Stagecoach Flex - Prudential Annuities

ARE THERE TAX IMPLICATIONS FOR DISTRIBUTIONS?(For more information, see "Tax Considerations")During the Accumulation PeriodA distribution during the accumulation period is deemed to come first from any "gain" in your Annuity and second as a return of your"tax basis", if any. Distributions from your Annuity are generally subject to ordinary income taxation on the amount of anyinvestment gain unless the distribution qualifies as a non-taxable exchange or transfer. If you take a distribution prior to the taxpayer'sage 59½, you may be subject to a 10% penalty in addition to ordinary income taxes on any gain. You may wish to consult aprofessional tax advisor for advice before requesting a distribution.During the Annuitization PeriodDuring the annuitization period, a portion of each annuity payment is taxed as ordinary income at the tax rate you are subject to at thetime of the payment. The Code and regulations have "exclusionary rules" that we use to determine what portion of each annuitypayment should be treated as a return of any tax basis you have in the Annuity. Once the tax basis in the Annuity has been distributed,the remaining annuity payments are taxable as ordinary income. The tax basis in the Annuity may be based on the tax-basis from aprior contract in the case of a 1035 exchange or other qualifying transfer.CAN I WITHDRAW A PORTION OF MY ANNUITY?Yes, you can make a withdrawal during the accumulation period. We call this a "Partial Withdrawal." The amount that you maywithdraw will equal your Surrender Value as of the date we process the withdrawal request. There is no Contingent Deferred SalesCharge applied if you surrender your Annuity or make a partial withdrawal. After any Partial Withdrawal, your Annuity must have aSurrender Value of at least $1,000, or we may treat the Partial Withdrawal request as a request to fully surrender your Annuity. Theminimum Partial Withdrawal you may request is $100. We may apply a Market Value Adjustment to any Fixed Allocations.Partial Withdrawals may also be available following annuitization but only if you choose certain annuity payment options.To request the forms necessary to make a withdrawal from your Annuity, contact our Customer Service Team at 1-800-680-8920 orvisit our Internet Website at www.americanskandia.com.CAN I MAKE PERIODIC WITHDRAWALS FROM THE ANNUITY DURING THE ACCUMULATION PERIOD?Yes. We call these "Systematic Withdrawals." You can receive Systematic Withdrawals of earnings only, principal plus earnings or aflat dollar amount.Systematic Withdrawals can be made from Account Value allocated to the variable investment options or Fixed Allocations.Generally, Systematic Withdrawals from Fixed Allocations are limited to earnings accrued after the program of SystematicWithdrawals begins, or payments of fixed dollar amounts that do not exceed such earnings. Systematic Withdrawals are available on amonthly, quarterly, semi-annual or annual basis. The Account Value of your Annuity must be at least $20,000 before we will allowyou to begin a program of Systematic Withdrawals.The minimum amount for each Systematic Withdrawal is $100. If any scheduled Systematic Withdrawal is for less than $100, wemay postpone the withdrawal and add the expected amount to the amount that is to be withdrawn on the next scheduled SystematicWithdrawal.DO YOU OFFER A PROGRAM FOR WITHDRAWALS UNDER SECTION 72(t) OF THE INTERNAL REVENUE CODE?Yes. If your Annuity is used as a funding vehicle for certain retirement plans that receive special tax treatment under Sections 401,403(b) or 408 of the Code, Section 72(t) of the Code may provide an exception to the 10% penalty tax on distributions made prior toage 59½ if you elect to receive distributions as a series of "substantially equal periodic payments". We may apply a Market ValueAdjustment to any Fixed Allocations. To request a program that complies with Section 72(t), you must provide us with certainrequired information in writing on a form acceptable to us. We may require advance notice to allow us to calculate the amount of72(t) withdrawals. The Surrender Value of your Annuity must be at least $20,000 before we will allow you to begin a program forwithdrawals under Section 72(t). The minimum amount for any such withdrawal is $100.Contract described herein is no longer available for sale.You may also annuitize your contract and begin receiving payments for the remainder of your life (or life expectancy) as a means ofreceiving income payments before age 59½ that are not subject to the 10% penalty.25