Independent Review of the Prudential B Series Variable Annuity
What will be covered in this annuity review?
Within this review, I will be going over the following information on the Prudential B Series Variable annuity:
- Type of Product
- Fees Charged
- How the Annuity Is Used
- How the Annuity Is Most Poorly Used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.
It may become clear to you as you go through this review that the Prudential B Series variable annuity – like many other annuities – is able to perform quite well in certain types of situations. However, there are other situations where this particular annuity will not be the ideal choice, especially given what the ultimate goals for the annuity may be.
Annuity and Retirement Education That You Can Trust
It is quite possible that you have found our website and that you are not entirely sure what we do or why we are reviewing this annuity. The good news is, though, that if you are looking for information about annuities, you have certainly come to the right place.
If you’ve done any type of research on annuities – especially on the Internet – then it is possible that you have seen other websites that will make certain claims about annuities in order to simply collect your contact information. For example, they might suggest that the annuities that they recommend offer features such as the:
- Lowest Fees
- Highest Payouts
- 7-8% Returns – with Absolutely No Market Risk!
If you’ve visited sites that make these types of claims, it is important to be careful prior to moving forward with the purchase of an annuity – especially if the person or the company that is offering that annuity does not know or understand your primary reason for wanting to purchase the annuity, because this can make a big difference.
Also, many of the annuities that are featured on these types of websites are not actually able to provide you with a 7-8% return in most instances.
Here at Annuity Gator, we provide you with annuity reviews that are thorough and independent – so we are objective about the information that we offer. We want you to be able to determine for yourself whether or not the annuity that is being discussed truly makes sense for your specific goals and needs.
We’ve also been providing these annuity reviews for a lot longer than many of the “copycat” websites that are out there in the marketplace – some of which have absolutely no idea how annuities even work!
So, let’s go ahead and get started!
Prudential B Series Variable Annuity at a Glance
|Product Name||Prudential B Series Variable Annuity|
|Type of Product||Variable Annuity|
|Standard & Poor's Rating||AA- (Very Strong)|
|Phone Number||(855) 366-5312|
Opening Thoughts on the Prudential B Series Variable Annuity
Overall, a variable annuity is designed to perform two primary tasks. These include growing principal in the account, and producing income. However, a variable annuity really is not all that great at producing income.
One of the main reasons for this is because of the amount of risk that a variable annuity can present to the investor, as well as the risk that it can present to the insurance company that offers it.
Because the account value inside of a variable annuity will often times fluctuate a great deal – especially in times of a volatile market – it is not uncommon for an insurance carrier to guarantee a lower amount of income from a variable annuity than it will from “safer” alternatives such as fixed annuities.
With that in mind, for each dollar that you might invest in a variable annuity, you could actually end up with less income than you would if you had invested it into a fixed annuity – without all the sleepless nights! Because of this, if in fact, your main goal for an annuity purchase is to have future retirement income, then in most cases, a variable annuity will not be the best alternative.
In terms of having a variable annuity for growing your principal, these vehicles can certainly provide you with the opportunity for high returns. For instance, with the Prudential B Series variable annuity, investors can create a fully customized portfolio with any combination of the 61 investment options and the annuity’s managed asset allocation portfolios, guided allocations, or individual asset class portfolios. However, because this is a variable annuity, the portfolio is still exposed to downside market risk.
It will also be exposed to a number of different fees – some that variable annuity investors may or may not even be aware of until they are already invested in the product and it is essentially “too late” to jump ship.
For example, what a number of variable annuity purchasers do not often realize is that in addition to the fees that are associated with the annuity itself, there will also be fees that are charged within the investments themselves. In other words, the mutual funds that are inside of the annuity will have their own management fees. These can really add up.
And, when you consider all of the investment management fees, plus the annuity fees such as a front-end load, annual administrative fees, and any possible rider fees – and you then add in the potential market volatility on the investments – it can be fairly difficult to earn a high return on these types of financial vehicles.
Before we move on to the details, there is some required legal information that has to be disclosed here…
This is an independent annuity review. Because of that, it does not include any type of a recommendation to buy or sell an annuity. Prudential has not endorsed this annuity review in any way. The information here is simply meant to be an opinion so that readers can view our personal perspective when making a determination as to the potential advantages and/or the drawbacks of this particular annuity, as well as whether or not it may fit in with their financial goals.
Prior to purchasing any type of financial product or service, it is important to pursue your own due diligence, as well as to consult with a licensed and competent financial advisor. In doing so, you can then better ensure that the product or service that you are considering may fit in with your circumstances. All of the names, the trademarks, and the materials that were used with this annuity review are the property of their respective owners.
How Prudential Describes the Series B Variable Annuity
The Prudential is known for offering quality insurance and investment products. This company has been involved in the industry for more than 140 years and has a long history of helping its customers to grow and protect their wealth. Prudential, or “Pru,” is considered to be the second-largest life insurer in the United States (based on total admitted assets), and it is the 9th largest institutional asset manager worldwide.
Prudential was also recently ranked first in the Insurance: Life and Health category, in Fortune magazine’s 2016 list of the World’s Most Admired Companies. As of early 2016, the company held more than $1.2 trillion of assets under management and roughly $3.5 trillion of gross life insurance in force.
Based upon the information from Prudential’s website, as well as from its annuity prospectuses, the Series B variable annuity is described as a variable annuity that can provide for long-term retirement goals at a lower cost.
The B Series variable annuity from Prudential is one of Prudential’s Premier Retirement annuities. This annuity offers more than 61 different, professionally managed investment options, each covering a wide range of styles and classes. As with other types of annuities, the B-Series also provides investors the ability to invest tax-deferred. The annuity offers additional benefits, too, such as a guaranteed death benefit, free withdrawals, and a waiver of withdrawal charges.
