The Retirement Red Zone®—

The Retirement Red Zone® is a very real, anxiety-producing period of time for people on the cusp of retirement and those who have just entered retirement. Yet the majority of people surveyed by Prudential didn't know how to help minimize the effect of losses during this time so that they wouldn't derail a long-planned retirement.

As described in Are You Ready for the Retirement Red Zone®?, Prudential defines this period as the five years before and the five years immediately following retirement. The Retirement Red Zone® is a critical time for retirement savings because short-term portfolio losses can have devastating long-term effects. With retirement imminent or already under way, not many recovery options exist.

Find out more about the Retirement Red Zone^SM

Risks not understood
Few of the 1,000 survey respondents (about an equal mix of pre-retirees and retirees) knew how to deftly navigate the Retirement Red Zone®:

• Almost two-thirds (63 percent) didn't realize how dangerous stock market declines in the early years of the Retirement Red Zone® could be.
• Twenty-seven percent had never even considered the problem, with women more likely than men to be unaware of the risk.
• Only 23 percent of respondents agreed that it was “very” critical to minimize losses in their retirement nest egg during this time.

Long-term impact
The reality is that the Retirement Red Zone® can't be avoided. However, the way you handle this very important time period can have an enormous impact on your standard of living in retirement and your peace of mind.

As the chart below shows, the risk of portfolio losses sustained in the Retirement Red Zone® have more dire consequences than those experienced at other times.

* This example is hypothetical and does not represent the performance of any particular investment.

Source: "Are You Ready for the Retirement Red Zone®? Prudential Financial Listens to Over 1,000 Americans in the Retirement Red Zone," 2006.

Annuities are issued by The Prudential Insurance Company of America, Newark, NJ, and its affiliates. Securities products and services are distributed by American Skandia Marketing, Incorporated and Prudential Investment Management Services, members SIPC. All are Prudential Financial companies.

Investors should consider the contract and the underlying portfolios' investment objectives, risks, charges, and expenses carefully before investing. This and other important information is contained in the prospectuses, which can be obtained from your financial professional. You should read the prospectuses carefully before investing.

IFS-A120623 Ed. 10/2006

Top 10 Things to Know About Life Insurance

We all recognize the importance of life insurance. After all, we want to make sure that our loved ones are taken care of when we die. But before you run out and purchase a policy, do some research ahead of time. That way, you'll be sure to get the best possible coverage at the right price. Here are some helpful tips to get you started:

1. Shop around
2. Never buy more coverage than you need
3. The healthier you are, the better the rates
4. Buy sooner rather than later
5. Realize the importance of periodically reviewing your coverage
6. You don't necessarily have to pay a commission
7. You may be paying more for monthly premium payments
8. Don't rely solely on the life insurance offered by your employer
9. Tell the whole truth and nothing but the truth
10. Buying more is sometimes cheaper

Shop around
When it comes to life insurance, it pays to shop around because premiums can vary widely. And thanks to the Internet, it's now easier than ever. Try out one of the many insurance websites that can provide you with instant quotes. Make sure the website you shop from takes into consideration the factors in your medical history that can affect the premiums.

Never buy more coverage than you need
The key to purchasing the right amount of life insurance is to have just enough coverage to meet your needs. If you have more life insurance than you need, you'll be paying unnecessarily for higher premiums. On the other hand, it's important not to have too little coverage, resulting in you being underinsured.

The healthier you are, the better the rates
It's true – healthy people get better rates on life insurance. You will be asked to pay a higher rate for anything that shortens your life expectancy (e.g., if you smoke, take medications regularly, are overweight, have a bad driving record).

Buy sooner rather than later
If you've been putting off purchasing life insurance because you don't want to pay the premiums, you may be doing yourself a disservice in the long run. The younger you are when you purchase life insurance, the lower your premiums will be.

Realize the importance of periodically reviewing your coverage
Any life change signals the need for a review of your overall financial plan. When it comes to life insurance coverage, you'll want to make sure that this major life event (e.g., birth of a child, children are grown) won't leave you underinsured or overinsured.

You don't necessarily have to pay a commission
One of the reasons for higher premiums is that most life insurance policies pay commissions to the agent/broker. However, you may be able to purchase a no-load policy through an insurer that sells no-load policies directly to consumers.

You may be paying more for monthly premium payments
You may not realize it, but you may be paying more for your life insurance if you pay your premium in monthly installments. Many insurance companies charge extra fees if you make monthly premium payments instead of paying the annual premium.

Don't rely solely on the life insurance offered by your employer
Many employers offer their employees some sort of group life insurance. But this amount of coverage is usually not enough to adequately meet your life insurance needs. In addition, group life insurance policies are not portable, meaning that if you leave your job, you can't take your life insurance coverage with you.

Tell the whole truth and nothing but the truth
If you're thinking about lying on your insurance application, think again. If your insurance company finds out that you lied about a health-related condition or your lifestyle (e.g., smoking habit), they may be able to terminate your coverage.

Buying more is sometimes cheaper
Life insurance usually costs less per thousand dollars once you get into higher coverage amounts (e.g., $250,000). If the numbers work out, you may be able to pay a lower premium while increasing your coverage.
Please note that this description/explanation is intended only as a guideline.