applicable.
(3) Distributing Contracts:
(a) Distribution Agreement between Pruco Securities
Corporation and Pruco Life Insurance Company of
New Jersey. (Note 7)
(b) Proposed form of Agreement between Pruco
Securities Corporation and independent brokers
with respect to the Sale of the Contracts. (Note
7)
(c) Schedules of Sales Commissions. (Note 7)
(4) Not Applicable.
(5) Variable Life Insurance Contracts.
(a) With fixed death benefit. (Note 7)
(b) With variable death benefit. (Note 7)
(c) Revised Contract with fixed death benefit. (Note
7)
(d) Revised Contract with variable death benefit.
(Note 7)
(6) (a) Articles of Incorporation of Pruco Life Insurance
Company of New Jersey, as amended March 11, 1983.
(Note 7)
(b) Certificate of Amendment of the Articles of
Incorporation of Pruco Life Insurance Company of
New Jersey, February 12, 1998. (Note 8)
(c) By-laws of Pruco Life Insurance Company of New
Jersey, as amended August 4, 1999. (Note 3)
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) (a) Application Form for Variable Appreciable Life
Insurance Contract. (Note 7)
(b) Supplement to the Application for Variable
Appreciable Life Insurance Contract. (Note 7)
(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 7)
II-2
<PAGE>
(e) Revised New York Application Form for Variable
Appreciable Life Insurance Contract. (Note 2)
(11) Form of Notice of Withdrawal Right. (Note 7)
(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 pursuant to Rule 6e-2(b)(13)(v)(B).
(Note 9)
(13) Available Contract Riders.
(a) Rider for Insured's Waiver of Premium Benefit.
(Note 7)
(b) Rider for Applicant's Waiver of Premium Benefit.
(Note 7)
(c) Rider for Insured's Accidental Death Benefit.
(Note 7)
(d) Rider for Level Term Insurance Benefit on Life of
Insured. (Note 7)
(e) Rider for Decreasing Term Insurance Benefit on
Life of Insured. (Note 7)
(f) Rider for Interim Term Insurance Benefit. (Note 7)
(g) Rider for Option to Purchase Additional Insurance
on Life of Insured. (Note 7)
(h) Rider for Decreasing Term Insurance on Life of
Insured Spouse. (Note 7)
(i) Rider for Level Term Insurance on Dependent
Children. (Note 7)
(j) Rider for Level Term Insurance on Dependent
Children-from Term Conversions. (Note 7)
(k) Rider for Level Term Insurance on Dependent
Children-from Term Conversions or Attained Age
Change. (Note 7)
(l) Rider for Coverage on Other Insured. (Note 7)
(m) Rider defining Insured Spouse. (Note 7)
(n) Rider covering lack of Evidence of Insurability on
a Child. (Note 2)
(o) Rider modifying Waiver of Premium. (Note 2)
(p) Rider to terminate a Supplementary Benefit. (Note
7)
(q) Rider providing for election of Variable Reduced
Paid-up Insurance. (Note 7)
(r) Rider to provide for exclusion of Aviation Risk.
(Note 7)
(s) Rider to provide for exclusion of Military
Aviation Risk. (Note 7)
(t) Rider to provide for exclusion of War Risk. (Note
7)
(u) Endorsement for conversion of a Dependent Child.
(Note 7)
(v) Endorsement for Contractual Conversion of a Term
Policy. (Note 7)
(w) Endorsement for conversion of Level Term Insurance
Benefit on a Child. (Note 2)
(x) Endorsement providing for Variable Loan Interest
Rate. (Note 7)
(y) Endorsement for Increase in Face Amount. (Note 7)
(z) Supplementary Monthly Renewable Non-Convertible
One Month Term Insurance
(i) for use in New Jersey with fixed death
benefit Contract. (Note 7)
(ii) for use in New Jersey with variable death
benefit Contract. (Note 7)
(iii) for use in New York with fixed death benefit
Contract. (Note 7)
(iv) for use in New York with variable death
benefit Contract. (Note 7)
(aa) Rider for Term Insurance Benefit on Life of
Insured-Decreasing Amount After Three Years. (Note
7)
(bb) New Jersey Rider for Term Insurance Benefit on
Life of Insured Spouse-Decreasing Amount After
Three Years. (Note 7)
(cc) New York Rider for Term Insurance Benefit on Life
of Insured Spouse-Decreasing Amount After Three
Years. (Note 7)
(dd) Endorsement for Contracts issued in connection
with tax-qualified pension plans. (Note 7)
(ee) Appreciable Plus Rider
(i) for use in New Jersey. (Note 7)
(ii) for use in New York. (Note 7)
(ff) Living Needs Benefit Rider for use in New Jersey.
