state income tax withholding and depending on your state’s requirements, any applicable insurance charges deducted. The amountreturned to you may be higher or lower than the Purchase Payment(s) applied during the right to cancel period. Where required bylaw, we will return your Purchase Payment(s), or the greater of your current Account Value and the amount of your PurchasePayment(s) applied during the right to cancel period, less any applicable federal and state income tax withholding.MAY I MAKE ADDITIONAL PURCHASE PAYMENTS?Unless we agree otherwise and subject to our rules, the minimum amount that we accept as an additional Purchase Payment is $100unless you participate in American Skandia’s Systematic Investment Plan or a periodic Purchase Payment program. PurchasePayments made while you participate in an asset allocation program will be allocated in accordance with such program. AdditionalPurchase Payments may be made at any time before the Annuity Date.MAY I MAKE SCHEDULED PAYMENTS DIRECTLY FROMMYBANKACCOUNT?You can make additional Purchase Payments to your Annuity by authorizing us to deduct money directly from your bank accountand applying it to your Annuity. We call our electronic funds transfer program “American Skandia’s Systematic Investment Plan.”Purchase Payments made through electronic funds transfer may only be allocated to the Sub-accounts when applied. Differentallocation requirements may apply in connection with certain optional benefits. We may allow you to invest in your Annuity with alower initial Purchase Payment, as long as you authorize payments through an electronic funds transfer that will equal at least theminimum Purchase Payment set forth above during the first 12 months of your Annuity. Wemay suspend or cancel electronicfunds transfer privileges if sufficient funds are not available from the applicable financial institution on any date that a transactionis scheduled to occur.MAY I MAKE PURCHASE PAYMENTS THROUGH ASALARY REDUCTIONPROGRAM?These types of programs are only available with certain types of qualified investments. If your employer sponsors such a program,we may agree to accept periodic Purchase Payments through asalary reduction program as long as the allocations are made only toSub-accounts and the periodic Purchase Payments received in the first year total at least $5,000.36
MANAGING YOUR ACCOUNT VALUEHOW AND WHEN ARE PURCHASE PAYMENTS INVESTED?(See “Valuing Your Investment” for a description of our procedure for pricing initial and subsequent Purchase Payments.)Initial Purchase Payment: Once we accept your application, we invest your Purchase Payment in the Annuity according to yourinstructions for allocating your Account Value. The Purchase Payment is your initial Purchase Payment minus any tax charges thatmay apply. You can allocate Account Value to one or more Sub-accounts or Fixed Allocations. Investment restrictions will apply ifyou elect certain optional benefits.Subsequent Purchase Payments: Unless you participate in an asset allocation program, or unless you have provided us with otherspecific allocation instructions for one, more than one, or all subsequent Purchase Payments, we will allocate any additionalPurchase Payments you make according to your initial Purchase Payment allocation instructions. If you so instruct us, we willallocate subsequent Purchase Payments according to any new allocation instructions. Unless you tell us otherwise, PurchasePayments madewhile you participate in an asset allocation program will beallocatedin accordance with such program.ARE THERE RESTRICTIONS OR CHARGESONTRANSFERS BETWEEN INVESTMENT OPTIONS?During the accumulation period you may transfer Account Value between investment options subject to the restrictions outlinedbelow. Transfers are not subject to taxation on any gain. We may require a minimum of $500 in each Sub-account you allocateAccount Value to at the time of any allocation or transfer. If you request a transfer and, as a result of the transfer, there would beless than $500 in the Sub-account, we may transfer the remaining Account Value in the Sub-account pro rata to the otherinvestment options to which you transferred.Currently, any transfer involving the Rydex or ProFunds VP Sub-accounts must be received by us no later than one hour prior toany announced closing of the applicable securities exchange (generally, 3:00 p.m. Eastern time) to be processed on the currentValuation Day. The “cut-off” time for such financial transactions involving a Rydex or ProFunds VPSub-account will be extendedto 1/2 hour prior to any announced closing (generally, 3:30 p.m. Eastern time) for transactions submitted electronically, includingthrough American Skandia’s Internet website (www.americanskandia.prudential.com).Currently, we charge $10.00 for each transfer after the twentieth (20 th ) transfer in each Annuity Year. Transfers made as part of aDollar Cost Averaging, Automatic Rebalancing or asset allocation program do not count toward the twenty free transfer limit.Renewals or transfers of Account Value from a Fixed Allocation at the end of its Guarantee Period are not subject to the transfercharge. We may reduce the number of free transfers allowable each Annuity Year (subject to a minimum of twelve) withoutcharging a Transfer Fee. We may also increase the Transfer Fee that we charge to $20.00 for each transfer after the number of freetransfers has been used up. We may eliminate the Transfer Fee for transfer requests transmitted electronically orthrough othermeans that reduce our processing costs. If enrolled in any program that does not permit transfer requests to be transmittedelectronically, the Transfer Fee will not be waived.Once you have made 20 transfers among the Sub-accounts during an Annuity Year, we will accept any additional transfer requestduring that year only if the request is submitted to us in writing with an original signature and otherwise is in good order. Forpurposes of this 20 transfer limit, we (i) do not view a facsimile transmission as a “writing”, (ii) will treat multiple transfer requestssubmitted on the same Valuation Day as a single transfer, and (iii) do not count any transfer that solely involves Sub-accountscorresponding to any ProFund Portfolio and/or Rydex Portfolio and/or the AST Money Market Portfolio, or any transfer thatinvolves one of our systematic programs, such as asset allocation and automated withdrawals.Frequent transfers among Sub-accounts in response to short-term fluctuations in markets, sometimes called “market timing,” canmake it very difficult for a Portfolio manager to manage a Portfolio’s investments. Frequent transfers may cause the Portfolio tohold more cash than otherwise necessary, disrupt management strategies, increase transaction costs, or affect performance. TheAnnuity offers Sub-accounts designed for Owners who wish to engage in frequent transfers (i.e., one or more of the Sub-accountscorresponding to the ProFund Portfolios, the Rydex Portfolios and the AST Money Market Portfolio), and we encourage Ownersseeking frequent transfers to utilize those Sub-accounts.In light of the risks posed to Owners and other investors by frequent transfers, we reserve the right to limit the number of transfersin any Annuity Year for all existing or new Owners and to take the other actions discussed below. We also reserve the right to limitthe number of transfers in any Annuity Year or to refuse any transfer request for an Owner or certain Owners if: (a) we believe thatexcessive transfer activity (as we define it) or a specific transfer request or group of transfer requests may have a detrimental effecton Unit Values or the share prices of the Portfolios; or (b) we are informed by a Portfolio (e.g., by the Portfolio’s portfoliomanager) that the purchase or redemption of shares in the Portfolio must be restricted because the Portfolio believes the transferactivity to which such purchase and redemption relates would have a detrimental effect on the share prices of the affected Portfolio.Without limiting the above, the most likely scenario where either of the above could occur would be if the aggregate amount of a37
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