According to Prudential, optional living benefits are very attractive to investors: the overall election rate for such benefits on Prudential Annuities’ variable annuity sales during the third quarter of 2007 was 81%. “From our perspective, the living benefits revolution began in 2005 with the debut of Lifetime Five—the industry’s groundbreaking guaranteed-withdrawals-for-life living benefit,’ said David Odenath, President of Prudential Annuities, in a company statement.

Highest Daily Lifetime Seven and Spousal Highest Daily Lifetime Seven are two new variable annuity optional living benefits. They offer a protected withdrawal value based on 7% annual compounded growth on the highest daily account value and daily opportunities to capture greater lifetime income with a 5%-8% income stream, depending on age at first withdrawal, guaranteed for life. Annuitization is not required.

Key features of HD Lifetime Seven and Spousal HD Lifetime Seven include:

• Daily Step Ups Before Withdrawals Begin: HD Lifetime Seven and Spousal HD Lifetime Seven give investors the opportunity to increase their Protected Withdrawal Value (the basis for guaranteed lifetime income) every day the market is open for trading. The Protected Withdrawal Value is determined by comparing every daily account value growing at an annual 7% compounded rate of return for the first 10 years from benefit election or until an investor’s first withdrawal, whichever is sooner. The protected withdrawal value is only available through withdrawals. It is not available as cash or a lump sum.
• Guaranteed Lifetime Income: HD Lifetime Seven and Spousal HD Lifetime Seven offer a lifetime annual income stream ranging from 5% to 8% of the Protected Withdrawal Value, with the potential for future increases and no annuitization required. (Annuitization at a particular age may be required by the terms of the base annuity.)
• Proprietary Risk Management Model: HD Lifetime Seven and Spousal HD Lifetime Seven incorporate the fundamentals of a proven proprietary risk management model that monitors an investor’s account daily, and, only if specified by the model, systematically transfers amounts between the variable investment portfolio and the AST Investment Grade Bond Portfolio.
• Post-Withdrawal Step-Up Opportunities: After withdrawals begin, HD Lifetime Seven and Spousal HD Lifetime Seven provide annual opportunities for increased income based on the account’s highest quarterly value.

HD Lifetime Seven and Spousal HD Lifetime Seven will replace the Highest Daily Lifetime Five benefit in all states where the two new options are approved (they are not yet available in all states). The new options allow investors the opportunity to increase their annuities’ income potential every day the market is open—up to 250 times a year (for the first ten years or until the first withdrawal if earlier).

Optional Accumulation Benefit

The optional accumulation benefit, Highest Daily Guaranteed Return Option (HD GRO), offers protection of a guaranteed minimum account value and the opportunity to automatically lock in the annuity’s highest daily value. The annual cost of HD GRO is 0.35%, assessed against the average daily net assets of the sub-accounts. The fee is in addition to the fees and charges associated with the chosen annuity. There is no minimum issue age for HD GRO. The maximum issue age is 84.

Key features of HD GRO include:

• Principal Protection Guarantee: HD GRO creates the initial guarantee on the day that the benefit is added to the annuity, and guarantees that the account value on the tenth anniversary of that day will not be less than the initial account value. Each benefit anniversary after that, a new guarantee is created. With respect to each subsequent guarantee, HD GRO identifies the highest account value that occurred between the date of that benefit anniversary and the date on which HD GRO was added to the annuity, guaranteeing that the account value ten years after that benefit anniversary will be no less than the highest daily account value that occurred during that time period. Purchase payments are adjusted for any credits or withdrawals.
• Proprietary Risk Management Model: Like HD Lifetime Seven and Spousal HD Lifetime Seven, HD GRO incorporates the fundamentals of a proven proprietary risk management model that monitors an investor’s account daily, and, only if specified by the model, systematically transfers

The new options can be elected at contract issue or post issue.