(Note 2)
(gg) Living Needs Benefit Rider for use in New York.
(Note 2)
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.
II-3
<PAGE>
5. Not Applicable.
6. Opinion and Consent of Pamela A. Schiz, FSA, MAAA, as to actuarial
matters pertaining to the securities being registered. (Note 1)
7. Powers of Attorney.
(a) William M. Bethke, Ira J. Kleinman,
Esther H. Milnes, I. Edward Price (Note 4)
(b) James J. Avery, Jr. (Note 6)
(c) Dennis G. Sullivan (Note 8)
(d) David R. Odenath, Jr. (Note 10)
(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Post-Effective Amendment No. 24 to
Form S-6, Registration No. 2-81243, filed April 29, 1997 on
behalf of the Pruco Life of New Jersey Variable Insurance
Account.
(Note 3) Incorporated by reference to Form S-6, Registration No.
333-85117, filed August 13, 1999 on behalf of the Pruco Life
of New Jersey Variable Appreciable Account.
(Note 4) 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 5) Incorporated by reference to Post-Effective Amendment No. 25 to
this Registration Statement filed April 25, 1996.
(Note 6) Incorporated by reference to Post-Effective Amendment No. 10
to Form S-1, Registration No. 33-20018, filed April 9, 1998 on
behalf of the Pruco Life of New Jersey Variable Contract Real
Property Account.
(Note 7) Incorporated by reference to Post-Effective Amendment No. 26 to
this Registration Statement, filed April 28, 1997.
(Note 8) Incorporated by reference to Post-Effective Amendment No. 12 to
Form S-1, Registration No. 33-20018, filed April 19, 1999 on
behalf of the Pruco Life of New Jersey Variable Contract Real
Property Account.
(Note 9) Incorporated by reference to Post-Effective Amendment No. 29 to
this Registration Statement, filed April 29, 1999.
(Note 10) Incorporated by reference to Post-Effective Amendment No. 7 to
Form S-1, Registration No. 33-20018, filed April 12, 2000 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 14th day April, 2000.
(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. 29 to the Registration Statement has been signed below by the
following persons in the capacities indicated on this 14th day of April, 2000.
SIGNATURE AND TITLE
/s/*
- -----------------------------------
Esther H. Milnes
President and Director
/s/*
- -----------------------------------
Dennis G. Sullivan
Vice President and Chief Accounting
Officer
/s/*
- -----------------------------------
James J. Avery, Jr.
Director
/s/* *By: /s/ Thomas C. Castano
- ----------------------------------- -------------------------
William M. Bethke Thomas C. Castano
Director (Attorney-in-Fact)
/s/*
- -----------------------------------
David R. Odenath, Jr.
Director
/s/*
- -----------------------------------
Ira J. Kleinman
Director
/s/ *
- -----------------------------------
I. Edward Price
Director
II-5
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Post-Effective Amendment No. 29 to the registration statement on Form S-6 (the
"Registration Statement") of our report dated March 17, 2000, relating to the
financial statements of the Variable Appreciable Life Subaccounts of the 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 March 21, 2000, 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.
PricewaterhouseCoopers LLP
New York, New York
April 24, 2000
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
Consent of PricewaterhouseCoopers LLP, independent
Page II-6 accountants.
3. Opinion and Consent of Clifford E. Kirsch, Esq., as to the legality Page II-8
of the securities being registered.
6. Opinion and Consent of Pam Schiz, FSA, MAAA, as to actuarial Page II-9
matters pertaining to the securities being registered.
</TABLE>
II-7
Exhibit 3
April 10, 2000
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 Numbers: 2-89780, 33-57186,
333-85117, and 333-94115) under the Securities Act of 1933 for the registration
of certain variable 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 life
insurance contracts is not chargeable with liabilities arising out of
any other business Pruco Life of New Jersey may conduct.
(4) The variable 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-8
Exhibit 6
April 10, 2000
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
(the "Contracts") under the Securities Act of 1933. The prospectus included in
Post-Effective Amendment No. 29 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 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/
- ---------------------------------
Pamela A. Schiz, FSA, MAAA
Actuarial Director
The Prudential Insurance Company of America
II-9