How Financial Advisors Might “Pitch” this Annuity
The B Series variable annuity fits into the Premier Retirement annuity series that is offered through Prudential. This group of variable annuities tends to offer different benefits to investors who are seeking various goals – with the B-Series geared towards those who are investing for the longer term.
The B Series offers a number of different living benefits that can be added to the product, which can be beneficial to the investor in case the need for long-term care arises, or the funds are needed for other various circumstances such as terminal illness.
This annuity offers roughly 61 different investment options to choose from – which can provide a wide variety of different asset types and classes. Because of that, a financial sales pitch may also include the ability for an investor to “customize” his or her portfolio so that it better meets their particular needs.
That being said, though, because this is a variable annuity, the funds in the account will still be exposed to market risk – and because of that, it will be important to have a good idea of just how much risk you are comfortable with taking prior to moving forward with a variable annuity, if this is, in fact, the route you decide to take.
What About the Fees?
When looking at the fees, a variable annuity can be one of the most expensive products out there in the market today. And, the Prudential B-Series does seem to be racked with many. For instance, the B Series variable annuity has several years of back-end surrender charges. These are as follows:
- Years 0-1: 7%
- Years 2-3: 6%
- Year 4: 5%
- Year 5: 4.5%
- Year 6: 4%
- Year 7+: 0%
So, even though any annuity should be considered a long-term endeavor, if you do happen to need your money out for any given reason, you will have to pay a pretty steep fee for the first several years.
The annuity also has an annual maintenance fee of either $50 or 2%, whichever is less. In addition, there is an annual Mortality & Expense Risk charge of 1.30%, as well as an administration charge of 0.15%. If the annuity holder opts for any of the optional living benefits, there will also be additional charges for these, too. There is also a portfolio operating expense of between 0.59 and 2.11% each year.
In addition, we can’t forget about the management fees that are charged inside of investments that are within the annuity. Just to cite an example here, the AST Balanced Asset Allocation Portfolio charges a net annual fund operating expense of 0.90%. The BlackRock Global Strategies Portfolio, on the other hand, charges a 1.14% net annual fund operating expense.
Our Take on the Prudential B Series Annuity
Where it works best:
When taking a look at the Prudential B Series variable annuity, it can usually work best if an individual wants to be invested in the market for growth, but also wants to have retirement income in the future. This is because the annuity does offer the ability to invest in more than 60 different investment options.
Plus, just like with other types of annuities, the B-Series provides the ability for tax-deferred growth. So, if you’ve already maxed out your 401(k) and IRA account, then this may be a nice alternative for continuing to obtain tax-advantaged investing with no annual maximum contribution limits.
In addition, a variable annuity – or any annuity – can also be a good option if you are seeking a way to calm the fear of outliving income in retirement. This is because an annuity can provide guaranteed lifetime income.
Where it works WORST:
If an investor is not planning to use the lifetime income benefit on the B Series variable annuity, then there could be some other alternatives to consider. This is because variable annuities can be an expensive way to just simply invest in equities for growth.
When considering any type of financial endeavor, it is extremely important to determine your overall goals first. This is because products will not really matter until you know what you need them to do – and why.
Also, in certain scenarios, a particular financial product might, at first glance, appear to offer both growth and income potential. Yet, after you have reviewed it more thoroughly, the product actually provides those benefits at a high price.
In the case of the Prudential B Series variable annuity, this product does provide some nice features – such as the many different investment options, as well as the ability to add different living benefits. However, it is still important to keep in mind that the annuity can be subject to the ups and downs of the market and that this, in turn, has an effect on the amount of future retirement that you can ultimately receive.
With that in mind, the only way to truly know if this particular annuity will be right for you is to have it tested. We can provide you with this testing for free. So, if you would like to know more about this annuity, please contact me and we can provide you with a better illustration of what this annuity may be able to return for you.
Have Any Additional Questions on the Prudential B Series Variable Annuity? See Any Mistakes on this Review?
Have any additional questions or concerns regarding the Prudential B Series variable annuity? If so, please contact us and we’d be happy to help. Or, if you happened to notice if there was any information on this review that needed to be corrected or revised, please let me know.
Over the past several years, annuities have become much more popular – primarily due to their ability to provide a guaranteed stream of lifetime income. Because of this, many financial sales people have been pushing these products on their clients – regardless of whether or not the annuity even makes sense for the client.
However, annuities can be confusing. Therefore, you really need to know what it is that you are getting. Annuities are long-term financial vehicles – so you do not want to make an expensive mistake.
If an annuity that you are considering does not seem to make sense for you, it is essential that you stop and ask questions now – not later. However, if an annuity does seem to make sense for your financial situation, then it can be an integral part of your overall financial picture.
Should there be any other investors that you know of who may benefit from an annuity, then you may want to share this review with them. Today, there are many people who are getting conflicting and confusing information about annuities from the media and on the Internet.
We have a goal of offering thorough and unbiased information about these financial vehicles so that people are better able to understand them and in turn, so that they may decide whether or not annuities truly make sense for them.
So, if you can help to spread the word, then it can be beneficial. For instance, if you happen to have a Facebook account, then you could just click on the Facebook icon here so that the article is shared and so that more people can find it, and are hopefully benefitted by it.
In addition, if you did happen to notice that any information is in need of updating, please contact us and let us know. As with any other financial product, annuities frequently change. It can be difficult to keep up with these changes. We are always happy to make the updates that are needed on this website so that consumers have the most complete information as possible.